Friday,
January 13, 2023
Market recap
Dow Jones
34,189.97
+216.96 (+0.64%)
S&P 500
3,983.17
+13.56 (+0.34%)
Nasdaq
11,001.11
+69.43 (+0.64%)
Top Story
Do you know what the interest rate is on your credit card?
When asked this question, a shocking 43% of Americans admit that they don’t. We’ve put together a quick guide that describes how APR works, as well as common strategies to help you keep your balances low.
Read more >>
Stocks rise as latest inflation print suggests Fed could adopt less aggressive stance
• US stocks rose Thursday after the December CPI showed prices fell 0.1% from November. While prices are still 6.5% higher on an annual basis, this is an encouraging sign. Investors are likely hoping for a less hawkish Fed, with many eyeing a 25-basis-point increase at next month’s meeting.
• Initial jobless claims fell in the first week of the year. This suggests the labor market remains robust despite the Fed’s rate-hike campaign. The market will be paying close attention to central bank officials and their comments in the ensuing months, particularly those concerning wage growth, a key driver of inflation.
• The US dollar weakened while gold prices rose. Elsewhere in commodities, oil prices increased.
What to be on the lookout for today
• The University of Michigan will release its January consumer sentiment index, as well as this month’s consumer inflation expectations. The December import and export price indexes are also set for release.
• Investors will be paying close attention to the banking sector, with a number of major names scheduled to report their latest results. Earnings data is due from Bank of America (BAC), Bank of New York Mellon (BK), Wells Fargo (WFC), First Republic Bank (FRC), and Citigroup (C).
One current income-driven repayment plan for federal student loans might be getting a total overhaul. As a borrower, here’s what you need to know.
If you can’t make your federal loan payments under the Standard Repayment Plan, an income-driven repayment plan (IDR) allows you to make a lower monthly loan payment. One such IDR is the Revised Pay As You Earn plan (REPAYE), which the Biden administration just proposed major changes to.
All student borrowers with direct federal loans are eligible for REPAYE, which adjusts your monthly loan payments based on your income and family size. Here is a summary of the new changes as laid out by the US department of Education :
• Monthly payments would be capped at 5% of a borrower’s discretionary income, instead of the current 10%.
• Single borrowers earning less than $30,500 annually would have their monthly payments reduced to $0. For borrowers in a family of four, the threshold is $62,400.
• The borrower’s original loan balance will be considered when determining their eligibility for forgiveness. Every $1,000 borrowed above $12,000 would add one year of required payments.
• Multiple federal education loans could be consolidated into a single Direct Consolidation Loan with the US Department of Education without resetting the number of payments required to be eligible for forgiveness. (Note: this is different from student loan refinancing, which could consolidate multiple loans into a new, private loan)
• To stop borrowers who would qualify for $0 payments from defaulting on their loans, borrowers who are at least 75 days behind on payments will be automatically enrolled in an IDR plan that offers the lowest monthly payment.
These changes aim to lessen the burden of those who are struggling to make monthly payments. But if your income is stable and credit good, and you have no need for federal programs like income-driven repayment plans, refinancing your student loans is an option. The goal is to pay off your existing loans with one new private student loan that has a lower interest rate.
Keep in mind that refinancing doesn’t guarantee a lower payment or interest rate, and refinancing federal student loans makes you lose access to federal benefits, such as deferment, Public Service Loan Forgiveness (PSLF), and all IDR plans. Along with that, different lenders offer different terms. Because of this, refinancing isn’t always the best option for everyone.
Today’s top stories
The hottest Gen Z tech trend may just surprise you. Could it be that a combination of social media and smartphone fatigue is driving the latest craze and Y2K nostalgia? Read more >> ShiftKey, a startup trying to solve the nursing shortage, claims double-unicorn status, raising $300 million for a $2 billion valuation. This Dallas-based startup provides a scheduling marketplace where nurses and other medical professionals can find and fill shifts. Read more >> Are you looking to boost your earning power? One of the best ways to further your career and build wealth is to master high-income skills. If your goal is to earn more money, learning one (or more) of these 15 high paying job skills might just be well worth the pursuit. Read more >>Not-So-Breaking News
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Ubisoft’s (UBSFY) share prices dipped near a seven-year low after the France-based publisher shared disappointing guidance and canceled three new video game titles. Ubisoft anticipates full-year net bookings will drop 10%, after a previous forecast predicted a 10% increase.
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American Airlines (AAL) revised its fourth-quarter revenue guidance upward. The company now expects quarterly revenue to rise up to 17% above pre-pandemic levels, after earlier estimates called for an 11% to 13% bump, despite recent air travel disruptions.
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As more consumers embrace “cord cutting,” DirecTV is looking to reduce its costs. Sources say the satellite television distributor will part ways with hundreds of managers later this month, with close to 10% of DirecTV’s upper ranks being laid off.
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Bitcoin (BTC) hit its highest price in nearly a month, hitting the $18,000 mark yesterday. Over 24 hours, the cryptocurrency increased in value by 5%, after attorneys working for the collapsed crypto exchange FTX found $5 billion in “liquid” assets, both cash and digital.
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Shares of Disney (DIS) moved higher after the media giant named a new board chairman, ​​former Nike (NKE) CEO Mark Parker. Billionaire activist investor Nelson Peltz is also seeking a board seat through his Trian Fund Management, calling Disney “a company in crisis.”
Financial planner tip of the day
“As you work toward paying your credit card debt, consider making more than the monthly minimum payments. This can help you pay off your debt faster and in doing so, could help you reduce the amount of money you spend in interest over the life of the debt. This can be helpful in both the avalanche and snowball methods of debt repayment.”
Brian Walsh, CFP® at SoFi