Thursday,
January 19, 2023
Market recap
Dow Jones
33,296.96
-613.89 (-1.81%)
S&P 500
3,928.86
-62.11 (-1.56%)
Nasdaq
10,957.01
-138.10 (-1.24%)
Top Story
The average case price for beer jumped 7% to 8% between October and December of 2022.
Despite rising prices, beer drinkers aren’t necessarily holding off on buying booze — they are simply changing how they buy.
Read more >>
January rally loses steam as some investors worry a recession is on the horizon
• US stocks fell, giving up earlier gains as recessionary concerns sat front and center along Wall Street. Discouraging corporate earnings data sent the major indexes lower. Although inflation may be cooling, there’s diminished optimism for a “soft landing” from the Fed.
• St. Louis Fed President James Bullard addressed the central bank’s target rate, saying he expects it to reach between 5.25% and 5.50% this year. Most analysts have it pegged to reach 4.9%.
• Retail sales fell 1.1% in December, as key categories like furniture, cars, and gasoline all came under pressure amid higher prices. Wholesale inflation fell 0.5% last month from November, but remained 6.2% higher on an annual basis.
• Oil prices declined, with international standard Brent crude falling around 1.3%. This is despite reports from the International Energy Agency that China’s post-COVID reopening will boost demand for oil.
What to be on the lookout for today
• Initial and continuing jobless claims will be reported. Last week, the amount of new jobless claims fell by 1,000 to 205,000. This was the lowest overall amount in the past three months, providing further evidence of the strong job market in the US.
• Discover Financial (DFS) will report earnings. This will add to the corporate data shared recently by other banking and financial institutions, and give Discover’s executives a chance to discuss macroeconomic trends.
• Consumer products giant Procter & Gamble (PG) is also scheduled to hand in its latest report card. An update concerning P&G’s portfolio of products will provide investors insight into how inflation is impacting America’s favorite consumer brands.
• Netflix (NFLX) will publish its fourth-quarter results. The streaming leader may discuss the initial success of its ad-supported tier and its plan to crackdown on password sharing.
Is a 529 college savings plan right for you? Here’s 7 benefits of the tax-advantaged account.
Saving for college is a major undertaking, but for many students the cost of college can be eased with a tax-advantaged 529 plan. Here is a summary of 529 plan benefits:
1. Options! You can decide between an education savings plan or a prepaid tuition product. Depending on your particular financial situation and the student’s outlook, there’s likely a very good choice available.
2. Your money grows free of taxes over time. What’s more, when you take out your money for qualified educational expenses, you don’t pay taxes on the gains.
3. Depending on the state you live in, you may be able to get an income tax break at the state level on the money you stash in a 529 plan.
4. You may be able to change the beneficiary. If the child whose education was saved for decides not to go to college or wants to attend a college other than one designated in a prepaid plan, you may be able to swap in another family member.
5. The funds may be applied to K-12 education or to student-loan repayment. This could be a huge help in the overall picture of paying for educational expenses.
6. The money in a 529 savings plan may in some cases be invested in stocks funds or in another market-based investment. This could allow for greater growth than what a typical savings account is likely to achieve.
7. These plans don’t have income restrictions; they can be accessed by consumers of all earnings levels.
If you are looking for another option to pay for your child’s education, you might consider a private student loan. SoFi offers private parent student loans with competitive rates and no fees.
Today’s top stories
A new report shows that 20% of households are spending more than they earn each month. Learn what this means for the American economy, plus 3 strategies that you can use to battle higher prices. Read more >> A simple Google search for “China reopening” returns endless articles, opinions, pontifications, and predictions on what this could mean for the rest of the world. SoFi’s Head of Investment Strategy weighs in on what the re-emergence of the world’s second largest economy could mean on a global scale. Read more >> Many middle-class families pay for college with the help of financial aid, including scholarships and federal student loans. Learn how to maximize your award. Read more >>Not-so-breaking news
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Party City (PRTY) filed for bankruptcy protection, as inflation has sapped consumer spending. After the holiday shopping season, it’s common for troubled retailers to take this step, allowing them to take advantage of cash buildups resulting from increased sales.
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COVID vaccine maker Moderna (MRNA) announced its experimental RSV vaccine was 84% effective at preventing at least two symptoms, including cough and fever, in a late-stage trial. RSV, which can be fatal for young children and older adults, surged this fall alongside COVID-19.
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According to a published report, the global smartphone market shrank 17% in the fourth quarter of 2022. Over the same period, iPhone maker Apple (AAPL) claimed its highest-ever market share at 25%.
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United Airlines (UAL) beat expectations for earnings during its fourth quarter and delivered upbeat guidance concerning travel volume in 2023. Executives expect the airline’s adjusted earnings to almost quadruple, thanks to increased demand and a tighter control on expenses.
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A court in Washington state allowed Albertsons (ACI) to pay a $4 billion dividend to its shareholders ahead of its planned merger with fellow grocery giant Kroger (KR). The payments, equaling $6.85 per share, will be distributed immediately. Washington’s Attorney General argued against the move, claiming it will lead to higher prices.
Financial planner tip of the day
"How do parents save for college? Early and consistently. Those are two crucial elements to creating and sustaining a plan to meet your child’s college education costs. By starting as soon as possible, you’ll have more time to potentially help your hard-earned savings grow."
Brian Walsh, CFP® at SoFi