Wednesday,
January 25, 2023
Market recap
Dow Jones
33,733.96
+104.40 (+0.31%)
S&P 500
4,016.95
-2.86 (-0.07%)
Nasdaq
11,334.27
-30.14 (-0.27%)
Top Story
Mortgage rates just hit an 18-week low and home prices have been declining since May 2022. Here’s everything you need to know about the state of the housing market.
When you’re borrowing hundreds of thousands, even a decline by less than a percentage point could save you hundreds on your monthly mortgage payments.
Stocks finish mixed as Wall Street wades through earnings reports
• US stocks finished Tuesday mixed. A technical issue on the New York Stock Exchange caused trading to halt for dozens of tickers right out of the gate. Blue-chip names including Verizon (VZ), AT&T (T), Nike (NKE), and McDonald’s (MCD) were all impacted, but trading ultimately resumed shortly after the glitch.
• Most of the price action was driven by corporate earnings. Big companies including General Motors (GM), Johnson & Johnson (JNJ), Lockheed Martin (LMT), and 3M (MMM) all handed in their latest report cards. Investors parsed through the results of each to gauge the health of the global economy.
• Flash readings from S&P Global (SPGI) showed that manufacturing and services activity slowed again in January. The services Purchasing Managers’ Index came in at 46.6 while the manufacturing reading was at 46.8. Anything below 50 indicates a contraction.
What to be on the lookout for today
• The MBA 30-year mortgage rate will be released. This weekly interest rate metric hit 6.23% for the week ended January 13th, continuing its decline from its peak of 7.16% last October. This is a sign that inflation is continuing to level off.
• On the earnings front, Boeing (BA) will offer further insight into the defense industry. Meanwhile, Tesla (TSLA) will expand on its full year numbers after releasing the initial figures at the top of the year. The EV giant delivered over 1.3 million EVs in 2022, a year-over-year increase of 40%.
In all things finance, Uncle Sam wants his cut. Here’s what to know about paying taxes on stocks and personal loans.
In most situations, personal loans are not taxable as income — but if your loan is canceled or forgiven, the remainder of the loan amount that you’ve yet to repay can be taxed the same way regular income is.
In that case, your lender will send you a 1099-C form stating the amount canceled, which you must subsequently report to the IRS on your tax return. Though this is a very, very rare circumstance, so it’s nothing to count on.
Recommended: Paying Taxes on Personal LoansThere are several scenarios in which you may owe taxes related to the stocks you hold in an investment account. The most well known is the tax liability incurred when you sell a stock that has appreciated in value since you purchased it. The difference in value is referred to as a capital gain. When you have capital gains, you must pay taxes on those earnings.
Recommended: Paying Taxes on Stocks: Important Information for InvestingIt may be worthwhile to work with an experienced accountant and a financial advisor who can help you understand and manage the complexities of different tax scenarios.
Today’s top stories
Spending on high-price items may be a form of “revenge” against inflation. Consumers are cutting back on necessities while splurging on the frills. Many consumers are following a “split-brain” budget. Economists liken this current spending phenomenon to “revenge bedtime procrastination.” Read more >> The price of eggs has gotten out of control – and industry insiders suspect foul play. A letter filed with the FTC claims that collusion and price fixing in the egg industry is the real reason prices are up. Sure enough, profit at the biggest egg supplier has soared. Here’s the full story. Read more >> Leverage allows an investor to have a large amount of exposure at a low cost, but there are some risks to be aware of. No matter which strategies for trading options you use, you may increase the leverage of your investment by using options. Read more >>Not-so-breaking news
-
Amazon (AMZN) is piloting RxPass, a prescription perk for its Prime program. The ecommerce company says Prime members, for an additional $5 per month, will be able to order as needed from a list of 50 common, generic drugs.
-
General Electric (GE) issued lower-than-expected guidance for its 2023 adjusted profit, as the industrial giant’s renewable energy business drags on its bottom line. The company projects its GE Vernova program will operate at a loss ranging from $200 to $600 million in 2023.
-
Uber Freight (UBER) is cutting ties with 150 employees, as the nation’s tech firms continue to face upheaval. The move amounts to a 3% staff reduction for the ride-hailing giant’s trucking unit. CEO Dara Khosrowshahi has insisted Uber isn’t planning company-wide layoffs.
-
Verizon Communications (VZ) beat analyst expectations for revenue in its fourth quarter and came in above estimates in terms of new wireless subscribers, despite price hikes enacted last year. Still, Verizon issued downbeat guidance for full-year profits, citing diminished demand.
-
Elon Musk’s rocket company SpaceX announced it has completed a significant test of its latest Starship prototype. This involved a fueling-up process, with the company calling it a “wet dress rehearsal.” An orbital launch attempt comes next.
Financial planner tip of the day
“For individuals who want to invest in the markets and not think about it, then the broad exposure — and generally lower fees — offered by index funds may make sense. Investing in index funds tends to work best when you hold your money in the funds for a longer period of time, or use a dollar-cost-average strategy, where you invest consistently over time to take advantage of both high and low points.”
Brian Walsh, CFP® at SoFi