Friday,
February 9, 2024
Market recap
Dow Jones
38,726.33
+48.97 (+0.13%)
S&P 500
4,997.91
+2.85 (+0.06%)
Nasdaq
15,793.71
+37.07 (+0.24%)
Top Story
If the economy is so strong, why are public companies hoarding cash?
Unemployment is low, inflation is cooling, and consumers are spending. Things are looking pretty good on the whole, but corporations seem nervous.
US stocks finished higher on Thursday as the S&P 500 continues its climb towards the historic 5,000 point mark
• Chip designer Arm’s stock soared 47.9% after surpassing analyst expectations and issuing strong guidance. Other strong performers of the day included Disney, the shares of which 11.5% after beating profit estimates, increasing its dividend by 50%, and announcing a $1.5 billion investment for a stake in Fortnite-owner Epic Games. Shares of Ralph Lauren surged 16.8% after beating estimates thanks to strong holiday season sales, and shares of chocolate manufacturer Hershey climbed 4.1% also after beating earnings expectations.
• Shares of PayPal tumbled 11.2% after its full-year and first-quarter guidance came in below estimates. In the healthcare space, shares of pharmaceutical giant AstraZeneca fell 4.6% after reporting earnings below expectations, a departure from peers Eli Lilly, Pfizer, and Merck, all of which recently reported earnings beats. Johnson & Johnson’s consumer-health spin-off Kenvue also saw its shares slide 5.8% after missing revenue estimates and forecasting full-year earnings below expectations.
• Spirit Airlines reported a smaller-than-expected loss and forecasted positive cash flow in the second quarter, sending its stock 3.3% higher.
• Oil prices rose more than 3% on continued turmoil in the Middle East.
• Richmond Fed President Thomas Barkin warned the fight against inflation wasn’t over, and that it would be smart for the Federal Reserve to make sure inflation is cooling consistently without the risk of a rebound.
What to be on the lookout for today
• 2023 Consumer Price Index revisions.
• In earnings, PepsiCo will report.
America’s wealth gap: Inequality in home buying
Buying a home can be stressful, but it’s even more challenging for certain groups of prospective buyers. It’s another arena where America’s racial wealth gap rears its head.
Lenders generally like to see a debt-to-income ratio (DTI) of around 36% or less when it comes to mortgage applications, meaning that about one-third of one's income goes toward paying debt obligations.
But a report from the Consumer Financial Protection Bureau showed that lenders more frequently reject applications over lack of income, and Black borrowers had the highest denial rates at nearly 17% in 2022. For non-Hispanic, White applicants that rate was below 7%.
The road to getting a loan
The disparities continue for those who are approved for a loan: For Black and Hispanic borrowers, the median home loan rate was above 5%, compared to below 5% for White and Asian borrowers.
With homeownership being a bedrock of generational wealth creation, the barriers to entry for some demographics have a lasting impact on communities.
See how employers can help first-time homebuyers. And if you’re looking for a home loan, SoFi can help with that.
Today’s top stories
Stealth wealth is cutting in line Nobody likes to wait, and premium-priced “fast pass” programs are sweeping through airports and amusement parks. Is this the new status symbol? Read more >> Yes, your meetings could be better Here are 4 ways to breathe new life into workplace meetings in today’s hybrid environment. Read more >> How does the mortgage interest rate tax deduction work? Buying a home can be the first step to creating generational wealth for your family. And if you have a mortgage, it’s key to know about the interest rate tax deduction. Read more >>Other news that caught our eye
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Google changed the name of its chatbot from “Bard” to “Gemini” as it launched a paid subscription plan to compete with Microsoft and OpenAI.
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McDonald’s plans to open roughly 1,000 new restaurants in China before the end of 2024 amid growing demand for affordable dining options.
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The CEO of Ozempic-maker Novo Nordisk says he has received calls from concerned food company CEOs over the impact of its weight-loss drug.
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Consulting firm McKinsey placed 3,000 workers on review over unsatisfactory performance as the consulting business slows.
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Taylor Swift’s The Eras Tour concert film will exclusively stream on Disney+ starting March 15 and will include five additional songs.
Financial planner tip of the day
“As you work your way toward a down payment for a house, setting a goal can be a sound step toward making it a reality. A mortgage calculator can help you estimate how much you can borrow, play with different down payment options, and view different monthly mortgage payment options (how much your monthly mortgage payments will be).”
Brian Walsh, CFP® at SoFi