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Meet the newest economic barometer: meme stocks
Shares of so-called meme stocks like GameStop and AMC have surged over the past week. What does their surprising performance say about the broader economy?
US stocks finished higher on Wednesday after cooler-than-expected inflation data, sending the S&P 500 and Nasdaq Composite to fresh record highs
• Aprilâs CPI report showed overall prices increased 0.3% from March, less than expected, and 3.4% annually. Core inflation also increased 0.3% from March, but fell to 3.6% annually, its lowest reading since April 2021. Following the report, the U.S. 10-year yield slid below 4.4%.
• Retail sales for April were flat, well below the 0.4% increase estimated. Together, the inflation and sales data signaled a potentially cooling economy, which could encourage the Federal Reserve to make its first interest rate cut sooner.
• The 30-year mortgage rate fell to 7.08% last week, its second consecutive decline.
What to be on the lookout for today
• Building permits and housing starts for April. Weâll also get the weekly update to unemployment claims.
• In earnings, Applied Materials, Deere & Company, Under Armour, and Walmart will report.
The good news â and the bad news â about inflation
CPI data came in lower than expected for the month and on target for the year, a welcome report that sent markets to an all-time high. Most items, except for shelter and auto, are back to their pre-pandemic levels of contribution.
But the news isnât all rosy. Prices havenât come down across the board, and consumers are still paying more for most goods and services. What might that mean for the future? âGiven recent reports of consumers pulling back, trading down, and answering sentiment surveys with notably less glee, the likelihood of buying more stuff at still higher prices seems to be dwindling,â writes SoFi Head of Investment Strategy Liz Young.
Read on for this weekâs column about why the latest inflation report is a mixed bag, and what to watch out for in the days ahead.
Todayâs top stories
Money is not the secret to happiness. So how does one become happy?Author, doctor, entrepreneur, and philanthropist Deepak Chopra went on SoFiâs Richer Lives YouTube series to talk about finding meaning and happiness in your life.
Read more >> Stocks and options are two of the most popular investment types that investors might include in their portfolioWhen deciding whether to invest in stocks vs. options, itâs important to consider your personal investing goals, experience, and more.
Read more >>Other news that caught our eye
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The federal interest rate on new undergraduate student loans is increasing from 5.5% to 6.53% starting in July. Interest on graduate student loans will also increase from 7.05% to 9.08%.
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Extreme weather events are impacting the home insurance system, driving up costs across the country and posing a risk to the insurance market.
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Amazon is closing in on Walmartâs title of Americaâs largest retailer by revenue, with $574 billion in 2023 compared to Walmartâs $648 billion.
Financial planner tip of the day
"Risk tolerance means the level of risk youâre comfortable taking; risk capacity is the level of risk you can actually take. You may be comfortable with risk but that does not mean you should, for example with an emergency fund. The opposite is also true for long-term money where your capacity is much higher."
Brian Walsh, CFPÂŽ at SoFi