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As the Fed’s attempts to tame inflation fall flat, banks prepare for leaner times.

Retailers are looking at a potential record-setting back-to-school shopping season. Here’s how you can get stocked up for less.

Contingencies are Back

As Americans are adjusting to the new realities of rising inflation, some are regretting their expenditures. Many find their income doesn’t stretch as far as it used to. As the Federal Reserve has taken aim at inflation through a series of rate hikes this year, mortgage rates have soared. This has left an increasing number of would-be homebuyers questioning if they can really afford the cost of home ownership.

In the current environment, the housing market is starting to show signs of cooling. One such indicator is a renewed demand for contingencies, which were often waived as bidding wars became the norm in recent years. For those experiencing buyer’s remorse, these clauses can offer a way out of a deal.

Protect Your Deposit

To keep options open, prospective homebuyers should read the fine print to gain a clear understanding of what circumstances will allow them to step away from a transaction, without forfeiting their “good faith” deposit. The amount required to hold your spot in a deal varies and can run upwards of 10% of the purchase price.

Buyers risk losing this large sum of money should they break the contract signed with the seller. If the contract contains a clause detailing that the final purchase is contingent on certain metrics being met, would-be home buyers retain flexibility. This allows them to potentially walk away from a deal without any financial penalty.

Inspections, Appraisals, and Financing

Contingencies typically pertain to home inspections, appraisals, and financing. A material issue with any of these key aspects of home-buying could provide reasonable grounds to terminate a contract, and get your deposit back. To some extent, the flexibility may be limited by state rules, so it’s a good idea to lean on your real estate agent or attorney for guidance before signing anything.

Inflationary pressures have added more stress to the homebuying process. Contingencies can serve as a form of insurance and may help alleviate buyer anxiety. From there, it’s important to nail down the details of financing, as well as the home’s true condition and ultimate value.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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Valuation Craters

Netflix (NFLX) stock is having a tough year. After its share price peaked at $691.69 on November 17, 2021, the company’s valuation has tumbled, bouncing along at levels below $200 a share since early May.

The streaming pioneer faces increasing competition. While numerous alternative platforms, big and small, have eroded its subscriber base, it still holds the top spot in terms of customers on its platform. Now, similar to entertainment giant Disney (DIS), the company is evaluating how to introduce an ad-supported tier.

A New Subscriber Avatar

The move is intended to address the leaks of its subscriber base by providing a low-cost option to price-sensitive viewers. However, the new revenue structure will require amendments to programming contracts so that the company can include content on the new ad-supported tier. This is likely to result in rising costs for the rights to stream these shows, which market observers estimate will be a markup of 15-30%. Time will tell how the seesaw effect of the strategic shift will impact the company’s bottom line.

Netflix is currently negotiating contracts with Warner Brothers Discovery (WBD), creator of You; Universal (CMCSA), which makes Russian Doll; and Sony (SONY) producer of “The Crown.”

Scant Details

The streaming giant wants to launch the new ad-supported tier by the fourth quarter of this year. It has yet to elaborate on the details, such as how the ads will be displayed, the difference in content between the commercial-free and less expensive tier, or the pricing structure.

Historically, studio executives have been dissatisfied regarding the lack of transparency Netflix has provided about viewership. The value to marketers could potentially be diminished if subscriber data remains limited.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

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Breaking Down the Big Number

The US Labor Department reported June’s CPI checked in at 9.1% over the previous 12-month period. Prices are rising at their fastest pace since November 1981. For the better part of this year, the Consumer Price Index has been at or above a 40-year high.

Meanwhile, core CPI, which strips out food and energy prices, rose 5.9% year-over-year in June. May’s number advanced 6.0% for the 12-month period. Still, consumers continue to face price increases on a broad number of items. Shelter, food, and gasoline are seeing the most significant jumps. Gas rose 11.2% in June, month-over-month.

Banks Under Pressure

Some publicly traded companies are perceived to be more or less sensitive to rising prices. This is reflected in the performance of their stock, particularly as reports on inflation are published. After June’s CPI came in hotter than expected, a number of companies saw their share prices affected.

Large banks such as JPMorgan Chase & Co. (JPM), Bank of America (BAC), and Wells Fargo (WFC) all traded lower following the CPI report. One potential reason is investors know banks are typically tied to the broader economy’s performance. With inflation still running hot, the Federal Reserve will likely keep hiking rates, potentially tipping the economy into a recession, which could negatively impact bank stocks.

Where Things Go From Here

After May’s CPI came in at 8.6%, the Federal Reserve enacted a 75-basis-point hike at its June meeting. This latest report is likely to keep the central bank on track to raise its target rate by another 0.75 percentage point at the end of the month. Fed Chair Jerome Powell has indicated rate hikes won’t be suspended or even slowed down unless there’s clear evidence prices have started to cool off.

Consumers have seen price breaks as a result of inflation in some cases. For example, Target (TGT) is offering discounts in a bid to move inventory. That said, the price of home goods and clothing rose last month. On the flipside, the growth in prices for both used and new cars eased up a bit. The Federal Reserve wants to execute a “soft landing” while fighting inflation if possible, meaning any downward pressure on prices is likely to take a while.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
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