This text/publish incorporates references to services or products from a number of of our advertisers or companions. We could obtain compensation while you click on on hyperlinks to these services or products
You are studying Investor Junkie’s weekly publication that will get you caught up on the week’s monetary information in lower than 5 minutes.
August fifteenth, 2022
Final week’s market abstract (August Eighth-August twelfth, 2022):
- S&P 500: +2.98%
- Dow: +2.69%
- Nasdaq: +2.70%
- Bitcoin: +4.35%
Hey Junkies,
Here is a fast abstract of the 5 information tales from final week that we’re discussing at this time:
- As inflation fell on a number of fronts, the Nasdaq formally entered a bull market.
- Zillow introduced a strategic partnership with Opendoor.
- Congress allotted $52 billion in direction of boosting U.S. chip manufacturing.
- H&R Block launched sturdy earnings outcomes to increase its scorching streak in 2022.
- Roblox inventory rose regardless of lacking its earnings estimates.
I will additionally clarify why I feel all eyes ought to be on the retail trade this week. Get pleasure from!
Clint, Editor-in-Chief
What Everybody’s Been Buzzing About
1. Costs Are Falling All over the place
You heard it right here first. Final month, we predicted that inflation would fall in July; and fall it did. The year-over-year charge of inflation progress in July was 8.5%, down from 9.1% in June. That was a fair larger drop than anticipated because the consensus estimate was 8.7%.
Not satisfied that costs are starting to chill down? Listed here are a couple of extra indicators:
- Gasoline costs…have fallen for 58 days straight (as of writing on August twelfth, 2022)
- Lumber costs…have been declining for 5 months, so far as 65% down from their 2021 peak
- U.S. wholesale inflation…fell in July for the primary since time 2020
The inventory market has reacted largely constructive to all of this information because it’s given traders hope that the Fed could soften its rate of interest coverage. All main indices completed within the inexperienced for the week. And the Nasdaq has formally re-entered a bull market.
2. Zillow Is Partnering With Opendoor
Lower than a yr after exiting the homebuying market, Zillow has introduced a multi-year partnership with Opendoor. As soon as the deal goes reside, residence sellers will have the ability to request money provides from Opendoor from proper contained in the Zillow app. Zillow will obtain a referral charge when customers promote to Opendoor.
The deal comes as each corporations are bracing for a housing market slowdown. Stock is rising sooner than anticipated all through the U.S. and mortgage purposes have been hovering close to file lows. Zillow’s inventory is down 35% for the yr and Opendoor has plummeted 58%.
The excellent news is that each corporations are financially safe sufficient that they need to have the ability to keep afloat till the market rebalances. And, within the meantime, becoming a member of forces may assist each corporations generate some extra income to spice up their backside strains.
3. Chips Anybody?
If we’re speaking about chips for electronics, the U.S. Congress simply ordered much more of them – $52 billion value to be actual. That is the sum of money that was allotted in direction of boosting U.S. chip manufacturing within the CHIPS and Science Act of 2022. The bipartisan invoice handed each homes of Congress this month and was signed into legislation by President Biden final Wednesday.
As a part of the bill-signing festivities, Micron introduced that it’s going to make investments $40 billion in reminiscence chip manufacturing, resulting in the creation of as much as 40,000 new jobs. Qualcomm mentioned that it’s going to improve semiconductor manufacturing by 50% over the subsequent 5 years and it introduced a $4.2 billion partnership with World Foundries (GFS) to broaden manufacturing capability at its Malta, New York manufacturing facility.
4. H&R Block Is Feeling It
Tax preparation corporations hardly ever make it onto the lists of greatest recession-resistant industries, however they in all probability ought to. Most of us have heard the previous saying: “On this world nothing could be mentioned to make certain, besides dying and taxes.” Effectively, this is a corollary: “Individuals will all the time want tax assist whatever the ups and downs of the economic system.”
Living proof — H&R Block had a killer earnings report final week. The mega tax prep firm introduced a dividend hike and a $1.25 billion inventory buyback. And whereas nearly all of shares have struggled mightily this yr, H&R Block is up an eye-popping 85% in 2022.
5. Roblox Inventory Rises Regardless of Lacking on Earnings
The favored gaming platform was one of many largest inventory market winners through the pandemic. The truth is, Roblox added roughly 35 million customers inside the first three months of COVID-19 lockdowns alone.
Roblox went public in March 2021. And, by November 2021, it had almost doubled in worth. However then the inventory cooled off as folks started to spend extra time outdoor and fewer time at their computer systems. At its lowest level in June of this yr, Roblox shares had tumbled all the way in which right down to $27 from their all-time excessive of over $134.
Quick ahead to final week’s earnings report and Roblox missed on each its prime and backside income numbers and reported a lack of almost 2 million common energetic each day customers. But it supplied a extra constructive outlook for Q3 by pointing to sturdy progress in July.
The outcome: Roblox completed the week up 6% and is up greater than 37% over the previous month.
What To Maintain Your Eye on This Week
1. Retail Gross sales (August seventeenth)
The retail gross sales report is a key financial indicator that measures the full receipts of each on-line and brick-and-mortar retailers. The info is used to gauge shopper spending habits and developments.
The retail trade usually takes successful throughout inflationary durations. Why? As a result of shoppers have traditionally responded to excessive inflation by allocating much less of their budgets in direction of discretionary objects and extra in direction of requirements like fuel and groceries (that are inclined to have thinner margins).
For these causes, rising retail gross sales does not essentially translate to extra earnings for retailers. Nonetheless, a powerful retail gross sales report will present that customers are no less than nonetheless spending (even when on lower-margin objects) reasonably than stashing their cash away in financial savings because of recession fears.
2. Retail Shares
Sticking with the retail theme, a couple of main shops are asserting earnings this week together with Walmart, Goal, and House Depot. All three of those corporations lately made it onto our checklist of the “5 Greatest Retail Shares To Watch or Purchase in 2022″ regardless of the inflationary headwinds that they are dealing with. Study why >>>
Employees Favorites
Listed here are three tales from across the internet that our staff discovered attention-grabbing:
Having fun with this text and wish it to be delivered proper to your inbox? Enroll beneath!
