has risen 18% this year against a basket of six other currencies, as the Federal Reserve has taken the lead among developed countries’ central banks in raising interest rates to push back against inflation.
A strong dollar can create pleasant surprises if traveling outside the U.S., but it is having other consequences for companies and investors, as Vivien Lou Chen explains.
Tesla slides and Musk mystifies
Tesla’s stock has fallen 41% this year, while the S&P 500 has declined 22%.
Shares of Tesla fell 7% on Oct. 20 after the electric-car maker’s chief financial officer lowered his forecast for deliveries as the company missed analysts’ estimates for third-quarter sales and earnings.
Difficulties in meeting targets and the rising dollar’s hit to profits didn’t keep CEO Elon Musk from saying he saw a “potential path for Tesla to be worth more than Apple and Saudi Aramco combined.” That would be a combined value of about $4.4 trillion, when Tesla alone had a market capitalization of $699 billion as of the close on Oct. 20, according to FactSet.
Good news for taxpayers
The IRS offers some relief from inflation.
Inflation is typically bad news for nearly everyone. However, it has caused the Internal Revenue Service to raise deductibles and tax brackets — you could save thousands of dollars.
More about taxes (and avoiding them): Don’t have $13 million? The lifetime estate- and gift-tax exemptions for 2023 still matter to you.
The bear market and your child’s college savings
A late-stage stock market decline can disrupt parents’ plans to pay for college.
Beth Pinsker has a 16-year-old headed to college. That means after so many years of saving and investing, it can be difficult for her to look at the 529 savings account in light of the stock market’s brutal decline in 2022. Here’s her advice for parents on a similar timeline for college expenses.
Now may be the time to move money into bonds
Investors and advisers often discuss the ideal mix of growth- and income-style securities. During a long bull market for stocks, bonds may be unattractive, especially when interest rates are as low as they were a year ago. But now, yields on two-year U.S. Treasury bills
have increased to 4.60% from 0.46% a year ago, and yields on 10-year Treasury notes
are at 4.23% — lower than the two-year but way above their 1.70% level at this time last year.
Even though the Federal Reserve has made it clear that it will continue to increase its target range for the federal funds rate (currently 3% to 3.25%), it may be a good idea to move money into bonds sooner rather than later, as Joy Wiltermuth explains.
Has the bear market in stocks ended?
MarketWatch photo illustration/iStockphoto
The S&P 500
rose 3.8% during the first two trading sessions this week and then pulled back 1.6% over the following two days. Not bad — and since the stock market always looks far ahead, could we be nearing the end of the bear market?
Michael Sincere outlines the nine stages of a bear market, encompassing financial and technical factors, as well as investors’ psychology, and makes this conclusion about where we are now.
As we move through earnings season, Joseph Adinolfi explains what investors will need to see from companies to set up a sustained rally for stocks.
Adjustable-rate mortgages make a comeback
A house for sale in Los Angeles on Sept. 22.
Allison Dinner/Getty Images
Adjustable-rate loans might be considered dangerous when interest rates are low. Millions of people who locked in fixed rates over the past several years through early 2022 might feel good about their decisions, as long as they are not forced to move.
The average rate for a 30-year fixed-rate mortgage loan in the U.S. rose to 6.94% as of Oct. 20 from 3.09% a year ago, according to Freddie Mac. Applications for adjustable-rate loans, which at least offer hope of lower payments when interest rates eventually fall, have hit their highest level since 2008.
More on housing:
Financial crime, fraud and “trickery”
In 2021, more than 92,000 people over age 60 reported falling victim to cyber fraud in the U.S., according to the Federal Bureau of Investigation.
Jessica Hall shares six ways to protect your family from online scams this holiday season — seniors are especially vulnerable.
More about financial crime:
How great has the Great Resignation really been?
It’s easy to report a trend and cherry-pick information to back it up — as has been the case with the so-called Great Resignation. But have people really changed their behavior when it comes to working and switching jobs? The results of this government survey may surprise you.
More about quitting and remote work:
How a classical musician made $170 million in the stock market
Edward Avedisian, left, and his lifelong friend Aram V. Chobanian, a former president of Boston University.
Photo by Jackie Ricciardi
Boston Pops clarinetist Edward Avedisian was very good at selecting companies for investment and knowing when to bail. He earned $170 million on stocks over a lifetime. Here’s how he did it.
What does the stock market have to do with the World Cup?
The 2022 World Cup tournament begins Nov. 20 in Qatar. Mark Hulbert explains what the soccer contest can mean for stock performance.
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