By Philippe van Doorn
Also, a transformed housing market, inventory for this economy, and financial considerations for those working past 65
Financial markets reacted in shock to the Federal Reserve’s reinforced promise to continue tightening monetary policy to combat high inflation. The S&P 500 is down 10.5% in the past month and the average interest rate on a 30-year mortgage has fallen from 6.02% to 6.29% in a single week, according to Freddie Mac. A year ago, the average rate for a 30-year loan was 2.88%.
Federal Reserve Chairman Jerome Powell said this week that fighting inflation will be painful and he doesn’t know if tighter monetary policy will lead to a recession.
But what does all this mean for you? Andrew Keshner has tips on how to prepare for high interest rates.
Beth Pinsker explains how inflation and a possible recession can affect you as an individual.
Alessandra Malito has some suggestions for what retirees and near-retirees should do during turbulent economic times.
The accommodation has already been transformed
Freddie Mac provided startling statistics on the mortgage market, highlighting a whirlwind of opposing forces as potential home sellers and buyers are driven out of the market.
A sign of a dramatic turnaround is that in August house prices registered their biggest drop since 2011.
A slowdown in the housing finance market is particularly difficult for non-bank mortgage lenders, which began laying off staff months ago. Aarthi Swaminathan interviewed Rocket (RKT) CEO Jay Farner who outlined the steps the company is taking to stay afloat.
Don’t sell in a declining market
Conventional wisdom holds that rising interest rates are bad for stocks because bonds become more attractive as yields rise. Mark Hulbert shows why this reasonable assumption has proven wrong for long-term investors, based on decades of market data.
More Hulbert: If the market passes this test, stocks will be on course to rise
The case of energy values
Oil prices fell dramatically on Friday, accelerating the decline of West Texas Intermediate crude to just under $80 a barrel from its intraday contract high of $130.50 on March 7. Despite this decline, earnings estimates for the energy sector have been rising. That and other factors point to what may be a good case for energy stocks if you’re a long-term investor.
Another group of actions for a changing US economy
Various shortages during the coronavirus pandemic have highlighted the need for various industries to perfect their supply chains. Michael Brush lists 17 corporate stocks that can benefit from the reshoring trend.
Financial considerations for people who continue to work after age 65
Delaying retirement has an obvious advantage: you continue to be paid. But there may be other financial consequences. Here’s how working after age 65 can affect Medicare and Social Security.
To tip or not to tip… or how much to tip
Quentin Fottrell – the Moneyist – helps a couple who disagree about how much to tip their housekeeper.
Italian elections and money
Here’s how concerns over a controversial election in Italy may affect financial markets.
More from Europe: Pound and Euro tumble as Dollar Index hits highest level since mid-2002
life after retirement
When famous athletes retire from their sport, they often have plans for a new career in place. Here’s how you can prepare for your own retirement, stay alert, and be prepared if you decide to return to work.
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-Philip van Doorn
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