Every Friday I recap “news you can use” from the week: a handful of quotes from major (and often expensive) news sources, so you can stay up to date on the news that affects your money without spending a dime and in less than a minute.
Here’s an overview of what happened this week.
Speaker Drama Raises New Fears on Debt Limit (Jan. 7, New York Times) Representative Kevin McCarthy of California finally secured the House speakership in a dramatic vote ending around 12:30 a.m. Saturday…
Economists, Wall Street analysts and political observers are warning that the concessions he made to fiscal conservatives could make it very difficult for Mr. McCarthy to muster the votes to raise the debt limit — or even put such a measure to a vote. That could prevent Congress from doing the basic tasks of keeping the government open, paying the country’s bills and avoiding default on America’s trillions of dollars in debt.
Wall Street Sets Low Bar for Corporate Earnings Season (Jan. 8, Wall Street Journal) The stock market faces its next big test this week with the kickoff of a corporate earnings season that is expected to be dominated by worries about inflation and the health of the economy.
Fourth-quarter profits are projected to have dropped 4.1%, a sharp reversal from the more than 31% growth logged a year earlier.
US Consumers Roll Over More Credit-Card Debt as Inflation Bites (Jan. 10, Bloomberg) Around 46% of cardholders don’t pay off credit cards in full each month, according to data collected by Bankrate LLC in December, up from 39% a year earlier. About 43% of those with debt aren’t aware of the rates associated with their cards, the data show.
Barclays analysts estimate home prices could fall by another 10% (Jan. 10, Axios) “The likelihood of a sharp house price correction has intensified,” the authors write, emphasizing that the uncertainty in the market right now is around the trajectory of interest rates.
Fed’s No-Rate-Cut Mantra Rejected by Markets Seeing Recession (Jan. 11, Bloomberg) Money markets are pricing a rate peak around 4.9%, followed by nearly half a percentage point of rate cuts by the end of 2023. That’s despite multiple officials in recent days delivering a sharply contrasting message: Rates are heading above 5% and will stay there all year.
Consumer prices fell 0.1% in December, in-line with expectations from economists (Jan. 12, CNBC) Inflation closed out 2022 in a modest retreat, with consumer prices posting their biggest monthly decline since early in the pandemic, the Labor Department reported Thursday.
Even with the decline, headline CPI rose 6.5% from a year ago, highlighting the persistent burden that rising cost of living has placed on U.S. households.
The Markets Are Locked in a Game of Chicken With the Fed (Jan. 12, Wall Street Journal) The Federal Reserve says it is too early to think about cutting interest rates this year. Investors are growing more convinced that is exactly what the central bank is going to do.
The clash between investors’ hopes and Fed policy, and how it ultimately resolves, is shaping up to be one of the biggest question marks for financial markets in 2023.
Tesla Stock Leads Auto-Sector Selloff After Elon Musk’s Company Cuts Prices (Jan. 13, Wall Street Journal) Tesla’s latest price cuts ricocheted across the industry Friday, sending auto stocks lower.
Elon Musk’s electric-vehicle company is cutting some prices in the U.S. and Europe. The move follows price cuts in China, and after Mr. Musk suggested higher interest rates are hurting vehicle demand.
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I founded Money Talks News in 1991. I’m a CPA, and I have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.