The Weekly Scan August 22, 2022

Welcome to the Weekly Scan. Here’s what we’re following for the week of August 22, 2022. Plus, our Certified Financial Professional Lauren Anastasio gives advice on how to respond to the news. 

A new spending bill. President Biden signed the Inflation Reduction Act into law on August 16, 2022. The spending bill marks the largest federal investment in clean energy, with more than $300 billion going towards energy and climate reform. Democrats have said that the bill should help lower greenhouse gas emissions by 40% by the end of the decade. In addition to climate spending, the bill outlined health care changes such as a $2,000 cap on out-of-pocket prescription costs for people on Medicare, starting in 2025. The act also included a 15% tax on corporations bringing in more than $1 billion, which is anticipated to create $300 billion in revenue. 

• Lauren’s take: The Inflation Reduction Act is likely a growth catalyst for clean energy stocks and exchange-traded funds (ETFs). 

NPR

Housing hiccup.. Sales fell to an annualized 4.81 million units, the slowest sales rate since November 2015 (excluding a dip at the beginning of the pandemic.) The decline coincides with mortgage rates spiking at 6% in June, before moving back down to 5%. Prospective homebuyers are also dealing with supply issues. In July, there were 1.31 million houses available, a 3.3 month supply. And house prices are still high: the median price of a house in July was $403,800, a 10% year-over-year increase. 

• Lauren’s take: Buying a home isn’t the only way to invest in real estate. If you’re not ready for that step yet, you can invest in  Real Estate ETFs.

CNBC

Bed Bath & Bonkers. Shares in the retailer Bed Bath & Beyond fell 19.6% in regular trading on August 18, 2022, then 20% in after-hours trading. The drop was a response to the CEO of pet product retailer Chewy, Ryan Cohen, selling 7.78 million shares, earning a profit of more than $58 million. Cohen’s shares had been closely watched by retail investors on platforms like Reddit. Earlier in 2022, Cohen sent a letter to the board calling for changes to Bed Bath & Beyond’s plan to turn around the struggling company. Cohen also previously invested in GameStop, where he is now the chairman. 

• Lauren’s take: The Stash Way encourages you to think long-term when you invest and avoid being distracted by fad or meme stocks.

MarketWatch 

Full stream ahead.  For the first month ever, streaming services beat out cable TV networks for viewing time in July. Streaming services accounted for 34.8% of viewing time last month, while cable TV networks made up 34.4% of viewing time. Streaming time increased 22.6% year-over-year, while cable TV time declined 8.9%. Among the streaming services, Netflix was the most popular in July, supported in part by the most recent season of Stranger Things. Hulu’s “Only Murders in the Building” and Netflix’s “The Sea Beast” also brought in viewers. Children being out of school and cable networks lacking sports content during the summer could be other reasons for the pop in streaming. 

• Lauren’s take: A standard Netflix subscription is $15.49/month. If someone invested that same amount each month with an average return of 7%, they could have over $1100 in just 5 years. 

Disclosure: This hypothetically illustrates how investments may impact the long-term value of investing in the market, assuming an annual growth rate of 7% (compounded annually). This is purely an illustration of mathematical principles and such results do not represent actual investing results and do not take into consideration fees, taxes, other account deposits, dividend reinvestment, time horizon or economic factors which can impact performance. Diversification, asset allocation, and dollar cost averaging does not ensure a profit or guarantee against loss. Client’s may achieve investment results materially different from the results portrayed. This example is for illustrative purposes only and is not indicative of the performance of any actual investment or investment strategy

Wall Street Journal

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