How the strong dollar can affect your financial health

By Philippe van Doorn

Also in a MarketWatch roundup of stories: big claims from Elon Musk; help from the IRS; a time for obligations; and a possible end to the equity bear market

The dollar has risen 18% this year against a basket of six other currencies as the Federal Reserve took the lead among central banks in developed countries by raising interest rates to fight inflation.

A strong dollar can create good surprises if you travel outside the United States, but it has other consequences for businesses and investors, as Vivien Lou Chen explains.

Tesla (TSLA) cited the “negative” effect of currency trading on third-quarter revenue. This points to a possible issue for Apple (AAPL) when it releases quarterly earnings on October 27.

Tesla slips and Musk mystifies

Tesla shares fell 7% on Oct. 20 after the electric carmaker’s chief financial officer lowered his shipment forecast as the company missed analysts’ estimates for third-quarter sales and earnings.

Difficulties in hitting targets and the impact of the rising dollar on earnings haven’t stopped CEO Elon Musk from saying he sees a “potential path for Tesla to be worth more than Apple and Saudi Aramco combined.” . That would represent a combined value of about $4.4 trillion, while Tesla alone had a market capitalization of $699 billion as of the Oct. 20 close, according to FactSet.

Read more: Elon Musk ‘excited’ about Twitter’s potential, even if he’s paying too much

Good news for taxpayers

Inflation is usually bad news for almost everyone. However, this caused the Internal Revenue Service to increase deductibles and tax brackets – you could save thousands of dollars.

Learn about taxes (and avoid them): Don’t have $13 million? Lifetime estate and gift tax exemptions for 2023 still matter to you.

The bear market and your child’s college savings

Beth Pinsker has a 16-year-old going to college. This means that after so many years of saving and investing, it may be difficult for her to look at the 529 savings account in light of the sharp stock market drop in 2022. Here is her advice to parents on a similar calendar for university expenses.

Now may be the time to move money into bonds

Investors and advisors often debate the ideal mix of growth and income stocks. During a long bull market for stocks, bonds can be unattractive, especially when interest rates are as low as they were a year ago. But now yields on two-year US Treasuries have risen to 4.60% from 0.46% a year ago, and yields on 10-year Treasuries are at 4.23% – lower than two-year Treasuries but well above their 1.70% level at this time last year.

Even though the Federal Reserve has made it clear that it will continue to raise its target range for the federal funds rate (currently from 3% to 3.25%), it may be wise to shift money into bonds as soon as possible. as soon as possible, as Joy explains Wiltermuth.

Is the equity bear market over?

The S&P 500 rose 3.8% in the first two trading sessions this week, then fell 1.6% in the following two days. Not bad – and since the stock market is still looking 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 investor psychology, and draws this conclusion about the current situation.

As we move into earnings season, Joseph Adinolfi explains what investors will need to see from companies to stage a sustained rally in equities.

Adjustable-rate mortgages are making a comeback

Adjustable rate loans can be considered dangerous when interest rates are low. Millions of people who have locked in fixed rates for the past few years through early 2022 could be happy with their decisions, as long as they don’t have to move.

The average rate for a 30-year fixed-rate mortgage in the United States rose to 6.94% as of October 20, from 3.09% a year ago, according to Freddie Mac. Demand for adjustable-rate loans, which offer at least the hope of lower repayments when interest rates eventually drop, have risen to their highest level since 2008.

Learn more about accommodation:

Financial crime, fraud and “deception”

Jessica Hall shares six ways to protect your family from online scams this holiday season – seniors are especially vulnerable.

Learn more about financial crime:

How great was the Great Resignation?

It’s easy to point out a trend and pick out information to back it up, as was the case with the so-called Great Resignation. But have people really changed their behavior when it comes to working and changing jobs? The results of this government investigation may surprise you.

Learn more about quitting and working remotely:

How a classical musician made $170 million on the stock market

Boston Pops clarinetist Edward Avedisian was very good at picking companies to invest in and knowing when to bail out. He earned $170 million in stocks during his lifetime. Here’s how he did it.

What is the relationship between the stock market and the World Cup?

The 2022 World Cup tournament begins on November 20 in Qatar. Mark Hulbert explains what the football contest can mean for stock performance.

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-Philip van Doorn


(END) Dow Jones Newswire

10-22-22 0928ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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