Stocks kept investors on edge for most of Thursday, indecisiveness between clear and halfhearted territory right through the session as investors sized up global central bank headlines.
Kicking things off was an early morning declaration from the European Central Bank (ECB) to hike its key appeal rate by an unique 75 basis points. A basis point is one one-hundredth of a percentage point.
“Stuck between a rock and a hard place, ECB policymakers felt they had small option but to go ultra-huge with the rate rise to try and cut the rope on inflation and spark a fall from its ascent,” says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. She adds that it couldn’t have come at a worse time. “With energy prices so stuck-up, bringing an end to the price spiral is going to be far from simple, and the ECB is warning that fresh hikes will be on the way.”
Back at home, Federal Reserve Chair Jerome Powell this morning doubled down on the hawkish tone he struck in a late-August speech in Jackson Hole, Wyoming. Language during a virtual talks hosted by the Cato Institute, Powell indicated that the Fed is firmly committed to fighting inflation and will be as aggressive as it needs to be in order to do that. “It is very much our view, and my view, that we need to act now basically, fervently, as we have been doing, and we need to keep at it until the job is done,” he said.
These two events sparked a wild ride for investors, but at the close, the major market indexes were in the green. The Dow Jones Manufacturing Average finished up 0.6% at 31,774, the S&P 500 Index rose 0.7% to 4,006, and the Nasdaq Composite gained 0.6% to 11,862.
Other news in the stock market today:
- The small-cap Russell 2000 tacked on 0.7% to 1,844.
- U.S. crude futures gained nearly 2% to end at $83.54 per barrel.
- Gold futures fell 0.4% to end at $1,720.20 an ounce.
- Bitcoin rose 1.8% to $19,355.05. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
- Snap (SNAP) stock jumped 9.4%, construction on Wednesday’s 6.4% gain, after a report in The Verge fussy a leaked memo from the social media company’s CEO Evan Spiegel. According to the article, the domestic memo to employees fussy SNAP’s plans to grow Snapchat’s user base by 30% to 450 million and boost revenue to $6 billion by the end of 2023. UBS Global Investigate analyst Lloyd Walmsley (Buy) said he is “clear” by the targets. “We admit this could be an domestic stretch goal and the company is in a show-me mode given macro uncertainty,” Walmsley writes in a note to clients. “Nonetheless, we reckon the company has done a excellent job executing, showing daily active user growth of 85% since 2018 to date and growing revenue 3x from 2018 through 2022 estimates. As such, we give management the benefit of the doubt here.”
- GameStop (GME) rose 7.5% after the video game seller reported return. While GME reported lower year-over-year sales and a wider per-share loss in its second quarter, it unveiled a link with crypto chat FTX. “At a high level, the link will initiate more GameStop customers to FTX’s union and its marketplaces for digital assets,” says Wedbush analyst Michael Pachter, who has an Underperform (Sell) rating on GME. “The two companies will work collectively on new ecommerce and online marketing initiatives, with GameStop admittance to carry FTX gift cards in select stores as its ideal retail partner in the U.S. Fiscal terms were not told, though we are disbelieving that the link will drive consequential revenue or profit role.”
REIT Dividends to Help Fight Inflation
Next week, Wall Street will get the latest reading on inflation data, with the consumer price index (CPI) for August set for release ahead of the Sept. 13 open. Prices eased back vaguely in July, but it’s likely that inflation is not done yet.
“There is some prove that food prices may be moderating after a year’s worth of large monthly increases,” says Kiplinger economist David Payne. “But long-lasting large wage increases at many businesses are likely to keep upward difficulty on most prices for some time to come.” And even if inflation continues to trend lower, it will take awhile to bring prices back down to a sustainable level.
Given that surroundings, investors should know that bonus stocks offer a commanding way to allay the effects of red-hot inflation. And one of the best places to find healthy yields is in real estate investment trusts (REITs). Dredge up, REITs are an mainly arresting option for income-seeking investors because they are legally vital to deliver at least 90% of their taxable return back to shareholders. It’s even better when these generous REITs boast exceptional bonus growth. Here, we take a look at 12 real estate stocks that have consistently raised their payouts in recent years, and delivered impressive growth to boot.