The Best Daily Financial Market Highlights - August 19th, 2022

💎Happy Friday, Steemers! And TGIF. 🎉

Mom money. Russia is paying women over $15,000 if they have at least ten children - Yes, you read that right.

Some side hustles are stranger than others. (Full story below)

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INFLATION

• GOLD: $1,772 (-0.23%)
• AVG GAS: $3.93
• 2022 CPI: 8.5%
  Inflation numbers as of August 18th

Slow And Steady

Unemployment rates are slowly falling back down.

• Initial jobless claims dropped to 250,000, lower than the 260,000 estimate.

• Continuing claims nudged a little bit higher to 1.437 million.

There’s still work to do. Despite the drop in unemployment claims, the Fed is still working to cool off the labor market, where there are currently two job openings per every potential worker.

The increase of layoffs and slowdown in hiring, especially in the tech sector, could still spell trouble for unemployment numbers through the rest of the year.

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Tip Your Waitress

Inflation may have forced people to cut their spending, but tipping servers remains a priority.

• Restaurant-goers tipped an average of 19.6% at full-service restaurants, the same rate as one year ago.

• Quick service restaurant and delivery orders’ tip rates remained unchanged too, averaging at 16.9% and 14.5%, respectively.

The average tip amount rose 10% year over year, with the cost of restaurant/takeout food rising 7.6%.

Inflation is still making its impact. Tip rates may have not changed, but the customer demographic has.

• Chain restaurants like McDonald's (MCD -0.09%) and Chipotle (CMG +0.31%) reported more frequent visits from higher-income customers, while lower-income customers are spending and visiting less.

Can’t relate. Starbucks (SBUX +0.23%) says it hasn't seen a change in customer spending or frequency despite rising prices. Coffee remains a non-negotiable necessity.

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STOCKS

• DOW: 33,999 (+0.05%)
• S&P: 4,283 (+0.23%)
• NASDAQ: 12,965 (+0.21%)
  Stock numbers as of market close on August 18th

The Ryan Cohen Conundrum

This week has been up and down for the world’s hottest meme stock.

Investors on R/Wallstreetbets tried to hold the line on Bed Bath & Beyond (BBBY -19.63%) while hedge funds tried to cover their shorted position.

Why the drop on Thursday? Ryan Cohen.

Backstory: Ryan Cohen is the former CEO of Chewy. He recently revealed an 11.8% stake in the heavily shorted Bed Bath & Beyond (9.5 million shares).

His enthusiasm inspired Redditors to “full send” on BBBY - they like the stock.

Is he selling? Various publications announced that Ryan Cohen filed to sell his entire stake in the meme stock - BBBY tanked Thursday morning as a result.

Truth: Ryan Cohen filed a Form 144.

Breakdown: As a company insider, Cohen needs to file a Form 144 for permission to sell shares and options. That does not mean he has or will make a sale, but he legally must do this in order to sell a large amount eventually.

(Update: Ryan Cohen ended up OFFICIALLY selling his entire stake - the news broke after hours and BBBY dropped -40%).

Eh, Let’s Blame Inflation

Kohl’s (KSS -7.72%) rounded out retail earnings by blaming inflation - classic.

Kohl’s beat expectations for the quarter, but the bar was set pretty low.

The trends:

• Middle-income Kohl’s customers have been pressured by higher inflation.

• Foot traffic has decreased and sales of apparel and shoes have shrunk.

• Customers are spending less per transaction and buying less-expensive brands.

The difference: This week, Target and Walmart had mixed earnings reports - but they see a rebound in the near future. Kohl’s on the other hand slashed its financial forecast for the rest of the year and said it will cut back on costs.

“2022 has turned out to be very different than we anticipated,” - Kohl’s CEO.

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GLOBAL SCOOP

• VIX: (-1.86%)
• WHEAT: (-4.16%)
• CORN: (+0.49%)
  Global Scoop numbers as of market close on August 18th

A Bloated Turkey

We haven’t heard too much of this in 2022; The central bank cut rates.

Turkey’s central bank cut its interest rate despite inflation near 80%.

• Its main policy rate, which had been at 14% for the last seven months, was cut to 13%.

Turkey’s currency slid 0.9% against the dollar. It’s trading at more than 18.1 to the dollar and is closing in on a record low.

What’s going on? Turkey has remained very open to Russian business. Many experts fear that Turkey has plenty of cash in its pockets from Russia. That’s why the Turkish government thinks it can cut rates, hold their currency, and ignore consumer prices.

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An Aging Population

Russia is coming to terms with an aging population.

So, it's making a strange offer in order to bring the average age down.

The offer: Russia is offering the “Mother Heroine’ medal and $16,800 to women if they have 10 children (that’s it?). It comes with stipulations; all children must be raised with an “appropriate level of care” and they must all be alive, aside from those killed in military service.

The country’s declining and aging population is likely to hurt growth in the coming decades.

• The Russian population fell by a record 86,000 people a month from January to May.

• Russia has been facing an economic challenge from a declining and aging population, which has accelerated since its invasion of Ukraine.

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CRYPTO

• BTC: $23,363 (+0.13%)
• ETH: $1,873 (+1.72%)
• SOL: $40.89 (-0.45%)
  Crypto numbers as of 5:00 pm EST on August 18th

It Was Good While It Lasted

Bitcoin ran out of steam, already erasing the gains it made earlier in the week.

Sunday night, the world’s biggest crypto crossed over $25,000 for the first time in over two months.

This was a pretty big deal. Bitcoin had been staying in the $20,000 - $24,000 range for months without making any dramatic breakthrough.

What’s changed? After reports that inflation may be calming down, stocks and crypto both jolted, but the hype doesn’t seem to be sticking.

Bitcoin is 70% below its all-time high of $69,000 in November last year. The crypto market’s meltdown earlier this year has shed over $2 trillion this year.

Are you still buying crypto? Let me know in the comments.

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REAL ESTATE

• 15-year: 4.86%
• 30-year: 5.46%
  Mortgage rates via Quicken Loans as of 5:00 pm EST.

Tax Dodgers

Wealthy Americans, making at least $200,000 or more per year, are fleeing high-taxed states and migrating down South.

Where are they leaving? New York, California, Illinois, and Massachusetts had the highest amount of high-earner outflow, running between 2,000-19,000 movers per state.

Where are they going? Florida. The Sunshine State has the lowest tax burden of 5.75%, and has welcomed 20,000 high earner migrants - The most of any other state.

🌞 Here comes the sun. Nine out of the ten states reporting the highest influx of high-income households are located in the Sunbelt.

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Housing Market Drought

Home sales are down 20% this year, suggesting the housing market has fallen into a recession.

• In July, sales plummeted by 6% to a rate of 4.81 million units sold.

• This is the slowest pace since 2015.

Supply is tight, prices are high, demand is dying off; The chief economist for the Realtors believes these factors confirm the housing market is in a recession.

Why? Builders aren’t building. There were only 1.31 million homes for sale, or a 3.3 month supply, by the start of August.

We’re in a pickle. Lack of houses means higher prices, and higher prices are pushing away buyers. More supply could help level out the playing field, but homebuilder sentiment just fell into the negatives this month.