Stocks slipped slightly, Biden extends pandemic protections for homeowners, and consumers likely boosted spending in January. Here's how the headlines could affect your money.
The market ended Tuesday mixed: The S&P 500 receded from record highs, finishing the day down 0.1%. The Nasdaq fell 0.3%, while the Dow managed a 0.2% gain.
Tepid results in the stock market came as traders monitored rising bond yields. The yield on the 10-year Treasury hit 1.30% Tuesday, the highest rate on the government debt since February 2020. Many on Wall Street believe that an eventual surge in interest rates could pose a threat to stocks — especially companies in fast-growing sectors such as technology, which have benefited from a prolonged period of low rates.
Major indexes traded slightly down on Wednesday morning.
The Biden administration announced Tuesday that it would extend mortgage forbearance and foreclosure relief programs for homeowners struggling during the pandemic.
Video by Richard Washington
Homeowners with federally backed mortgages, comprising about 70% of borrowers, are eligible. The move allows homeowners to apply for two 180-day relief periods, mirroring the two three-month periods offered in the March 2020 CARES Act.
The rules surrounding the relief you'll receive vary depending on what kind of government-backed mortgage you have. "The easiest way to find out if you are eligible and to seek payment relief if you need it is to reach out to your lender," Greg McBride, chief financial analyst at Bankrate.com, told CNBC.
Consumers likely upped spending in January, bolstered, experts say, by the latest round of stimulus checks. Economists estimate that spending rose by 1.2% in January after a 0.7% decline in December — a welcome sight for investors banking on continued U.S. economic growth.
Video by Courtney Stith
"I really do think we were heading toward a double dip. We had a pretty dramatic slowdown as we went into the end of the year," Diane Swonk, chief economist at Grant Thornton, told CNBC.
Market-watchers are bullish that another round of stimulus payments coupled with a successful vaccine rollout could keep the economy humming.
TINA, short for "There is no alternative," is a phrase Wall Street uses to describe market environments in which investors pile into stocks either solely or partly because other asset classes offer unattractive returns. For example, if persistently low interest rates mean that investors can't earn attractive yields on bonds or cash, they may stick with stocks, even if stocks look overvalued or primed for a pullback.
Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.
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