SoFi Technologies Inc. (NASDAQ:SOFI) shares are rising Monday as financial stocks climb while falling oil prices ease worries about inflation and high interest rates.
- SoFi Technologies stock is moving in positive territory. Why are SOFI shares climbing?
SoFi Stock Rises as Oil Prices Drop and Financials Rally
SoFi is rising Monday along with other banks and financial companies. The common thread is oil, which is falling hard. Cheaper fuel leaves households and businesses more room to spend, which could lift demand for loans and lower the odds that borrowers fall behind.
Falling oil also eases inflation fears, and that weakens the case for rates staying high. SoFi is an online bank and lender, so rates and borrower health matter to its results.
December West Texas Intermediate crude dropped approximately 4.21%, to $99.74 a barrel. January Brent fell around 4.28%, to $108.57. Oil funds followed in premarket trading, with UCO down roughly 4.05% at $64.55 and USO down 3.45% at $162.99.
Why Interest Rates Matter for SoFi
Inflation is the sticking point. In September, the Fed’s favored gauge, PCE prices, ran 3.6% above year-ago levels, matching forecasts and topping August’s 3.4%. Core prices, which strip out food and energy, rose 3.1% over the year after rising 3.0% before. Prices gained 0.5% in the month overall and 0.3% in the core measure, both as expected.
The Fed left rates at 3.75% to 4.00% on Wednesday after hiking in September. Another quarter-point hike on Dec. 9 looked likely, with CME’s FedWatch tool showing 83% odds shortly before Thursday’s data. A day earlier the figure was 84.2%, a week earlier 73.3% and a month earlier 49.4%. Those odds predate Monday’s oil drop.
Economic Data and Treasury Yields Set the Backdrop
Growth picked up in the third quarter. The economy expanded at a 3.4% annual rate, beating the 3.2% economists expected and the 2.2% rate of the prior quarter. Inflation-adjusted consumer spending rose 3.8%, matching that earlier pace.
Treasury investors shrugged at the numbers. The 10-year yield held at 5.01%, the 2-year yield crept up to 4.70% and the 30-year yield stayed at 5.33%.
SOFI Shares Are Climbing
SOFI Price Action: SoFi shares were up 1.13% at $16.95 at the time of publication on Monday, according to Benzinga Pro.
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