Today's Scoop:

Hey friends, last day to snag a 20% discount at the Scoop Shop!

Here’s what you need to know…

1. Policymakers say the economy is doing perfectly OK.

2. Service industries are doing much better than manufacturing.

3. Expensive mortgage rates have stalled home buying.

Check out more newsletter recommendations from Beehiiv:

S&P 500: 4,465.48
1Mo: -1% | 1Yr: +12% | 5Yr: +56%

The market wavered lower today as decent news about a mediocre economy got investors worried about inflation picking back up. Basically, any good news is bad news for stocks right now.

Policymakers said the economy saw modest growth in July and August. The Federal Reserve’s Beige Book report indicated a slowdown in consumer spending on most things except travel as Americans use up the last of their excess savings. Manufacturing supply chains have cleared up. There’s a growing shortage of affordable housing. Banks are still lending at a decent pace and not seeing worrisome delinquencies yet.

The services industry is doing much better than manufacturing as consumers cut back on buying stuff and focus their budgets on travel, dining, and experiences. The Institute for Supply Management reported a surprising surge in business activity across services in August, which comprise two-thirds of the economy. ISM reported a contraction in the manufacturing sector for the tenth straight month, though factory orders look to be bottoming.

Expensive mortgage rates have stalled the housing market. The Mortgage Bankers Association reported the number of mortgage filings to purchase a new home fell 2% last week, down 28% from a year ago and the lowest level in 27 years. The average 30-year mortgage sits near multi-decade highs at 7.21%. [🤓]

Click to dig in & vote your reaction, see how others feel

• Apple iPhones banned by the Chinese government

• Goldman exec sues over bullying culture and mental breakdown

• Warner Bros profit hurt by landmark Hollywood strike

• Coinbase launches institutional lending and future trading

• Meta bans more news on Facebook

(These links only work for 24 hours while the story is live)

How do mortgage rates work?

Mortgage rates can be fixed or floating. A fixed-rate means you've locked in that percentage of the loan you need to pay back in interest each month, and it won't increase. A floating rate is usually tied to the movement of a benchmark interest rate. So as broader interest rates rise, your rate increases, and you pay more each month.

Whether fixed or floating, banks determine their mortgage rates by taking a baseline low-risk lending rate like US Treasury bonds, then marking it up based on how risky you are as a borrower. So banks say, "OK, we can lend to the US Government (considered no default risk) for ten years at 4% interest. You're more likely to default than the US Government, so you will need to pay us higher interest to make it worth the risk, maybe 7%." As baseline rates rise, your rates will rise.

Use our vetted resources to level up your financial wellness. View & compare more tools.

Hidden Opportunities: Volatile markets are a good time to hunt for new investments if you have extra savings. Find new companies, then follow their scoops. We’ve found a lot of interesting picks from Motley Fool, and it’s all written in digestible language for any experience level.

Right now, Motley Fool’s offering their bundle of stock research for $300 off. We’ve hesitated on the pricing before but found these bundles pay for themselves in our portfolio. Learn more and get $300 off here.