Facebook scrambles to escape stock’s death spiral as users flee, sales drop (9 min read)
Meta has lost two-third of its value since the peak in September 2021 and became one of the worst stocks on the S&P 500 this year. There has been a chain of bad news since Facebook’s name changed to Meta. Losing users and advertisers resulted in the company’s consecutive quarterly revenue drop. Meta has been mostly putting their focus on the Metaverse in hopes it will reach a billion people in the next decade. Investors are questioning this new core business as they continue to sell their stocks and create a downward pressure that looks like a death spiral. However, if Meta is right about the future of their company, then the stock price today will look like the discount of the decade 10 years from now.
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Carnival shares shed 23% on ballooning costs, dragging cruise stocks lower (2 min read)
Shares of Carnival dropped 23% and reached a new 52-week low. Their third-quarter earnings revealed a net loss of $700 million with operating cost and expenses at $3.4 billion, more than doubled compared to same time last year. The higher costs were driven by inflation. Despite lower prices and governments relaxed on Covid restrictions, the company projected the bookings in the fourth quarter below 2019 levels. Other cruise stocks also fell on Friday following the news.
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Dow tumbles 500 points on Friday to end September down nearly 9% (1 min read)
The Dow closed below 29,000 for the first time since November 2020. Other major indexes also closed out a terrible month. For September, the Dow is down 8%, the S&P 500 is down 9.3%, and the Nasdaq is down 10.5%. An inflation report was also released on Friday that showed prices continued to increase at a rapid pace. Market volatility with a downward bias is expected to continue as earnings season is coming and the Fed is firm on keeping interest rates higher for longer.
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More Than $11 Billion Exits Hedge Funds in August (2 min read)
Hedge funds had negative outflows of $11.66 billion in August for three consecutive months. Long/short equity, credit and macro-based hedge fund strategies have had the most redemptions this year. The only strategy that had inflows were multi-strategy funds which shows investors prefer single allocation to a diversified set of strategies instead of picking a single-strategy. The hedge fund industry has been losing assets in recent years but still holds $3.49 trillion in assets with average annual returns of 9.29% in 2019, 2020 and 2021.
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iShares Dips Its Toe in the Metaverse (2 min read)
BlackRock’s iShares has filed a prospectus to launch a metaverse ETF. This ETF will track a Morningstar index that includes companies based on these six key themes: metaverse platforms; wearable technology and VR/AR; enhanced social media; immersive gaming; 3D rendering and simulation software; and digital assets and payments. There are currently seven metaverse ETFs and the majority have less than $12 million in assets. This might suggest either investors are not interested in this space or there’s room for a big player to come claim the spot.
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Best Online Brokers Of 2022 (3 min read)
Choosing the right online broker can be challenging for some investors. You want to make sure the services and platform from the broker matches your investing style and objectives. This article provides a list of online brokers that are best for different types of users. They tested the leading online trading platforms in the US over a six month period and put together the online broker best for in these six categories - beginners, traders, mobile app, option trading, customer service, and best overall. It includes the pros and cons for each selection and why it was picked for that category.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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