OPEC+ agrees deep oil production cuts, Biden calls it shortsighted (3 min read)
OPEC+ will cut oil production by 2 million barrels per day and said it is necessary due to higher interest rates in the West and weaker global economy. The real cut is estimated to be around a million barrels instead because it is based on existing baseline figures and OPEC+ already fell short of its oil output target in August. The lower supplies may potentially recover the plunging oil prices. There were also criticism OPEC+ colluding with Russia to bring prices higher but they dismissed it and said those criticizing are driven by wealth arrogance.
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Businesses added 208,000 jobs in September, better than expected, ADP reports (2 min read)
Recent ADP report shows private companies added more jobs than expected in September. It was estimated to be a 200,000 increase in jobs but it totaled 208,000 instead for the month. Most industries saw an increase in jobs except for manufacturing, natural resources, and mining. There were also another month of sizable pay hikes, with annual pay trending up 7.8% from the same time last year. The Fed officials are watching the job numbers closely as they decide on the level of rate hikes to stem inflation.
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Apple Suppliers Slowly Boosting US Presence To Cut China Reliance (2 min read)
Apple released a supplier list for fiscal year 2021 and it shows 48 of the company’s 180 suppliers have operations in the US. There were only 25 suppliers with US presence just a year ago. It also revealed that their bigger suppliers such as Qualcomm, Taiwan Semiconductor Manufacturing, Foxconn, and Sony Group have been adding production sites in the US as well. China is still dominating Apple’s supply chain with 150 suppliers having facilities there, but this supplier list shows Apple’s effort to diversify productions away from China.
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Vanguard to Outgain BlackRock for Third Straight Year (2 min read)
Vanguard has pulled in more assets than BlackRock last quarter and is on pace to outgain for the third straight year. Vanguard currently has $1.76 trillion in US ETF assets while BlackRock has $2.03 trillion. Vanguard will likely take BlackRock’s place as the largest asset manager if the current trend persists. BlackRock’s ETFs are cheap and comprehensive but Vanguard has a more investor-friendly reputation. Regardless who wins the race, it will still benefit investors as fees will continue to trend downwards and more innovative product launches to attract assets.
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Most Actively Traded ETFs (3 min read)
ETFs are often the most actively traded securities on the US exchanges. For example, SPY traded 190.1 million shares on average the last 30 days while the most actively traded stock, General Electric Co, traded only 107 million during the same period. Along with SPY, some of the most traded ETFs are QQQ, EEM, XLF, and IWM. The heavy traded ETFs are usually not the cheapest or with the most AUM, but are often old and established with higher liquidities. This article has the full list of most traded ETFs in the last 30 day by volume and dollar volume.
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How Do Fractional Shares Work? (5 min read)
Fractional shares, as the name suggested, are a portion of a whole share. It allows you to buy expensive stocks or ETFs for as little as one dollar. Until recent years, it was almost impossible to own less than a full share of a stock. Most online brokerage platforms now offer fractional shares to clients. Some investors prefer fractional shares because you can buy stocks or ETFs with less money and it’s easier to dollar cost average as you will be buying the same dollar amount every time. However, not all stocks or ETFs have fractional shares and it might have less liquidity since it is only a portion of a full share. Some brokerages might not give shareholder rights on fractional shares or even allow transferring it to another broker. As the requirements vary for each brokerage platform, it is best to check prior to making a purchase.
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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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