Amazon sell-off pushes market cap below $1 trillion for first time since April 2020 (1 min read)
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Amazon stocks dropped another 5.9% on Tuesday after falling for five straight days. It closed at their lowest price since April 2020, wiping most of the gains made during the pandemic surge. The recent sell-off was triggered after Amazon gave a disappointing Q4 forecast and expects sales growth to be lower in the coming holiday season. Similar to other big tech peers, Amazon has struggled this year from economic slowdown. The company has been forced to scale back after expanding dramatically during the pandemic. So far this year, their stocks dropped 43% and is on track for the worst year since 2008 when it plunged 45%.

Uber stock pops 11% on revenue beat, strong guidance (3 min read)
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Uber reported a third quarter loss but beat the estimates on revenue with a 72% increase from last year. The company said reopening from lockdowns had benefited them as riders began to take more trips which boosted their mobility segment and surpassed the Eats delivery business that was heavily relied on during the pandemic. They also expect bookings to grow from 23% to 27% year-over-year in the next quarter. Shares of Uber closed 11% higher on Tuesday but were still down more than 30% this year. The recent stock tumble was due to a new proposal on reclassifying gig workers.

Job openings surged in September despite Fed efforts to cool labor market (2 min read)
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The recent JOLTS report shows that job openings continued to surge in September and were at 10.72 million, well above the estimate of 9.85 million. It means that there are about 1.9 job openings for every available worker. The disparity has fueled the increase in wages and the employment cost index. As the Fed watches JOLTS report closely for indication of the labor market, it is unlikely they will pivot from the 0.75% rate hike decision on Wednesday. However, a positive news is that the ISM manufacturing data in September are showing signs of weakened inflation.

Australia central bank sticks with slower rate hikes, raises inflation forecast (4 min read)
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Australia’s central bank continues with a slower pace of rate increase and raised the key rate by another 0.25% on Tuesday. The current rate is at 2.85% after seven rate hikes this year. It surprised many in the markets when the central bank reduced the rate hike to 0.25% last month after consecutively increasing it at 0.5%. Australia’s inflation is forecasted to peak around 8% this year and slow to 3% by 2024. The central bank said more rate hikes are needed to bring inflation down but expects to be lighter at 0.25% going forward as they have seen how drastic tightening were affecting consumer spending amid global uncertainty.

Direct Indexing May Offer ETF Alternative (2 min read)

Morningstar wealth has launched a direct indexing service that allows investors to buy stocks that make up an index. Direct indexing has grown in popularity in recent years as it gives investors more control over their indexing strategies. It is projected to outpace the growth of ETFs in the next five years. More than 60% of financial advisors have used or are considering using this service. Morningstar’s new launch came after Fidelity Investments, Vanguard, and Blackrock announced offering similar services to their clients.

Portfolio-shielding active ETFs struggle to gain ground (4 min read)

Non-transparent ETF is a hybrid of a mutual fund and an ETF. It has struggled to raise assets since the approval by regulators two years ago. It’s only about 1.5% of the active ETF market and the growth rates have severely lagged active ETFs. This hybrid structure was created due to active managers' concerns on rivals copying their strategies but so far it had underperformed the typical transparent active ETFs. Experts said the main challenge is that investors have already embraced the transparency feature of an ETF and removing it now is close to impossible.

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Thomas

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