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Good Morning!
After receiving some feedbacks, I've decided to try a new layout for the newsletter. "Business & Markets" will be split into two segments with individual stocks or companies related news in "Business & Stocks" and general markets or economy related news in "Markets & Economy". I also removed "Investing & Finance" for now but will be adding it back if I come across interesting articles on that topic!
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Tesla comes in light on revenue, beats on earnings (2 min read)
Tesla reported Q3 results that are close to what analysts had expected. The company’s net income reached $3.33 billion in the third quarter. The same time last year it had only reported $1.62 billion in profits. Revenue was at $21.45 billion with a big part of it from automotive sales. Cost also went up in line with the increase in sales. A concern from the Q3 release was about a bottleneck in transportation capacity in delivering new cars as it was transitioning to a smoother delivery pace. Shares of Tesla were down 4% in the after-market following the Q3 results.
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SPAC liquidations top $12 billion this year as sponsors grapple with tough market, new buyback tax (2 min read)
SPACs stand for special purpose acquisition companies that are used to raise capital through an IPO and merge with a private company afterwards to take it public. Demand for SPACs are often early-stage companies but has fallen under current market conditions. There is also a new buyback tax under the Inflation Reduction Act that gives a 1% exercise tax to SPAC sponsors starting in 2023 which forces many to close up shop before the year-end. A total of 27 SPAC deals, worth $12 billion, have been liquidated this year.
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U.S. to release oil reserves as Biden tackles high pump prices (4 min read)
US President Joe Biden plans on releasing an additional 15 million barrels of oil from the reserves to help keep oil prices low. He also asked US energy companies to stop using profits to buy back stock, and to invest in production instead. The US had already announced a release of 180 million barrels of oil earlier this year. The Strategic Petroleum Reserves is currently about half full and at its lowest level since 1984. The news faced some criticism as the reserves are being tapped into for political reasons and not for an emergency like it was intended.
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Jeff Bezos is the latest to warn on the economy, saying it’s time to ‘batten down the hatches’ (2 min read)
The CEO of Goldman Sachs made a comment recently that suggested a recession is likely to come and investors should prepare accordingly. Jeff Bezos echoed that comment shortly after saying “the probabilities in this economy tell you to batten down the hatches”. Jeff is one of the many latest corporate leaders to comment about the current economy but the signals have been a mixed bag. The CEO of JPMorgan Chase predicts a recession in the next six months, meanwhile the Bank of America CEO said credit card data and related information show that consumer spending remains strong.
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ESG Growth Defies Pushbacks: Surveys (4 min read)
ESG investing products have been facing backlashes from the “anti-woke” investment advocates. ESG stocks underperformed the non-ESG stocks this year and the SEC looking to tighten up the disclosure requirements also played a huge role in pushing against ESG. However, recent surveys show that the demand for ESG continues to grow with most respondents saying they implemented ESG in their portfolios and will increase the allocation in the future. One survey also estimated that the AUM will double to $10.5 trillion by 2026.
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2 Mutual Funds Are Now FundX ETFs (2 min read)
FundX had converted two of their fund-of-funds mutual funds into ETFs. They are the FundX ETF (XCOR) and the FundX Aggressive ETF (XNAV). FundX’s products typically invest in other ETFs or mutual funds and aim to select the best-in-class within a category. XCOR holds a portfolio of core-equity ETFs with the intention for exposure to a broader market. XNAV concentrates on ETFs that are considered aggressive such as small, midcap, commodities, or real estate. Both ETFs have a relatively high turnover rate and management fee.
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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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