Elon Musk Casts Uncertainty Around Tesla (4 min read)
Tesla stocks fell almost 4% after Elon Musk agreed to uphold the twitter buyout deal again. Investors are concerned that he will need to sell a huge amount of Tesla shares like he did in August to facilitate this deal. Soaring interest rates had put pressures on the banks that had pledged to help with the financing. Various experts calculated that Elon will still need another $6 billion of funding. Tesla stocks will likely drop if he does end up selling more shares of it. There were also concerns that Twitter is going to distract Elon from managing Tesla’s business.
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Chip stocks slide as Samsung, AMD expect steep fall in demand (2 min read)
Shares of Samsung and AMD were down and dragged other chip stocks lower after profit misses and a gloomy forecast. The forecast sparked fear that demand for chips could be worse than expected. High inflations and interest rates, geopolitical tensions, and zero-Covid lockdowns in China have caused weak demands in the chip sectors. PC and smartphone makers are holding off on new purchases and using existing inventories instead which further weakens the demand. Major US chip makers have lost about a third of their value this year.
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Unemployment rate falls to 3.5% in September, payrolls rise by 263,000 as job market stays strong (3 min read)
The September job report shows the labor market remains strong despite the Fed’s effort to slow the economy down. The job growth fell short in September, nonfarm payrolls increased by only 263,000 compared to the estimate of 275,000. The unemployment rate on the other hand was at 3.5%, lower than the forecast of 3.7%, as the labor force participation shrinks. Stock futures dropped and government bond yields rose after the job report was released as investors anticipated another 0.75% rate increase in November.
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Best S&P 500 ETFs Of 2022 (8 min read)
S&P 500 is one of the most widely known indexes and many funds aim to replicate this index. SPDR’s SPY was the first S&P 500 fund launched in the US and remains the largest ETF in the world by AUM size. Since then various providers have launched their own version of S&P 500 ETFs. This article includes the top six S&P 500 ETFs that offered a combination of low fees and performance that closely matched or exceeded the index. Four ETFs on this list aim to mimic the index itself before fees while the other two track an alternate version of the S&P 500. Ticker and details of each ETF are available in the article.
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Turkey's Inflation Is Wild. Markets Are Surging (2 min read)
The iShares MSCI Turkey ETF (TUR) increased more than 34% this year and is currently the best-performing total market country ETF. Turkey’s inflation is at 80% but their central banks decided to aggressively cut interest rates which downgraded its credit to high risk. A possible reason for this mysterious market surge is that investors are buying Turkish stocks as they find protection from the effects of inflation in the country’s rate cuts. However, instead of gaining assets for the stellar performance, TUR had an outflow of roughly $72 million this year.
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Investing: 4 Ways to Determine Your Risk Tolerance (3 min read)
Risk tolerance falls into three categories: aggressive, moderate, and conservative. These four questions can help you determine in which category you belong to. 1) What are my goals? Figure out how much you need to achieve your financial goal then you will have a sense of how aggressive you need to be to attain that amount of money. 2) What is my time frame? The amount of risk to take is based on your time horizons. Generally, the more time you have to invest, the more risk you can tolerate and vice versa. 3) Can I handle short-term loss? If your portfolio declines in value causes you to panic, then aggressive investing might not be suitable for you. 4) Do I have an emergency fund? High liquidity in your emergency fund may indicate you’re risk-averse while low liquidity may describe you as moderate. More detailed breakdowns of each question is available in the article.
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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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