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Apple stock closes out its best day since 2020 (2 min read)
Apple stock rose 7.5% after posting a better than expected Q3 earnings. Although the results were only slightly higher than expectations, it was still noteworthy since the company continues to grow sales and kept margins high amid tough macroeconomic conditions. Apple’s sales grew by 8% and their MacBook business grew by 25%, while sales from other brands around the world have dropped. This shows that demand for their products remains strong. Shares of Apple’s big tech peers such as Meta, Google, Amazon, and Microsoft have all plunged after reporting weaker results.
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‘Shock and awe’ cost cuts rocket Intel stock up more than 10% to best day since March 2020 (5 min read)
Shares of Intel Corp had the best one-day rally on Friday since the beginning of the pandemic. Despite poor earnings from the previous quarter and a weak forecast, their stock still surged more than 10% that was driven by the company’s announcement on cutting costs. Intel said they have been addressing costs aggressively as the demand for chips has weakened. They pledged up to $10 billion in cost cuts by the end of 2025 including layoffs. Some analysts see this as a big positive because it can help preserve book values and stabilize their business financials.
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Dow closes 800 points higher on Friday, registers fourth straight week of gains (2 min read)
US stocks rise sharply on Friday despite Amazon and Meta shares tumbling after reporting a weak Q3. The Dow, S&P 500 and Nasdaq were up 2.6%, 2.5% and 2.9% respectively. It is the fourth positive week for the Dow and is on track for its best month since Jan 1976. The week was volatile as most big tech stocks reported weak results. However, data that came later in the week showed inflation may be cooling off which gave hopes that the Fed might ease the next rate hike. Positive performers in tech like Apple and Intel, and oil giants like Chevron and Exxon Mobil also helped boost the market.
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BOJ defies global tightening trend, sticks to ultra-low rates (3 min read)
The Bank of Japan decided to keep their key interest rate at -0.1% on Friday and remained an outlier among major central banks as they have been raising rates rapidly. Japan’s bond yield and the yen dropped to their lows after the announcement. The decision to keep the rates ultra-low is to help stimulate growth in the economy. The Bank of Japan said they will not use rate hikes as a tool to prevent the yen and yield from falling. They have announced plans to increase the frequency of bond buying next month to defend its negative-rate policy.
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First Trust Adds Defense ETF Amid Global Unrest (2 min read)
First Trust recently launched the First Trust Indxx Aerospace & Defense ETF (MISL) which tracks the Indxx US Aerospace & Defense Index. The index gained 13% so far this quarter and has outperformed the S&P 500 as threats of war are on the rise globally. For companies to be included in the index, it must derive at least 50% of its revenue from business activities related to aerospace and defense. Current top holdings include Lockheed Martin Corp., General Dynamics Corp. and Northrop Grumman Corp. and they make up for about 26% of the index.
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'Buffer' ETFs Post 80% Surge In Assets As Haven In Bear Market (3 min read)
Buffer funds have surged 80% in assets to $16 billion so far this year. Buffer funds use options to provide downside protection up to a certain amount while also limiting the upside. An example is the Innovator US Equity Power Buffer ETF - October (POCT) which gives investors a buffer on the first 15% losses in the S&P 500 but also limits the gains at 20%. For the full protection that it offers, investors will need to stay invested for the entire fund target duration, typically a year. The growth in buffer funds shows that investors are increasingly willing to give up potential gains for greater protection amid market uncertainty.
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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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