CPI Inflation Data Hot, But Dow Jones Roars Back From Bear Lows As Treasury Yields Slash Gains (3 min read)
The core CPI and inflation rate that the Fed pays close attention to were higher than expected in September. Core inflation rate went up by 0.3% while the core CPI advanced by 0.6%. Based on the CPI inflation report, it’s most likely the Fed will raise the key rate by another 0.75% in both November and December which would bring the interest rate to 4.25% - 4.5% range by year end. Stock markets took a dive in the early morning following the report, but turned positive into market closed. Treasury yields surged on the expected Fed rate hike decisions.
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Digital World Acquisition Corp shares jump after Google Play Store approves Trump’s Truth Social (2 min read)
Shares of Digital World Acquisition Corp (DWAC), the SPAC set to take Truth Media public, surged more than 14% after the Truth Social app was approved to be on the Google Play Store. The app has agreed to enforce moderation in contents which was the reason it was barred from the Google Play Store previously. Some investors have pulled funding from DWAC after it missed a key deadline in September. DWAC is currently pushing to extend the merger deadline set on Dec 8. Without an extension or completion of the merger, the company will liquidate on that date.
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Delta forecasts another profit after summer boom drives record revenue (3 min read)
Delta Air Lines was the first US carrier to report Q3 results and it showed a net income of $695 million on a record revenue. It was mostly driven by the surge in summer travels on higher fares. The company expects to post another profit in Q4 with revenues 5% to 9% higher than the same period in 2019. They expect capacity to be 92% restored to 2019 levels in Q4 and are aiming for a full recovery by next summer. Other airlines have also announced similar positive forecasts and expectations recently. Delta shares were up more than 5% after the news.
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Checking in on Factor ETF Performance (5 min read)
Factor ETFs are one of the most popular strategies you see on the market. Factor is simply an area of characteristic the investment focuses on. It can be value, low size, momentum, low volatility, dividend yield, etc. Although there are many factors that exist, only a handful of them managed to outperform the broader market. This article compares the largest ETFs in the most popular factors (Value, Growth, and Dividend) with their plain vanilla counterparts. Some did outperform but it is very dependent on the time horizon and how the ETF captures the factor.
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Invesco Adds ‘Future Gen’ to QQQ Suite (2 min read)
Invesco launched the Nasdaq Future Gen 200 ETF (QQQS) which tracks 200 smaller cap non-financial companies on the Nasdaq exchange. QQQS is a new addition to Invesco’s innovation suite of funds which includes QQQ and QQQM that tracks the Nasdaq 100, and QQQJ that tracks the 100 non-financial companies just below the Nasdaq 100 by market capitalization. QQQS covers the 200 stocks after excluding QQQM and QQQJ, and the holdings are equally weighted unlike the other funds in the suite.
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How Impact Investing Impacts Investment Choices (5 min read)
Impact investing is a type of thematic investing style where you have a particular focus on an industry or social trend. The focus for impact investing is to aim for a specific positive impact in the world while achieving competitive financial returns. It can be a selection of companies that promote positive changes like reducing human carbon emission, mitigating climate change, or reducing water consumption. It can also be avoiding companies that are considered negative like alcohol, tobacco, or gambling. It is very similar to environmental, social and governance (ESG) investing but ESG has a stronger focus on generating superior returns than creating desirable changes. It can be complicated and time consuming to research companies to execute this investing style so many investors tend to use mutual funds or ETFs designed to follow specific impact investing strategies.
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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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