Dow closes up 550 points, Nasdaq pops more than 3% as strong bank earnings boost volatile market (1 min read)
US stock markets rose sharply from their lows of the year as solid Q3 reports from the banks eased some of investors’ concerns. The S&P 500, Dow, and Nasdaq were up 2.65%, 1.86%, and 3.43% respectively. Entering the third quarter earnings season, most banks have reported better than expected results. Bank of America and Bank of New York Mellon were among the recent banks posting solid Q3 results which sent their stocks up 6% and 5% respectively. The UK announcing a reverse on the tax cuts also played a role in Monday’s market rally.
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Why Is Roblox (RBLX) Stock Soaring Today? (3 min read)
Roblox stock surged 20% on Monday over the news of positive user growth. The gaming platform released its key metric report and revealed an encouraging growth in the number of users. Their daily active users increased to 57.8 million in September, gaining 23% year-over-year , and hours engaged at 4 billion which represents a 16% increase for the year. Their estimated bookings also increased 11% - 15% year-over-year. There were concerns over the demand for the company’s virtual gaming as markets reopened. The report offered hope that the company is well positioned to continue growing and scaling operations.
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The oil market is worried Biden could release another 100 million barrels of crude from strategic reserves, analyst says (1 min read)
Oil investors are worried that the US might flood the market again with more oil from the Strategic Petroleum Reserves. OPEC+ recently declared a cut in oil output by 2 million barrels per day despite the US against that decision. There are speculations that the US might respond with more releases from the reserves to help ease prices. The US had already announced a release of 180 million barrels earlier this year. Although the reserves were intended for emergency supply constraints, it is now being potentially used to keep oil prices low.
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Schwab ETF Unit Hit by Slumping Market in 3Q (1 min read)
Charles Schwab said their fund revenues dropped in the third quarter, driven by investors redeeming assets amid declines in the stock and bond markets. Their fund revenues (including ETFs, mutual funds, and trust funds) fell 10% and lost about 13% of total client assets. Other third party fund companies had also reported a similar loss in revenue and client assets. Investors have been allocating more of their assets into money market funds to take shelter from rising interest rates and high inflation.
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Franklin Templeton ESG ETF Goes Transparent (1 min read)
Franklin Templeton’s only non-transparent ETF, ClearBridge Focus Value ESG ETF (CFCV), will start publishing its holdings by the end of this year. CFCV is the only ActiveShares fund that the company has and it will transition into an ETF on Dec 16. ActiveShares are similar to an ETF where it can trade on the exchange but it does not require a full disclosure of the underlying holdings. The fund’s investment management team and investment objective will remain the same. No formal explanation was given on what spurred the change in fund structure.
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‘The best buying opportunity’: Why now is a good time to invest, according to a stock market historian (3 min read)
A market historian said the current market might be a good entry point for investors to start investing. The market has declined for three consecutive quarters this year. History shows that since 1946, the S&P 500 gained an average of 28.2% in the next five quarters after dropping in the first three quarters of the year. In addition to this, there are two more reasons based on history why now may be a good opportunity. October has historically been a bear market killer and the S&P 500 usually start heading back up during that month. It is also a midterm year and the S&P 500 has a high historic average return that starts after the October of a midterm election year. Regardless of whether or not now is a good entry point, the market will recover and rise over the next decades. If you are a long-term investor, keep investing regularly and dollar cost average so it's guaranteed that you’ll buy more shares when stock prices are low and fewer when they’re high.
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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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