Wall Street banks' profits slide as economic clouds loom, some beat forecasts (5 min read)
The largest banks on Wall Street reported a drop in profits for Q3 as they braced for a weaker economy but some still managed to beat estimates. Most banks saw the biggest decline in their investment banking business. This is the first quarter the banks experienced the full effect of the Fed’s rate hike. JPMorgan stood out with profits declining much lower than expected and a net interest income rose by 34% as they took advantage of rising rates. Bank stocks still went up by 2% to 4% as their profit falls were not as deep as feared.
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U.S. grocer Kroger carts away Albertsons for $25 billion but faces antitrust test (4 min read)
Kroger will be buying Albertson in a $25 billion deal. The mega merger between the two will enhance their customer base and distributions, giving them an edge over price negotiation with suppliers. This will also put them in a better position to compete with the consumer giant Walmart on prices. However, the FTC could challenge this merge deal under the antitrust law. The companies plan on divesting some of their stores in an attempt to ease that concern. Kroger will pay $34.10 for each Albertson’s share and is required to pay $600 million if the deal is terminated.
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Netflix ad tier: Analysts bullish as streaming giant unveils key details (4 min read)
Shares of Netflix rose more than 5% after investors received more insights on the company’s upcoming advertising tier. It will be the lowest tier that costs $6.99 per month and runs an average of 4 to 5 minutes of ads an hour. It is set to launch in the US on Nov 3, about a month earlier than Disney’s version of advertising tier release. The new tier will roll out in several stages in 12 other countries. Many analysts increased their price target on the stock believing that the advertising tier will boost Netflix’s revenue and profitability in the long term.
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Most Puzzling Stock Market Term on the Web? ‘ETF’ (1 min read)
According to recent research, the abbreviation “ETF” was the most searched financial term on google. The growing popularity may be one of the reasons why the term was looked up so often. ETF assets have grown by 85% in the last five years, from $3.4 trillion in 2017 to $5.95 trillion currently. The term ETF stands for exchange-traded fund and a common misconception is that an ETF only tracks an index. Although most ETFs are index-based strategies, it can also be actively-managed. ETFs are essentially funds that trades on the exchange like a stock does.
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BlackRock’s iShares ETF Unit Shines in Rough Third Quarter (1 min read)
BlackRock’s earnings and revenue slid in Q3 and were lower than expected. Their revenue dropped by 15% and lost about 16% of assets under management. However, their ETF business, iShares, provided a bit of relief. iShares’ ETFs had a net inflows of $22 billion in the third quarter. Although it is not as much as the inflows from the same time last year, the fees collected were more than expected. Majority of the inflows were in fixed income ETFs as investors turned to this asset class in a volatile market with high inflation and interest rates.
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How To Invest To Beat Inflation (7 min read)
Recent data shows inflation remains far higher than the Fed’s 2% target and will most likely stay elevated for a while. Until it comes back down, there are several investment assets that can help investors hedge against inflation. Treasury Inflation Protected Securities (TIPS) are treasury securities that pay a margin above the rate of inflation to ensure your investments will always be slightly higher. Gold is one of the oldest methods in history as a store of value and there are a number of ways you can purchase it. Other precious metals like silver or platinum can also be used to combat inflation but they tend to be more volatile than gold. Commodities are another way to hold your investment value because agriculture such as wheat, wool, and soybeans will move closely alongside inflation. More on the pros and cons of each investment asset are 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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