OPEC cuts 2022, 2023 oil demand growth view as economy slows (3 min read)
OPEC cut its 2022 forecast for growth in global oil demand to 2.7% from 3.1%. The lower forecast was due to the slowing economies around the world, zero-Covid lockdowns in China, and high inflation. The forecast for 2023 was also lowered but still expects the demand to be higher than the pre-pandemics in 2019. The revised forecast added some context to the large output cut OPEC+ announced last week. However, the output cut last week was at 2 million barrels per day, which is still much larger than the difference in the adjusted lower demand.
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PepsiCo hikes forecast after higher pricing helps boost revenue (2 min read)
Shares of PepsiCo jumped 4% on Wednesday after reporting Q3 results better than expectations and hiked its forecast for the year. Their revenue rose 9% higher than a year ago despite volume declines in some of the company’s units. The increase in revenues were mainly from the sales in the summer driven by impulse purchases in products that have a higher price per liter. PepsiCo said they were also accelerating on its cost management initiatives which includes using smaller sizes for its variety packs, to combat rising costs this year.
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AMC Entertainment struggles with falling stock, high debt load and light blockbuster schedule (5 min read)
AMC stocks have fallen about 80% this year and reached a new 52-weeks low on Wednesday. The company sits on a massive debt and was almost at bankruptcy in 2021 until their shares turned into a meme stock and gave them time to search for more capital. AMC released “APE” preferred shares earlier this year in an effort to raise assets to pay down its debt but received backlash for diluting its shares. They continue to struggle with sales due to the lack of blockbusters and people preferring streaming services at home. AMC has not posted a single profit in the last several quarters.
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Will Rising Demand Breathe Life Into Bond ETFs? (4 min read)
Fixed income ETFs have always been seen as an afterthought which is the reason for the lack of product innovation in this space. However, the recent economy had investors taking a closer look into this asset class. Most fixed income ETFs are typically passive bond indexes and do not have the diversity and creativity that you see in equity ETFs. As the demand for fixed income ETFs continues to grow, firms are starting to get creative with their fixed income products. Examples of the latest innovative fixed income ETFs launched are available in the article.
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Victory Capital Launches ETF Mirroring US Sector Strategy (1 min read)
The VictoryShares WestEnd U.S. Sector ETF (MODL) was launched on Wednesday and this ETF focuses on active sector selections. It is actively managed and follows a proprietary model that aims to select and weight sectors that perform best throughout different economic cycles. It will allocate in four to six sectors at any given time with no single sector having exposure more than 35% of the overall portfolio. Currently healthcare and technology are the two largest sectors comprising 29.20% and 26.42% respectively in the portfolio.
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8 Ways to Find Businesses Worth Investing In (3 min read)
Before investing in a stock, it might be helpful to review their prospectus. A prospectus can provide the information you need to determine whether that stock is a suitable investment for you. Here are eight factors to focus on when looking into a prospectus. 1) Earnings growth - did earnings increase or have they been steady? 2) Competition - how does the company compare with the overall industry? 3) Stability - does it perform inconsistently and outside of general market patterns? 4) Management - review the management team and see if their backgrounds align with the business. 5) Debt-to-equity ratio - see how much debt the company carries compared to its equity. 6) Price-to-earnings (P/E) ratio - compare the P/E ratio with competitors to see if you are paying more or less for per-share earnings. 7) Dividends - make sure it is not too high because it means the company is not reinvesting back into the business. 8) Scalability - Does the company have room for growth?
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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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