Rent the Runway rebounds as consumers shop for bargains (2 min read)
Rent the Runway, a subscription clothing service, reported its Q3 financials and posted a shocking 30% increase in sales for the quarter. Their stocks jumped more than 60% after the news, but this year it is still down nearly 75%. The company’s financial health is not in the best shape but consumer demand seems to have held up amid retail slowdown. A Goldman Sachs analyst gave a surprising price target of $6 for the stock when it is currently trading around $2.18.
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Lululemon offers weak holiday quarter guidance (2 min read)
Lululemon posted higher than estimated quarterly sales and profits for the third quarter but gave a softer outlook for the holiday season. The company expects the revenue for Q4 and the full year to be lower than they had forecasted. Shares of Lululemon dropped 7% in extended trading after the news, but it is still doing relatively well this year. It dropped just about 4% year-to-date, far outperforms the S&P 500 which lost nearly 17% during the same period.
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S&P 500, Nasdaq snap losing streaks after jobless claims rise (3 min read)
Major US indexes snapped a five day losing streak on Thursday after the latest data on jobless claims gave hopes the pace of rate hike could slow soon. It showed those claims had continued to rise and reached a 10-month high. The US stock markets started sliding last Friday when the higher than expected November job growth and increased wages spurred fear that the Fed might stick to its aggressive rate hikes. Recent downbeat economic views from some top company executives also added pressures to the markets.
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Ray Dalio warns stock market hasn't priced in rate hikes impact (2 min read)
Ray Dalio had previously warned that higher interest rates could trigger another 20% decline in the stock markets. He reiterated again this week that the equity market is not yet priced in on the full impact of the Fed’s rate hikes and could be in store for a sharp correction in 2023. Ray believes that for inflation to settle anywhere near 4%, the Fed will need to raise interest rates to a range approaching 6%, which will be very harmful and damaging to the economy.
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Gambling ETFs poised for growth in a postpandemic era (4 min read)
The gambling industry has been steadily recovering in the recent year as Covid rules have softened. New technologies have also made it more accessible to the public, increasing opportunities for online gambling. This article highlighted the Roundhill Sports Betting and iGaming ETF (BETZ) and the VanEck Gaming ETF (BJK) as a way to capture this potential growth. It analyzes their holdings to identify some of the risks and rewards it might offer.
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What Is a Leveraged ETF? (5 min read)
While leveraged ETFs were designed to maximize your investment returns, they are considered much riskier than the traditional ETFs. This article goes in detail on what leveraged ETFs are, how the strategy works, and the pros and cons of using it. It also explains how leveraged ETFs are different from some of the ETFs that might seem similar like inverse leveraged ETFs and single-stock leveraged ETFs.
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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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