Snap will lay off 20% of staff, report says (2 min read)
Snap will lay off 20% of the workforce starting on Wednesday, which is about 1000 employees. Their shares slid over 25% recently after a second quarter report release that shows revenue and earnings missing estimates. The disappointing results started a wave of social media companies following with similar below estimates reporting. The social media companies blamed part of the poor results to the weak economy and Apple’s iOS privacy update that made it harder to track users. Snap will not provide guidance this quarter and said it will continue to be challenging.
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Job openings top 11.2 million in July, well above estimate and nearly double the available workers (2 min read)
The Job Openings and Labor Turnover Survey (JOLTS) shows that available jobs in July were about a million more than expected and 200,000 more than the previous month. This indicates that there is still a shortage of workers to available jobs which is an inflationary sign as employers will need to raise compensation to attract workers. Jerome Powell said last month that the US labor market is extremely tight and ongoing rate hikes would likely slow economic growth and soften the labor market condition. However, with signs that job openings are remaining strong, rising rates might not have slowed growth as much as he had imagined.
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Nikola (NKLA) Stock Slumps 9% on Stock Sale News (2 min read)
Nikola’s stock dropped nearly 10% after announcing its plan on issuing up to $400 million in new shares. Nikola said the need to raise additional funding is to combat the increase in labor and material costs. Currently the company only has $529 million available in cash. Another EV company, Lucid, has also announced plans to raise new funds and shortly after the news the stock plummeted 6%. It has been challenging for EV makers as the costs of batteries are rising and the new EV tax credit limiting their sales.
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Buffered Funds Cross $6 Billion in Flows (2 min read)
As market volatility and uncertainty continues, many investors are turning to buffered funds for downside protections which have already attracted $6 billion inflows this year. Buffered funds are built to take less risk on the downside in exchange for limited gains and higher fees. This article uses Innovator U.S. Equity Power Buffer ETF (PJAN) as an example. Year to date, the S&P 500 was down 15% while PJAN was only down 5.7%. These funds only offer protections up to a level and investors can still suffer significant losses if the market continues to fall beyond that.
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Newcomer NEOS Debuts 3 ETFs (1 min read)
NEOS launched a trio of actively managed ETFs. The three new ETFs are S&P 500 High Income ETF (SPYI), Enhanced Income Aggregate Bond ETF (BNDI), and Enhanced Income Cash Alternative ETF (CSHI). They are all option based and provide monthly income. SPYI provides exposure to the S&P 500 index with an option overlays that implements a call spread. The latter two are fixed income ETFs holding mainly one to three months treasury bills with put spread strategies. More details and links to each ETF are available in this article.
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5 Money Challenges You Should Try, According to Reddit (3 min read)
There is a 30 day money challenge in the r/personalfinance subreddit that was created to help users better at managing their money. The challenge requires you to make these 5 changes during the next 30 days - 1) Track all your spendings and categorize them. 2) Pick a category and try to reduce the spending on it. 3) Cook more often at home. 4) Get on top of your credit by disputing any errors or increase your score if possible. 5) Find free activities to participate in your area. If any of these changes gave you positive results, then turning it into habits should be easy after the challenge.
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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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