Roku Beats Q3 Estimates, Stock Plummets on Weak Outlook (4 min read)
Shares of Roku dropped more than 17% in extended trading after the company gave a weak Q4 guidance. Roku reported Q3 earnings and revenue that are better than analysts expected. Overall revenue was 12% higher year-over-year and the total streaming hours was also up 21% during the same period. However, with economic uncertainty and the likelihood of companies canceling ad budgets, Roku expects to see a decline in revenues for the holiday season and projected lower earnings for Q4. They believe the slowdown should be temporary but it's hard to predict when it will stabilize or rebound.
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Boeing forecasts jump in aircraft deliveries, up to $5 billion in free cash flow next year (1 min read)
Boeing plans on ramping up the production and deliveries of new aircraft and forecasted a higher cash flow in 2023. Supply chain issues and labor shortages had affected their abilities to deliver planes. Boeing delivered 375 planes this year but expects to up that number to between 400 and 450 planes next year. The company also forecast free cash flow between $3 billion and $5 billion next year which is lower than what analysts expected, but still more than doubled the free cash flow generated this year. Shares of Boeing rose 2.8% after releasing the forecast.
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Fed delivers big rate hike, signals possible smaller increases ahead (4 min read)
The Fed approved the fourth consecutive rate hike for another 0.75% increase. This brings the key rate to a target range of 3.75% - 4%, the highest since 2008. Fed chairman Jerome Powell said the peak rate that was expected from the last meeting is now higher. He dismissed the idea that rate hikes will be paused any time soon but it may come at a slower pace which will be discussed in the next meeting or two. As the only anticipation is for a slower pace, economists are hoping that the rate hike in December will be at 0.5% and follow by lower hikes in 2023.
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Private payrolls rose 239,000 in October, better than expected, while wages increased 7.7%, ADP says (2 min read)
Private payroll growth remained strong in October while the worker pay rose as well. The number of jobs added was higher than estimated and the previous month. Most of the job gains were in the services-related industries and the losses were in goods-producing sectors. ADP’s chief economist said goods-producers are pulling back because they are sensitive to interest rates. While this is a sign that the Fed’s rate hikes are starting to take effect, it's only affecting certain sectors in the labor market.
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Goldman Sachs’ ETF Advisory Debuts as Demand Jumps (2 min read)
Goldman Sachs started a new advisory service called the ETF Accelerator that advises asset management clients on how to launch and operate ETFs. This new service was created because of the increasing demand for the product. ETFs inflow reached a new record high last month, bringing in $91.5 billion. So far this year, 319 ETFs were launched, nearing the 334 launched in 2021. Goldman Sachs said the advisory service is designed to help fund companies that want to be a part of the ETF growth but don’t have the expertise or infrastructure to do so.
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5 Sector ETFs That Could Flourish in November (5 min read)
The US markets made a huge comeback in October after dropping for two consecutive months. All the major indexes were in the positives last month with the Dow having its best month since 1976. Some historical data suggest that the trend may continue into this month. November is typically the best month of the year and the start of a seasonality change for US equities. Cyclical sectors like consumer discretionary, industrials, financials, energy and materials tend to benefit the most. For those expecting bullishness to continue this month, this article highlighted an ETF choice for each of the five sectors.
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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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