Apple, Amazon and Alphabet stocks fall after mixed holiday quarter results (2 min read)
The holiday quarter earnings from Apple, Amazon and Alphabet missed Wall Street expectations, causing their stocks to drop over 3% in after-hours trading on Thursday. Apple had a rare revenue decline due to a Chinese factory shutdown, Google suffered from increased competition and tighter ad spending, and Amazon's sales growth for the current quarter was forecasted to be slower. The results added to concerns about the tech industry's growth and the global economic uncertainty.
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Ford posts ugly fourth quarter, full-year net loss as ‘execution issues’ plague production (2 min read)
Ford reported a disappointing 4th quarter, missing earnings expectations and falling short of its own guidance. The company lost $2 billion in 2021, with CEO Jim Farley blaming poor execution. Shares of Ford fell by over 6% during after-hours trading. The automaker blamed the disappointing results on execution and supply chain management issues. It plans to cut costs this year, including potentially laying off workers in Europe.
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S&P 500 advances to five-month high, driven by tech fueled rally (2 min read)
The S&P 500 and Nasdaq rose to five and nine-month highs, driven by positive earnings from Meta, which led shares of Amazon, Alphabet, and Apple higher as well. The Nasdaq rose 3.25% and the S&P 500 rose 1.47% on Thursday. The tech sector is up 14% this year due to expectations of a Fed rate hike pause. Financial experts believe tech's latest performance reflects growth outpacing value and easing pressure from hawkish rhetoric in 2022.
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ECB raises rates by 0.5%, signals at least one more hike (4 min read)
The European Central Bank (ECB) confirmed a 0.5% increase in interest rates, bringing the key rate to 2.5%. The bank plans to raise rates again by another 0.5% in March as part of its efforts to tame inflation, which currently stands at 8.5%. Despite weak economic growth of 0.1% in Q4, ECB President Christine Lagarde said the outlook is improving and the economy is expected to pick up in the near future. The announcement caused the European markets to rise by 1.3%.
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From marijuana to the metaverse: specialized ETFs underperform (4 min read)
A recent study shows that specialized equity ETFs based on specific industries or themes tend to be poor investments. The study found that these ETFs underperformed broad-based benchmarks by about 30% in the first five years since their creation. The reason behind this underperformance is due to the fact that these ETFs hold overvalued assets and charge higher fees. The study concludes that investors should be cautious when investing in specialized ETFs as they risk sacrificing diversification, investing in overvalued assets, and paying higher fees.
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How Do ETF Fees Work? (4 min read)
ETF fees, expressed as an expense ratio, show the cost of owning the ETF each year and are deducted from the fund's assets. ETFs are often cheaper than mutual funds due to their passive management and direct trading on an exchange. The fees impact an ETF's ability to track the benchmark index, with lower fees usually leading to higher returns. It's important to consider the fees when choosing an ETF to invest in.
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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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