The Week Ahead on Wall Street
Today, September construction spending is released. A pair of manufacturing figures including the October ISM Manufacturing Index and October markit manufacturing PMI are also published. Last month, economic activity in the manufacturing space expanded, with markit manufacturing PMI in the US ticking up to 53.2 in September from 53.1 in August.
Tomorrow, September factory orders and October motor vehicle sales are due. September marked the best month for car sales since before the pandemic. This was likely because more people are traveling or commuting, but still feel wary of public transportation. Of course, tomorrow is also the election for the president of the United States. While results may not be announced for several days after November 3, investors will be carefully following developments as people across the country cast their ballots.
On Wednesday, September trade deficit data, October markit services PMI, and the October ISM Services Index are released. The October ADP Employment Report, which tracks private employment in the US, will also be published. In September, this figure climbed by 749,000 on a seasonally adjusted basis, beating economist expectations of 600,000.
On Thursday, look for Q3 productivity and Q3 unit labor costs. Initial jobless claims will also be released. During the week ending October 24, jobless claims declined for a second straight week, reaching 751,000. This was the lowest level since the beginning of the pandemic. The Federal Open Market Committee is also scheduled to meet today and Jerome Powell, Chair of the Federal Reserve, will hold a press conference. Investors will be curious to see if he provides information about the Fed’s economic outlook and any color surrounding the interest rate environment.
To round out the week, on Friday, September wholesale inventories and September consumer credit will be released. Also look for October nonfarm payrolls, the October unemployment rate, and October average hourly earnings. Together, these three metrics will give a picture of the US labor market. In September, the unemployment rate was 7.9%—down from 8.4% in August.
Today, PayPal (PYPL) reports its earnings. The online payments giant recently announced that it will allow users to store, buy, and sell various cryptocurrencies on the platform and on Venmo, which is owned by PayPal. Bitcoin, Ethereum, Bitcoin Cash, and Litecoin will be supported on PayPal.
Tomorrow, look for a report from Wayfair (W). The online furniture retailer’s shares fell 76% following a mid-March selloff, but have made a strong comeback since then. Many of the brand’s physical storerooms remain closed, but online sales have been strong with people spending more time at home.
On Wednesday, Qualcomm (QCOM) hands in its report card. Shares of the San Diego-based software and semiconductor maker have climbed by roughly 40% so far this year. Qualcomm’s technology has been an important part of the 5G rollout. Additionally, the company signed a licensing deal with China-based Huawei which involves Huawei paying Qualcomm $1.8 billion for previously using patented Qualcomm technology. Huawei also agreed to pay Qualcomm royalties for using its technology in the future.
On Thursday, Uber (UBER) reports its earnings. The company’s core rideshare business is still suffering as a result of the pandemic, but it is investing in its restaurant delivery business and recently began delivering groceries in select locations. The last quarter was also marked by legal battles concerning whether or not Uber should be legally required to classify its drivers as employees. Investors will be curious to see how these difficulties impacted the company’s bottom line.
To round out the week, CVS (CVS) will report earnings. The pharmacy chain is currently in the process of hiring 15,000 new workers to help give flu vaccines, perform COVID-19 tests, and administer a COVID-19 vaccine if and when it becomes available. Distributing hundreds of millions of COVID-19 vaccine doses could put a strain on the healthcare system, and drugstores like CVS could be integral to successfully immunizing the population.
The Week Ahead at SoFi
Kick off November in financial style with our virtual events—where you’ll learn how to write the perfect resume and talk about your next dollar with Brian Walsh. It’s all happening this week on Zoom, Twitter, and LinkedIn. Register today in the SoFi app!
The First Full Week of Apple One
Apple One Bundle Options
On Friday, Apple (AAPL) launched its new service called Apple One, which offers consumers subscriptions to bundles of products. There are three different bundle options to choose from: Individual, Family, and Premier.
The Individual plan costs $14.95 per month and includes Apple Music, Apple TV Plus, Apple Arcade, and 50GB of iCloud storage. With the Family plan, which costs $19.95 per month, users get the same services offered with the Individual plan plus 150GB more in iCloud storage and an Apple Music family plan. Lastly, the Premier plan costs $29.95 per month and includes Apple Music, Apple TV Plus, Apple Arcade, 2TB of iCloud storage, Apple News Plus, and Apple Fitness Plus.
Apple Fitness Plus does not yet have a launch date, but it is expected to debut sometime before the end of the year. The app will include yoga, cycling, running, and other virtual classes.
The Rise of the Subscription Economy
The subscription economy was taking off before the pandemic, but it has gained even more traction recently because of the advantages it offers to consumers and companies. Customers can make small, monthly payments for a regular supply of shaving supplies, makeup, groceries, movies, and many other products. This allows customers to visit the store less frequently, which has made some subscription services popular during the pandemic.
For companies, the subscription model offers a steady stream of revenue each month, which is helpful during times of economic uncertainty. Amazon (AMZN) was an early leader in the subscription game with Amazon Prime. Within the last year, Disney (DIS) and Walmart (WMT) have launched massive subscription initiatives. Now, Apple is bulking up its offerings.
Hardware Is Excluded from Apple One Offerings
Investors are eager to see if Apple One will be able to carve out a place for itself in an already crowded subscription landscape. Apple One bundles will help save money for customers who already pay for each of the Apple services individually, but it will likely be difficult for Apple to lure customers away from subscriptions like Netflix (NFLX) and Spotify (SPOT).
Interestingly, Apple has chosen not to include any hardware-related perks in the Apple One bundles. The company already offers the iPhone Upgrade Program, which gives users a new iPhone each year along with access to Apple Care services. This subscription model boosts revenue from both iPhone sales and Apple Care. Some analysts wonder why the iPhone and other popular Apple hardware products are absent from Apple One offerings, and if that could change in the future.
Without Commutes, People Are Spending More Time Working
US Workers Spending 22 Million Extra Hours on Primary Jobs Each Day
Recent data shows that between mid-March and mid-September, people in the US spent 60 million fewer hours commuting to and from their workplaces each day. When the pandemic first set in and many people began working from home, many had plans to pick up new hobbies, read more, or exercise more during the time when they used to commute.
It turns out that the majority of that extra time in the day has been spent on work. People’s primary jobs have taken up about 35.3% of the time that they used to spend commuting. This is equal to more than 22 million hours each workday.
Childcare and Housework Also Take Up Extra Time
In addition to spending more time on primary jobs, people also devoted more time to responsibilities at home. People cooked more because of restaurant restrictions and spent more time on childcare because of school and daycare closures. 15.5% of people’s extra time was spent on home improvement and chores. 11.1% of extra time went to child care and 8.4% was devoted to second jobs.
Altogether, about 70.3% of time that people used to spend commuting has been taken up with various forms of work. The remaining 30% was spent on consuming media, exercising, and other leisure activities.
The recent study of newly formed habits, which was published by the Becker Friedman Institute for Economics at the University of Chicago, calculated these statistics using data from the Census Bureau. This data showed that 147.2 million Americans work for pay. Before the pandemic, on average these people spent 54 minutes each day traveling to and from work. The researchers also conducted a survey of 10,000 American workers aged 20 to 64 making at least $20,000 per year and found that just over half of them were working from home during the pandemic.
A number of large companies have let their employees know that they will be working remotely until 2021 and beyond. Though the future of the workplace remains uncertain, some companies may implement remote work options even after the pandemic because of these types of studies showing that people spend more time working when they do not need to commute. On the other hand, for some companies, the pandemic has highlighted the importance of a physical office for productivity, ease of communication, and work-life balance.