Top Story
Stocks Slump Following Thursday’s Record Turnaround, September’s Retail Sales Come in Flat
• U.S. stocks fell Friday, giving up early gains. This followed the previous session’s record intraday turnaround. The University of Michigan’s consumer inflation expectations survey may have been a factor as it showed prices increasing. This affects the likelihood of additional rate hikes.
• September’s retail sales were stagnant as rising prices ate into demand. This is a negative for the economy as a whole given the importance of consumer spending, which appears to be under pressure amid record inflation.
• British Prime Minister Liz Truss fired Treasury chief Kwasi Kwarteng and reversed key aspects of her tax plan with the UK bond market in turmoil. The British pound also fell 1% against the U.S. dollar.
What to Be on the Lookout for Today
• The New York Fed will release the Empire State Manufacturing Index for October. This is a snapshot view of the region’s manufacturing activity. The September survey showed business activity holding steady across the state, with new orders and shipments up from the previous month.
• Bank of America (BAC) kicks off an earnings week that’s chock full of financial institutions reporting their latest results. Bank earnings reports are often a good barometer of the economy as a whole since they offer insight into things like business and consumer debt levels, mortgages, and business loans.
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A Few Headlines That Should Be on Your Radar
This week’s earnings reports include a number of financial institutions like Charles Schwab (SCHW), Bank of America (BAC), Goldman Sachs (GS), and more. These reports should offer us a good perspective into how the economy is doing as a whole. Additionally, Netflix (NFLX) will discuss why it’s putting ads on its platform and Tesla’s (TSLA) Elon Musk will hopefully share his plans for the company’s AI–powered humanoid robot. Read more >> On Friday, grocery giant Kroger (KR) announced it had agreed to buy rival Albertsons (ACI) at $34.10 per share. The combined company will be an even closer second place to industry leader Walmart (WMT) – if regulators approve the deal. The FTC and consumer advocacy groups are concerned about potential price control, especially given market overlap between the two companies. Here’s how the deal could impact your experience while shopping for groceries. Read more >> “Want to earn a 9.62% return on your money while avoiding the volatile stock market?!” Nope, it’s not a late night infomercial – It’s the Series I savings bond. The Series I savings bond is currently offering a 9.62% interest rate as long as you buy before November 1st. Here’s everything you need to know. Read more >> Financial infidelity in a marriage can lead to a loss of trust and even divorce. Read on for ways to recover from and guard against financial infidelity. Financial infidelity occurs when one person in a relationship hides, manipulates, or falsified information about their financial position, bank accounts, or transactions. Read more >>Not-So-Breaking News
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Streaming TV giant Netflix (NFLX) is moving forward with its plans for an ad-supported tier, which will launch in the U.S. on November 3. It will cost $6.99 per month and also roll out in eleven other countries. The move comes as Disney+ (DIS) continues to carve out a larger space in the global streaming sector.
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As the third-quarter earnings season gets underway, two major banks shared earnings that painted a mixed picture for the sector as a whole. JPMorgan Chase (JPM) beat estimates on the top and bottom lines, with interest income up as a result of higher rates. But Morgan Stanley (MS) missed profit expectations in its third quarter, as investment banking revenue fell 55%.
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Fellow banking giant Citigroup (C) posted sales that exceeded forecasts, but also reported that third-quarter profit declined 25% year-over-year. Citi executives blamed the lower profit on an increase in loan loss reserves, which is in response to added risk of default amid the current macroeconomic conditions.
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Wells Fargo (WFC) posted upbeat results for its third quarter, beating expectations even though it set aside $784 million for credit losses. The bank notes this ate into its profits for the quarter. By comparison, during Q3 2021 Wells Fargo reduced its loan loss reserves by $1.4 billion.
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Plant-based food company Beyond Meat (BYND) reported it plans to lay off around 200 employees, which amounts to 19% of its workforce. In a regulatory filing, Beyond Meat also noted several top executives are leaving the firm. This is all part of efforts aimed at becoming cash flow positive by the second half of 2023.
Financial Planner Tip of the Day
“It’s recommended that a credit report be checked yearly from the three major credit bureaus. Reviewing them on a yearly basis is a good way to understand and monitor overall credit health.”
Brian Walsh, CFP® at SoFi