💥 Big earnings (Apple, Amazon, Mastercard and more)

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Good morning investors! October proved to be a dull month as stocks fell down yesterday.

Today we cover:

• Prices are getting lower

• Big names announce earnings (Amazon, Apple, and more)

• International companies announce earnings (Samsung, BYD, and more)

📊 Economy and News 

Inflation Rises Slightly in September, Approaches Federal Reserve’s Target

In September, inflation inched closer to the Federal Reserve’s target, as the personal consumption expenditures (PCE) price index rose by 0.2% on a seasonally adjusted basis, with the annual inflation rate reaching 2.1%, according to the Commerce Department’s recent report. This is the primary gauge for inflation used by the Fed, which aims for a 2% annual rate—a target that has remained elusive since February 2021.

The core inflation rate, excluding volatile food and energy prices, stood at 2.7% for the year after a 0.3% monthly rise, slightly exceeding expectations but matching August's rate. Although the headline rate signals progress toward the Fed's goal, this core rate highlights ongoing challenges in managing inflation precisely.

As the Fed meets next week, markets anticipate a rate cut following September’s significant half-point reduction, an unusual move during economic expansion. Despite inflation's slight climb, Fed officials express confidence that it will stabilize, though concerns over labor market resilience persist.

Data from the Labor Department on unemployment claims reflects this, showing a drop to 216,000 for the week ending October 26, below forecasts and indicative of strong labor retention.

Additionally, the report highlighted steady personal income and spending growth. Personal income rose by 0.3%, meeting expectations, while consumer spending outpaced forecasts with a 0.5% increase. The steady consumer activity provides a reassuring indicator amidst inflation concerns.

Lastly, U.S. labor costs recorded their smallest increase in more than three years in the third quarter amid cooling wage growth, indicating that inflation was firmly on a downward trend.

Global hits:

• Euro zone inflation rises to higher-than-expected 2%, weakening case for jumbo rate cut as Switzerland struggles with deflation.

• Europe stocks close October with biggest monthly loss for a year; UK housebuilders plunge after budget.

• Global economy set to cruise at a solid 3% growth rate next year.

Something about China: China’s factory activity expands for the first time since April yet top Chinese airlines’ profits fall as flagging economy pressures fares.

📈 Stocks

S&P 500 5,705.45 (-1.86%)
DJIA 41,763.46 (-0.90%)
NASDAQ 18,095.15 (-2.76%)
BRENT CRUDE 73.16 (+0.86%)
* Prices as of Nov 1st, 12:20 AM UTC

Stocks tumble with Microsoft recording worst day in two years

Microsoft had its worst day in 2 years declining -5% following disappointing revenue guidance. Similarly, Meta Platforms saw a -4% drop after the parent company of Facebook fell short of market expectations for user growth and issued a warning about significantly rising capital expenditures in 2025.

As a result of these developments, the major stock indices are poised to finish the week on a down note. The Dow Jones Industrial Average has decreased by 0.6% since the start of the week, while the S&P 500 and Nasdaq Composite have seen steeper declines of 1.6% and 2.2%, respectively.

Thursday marked the final trading day of what has been a turbulent month for the markets, characterized by increased uncertainty ahead of the upcoming U.S. Presidential election on November 5.

More earnings are here

• British oil giant Shell reported adjusted earnings of $6 billion for the July-September period, beating analyst expectations of $5.3 billion, according to estimates compiled by LSEG. The energy company said it will buy back a further $3.5 billion of its shares over the next three months, while its dividend remained unchanged at 34 cents per share.

• Uber reported third-quarter results Thursday that beat analysts’ expectations for revenue. The company’s revenue grew 20%, totaling $11.19 billion. For its fourth quarter, Uber said it expects gross bookings between $42.75 billion and $44.25 billion, compared with StreetAccount estimates of $43.68 billion. Uber anticipates adjusted EBITDA of $1.78 billion to $1.88 billion, compared with the $1.83 billion expected by analysts. The report sent the stock down about -10%.

• Dodge maker Stellantis posts 27% drop in revenues, flags progress in slashing U.S. inventories. It attributed its net revenue drop primarily to “lower shipments and unfavorable mix as well as pricing and foreign exchange impacts.” Milan-listed shares of Stellantis have tumbled more than 42% year-to-date.

• BYD reported revenue for the three months ended Sept. 30 of 201.12 billion yuan ($28.24 billion), up 24% from a year ago. That exceeded Tesla’s revenue of $25.18 billion reported for the same period.

• Samsung Electronics reported third-quarter sales and operating profit slightly above its own expectations. The semiconductor unit reported third-quarter operating profit of 3.86 trillion won (about $2.8 billion), down 40% from the previous quarter. While artificial intelligence drove demand for advanced chips in its foundry unit, Samsung said mobile and PC demand underperformed.

• Mastercard reported third quarter EPS of $3.89, $0.15 better than the analyst estimate of $3.74. Revenue for the quarter came in at $7.4B versus the consensus estimate of $7.26B. Mastercard's stock price closed at $513.69. It is up 11.18% in the last 3 months and up 35.96% in the last 12 months. The report, however, sent it down -2%.

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💵 Personal Finance

Best rewards credit cards

Interested in top rewards credit cards? Here are our picks:

Chase Sapphire Preferred® Card

You will need an excellent score (at least 700) to qualify for this card and once you do, you will be rewarded with incredible rewards, including 5x points on travel purchases, 3x on dining, and 2x on all other travel purchases. New users earn 60,000 free points that are easy to redeem. On the downside, the annual fee is a little high at $95 per year.

American Express® Gold Card

A little expensive at $250 per year, this card offers $60,000 points to new users once they spend $6,000 on eligible purchases within the first six months. As for rewards, you get 4x points at restaurants (including delivery and takeout) and supermarkets, 3x on flights, and 1x on all other purchases. In addition, you will enjoy a $240 credit to be divided among eligible restaurants and Uber Cash equally. This means the card is almost free.

Discover it® Cash Back

Not all rewards cards are expensive as the Discover it® Cash Back comes with a $0 annual fee. Other perks include 0% intro APR for 15 months on purchases, 5% cash back on everyday purchases, and Unlimited Cashback Match for the first year, i.e.: a chance to double your cash back.

U.S. Bank Altitude® Connect Visa Signature® Card

This card offers points worth $500 when you spend $2,000 in eligible purchases within the first 120 days. There is no annual fee for the first year, but expect to pay $95 from the second year. On the downside, a score of 740 or higher is needed to get approved.

These are all great cards. Pick one only if you need one and you’re sure you’d be able to pay it on time.

Also, check this video for some tips on choosing a credit card:

💰 Be a Better Investor

Resources:

• Calculators

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👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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