💻 Google, McDonald's and more shine

but some came up short

Good morning investors! Big earnings are here as the market continues to grow and Bitcoin crosses over $73,000.

Today we cover:

  • New job data

  • Big earnings (Chipotle, PayPal, McDonald’s and more)

  • Google beats and shines

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📊 Economy and News 

Job Openings Reach Pre-pandemic Levels

The Bureau of Labor Statistics reported a decline in job openings to 7.4 million by the end of September, down from August’s revised 7.86 million. The largest drops occurred in health care, social assistance, and government sectors, areas that have historically driven job growth. Economists had expected openings to be around 7.9 million.

This decrease signals a labor market returning to a pre-pandemic pace after years of rapid expansion. It may also be the last unaffected jobs report before October data faces disruptions from the Boeing strike and recent hurricanes.

The JOLTS report highlighted a cooling trend, with hires slightly rising to 5.56 million and layoffs increasing to 1.83 million. However, the hiring and layoff rates remain in line with pre-pandemic levels. The "quits rate," a key indicator of job confidence and wage growth potential, fell to 1.9%, marking its lowest point since 2015, excluding 2020.

Global hits:

Reminder: US airlines are required to refund you for a canceled flight automatically.

Good News: The Conference Board’s October survey revealed a surge in consumer optimism, with Americans showing increased confidence in the labor market and broader U.S. economy. The Consumer Confidence Index rose at its fastest pace since March 2021.

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📈 Stocks

S&P 500 5,832.92 (+0.16%)
DJIA 42,233.05 (-0.36%)
NASDAQ 18,712.75 (+0.78%)
BRENT CRUDE 71.25 (-0.23%)
* Prices as of Oct 30th, 12:20 AM UTC

More Earnings are Here (McDonald’s, Google, PayPal, and More)

McDonald’s reported earnings and revenue that surpassed analysts' expectations for the quarter ending Sept. 30, driven by a recovery in U.S. same-store sales. However, recent concerns emerged over an E. coli outbreak linked to its Quarter Pounder burgers in 13 states, with 75 cases and one fatality reported. The outbreak caused a temporary dip in sales and foot traffic, though McDonald's doesn't foresee a lasting financial impact.

Health authorities traced the contamination to the burger's slivered onions, leading McDonald’s to pause its supplier relationship temporarily. The Quarter Pounder is set to return in affected areas without onions this week.

For the quarter, McDonald’s reported adjusted earnings per share of $3.23, slightly beating the $3.20 forecast, and revenue reached $6.87 billion, exceeding the $6.82 billion expectation.

The company's net income was $2.26 billion, or $3.13 per share, down from $2.32 billion, or $3.17 per share, in the same period last year.

Google Beats: Alphabet, Google's parent company, reported earnings that beat analyst expectations, with earnings per share of $2.12 versus the $1.85 expected and revenue reaching $88.27 billion, above forecasts of $86.30 billion. Wall Street also focused on key segments like YouTube advertising and Google Cloud, with estimated revenues of $8.89 billion and $10.88 billion, respectively.

Alphabet continues to face antitrust challenges. In August, a U.S. judge ruled that Google illegally maintained a monopoly in search, and the DOJ has since recommended changes to Google’s business practices. These proposals include restructuring parts of its search operations, potentially affecting agreements with companies like Apple and Samsung.

Alphabet is also dealing with a separate injunction requiring alternatives to the Google Play Store, though this ruling has been temporarily paused. As legal battles continue, Google remains active in releasing new products.

The stock went up +5% after the bell.

Pfizer's third-quarter revenue and adjusted profit exceeded expectations, driven by strong sales from its Covid vaccine and antiviral pill, Paxlovid. The company raised its full-year outlook as it faces activist pressure from Starboard Value.

Reddit reported third-quarter financial results that topped analyst estimates. The company’s forecast for the fourth quarter was also better than expected, helping the stock jump +16%.

HSBC reported a 10% increase in third-quarter pre-tax profit to $8.5 billion, up from $7.7 billion a year earlier, with revenue rising 5% to $17 billion. The bank also announced a new $3 billion share buyback, bringing this year’s total to $9 billion.

Chipotle Mexican Grill gave a mixed performance. While the company's earnings exceeded expectations, its revenue fell short of projections. Chipotle reported a 6% increase in same-store sales, slightly under the anticipated 6.3%. Despite this, the chain reaffirmed its full-year outlook, forecasting same-store sales growth in the mid- to high-single-digit range.

PayPal shares dropped -7% after issuing lower-than-expected fourth-quarter guidance, predicting “low single-digit growth” compared to analysts' forecasts of 5.4% growth, or $8.46 billion in revenue. The company posted net income of $1.01 billion, or 99 cents per share, slightly down from $1.02 billion, or 93 cents per share, a year ago.

Interesting: Apple announces new iMac with M4 chip, starts at $1,299.

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💵 Personal Finance

Health insurance

Health insurance, also known as medical insurance, should be included in your financial plan. In fact, based on your location, it might be mandatory to have some form of medical insurance.

Health insurance protects in case of medical emergencies by covering eligible procedures, including surgery, hospitalization costs, health checkups, and more. Furthermore, it offers tax rebates.

This becomes even more important as you grow older as you’re more likely to fall sick and need medical assistance in your later years.

Health insurance costs anywhere from $100 to $2,000 based on your location and the perks included. Sadly, about 20% of Americans have no medical insurance. The number is lower in developing economies. This is a concern because high medical bills are a leading cause of bankruptcy in the US:

  • About 17% of adults in the country with healthcare debt lose their homes or declare bankruptcy because of it.

  • Around 66.5% of bankruptcies are linked to medical expenses.

Here are some tips on how you can save money on health insurance:

  • First, understand what factors influence costs. Your age, location, lifestyle, and insurance type are a few of the things that can impact rates.

  • Use tax credits to lower premiums. For example, individuals who use the Health Insurance Marketplace may be eligible for an advanced premium tax credit (APTC) that depends on their income and household size.

  • See if you qualify for low-cost or free health insurance through Medicaid or the Children’s Health Insurance Program (CHIP). Requirements change from state to state and depend on factors such as your income and household size.

  • Be smart when filing taxes and deduct premiums. However, there’s a catch – you can only deduct medical expenses you paid above 7.5% of your adjusted gross income (AGI). 

  • The premium is directly linked to the deductible. You can reduce the monthly premium by going for a high deductible.

  • Choose a health savings account (HSA) to set aside funds for eligible health-related costs. We must mention that HSA funds cannot be used for health insurance premiums, but they can be applied toward covering your deductible, coinsurance, copayments, and other qualifying medical expenses.

  • If you're looking to cut down on monthly premium costs, contemplate opting for a catastrophic health insurance policy. These plans are accessible to individuals under 30 or those over 30 who meet the criteria for a hardship or affordability exemption. However, remember that these have very low premiums but extremely high deductibles. The annual deductible last year stood at $9,100 for individuals and $18,200 for families.

Want more? Check this (old but still useful) video:

💰 Be a Better Investor

“The most important quality for an investor is temperament, and not intellect.”

Warren Buffet

Resources:

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