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Good morning investors! Yesterday was a good day for the market with Dow up over 500 points to star the week.

Fun fact: Were it a U.S.-listed stock, Bitcoin would rank as the ninth-largest by market cap, just behind that of Berkshire Hathaway,

Today we cover:

• Treasury to borrow more but lower than expected.

• Ford and UAW deal – all the details inside.

• Americans are spending like crazy but they shouldn’t.

Follow us on Twitter for more.

📊 Economy and News 

Treasury set to borrow $776 billion next quarter

This will be the most ever borrowed in the fourth quarter.

This is, however, lower than the $1.01 trillion in privately held marketable debt the department borrowed in the July-through-September period, the highest ever for that particular quarter.

Moreover, it's lower than what experts expected – strategists at JPMorgan were ready for a number closer to $800 billion. However, expert expect treasury to borrow $816 billion in Q1 '24, so on track to borrow $3+ trillion this FY, as projected.

Stocks lost some of their gains but still remained strongly positive after the announcement. Treasury yields were mostly higher.

Global hits:

• Evergrande shares fall 20% to all-time low as court adjourns winding-up hearing.

• Shares of ON Semiconductor fall 20% as fourth-quarter guidance disappoints.

• The escalating Israel-Hamas conflict raises risks of global market contagion.

📈 Stocks

S&P 500 4,166.82 (1.20%)
DJIA 32,928.96 (1.58%)
NASDAQ 14,335.51 (1.09%)
BRENT CRUDE 88.15 (0.70%)
* Prices as of Oct 31st, 12:20 AM UTC

All about Ford and UAW deal

Local United Auto Workers union leaders approved a tentative agreement Sunday with Ford that includes major changes, including $8.1 billion in new plant investments, $5,000 ratification bonuses, and a 25% compounded wage increase and improved profit-sharing payments.

The 25% raises includes an 11% increase upon ratification, followed by 3% increases the next three years and then a 5% increase in October 2027. The raises and benefits such as expectations of $8,800 for cost-of-living adjustments cumulatively raise the top wage to more than $40 an hour, including an increase of 68% for starting wages to over $28 an hour.

The 4 ½-year tentative agreement will now be rolled out to 57,000 UAW-Ford members for regional informational meetings and then voting, the union said Sunday.

The tentative deal was reached following the union launching targeted strikes against Ford, General Motors and Stellantis following the sides not reaching deals ahead of a Sept. 14 deadline.

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🔐 Crypto

Bitcoin $334,409.30 (0.24%)
Ethereum $1,802.68 (0.38%)
Total market cap $1.27T (0.07%)
* Prices as of Oct 31st, 12:20 AM UTC

Here’s what’s happening in the world of crypto:

• Sam Bankman-Fried called some customers 'dumb'.

• Celestia's TIA token trades at $3.15 on futures market ahead of Airdrop.

• Standard Chartered-owned crypto firm Zodia launches in Hong Kong.

• Crypto thief steals $4.4M in a day as toll rises from LastPass breach.

💵 Personal Finance

Why Americans are spending like crazy

We read a lot about inflation and how people are struggling to make ends meet, yet reports suggest that Americans are on a spending spree.

They appear to be spending on everything from the latest iPhones to luxurious vacations. But, what’s causing this excessive spending and what impact could it have on us? Let’s dig in:

They’re making more money

Salaries are growing and unemployment is not very high.

Wages in the US increased 5.31% in September of 2023 over the same month in the previous year. Wage Growth averaged 6.19% from 1960 until 2023, reaching an all time high of 15.28 percent in April of 2021 and a record low of -5.89 percent in April of 2020.

The chart below highlights the growth:

This growth is encouraging Americans to spend more. Unfortunately, they don't appear to be very high on savings. In fact, savings rate for Americans is falling.

This could impact retirement plans since most people retire on savings. However, reports say that the new generation plans to work beyond their 50s.

Perks of pandemic

This might comE as a surprise to some but the pandemic is one of the main reasons why people are spending so heavily. Firstly, they couldn’t do much during the pandemic.

Most people took no vacations and bought no expensive goods. Thus, they have more money to spend now. Plus, many had access to government packages. As a result, Americans accumulated more than $2 trillion in savings above the pre-pandemic trend.

This money is making people spend more. In fact, reports suggest that a large number of Americans are now digging into their savings. In fact, many are going into debt, which is a concern. It is not sustainable to count on savings. One should save for the rainy days.

A shift in values

There is a growing emphasis on experiential spending.

Consumers are willing to spend on new experiences. We have seen a surge in earnings reported by entertainment and travel companies due to a sudden increase in demand for these services.

There is a cultural shift that is fundamentally altering consumer behavior. People are spending on well-being and improving their quality of life. Experts believe this trend to continue.

But is this good?

No.

Most experts agree that this behavior is not good.

"The main reason why we think this pace of spending is not sustainable is because we look at the underlying drivers of spending. They are not the most reliable and sustainable sources of spending," said EY's chief economist Gregory Daco. "When you have households that are dipping into their savings, that's not an encouraging sign," he added.

There is a need to rethink your spending habits and concentrate more on savings.

Take that vacation, buy that outfit, and enjoy good meals but don’t use your savings to buy these new experiences. Spend in a consistent manner on your income.

Check this video for some motivation:

💰 Be a Better Investor

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