🥦 PPI is high but no quick cuts

and Disney impresses

Good morning investors! Dow dropped 200 points yesterday as post-election rally sputters and BTC takes a break.

Today we cover:

  • Wholesale inflation is up

  • Fed not in a hurry to cut rates

  • Disney impresses and prepares for another great year

📊 Economy and News 

US Wholesale Inflation Rises in October as Price Pressures Persist

The Producer Price Index (PPI), tracking average price changes seen by producers, rose 0.2% in October from the previous month, with an annual increase of 2.4%, signaling an acceleration from September's 0.1% monthly and 1.9% annual gains. Lower energy prices provided limited relief, dropping only 0.3% in October compared to a 2.8% decrease in September.

A potential positive note for consumers: Wholesale food prices fell by 0.2% in October, a sharp contrast to the 1% increase in September, which was the largest rise since February. Core PPI, which excludes food and energy due to their volatility, rose 0.3% month-over-month and increased to an annual rate of 3.1%, exceeding economist forecasts.

Global hits:

Fed not in a hurry: Federal Reserve Chair Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in Dallas.

Good to check: Oil could plunge to $40 in 2025 if OPEC unwinds voluntary production cuts, analysts say.

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📈 Stocks

S&P 500 5,949.17 (-0.60%)
DJIA 43,750.86 (-0.47%)
NASDAQ 19,107.65 (-0.64%)
BRENT CRUDE 72.41 (+0.18%)
* Prices as of Nov 15th, 12:20 AM UTC

Disney beats estimates, expects a bright future

Disney reported fiscal fourth-quarter earnings beating expectations. Adjusted earnings per share were $1.14, exceeding analysts’ expectations of $1.10, while revenue came in at $22.57 billion, slightly above the anticipated $22.45 billion.

The company’s net income rose to $460 million, or 25 cents per share, compared to $264 million, or 14 cents per share, in the same quarter last year.

Entertainment Segment and Streaming Growth

Disney's entertainment revenue, which includes TV networks, streaming services, and films, saw a 14% year-over-year increase to $10.83 billion.

The streaming segment, which includes Disney+, Hulu, and ESPN+, reached $321 million in operating income, marking a significant improvement from the $387 million loss reported a year ago.

Disney+ Core subscribers rose 4% to 122.7 million, while Hulu subscriptions grew by 2% to 52 million.

Average revenue per Disney+ user slightly decreased from $7.74 to $7.70, with more users opting for the ad-supported tier.

Stable Sports and Park Segments

ESPN’s profitability dipped 6% due to rising programming costs for college football rights and due to a reduction in cable bundle subscribers. Meanwhile, the experiences segment, encompassing theme parks and consumer products, grew 1% to $8.24 billion.

Future Outlook

Disney projects a modest decline in Disney+ Core subscribers for the first quarter of fiscal 2025. The company expects entertainment streaming profits to increase by $875 million over the full year, with double-digit growth forecasted for fiscal years 2025 and 2026 in its entertainment segment.

Reminder: Back in August, we recommended Disney as a buy at $85. Today, it’s almost $110—a strong gain for those who followed our advice. Don’t miss future opportunities like this. Upgrade to PRO for just $3.99 a month.

Shocking: Ford knew about dangerous backup camera glitches but moved too slowly to fix them, safety regulator says. Elsewhere, Europe has fined Meta $840 million over ‘abusive’ practices benefiting Facebook Marketplace.

This week we’ll be covering stocks that are less likely to do well in Trump presidency.

Controversial: Ben & Jerry’s sues Unilever claiming its parent company silenced it over Gaza. The last time something like this happened, Unilever had to pay a price.

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💵 Personal Finance

Foreign ETFs and getting exposure to non US markets

Exchange-traded funds (ETFs) are a great way to diversify and get involved in foreign markets. There are several ways to invest in foreign ETFs:

  • You can choose a country-specific ETF to get exposure to companies operating in a specific country. For example, EWG, the iShares MSCI Germany Index ETF, tracks the MSCI Germany Index. You will have to open an account with an online broker that offers these services.

  • You can try a broad foreign market ETF that consists of companies from different markets. For example, a BRIC investment will include securities deriving from Brazil, Russia, India, or China. Examples include BKF iShares MSCI BRIC Index ETF.

  • Currency ETFs track foreign currencies and are known to be risky. The best way to reduce the risk is to own a large share in your currency or a currency that's less likely to fall.

  • You can get access to emerging markets with an Emerging Market ETF. Examples include the Global X MSCI Colombia ETF (GXG) and the iShares Core MSCI Emerging Markets ETF (IEMG).

  • International bond ETFs also exist. Known for offering a regular flow of income, they can be safe and an easy way to diversify.

  • This might come as a surprise, but commodity ETFs also exist and they greatly vary in prices. You can invest in coal ETFs, solar energy ETFs, and more. However, understanding commodity ETFs can be a little tricky.

You can own foreign stocks even through US ETFs as a large number of them, including the Vanguard Total World Stock ETF own a mix of American and foreign stocks. Some such as the iShares MSCI ACWI ex U.S. ETF only own foreign stocks. However, returns might not always be phenomenal.

The former has had an annualized return of 8.07%, slightly lower than its benchmark of 8.17%, whereas the latter has had annualized return of 3.70%.

You will even find country-specific ETFs in the US, such as the WisdomTree Japan Hedged Equity Fund (DXJ) that concentrates on the Japanese market with an ROI of 9.97% over the past ten years.

Check this video for more:

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