đŸ•ș Netflix beats again

and economy looks strong

Good morning investors! Stocks are still looking great as earnings continue to pour in.

Today we cover:

  • Spending is up

  • Netflix beats again

  • Technology stocks in trouble?

📊 Economy and News 

New Spending Reports Show Strength

In September, spending at U.S. retailers saw a notable increase of 0.4%, a stronger gain compared to August’s modest 0.1% rise. This growth aligns with economists' projections, according to a poll conducted by FactSet. The increase in retail sales was spread across most categories, indicating continued consumer activity despite ongoing inflation and high interest rates.

Certain sectors stood out with particularly strong performances:

  • Specialty stores experienced the largest jump, with a 4% increase.

  • Clothing store sales rose by 1.5%.

  • Health and personal care shops saw a 1.1% boost.

  • Bars and restaurants also enjoyed a 1% rise in sales.

On the other hand, spending at gas stations fell by 1.6%, reflecting a drop in gas prices. Excluding gas station sales, retail spending was up by a more robust 0.6%. Meanwhile, the electronics and appliance sector faced the steepest decline, with sales dropping 3.3% from the previous month.

Consumer spending, which drives around 70% of the U.S. economy, remains strong, signaling that the economy is far from a recession despite years of elevated inflation and recently declining interest rates.

Global hits:

Shocking: Hurricane Milton’s losses of up to $34 billion could make it one of the costliest storms in US history. Also, IMF chief warns ‘not yet time to celebrate’ as low growth and high debt weigh on the global economy

Exciting: Musk’s win on India satellite spectrum raises prospect of price war with Ambani. Elsewhere, Universal’s Epic Universe theme park set to open in May 2025.

📈 Stocks

S&P 500 5,841.47 (-0.017%)
DJIA 43,239.05 (+0.37%)
NASDAQ 18,373.61 (+0.036%)
BRENT CRUDE 174.44 (-0.01%)
* Prices as of Oct 18th, 12:20 AM UTC

Netflix Beats Again

Netflix reported stronger-than-expected third-quarter earnings on Thursday, driven by the growth of its ad-supported service.

Ad-tier memberships surged by 35% from the previous quarter, and the company plans to expand the service to Canada next quarter, with broader availability by 2025. While advertising isn't expected to be a major growth driver until 2026, it made up over half of sign-ups in markets where it's available.

Key results for the quarter ending September 30:

  • Earnings per share: $5.40 (above the $5.12 expected)

  • Revenue: $9.83 billion (vs. $9.77 billion expected)

  • Paid memberships: 282.7 million (exceeding the 282.15 million estimate)

Net income for the quarter rose to $2.36 billion, compared to $1.68 billion a year earlier. Revenue also increased 15% year-over-year. Netflix forecasts fourth-quarter revenue of $10.13 billion and EPS of $4.23.

The stock went up +5% after the bell.

Check this: Chinese robotaxi firm Pony AI files for a U.S IPO. Also, China seems to be in attack mode as calling Intel a security risk for the country.

Controversial: Technology giants could face “significant” fines if they don’t comply with the U.K.‘s internet safety regulations, which are set to enter into force in two months’ time. The Online Safety Act includes sweeping new rules that will force large tech firms to do more to combat illegal content online. Elsewhere, Intel faces headwinds in China as trade body calls for security probe.

Something about e-cigs: While tobacco use has fallen to a 25-year low among middle and high school students, nicotine pouches are now the age group’s second-most used product.

E-cigarettes continue to be the most used among students who reported tobacco product use, at 5.9%.

Zyn was the most-popular nicotine pouch brand, at 68.7%, reflecting the surge in the brand’s popularity on social media and subsequent nationwide shortage.

Are e-cigarettes completely free of harmful chemicals?

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🔐 Crypto

Bitcoin $67,235 (+0.02%)
Ether $2,606 (+0.01%)
Solana $149 (+0.04%)
Total market cap $2.3T (+0.03%)
* Prices as of Oct 18th, 12:20 AM UTC

Arrests Made in SEC Hack and Multi-Million Dollar Bitcoin Scams as Crypto Crime Wave Intensifies

Two major cryptocurrency-related crimes have come under scrutiny this week. FBI agents arrested Eric Council Jr. for allegedly hacking the SEC's X account on January 9, which led to a fake tweet that temporarily spiked bitcoin's price by over $1,000. Council faces charges of conspiracy to commit aggravated identity theft and fraud.

In a separate case, two men accused of swindling $230 million in bitcoin from a Washington, D.C. resident are under investigation for a lavish spending spree, which included exotic cars, rental homes, and a $2 million watch. The duo is also being linked to a failed kidnapping plot, possibly intended to extort ransom from the victim’s family.

đŸ’” Personal Finance

Get auto insurance

Auto insurance is mandatory in most countries. Its purpose is to protect the owner in the event of an accident or theft.

Most people in first world countries have car insurance but the rate is very low in developing countries such as India where less than 50% of vehicles are insured despite it being mandatory.

Cost is one of the major reasons why people don't buy vehicle insurance. The average in the US is about $2,150 per year. However, it is worth the money since accidents are common and vehicle insurance is the only way to protect against financial losses in the event of an accident or if you get sued.

Nearly 215 million drivers carry car insurance in the US, and about 6% of drivers on the road are uninsured. If you find car insurance too expensive then check these tips to reduce the cost:

  • You might be able to get a discount if you opt for 'multi car' insurance. In most cases, you will qualify if all drivers are related and live in the same house, or own the vehicle jointly.

  • Don’t worry about young drivers costing a lot because there are ‘student’ discounts. However, these are typically only for 'good' students.

  • Get enrolled in an approved defensive driving course since a large number of insurance companies offer discounts to drivers who have completed such courses. Plus, such courses can help reduce the number of points you have on your license.

  • Using your vehicle for a three-hour daily commute typically results in higher insurance premiums compared to driving just one mile a day. To reduce mileage, consider utilizing mass transit. However, be aware that a substantial reduction in mileage is usually required to qualify for a discount.

  • Big cars are typically costlier to insure, so consider choosing a smaller vehicle. Plus, there might be discounts for hybrid or e-vehicles.

  • Remember how deductibles work: the lower the deductible, the higher the annual premium. Conversely, the higher the deductible, the lower the premium.

  • Your credit score could impact the quote so work on it.

  • Install an anti-theft system to save money since companies are known to give over 20% discount to drivers who have installed a reliable system.

  • Black box insurance can be a great money saver. Designed for people who drive less and safely, this option uses technology to track and record a policyholder's driving behavior and base the premium on it.

Got questions? check this video for more:

💰 Be a Better Investor

“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.”

Charlie Munger

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.