Good morning investors! The market jumped higher as investors now await for big earnings.
Today we cover:
The changing policies
Apple jumps
AWS goes down
📊 Economy and News
Are new policies worsening the labor situation?
A new study from the National Foundation for American Policy (NFAP) warns that restrictive immigration measures could reduce the U.S. labor force by 6.8 million workers by 2028 and 15.7 million by 2035.
Key Projections
GDP Loss: $1.9 trillion (2025–2028); $12.1 trillion (2025–2035)
Per Capita Impact: $5,612 loss by 2028; $34,369 by 2035
Federal Debt Increase: $252 billion by 2028; $1.74 trillion by 2035
Changes include reduced refugee admissions, travel bans, ended Temporary Protected Status, humanitarian parole cuts, and limits on international student work.
Foreign-born workers drove 85% of labor force growth (2019–2024). Sectors like agriculture face shortages, raising food prices. The study predicts slower economic growth and wider deficits.
Whitehouse Spokesperson, Abigail Jackson, said: "There is no shortage of American minds and hands... President’s agenda creates jobs for American workers."
Global hits:
China’s Q3 GDP growth set to slow to one-year low as property slump, trade tensions sap demand.
US appeals court lets Trump send troops to Portland.
Canada offers tariff relief on U.S. and Chinese steel, aluminum imports.
Mexico economy set to recover slowly next year amid higher inflation risks.
Falling yields: U.S. Treasury yields were modestly lower Monday, with the benchmark 10-year note yield again dropping below 4%, as investors weighed the state of the U.S. economy and the government shutdown approached its fourth week.
The 10-year Treasury yield dropped more than 2 basis points to 3.982%. The 2-year Treasury note yield declined less than 1 basis point to 3.457%, and the 30-year bond yield fell more than 3 basis points to 4.572%.
Look here: Brent crude futures settled near a five-month low as curve structure flipped deeper into contango, a signal of ample near-term supply and softer demand.
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📈 Stocks
S&P 500 6,735.13 (+1.07%)
DJIA 46,706.58 (+1.12%)
NASDAQ 22,990.54 (+1.37%)
BRENT CRUDE 61.01 (-0.28%)
* Prices as of Oct 21st, 12:20 AM UTC
Apple Hits Record Close on Strong iPhone 17 Sales
Apple shares surged nearly 4% to a record $262.24 close on Monday, fueled by robust iPhone 17 sales in the U.S. and China.
Launched in September, the iPhone 17 series outsold the iPhone 16 by 14% in its first 10 days, per Counterpoint Research. Analyst Mengmeng Zhang praised the base model's value: upgraded chip, display, storage, and selfie camera at the same price, plus discounts.
Loop Capital upgraded Apple to buy, raising its price target to $315 from $226, citing demand exceeding expectations through 2027. Evercore analysts predict upside in next week's earnings, boosted by the sold-out iPhone Air in China.
The stock is up 5% YTD but 24% in the last three months.
AWS goes down: Amazon Web Services (AWS), the top cloud provider with a third of the market, went down yesterday. Downdetector showed problems at top names like Amazon, Snapchat, Disney+, Reddit, Delta, United, and Canva with Amazon restoring services "as quickly as possible."
Check this: OpenAI will crack down on deepfakes made with Sora 2 following concerns from actor Bryan Cranston and SAG-AFTRA.
Kering agrees to sell beauty unit to L’Oreal for $4.7 billion as De Meo trims debt.
General Dynamics secured an about €3 billion contract to deliver next-generation reconnaissance vehicles to Germany’s Bundeswehr.
💵 Personal Finance
Credit Card Rewards: A Boon for the Rich, a Burden for All
Despite economic gloom, high earners are splurging, fueling a boom in premium credit cards from American Express and JPMorgan Chase. But these lavish perks—like $200 Oura ring credits on Amex Platinum ($895 fee) and $500 hotel credits on Chase Sapphire Reserve ($795 fee)—come at a steep cost to everyone else.
Who Foots the Bill?
Credit card rewards are funded by swipe fees merchants pay on every transaction—highest in the US globally. Fees have surged 70% since COVID, per NACS data.
Merchants pass costs to all customers via higher prices.
Cash/debit users subsidize rewards without benefits, says Federal Reserve economist Joanna Stavins.
Low-income households see spending lag 4x behind high earners (Bank of America Institute).
Top 10% of earners drive 50% of US spending—the highest since 1989. 51% of $150K+ households prefer credit cards (Fed 2025).
The Growing Divide
Group | Spending Growth (Sept) | Preferred Payment |
|---|---|---|
High-Income | +4x faster | Credit (51%) |
Low-Income | Minimal | Cash/Debit |
Experts like NACS's Doug Kantor warn: Rewards target the rich "at everyone else’s expense." Legislation for lower fees stalled despite 2023 support.
Defenders' View
Prof. Todd Zywicki argues fees enable fraud protection and cashless convenience—merchants can refuse cards if costs are too high. An IMF study shows high-credit-score users (even low-income) benefit most.
Bottom line: Without reform, premium perks enrich the elite while inflating prices for all.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.