Morning Download 

Personal finance + economics + markets

Good morning, investors! The market seems red hot lately and some analysts are expecting an exciting quarter, which is nice to see after a lazy September.

Here’s what the market close looked like (up about 1%):

Why? Earnings season is going pretty well.

🥤 Fun fact: Buffett owns 9.26% of the outstanding Coca-Cola stock. His first Coca-Cola trade was made in Q4 1998. Since then he has bought shares ten more times and sold shares on eight occasions. The stake cost the investor $13.2 Billion, netting a gain of 61% so far.

Today we cover:

• Social Security recipients set to receive more.

• Lululemon in demand.

• Retirement savings- where do you stand?

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📊 Economy and News 

Social Security recipients set to receive more

Social Security recipients are set to receive their annual cost-of-living adjustment.

Starting next year, they’ll see a 3.2% boost in their Social Security checks, which is lower than the increase introduced for the past two years when inflation was higher. The figure is close to the current inflation rate, which suggests retirees or people on benefits will continue to live the same lifestyle they’re living now (assuming prices of the goods they buy are rising at the same pace as inflation).

Monthly payments will reach $1,907, up $59. Recipients had received increases of 8.7% for 2023 and 5.9% for last year, which were the largest since the early 1980s.

Global hits:

• Japan stock exchange adopts name and shame regime to boost corporate valuations.

• Malaysian, Thai economies suffer as currencies slide vs. dollar.

• UK inflation expected to fall to 6.5% in September.

📈 Stocks

S&P 500 4,373 (+1.06%)
DJIA 33,984 (+0.93%)
NASDAQ 13,567 (1.2%)
VIX 17.21 (-10.92%)
* Prices as of October 16th, 20:40 PM UTC

Lululemon now part of S&P 500

Lululemon Athletica will be part of the S&P 500 Index, which helped push the stock up over 10%, to an almost two-year high.

Lululemon [LULU +10.31%] will replace Activision Blizzard, effective today. This became possible due to Microsoft completing its blockbuster $69 billion deal to acquire the videogame publisher.

Why the jump? Being a part of the S&P 500 Index helps companies appear more authentic and in-demand. Not to mention the buying demand from all those index funds.

🔥 It results in more demand for the stock, which pushes prices higher.

LULU price reached as high as $417.47 on Monday, their highest level since December 2021. The stock has grown about 30% year-to-date, enjoying a market capitalization of over $52 billion.

Is it good? The stock has a ‘buy’ rating with a price target of $450 based on reports from 32 analysts. The

🔐 Crypto

Bitcoin $28,529 (+5.4%)
Ethereum $1,588 (+1.8%)
Total market cap $1.14 (+4.3%)
* Prices as of Oct 16th, 20:00 PM UTC

BTC crumples on false hope

Bitcoin (BTC) surged from $27,900 to $30,000 after a false report of a spot ETF approval was posted on social app X. The report first appeared on Cointelegraph, which has since apologized for the error.

Deleted after nearly 30 minutes, the false report was enough to impact prices (temporarily). Bitcoin has since gone back to ~$28,500 after briefly hitting the $30,000 mark.

The big change: About $81 million worth of short positions were liquidated on the move to $30,000, and $31 million in longs were liquidated during the correction.

What about the ETF? The application is still being processed but this is a good indication of things to come if the ETF gets approved.

💵 Personal Finance

Are you 'behind' on retirement savings?

About 56% of adults in the US aren't happy with retirement savings and about 37% are 'significantly behind' retirement goals.

Is this number surprising? Not to us because we know how hard it is to save in today’s environment. You need about a million to retire happily (in the US). The amount, however, depends on a variety of factors.

Here’s how you can know if you’re also ‘behind’ on your plan:

Use online tools

There are several online tools that can help you determine how much you need to save in order to retire peacefully. Some of our favorites are find on sites like Fidelity and T. Rowe. The platforms provide benchmarks for different age milestones and a target for how much to save.

We used both these tools and found this:

• You should have twice your starting salary saved by the age of 35, according to Fidelity.

• You should have 10x your starting salary saved by the age of 67, according to Fidelity.

• You should have 1 to 1.5 times your current annual salary saved by age 35, according to T. Rowe.

• You should have 7 to 13.5 times your current annual salary saved by age 65, according to T. Rowe.

Based on these figures, you can see how close you are to your goal.

Or use our formula

We recommend another method to calculate how much you need to retire: 25x your expected living expenses in retirement, so you can withdraw 4% without running out of money (per the Trinity Study).

The keyword is ‘expected’. Just because you spend $2,000 a month today doesn’t mean you will need $2,000 a month tomorrow. Inflation exists. Plus, you may need more money in the future due to other reasons such as increasing healthcare costs.

So, calculate your required amount using this formula and see how close you are to your goal.

The sad situation

People today just don’t have enough money. Most between 25 and 34 years old have an average 401(k) balance of $30,017, or a median $11,357. The situation is better for the older generation but still not good enough. The average 55 to 64 year old has only $207,874 on average and $71,168 median.

To keep you a little motivated, watch this video about retiring on $100,000.

💰 Be a Better Investor

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