💃 Stocks hit new highs

Good morning investors! So far, 30 S&P 500 companies have posted results, beating the earnings consensus by about 5% on average. That is better than the 3% beat this time last quarter.

Today we cover:

📊 Economy and News 

Rising Risk of Sovereign Debt Defaults

S&P Global Ratings warned that countries are likely to default more often on foreign currency debt in the coming decade due to rising borrowing costs and growing debt levels.

Despite recent signs of easing debt crisis concerns, the report highlights increased default risks as global economies recover from the pandemic and geopolitical tensions.

Since 2020, 15 countries, including Ukraine, Russia, and Argentina, have defaulted on foreign currency debt—accounting for more than a third of all defaults since 2000.

Developing nations, heavily reliant on foreign borrowing, face greater risks, compounded by slow debt restructuring processes and unpredictable policies.

Markets such as India and China are not at risk. Also, we’d like to mention that Indian markets gave better returns than China in last 5 years.

Global hits:

• ServiceNow, Coreweave and others to invest $8.2 billion in UK data centers to fuel AI growth.

• European Central Bank set for third interest rate cut of the year in meeting this week.

• BlackRock, Fidelity snap up Hyundai India shares in record $3.3 billion IPO.

About China: China's exports and imports in September grew much slower than anticipated, reflecting weaker trade momentum. Meanwhile, Chinese property stocks surged following Beijing's proposed measures to support the struggling real estate sector. In other news, the UK confirmed it has no plans to impose EU-style tariffs on Chinese electric vehicles.

Check this detailed article on the topic of the potential impact of the China situation on the US stocks.

📈 Stocks

S&P 500 5,859.85 (+0.77%)
DJIA 43,065.22 (+0.47%)
NASDAQ 18,502.69 (+0.87%)
BRENT CRUDE 75.26 (-4.76%)
* Prices as of Oct15th, 12:20 AM UTC

Stock Market Hits New Highs

The S&P 500 and Dow Jones hit record highs Monday, driven by gains in McDonald’s, UnitedHealth, and Apple, as investors awaited key earnings reports from major companies like Bank of America, Netflix, and Procter & Gamble.

Technology continued its upward run and was the best-performing sector in the S&P. Moroever, Upstart and Affirm jumped sharply after Wedbush Securities upgraded them from ‘underperform’ to ‘neutral.’

Early results from JPMorgan Chase and Wells Fargo lifted the market last week, pushing the S&P 500 above 5,800 for the first time. This continued yesterday as Neobank SoFi Technologies saw its stock surge by 11% following the announcement of a $2 billion loan platform agreement with affiliates of Fortress Investment Group. This deal is intended to strengthen SoFi's personal loan services. As part of the agreement, SoFi will refer pre-qualified borrowers to its loan origination partners and will also originate loans on behalf of third parties.

The S&P 500 has risen nearly 23% this year, excluding reinvested dividends, as the bull market recently marked its two-year anniversary. Since its October 2022 low, the index has surged about 63%. Meanwhile, Treasury yields have climbed, with the 10-year note, a key measure for rates like mortgages and auto loans, exceeding 4.1% last week.

Despite new highs, investors are cautious due to rising Treasury yields, election uncertainty, and geopolitical risks.

Also, Nvidia surged to a record high, with the company now valued at over $3.4 trillion.

Good to know: Google signs deal with nuclear company as data center power demand surges.

💵 Personal Finance

Struggling to get rid of student loans? Check your options

People are struggling to make loan payments and only about 60% with student loans had paid by mid-November when the bills resumed after a gap of three years.

The situation impacts a large number of people. Outstanding education debt stands at $1.7 trillion, more than credit card or auto debt with the average loan balance standing at $30,000. In fact, around 7% of student loan borrowers owe more than $100,000.

The government is taking steps to make things right. Last year, it introduced a 12-month “on ramp” to repayment, during which borrowers are shielded from the worst consequences of falling behind.

But, you may have some other options too:

Deferments

See if you are eligible for deferments. It helps save money (no interest is accrued) and offers greater ease. There are several options, including unemployment deferment and economic hardship deferment. You must meet certain requirements to qualify for these. For example, you must be receiving certain types of federal or state aid to qualify for hardship deferment.

Other options include the graduate fellowship deferment, the military service and post-active duty deferment, and the cancer treatment deferment.

The maximum benefit from an unemployment or hardship deferment for only up to three years, per type.

Forbearances

This option allows borrowers to keep their loans on hold for up to three years. Consider this option only if deferment is not available since this option is costly due to interest.

We suggest that you try to keep up with your interest payments during the pause to prevent your debt from increasing.

Income-driven repayment plans

These schemes limit your monthly payments to a fraction of your discretionary income and grant forgiveness for any outstanding debt after 20 or 25 years.

Introduced by the Biden administration, this option enables borrowers to contribute only 5% of their discretionary income towards their undergraduate student loans, with some individuals having a monthly bill as low as $0.

Check this video for more:

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

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