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Hey friend - Make sure to catch up with our Weekly Scoop, and don’t miss our Explained about the hidden power of consumer brands giants.
Here’s what you need to know today…
Big Picture
Companies have cut back on hiring.
America’s biggest corporations are doing better than feared.
Artificial intelligence is getting its own App Store.
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The Market: ⬆️ +0.2%
S&P 500: 4,365.98
1Mo: +1% | 1Yr: +15% | 5Yr: +57%
The market continued the positive streak today after the underwhelming jobs report on Friday pointed to a slowing economy. Investors hope that means an end to restrictive economic policy.
Companies didn't hire as many workers in October as the economy slowed further. According to the Department of Labor, employers added 150,000 jobs last month, only half the amount added in September. Most of these positions were in healthcare and government, sectors less tied to the state of the economy. The unemployment rate rose to 3.9% from 3.8% the month before but remains historically low. Wages rose by the smallest amount in nearly 2.5 years.
💼 Low layoffs and slow hiring may indicate that employers are hanging on to the workers they know and trust amidst an uncertain economy. Networking will be more important than ever in the job hunt.
Things are still going well for America's largest companies, even though executives are flashing warning signs. We’re most of the way through third-quarter financial updates, and 82% of the S&P 500 companies have reported better profits than investors expected. Real estate and tech have been doing the best, while the energy sector is dragging everyone else down. They couldn’t maintain the record profits of last year’s oil price boom. [🤓]
Artificial intelligence keeps getting more accessible. ChatGPT developer OpenAI unveiled several new product updates at its first major DevDay conference. AI will soon get its own App Store: the GPT Store, allowing users to create, share, and monetize their own custom GPT bots. Their flagship program, ChatGPT, is also getting an upgrade. The new GPT-4 Turbo version will be cheaper and unlock more features for web browsing, code writing, data analysis, and more.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡Act like a boardmember and judge how companies behave. Engaging helps build your financial confidence and hold corporations accountable.
 Nikola | Fire Pivot Nikola is betting on a new hydrogen fuel-based truck to save its struggling business after electric battery-related fires forced the startup to discontinue its electric fleet. The electric truckmaker hopes to deliver vehicles again next year. |
 BP | Charging Up BP will invest $100M to expand into the electric vehicle charging market, purchasing Tesla ultrafast chargers to integrate into its gas station network. The energy giant aims to transition to more clean energy and reduce its oil production. |
 DraftKings | Gambling Boom DraftKings has capitalized on the surging interest in sports betting and online casino games, growing sales by nearly 60% in the past year. DraftKings just took the lead in market share from FanDuel, but competition keeps intensifying. |
 Starbucks | Weak Wages Starbucks hasn't bowed to the pressure of its unionizing workforce, offering only 4-5% raises this year while other industry unions have earned 5-10 times more. The coffee giant's profits have surged nearly 40% in the past year on strong sales. |
 Tesla | Appeal to Workers Tesla will raise its German employees' wages by 4% and offer an end-of-year bonus to help offset rising living costs after employees staged protests demanding higher pay. Tesla could see its US and European workers start unionizing. |
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Inside Scoop 🤓
What are all these beats and misses?
Earnings season is full of beats and misses. News articles typically reference whether the company reported more or less profit/revenue/whatever for the quarter than investors expected.
Wall Street Analysts make projections, and then media outlets will compare the reported financial figures to the average of the Analysts' expectations. Having a tiny bit more or less revenue (sales) or earnings (profit) than the average of a range of expectations isn't typically something to worry about, especially when it's only three months of a company's lifetime. The important stuff is the report's context and whether the company feels confident about the future.
One important thing to keep in mind: Beats and misses are just short-term relative terms, so they’re not that helpful for understanding the company’s financial health. A company can beat estimates and still report declining sales and profits if analysts projected a decline. The company may have lost a little less money than expected, but it still lost money. The same is true the other way. A company could report surging profits, but if analysts had high expectations, it would be classified as a miss. Make sure to read into the news a little more closely.
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