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Hey friend - Happy Halloween! 🦇👻🧙🧛
Please excuse me while I eat an unhealthy amount of pumpkin-shaped Reeses.
Here’s what you need to know today…
Big Picture
Wages aren’t keeping up with inflation.
Consumers are losing confidence in the economy.
Low home supply is keeping prices at record highs.
Check out more newsletter recommendations from Beehiiv:
The Market: ⬆️ +0.7%
S&P 500: 4,193.80
1Mo: -2% | 1Yr: 9% | 5Yr: +54%
The market drifted higher today to end October down 2%, the third negative month in a row.
Workers saw their pay increase last quarter. The Labor Department’s Employment Cost Index revealed total compensation, including wages and benefits, increased by 1.1% in the third quarter. Incomes aren’t keeping up with living costs, though. Adjusted for inflation, American workers’ salaries and benefits have increased by only 0.6% over the past year. That compares to 1.6% back in June.
Americans aren't feeling optimistic about the economy. The US Conference Board's Consumer Confidence Index fell for a third consecutive month to a five-month low in October. People are worried about rising prices, especially for groceries and gasoline, and higher interest rates. The percentage of people who expect inflation to rise over the next 12 months also climbed. Consumer spending makes up two-thirds of the total economy, so negative sentiment can have a tangible impact on business trends.
Home prices hit a record high in August, putting a further strain on potential buyers. According to data from S&P CoreLogic Case-Shiller, home prices rose 0.9% from July to August, up 2.6% from the same time last year. The surge is due to a shortage of homes for sale, keeping the market competitive. High mortgage rates have deterred home buyers and sellers and stalled the market.
🔦 With living costs rising, it's important to monitor how much you're spending on a regular basis. Comb through your most recent statement to clean up any recurring charges you don’t recognize.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡How are these companies doing? Judge their decisions. Investing starts with an opinion.
 Anheuser-Busch InBev | Bud Light Bashing Anheuser-Busch continues to suffer losses from the ongoing backlash against its Bud Light marketing partnership with a transgender influencer, dragging US sales down 14%. The world's biggest brewer is still doing well across its other brands. |
 Tesla | Battling Liability Tesla avoided liability for fatal crashes from drivers using its Autopilot feature in its second case this year after a jury found human error caused a 2019 crash. Tesla still faces regulatory investigations related to Autopilot crashes. |
 Stellantis | Surviving the Strike Stellantis lost $3.2B in sales from six weeks of employee walkouts that disrupted production, but it reached a deal with workers this past week. The Jeep maker still expects to profit through the end of the year due to sales abroad. |
 Caterpillar | Construction Peak The world's largest construction equipment maker reported double-digit profit growth amid increased infrastructure projects and construction across the US. Caterpillar's order backlogs shrank, suggesting this activity may be slowing. |
 BP | Headwinds BP isn't making the blowout profits it was last year, unable to earn as much trading in volatile gas prices and suffering a substantial loss on wind projects not going to plan. The oil giant still hasn't replaced its fired CEO after six weeks. |
(These links only work for 24 hours while the story is live.)
Inside Scoop 🤓
What are investors watching for in earnings reports?
One of the most critical components of corporate financial reports is the guidance. Public companies must report on their financial health each quarter, releasing standardized metrics on their sales, expenses, debt, profit, etc. All of that information, though, is backward-looking. Investors are buying a company for its future earnings (aka profit).
Companies often issue guidance or provide projections for future sales and earnings. This gives investors a sense of optimism or pessimism from those who know the company the best. Forecasted metrics are not required, so many companies have often avoided making projections over the past few years, given the unprecedented economic events. If they do report, you'll hear that they may have raised or lowered guidance, meaning they expect higher or lower profit/sales/whatever than they projected last time. You might also hear guidance compared to Wall Street Analysts' projections or estimates.
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