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Here’s what you need to know today…
Big Picture
Policymakers have stopped making borrowing more expensive, for now.
There are still way more open jobs than workers to fill them.
The manufacturing sector is still having a bad year.
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The Market: ⬆️ +1.1%
S&P 500: 4,237.86
1Mo: -1% | 1Yr: +13% | 5Yr: +56%
The market started the month on a high note as investors celebrated policymakers' decision not to raise interest rates again.
Policymakers have stopped trying to make borrowing more expensive, for now. The Federal Reserve decided not to increase interest rates at its second straight policy meeting Wednesday. Fed Chair Jerome Powell assured investors that while they are not hiking rates now, they are ready to raise them at any meeting in the future if inflation does not continue to slow down. Policymakers believe the economy is still reasonably strong, but higher borrowing costs have strained consumers and business owners. The Fed has taken short-term interest rates from nearly zero to over 5% within 18 months to slow spending and control inflation.
There are still a lot of unfilled job openings. The Labor Department’s JOLTS report indicated companies had more than 9.5 million unfilled positions at the end of September. That’s still well above the 7 million average before the pandemic. Hospitality and food services have dominated the job openings, particularly for small businesses. Openings dropped for big companies and across most other services. Unemployment is near record lows, and there are roughly 1.5 jobs available for every unemployed person. Layoffs are at a nine-month low.
💼 While there are a lot of openings, they’re not spread evenly across industries. If you’re on the hunt, try looking at smaller companies or ways to apply your skillset to alternative sectors outside of tech, finance, or marketing services. Companies are hanging on to the staff they already know.
Americans are buying less stuff, and manufacturers are suffering. The Institute for Supply Management (ISM) reported that economic activity in the manufacturing sector contracted in October for the 12th consecutive month, the longest stretch since the 2007-2009 recession. Manufacturers face weaker demand, lower production, and less revenue.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡Practice having an opinion. Build your voice. It accelerates your comprehension and comfort with these topics.
 WeWork | Out of Work Workspace provider WeWork plans to file for bankruptcy, unable to make interest payments on its mounting debt amidst a slowdown in office work. Once one of the most valuable startups ever, WeWork failed to prove its business model could work. |
 Airbnb | Staying Profitable Airbnb hasn't seen a major travel slowdown, notching double-digit sales and profit growth over the past year. The homeshare giant said average stay prices are up only 1% from last year and promised to lower costs further. |
 Kraft Heinz | Pricey Food Kraft Heinz keeps boosting its sales and profits by raising prices across its brands, from ketchup to Jello-O, inflating sticker prices by 7% last quarter. The food giant has kept raising prices despite consumers pushing back and buying less. |
 CVS Health | Rough Transition CVS boosted profits through its massive pivot from a drugstore chain to a healthcare empire by slashing costs and expanding medical services, insurance, and pharmacy care. Pharmacists staged nationwide walkouts protesting harsh conditions. |
 Toyota | Electric Demand Toyota notched record profits from surging car sales worldwide, as consumers flocked to its lower-priced gas-electric hybrids amidst waning enthusiasm for pure electric vehicles. Toyota will spend $14B to expand US battery production. |
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Inside Scoop 🤓
What do investors look for in an earnings report?
Earnings Per Share (EPS) is one of the two main metrics you'll find in the news about a corporation's quarterly financial update. Earnings is another word for profit, and so is net income. Earnings per share are the company's profit divided by the number of shares available. It's a standard way for an investor to evaluate whether the company is earning more or less profit this quarter than the investor expected.
Understanding how much the stock price is marked up over the company's profitability is also helpful. That's called a price-to-earnings multiple (P/E multiple). If one company's share price is 15x higher than its earnings per share, investors are more confident in its future growth than a company whose share price is 12x its EPS.
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