US consumer prices rose 3.7% over last year in September, matching August's increase (3 min read) US inflation rose 0.4% on a monthly basis in September, a deceleration from the 0.6% increase in August. The annual inflation growth remains the same at 3.7% as the previous month. Markets showed little response, with stocks mostly unchanged and Treasury yields inching up slightly. The report is seen as unlikely to influence the Fed's rate decision, with currently a 90% chance of no change next month.
IMF urges governments to cut deficits to dent inflation (2 min read) An IMF official warns that governments worldwide must control spending and boost revenues promptly to avoid hindering central banks' efforts to control inflation. Tighter fiscal policies are crucial as many countries often struggle to balance public finances and may affect inflation in certain situations. These remarks align with the IMF's recent concerns about rising deficits and governments accumulating more debt, notably in the US.
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Business & Stocks
Berkshire Hathaway scored a 93% gain on Nubank, making the stock its best performer this year (2 min read) Although Berkshire Hathaway’s stake in Nubank is small, it has gained over 93% this year, making it the best performer in the portfolio. The company invested in Nubank back in mid to late 2021, around the time it went public on NYSE. Although Nubank stock is still 13% below its IPO price, the bank has shown significant operational and revenue growth over the past year, leading to a sharp rebound from its all-time lows.
Delta Air Lines profit jumps almost 60% after strong summer (3 min read) Despite the pressure in fuel prices, Delta Air Lines reported a nearly 60% increase in Q3 profit due to robust travel demand, especially for international trips. The company expects solid travel demand in Q4, projecting a revenue increase of 9% to 12% compared to the same quarter in 2022. This led to speculation that other major airlines might see similar results and momentum.
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Funds & ETFs
U.S. bank ETFs suffer sharp outflows ahead of results (2 min read) US bank-focused ETFs experienced notable outflows this month. So far in October, Invesco KBW Bank ETF (KBWB) saw $336.18 million in outflows, erasing most of the $381.16 million cumulative inflows it received this year. Although minor compared to KBWB, the SPDR S&P Regional Banking ETF (KRE) also experienced $19.58 million in outflows this month. Rising interest rates, cost challenges, and stricter regulations have weakened demand for US banks.
TLT vs. Worst Treasury Bonds Bear Market in History (3 min read) The iShares 20+ Year Treasury Bond ETF (TLT) is rebounding after hitting a 16-year low, rising nearly 5% from its lowest point. Despite concerns about the bond market, investors are buying TLT for various reasons, including bets on a price bottom or simply for higher yields. This article breaks down some of the reasons that might have caused TLT to bounce recently.
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Portfolios & Investing
Why I Invest in Canadian Banks But Not U.S. Banks (3 min read) Although this article is a bit dated, it touched on a few good points on why Canadian bank stocks are typically better long-term investments than US banks. One of the biggest reasons is because of the banking landscape in Canada, where the oligopoly of the big six banks allows them to make solid profits, even during economic downturns.
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