The company shares rose sharply on Monday after receiving an upgrade from Morgan Stanley. Consistent with Pika World’s previous update, SoFi Technologies is poised to grow rapidly in the consumer finance sector and to some extent, a “Super App” where we believe they have the potential to pivot to a broader segment of young consumers.
It started as a company focusing strongly on student loan refinance but has broadened to include many peripheral financial service products. As a SPAC stock, it has shone brightly. On the backdrop is the expiry of the federal student loan deferment on Jan 31 2022, which is expected to provide robust student loan growth narrative. Moreover, loan growth should set the momentum for the next “leap” forward if its application for a federal bank charter is approved.
Pika World continues to stay optimistic about the growth story and remains vested and seeks a re-entry position.
🏦Bank Earnings Bring it On🏦
It’s back to the earning session for banks, which will kickstart the first bang. Financial gains have been impressive this year. We saw KBE ETF up by around 31% this year, exceeding S&P 500 gains of about 16%.
However, enthusiasm is light as most of the catalysts have already surfaced. Moreover, with banks repurchasing their shares and paying out generous dividends, the sector has stable support given an inflationary environment.
As deal makings, IPOs and trading activity are returning; although still facing pressure, Pika World is still positive on the sector as a hedge against a higher interest rate environment.
💡Surge in Oil Prices a Danger💡
The sharp rise in oil prices is threatening the notion of global inflation again. This weighs down stocks as there is fear that the Fed might be motivated to tighten more than expected and faster.
Indeed, higher oil and gas prices mean more costly operations for companies and might weaken consumer demand. Likewise, we also see higher bond yields around the world. The higher bond yield continues to put pressure on the technology sector.
📮What’s on the Menu Today?
10 pm will bring us to the JOLTs Job Openings for August. If you have read out the weekend edition, we had mentioned the high job opening per unemployed worker. We expect it to remain elevated at 10.925M.
At 12.30 am, we will have FOMC member Bostic speaks as any hints on the progress of the economy brings us closer to the Nov FOMC meeting insights.
Auction on 10-Year Note will also begin at 1 am.
It is Oct 12, Tuesday, at 7.25 am in Singapore and 7.25 pm in New York. It is the first trading day of the week, and the market has been kind. Pika World wishes all a vibrant week.
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