Economy

💰Searching for direction🧮

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Equity markets rose with Americans marching towards the poll for midterm elections. There are two hopes: the rise of a red wave and for the Fed to pivot.

With the expectation of a Republican sweep, possibly a split government, investors see the gridlock situation as positive on both policy and economic front. In addition, polls are reflecting an expectation for the Republicans to take over the House.

As long as no single party has absolute control over both chambers, enacting policy would be difficult, and Democrats’ aggressive fiscal spending could be tamed, a positive sign in an inflationary environment contrary to popular likes of government to spend more money.

🎢The next big thing: CPI data🔫

Beyond the midterm election is the CPI data that will be released on Thursday. We are seeing the 10-year Treasury yield moderating to 4.125%. The same goes for the two-year yield dropping to 4.672%.

When CPI is released on Thursday, the expectation of an 8% gain on a y-o-y will be sufficient to provide relief. It will be a decline from September 8.2%. This will spur the narrative of a Fed pivot again and lift the pedal off toward an aggressive rate hike.

🍟Disney – a mixed result🎲

Fresh off the release is Disney. Investors were looking at three main ideas: stable visitorship and spending at theme parks, sound TV and movie businesses. Yet, there were some disappointments. First off, Disney+ posted a more comprehensive loss despite adding more subscribers. Theme parks see good revenue, but profit needs to catch up. Hence, there is a big miss on both revenue and earnings. Guidance was also poorer than investors’ expectations.

Pika World sees weakness as potential accumulation or long-term but cautioned on the weaker maco-environment.

📱Affirm Tough love❤️

After the company also posted a weaker-than-expected earnings result, Shares of Affirm plunged an hour. The result was widely looked into as it is like a microscope towards identifying clues on the health of the consumers’ wallets and how the challenging economic situation affects spending.