Home Depot and Lowe booming in a housing market bust (4 min read)
Home Depot and Lowe remained strong despite home sales and constructions having weakened from high mortgage rates. Both companies reported better than expected quarterly earnings this week that have sent their stocks higher. Aging houses, work from home, and less household mobility have all kept remodeling spending strong. Consumers bought less but spent more on expensive items which led to increases in revenue for Home Depot and Lowe.
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Nvidia revenue dropped but data center sales grew (2 min read)
Nvidia reported their quarterly results on Wednesday with sales beating expectations but earnings were slightly below. Revenue was down 17% from a year ago as the demand from the PC market slowed. The company also forecast fourth quarter sales to be lower than anticipated. However, their data center business increased in sales by 31% year-over-year, mostly from U.S. cloud service providers and consumer internet companies.
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Canada’s annual inflation rate steady at 6.9% in October (3 min read)
Canada’s inflation rate remained steady in October but still at an elevated level. The country’s CPI rose 6.9% from last year which is the same as the previous month. It is showing signs that annual inflation rates are somewhat easing as it stayed below the all-time high of 8.1% in June. The biggest price jump in October was gas but was offset by the slowing price growth in other areas. Analysts are divided evenly on whether the next rate hike in December will be 0.25% or 0.5%.
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US homebuilder sentiment drops to a decade low (2 min read)
The US home builder sentiment index has fallen for eleven straight months in October and reached the lowest level since June 2012. The three components of the index, current sales, sales expectation, and buyer traffic, have all continued to slide. Mortgage rates that are more than twice as high as the start of this year have significantly impacted demand for new homes. Homebuilders are increasingly adding various incentives to attract buyers.
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ETN vs ETF: What's the Difference? (4 min read)
ETN stands for exchange-traded note and it is a debt instrument that trades on the exchange. The main similarity to an ETF is that they both track the performance of an underlying benchmark or asset. This guide from ETF.com explains the differences between ETN and ETF in terms of structure, tax treatment, market risks, and how they track benchmark performance. It also discusses the pros and cons of investing in each investment vehicle.
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Grayscale Bitcoin Trust’s Endlessly Widening Discount (3 min read)
The Grayscale Bitcoin Trust (GBTC) was trading at roughly 40% discount to its net asset value after the collapse of crypto exchange FTX. GBTC is similar to a closed-end fund where the underlying assets are locked and often trades at a different value. GBTC’s manager has been trying to convert it into an ETF but was denied by the SEC previously. If it does become an ETF, investors who bought it at a discount will profit handsomely because the mechanism will bring the trading price to its net asset value.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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