Good Morning 👋

Halloween has certainly brought in a festive vibe. The week started slowly but picked up momentum when things were getting boring.

If you are following the ICC Cricket Worldcup, New Zealand was beaten quite comprehensively by South Africa (who have now become the table toppers). The defeat has opened up the points table pretty nicely, and the race to the finals is now heating up. These are pretty exciting times if you are a fan of cricket!

I want this newsletter to be all things money; therefore, I have started a new series on passive income ideas. This will be on top of the financial news and analysis that I regularly share.

So let’s get started.

Passive Income Ideas 💵

We have all read and heard much about passive income in the last few years. In fact, in my opinion, the concept of passive income will continue to gain traction and grow in 2024 and beyond.

But in all fairness, once you truly understand that passive income is not actually passive and there is an active effort involved, you will get ahead of 95% of the people.

I have a list of passive income ideas that I will go into detail about in the coming days; the first one is as follows:

Cents & Sense Perspective💪

I have said this many times: the stock market is a funny place.

After a catastrophic week ending last Friday, there was significant pessimism going into the weekend. But in the last three days, the sentiments have moved from bearish to almost bullish. I say “almost”. It is a conscious choice of words mainly because this can go back to red pretty quickly if Apple misses the mark in the earnings call today.

The stock prices of tech giants have tumbled, not because of their current earnings but due to the expected performance in the coming months. We have seen this with Alphabet, Meta, and yesterday with AMD. I also suspect Apple might hint at lower-than-expected demand for iPhone 15 in China.

But the big news that helped the stock market sustain its counter-trend rally on the third day was the Fed’s decision to continue holding the interest rate hikes.

Federal Reserve Policy Update

The Federal Reserve has maintained its current interest rates, marking the second consecutive policy meeting without a rate hike. This decision was met with a positive response from the financial markets, with notable gains in the Nasdaq Composite, Dow Jones Industrial Average, and the S&P 500. Despite the challenges of October, this development has provided a positive start to the month.

The robust performance of the U.S. economy, fluctuating bond yields, and an evolving geopolitical landscape influence Powell's stance.

I do expect the high-interest rates to continue. Recent data, including subdued manufacturing figures and ADP employment numbers, suggest that the effects of previous rate hikes by the Federal Reserve are becoming evident, although very slowly for my liking. The upcoming Friday jobs report would also be interesting!

Labour Market Update Insights

The Bureau of Labor Statistics released its latest Job Openings And Labor Turnover Survey, which showed a relatively stable job market with little change in key metrics.

Job openings remain high at 9.6 million, with significant increases in sectors like manufacturing, healthcare, and arts compared to pre-pandemic levels. This indicates potential strength in hiring and job growth. However, a high number of job openings does not necessarily predict a rapid hiring pace, as companies are filling positions more cautiously due to economic uncertainty.

The report also noted that job turnover rates are slowing, with the quit rate holding steady at the same level as in 2019, suggesting workers are less inclined to leave their jobs voluntarily. Companies are cautious about releasing workers, mindful of the costs associated with rehiring. Hiring rates are slightly down from February 2020, while layoffs are significantly lower.

Overall, the demand for workers remains strong, and the labor market is tight, which is not ideal for the Federal Reserve but isn't necessarily negative for the economy. The continued demand for labor, coupled with a growing labor supply, is not expected to drive inflation, suggesting the possibility of a smooth economic adjustment ahead.

Is Hulu going to Disney? At what price?

Walt Disney announced its intention to acquire Comcast's one-third stake in the streaming service Hulu. This deal will make Disney a 100% owner of Hulu. This decision is based on a five-year-old agreement that set Hulu's minimum valuation at $27.5 billion.

The question now is about the final price that Comcast can get.

While Disney is set to pay Comcast an initial $8.61 billion by December 1st, a detailed appraisal process will determine Hulu's exact equity value. If the appraised value exceeds the base valuation, Disney will pay the difference, which could be in the billions.

Financial experts will be engaged by both parties to estimate Hulu's market value. Comcast's CEO, Brian Roberts, has previously indicated that Hulu's worth could be significantly higher than the base valuation. Comcast will use the proceeds from this sale to boost its stock repurchase program.

Following the announcement, stocks of both companies saw a slight increase in after-hours trading.

I’m Armaghan Tanveer, a numbers guy by profession and a romantic by heart. I have just started documenting my life (as a part-time content creator while managing my day job and family). I would love to have you as a part of my journey; you can follow me on my journey here.

DISCLAIMER: We are not investment advisors; this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your research.