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Blue Chip

A GREAT day for the stock market – here’s what happened

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Corporate America to the rescue… the Dow closed up 2.2% on Tuesday on the back of big corporate profits from some of the most prominent companies. Yesterday represents the best day for the Dow since March. And, quick to forgive, investors were back on the Amazon, Facebook, and Netflix bandwagon after dropping the stocks like a hot potato last week!

 

Last week took an L…, but today we bounce back (after last week’s mini-crash). Last week, the Dow, S&P 500, and Nasdaq all had their worst week since March (yes, the same month the market had its best day). However, despite the solid rebound, all three indexes are down for the month.

 

Yesterday’s issues… are slightly better today. Treasury rates have gone from 3.25% to 3.15% which has calmed investors down a bit. Remember – treasury rates move in the opposite direction of stock prices. Let’s hope the bull keeps charging forward!

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Hustlin'

This just in: It’s time to ask your boss for a raise.

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Unemployment is low… so low that it is at its lowest level in close to 50 years! And now, finally, American workers are seeing a pay increase (not me, of course, but hopefully some of you are benefitting). Weekly wages are up 3.3% in the third quarter which actually beats the 2.6% inflation increase over the same period.

 

The Labor Department… decides this figure (3.3%) by surveying people based on full-time wage and salary workers weekly earnings. This is good news because we have seen the job market improve, but not the wages people are making at those jobs. However, rather than pay raises, we have seen companies offer other benefits (that are easier to take away when things go south) like paid sick leave and improved healthcare.

 

Wages are up, and unemployment is down… so who do we credit for this fantastic turnaround? Actually, no need to ask, because Donald Trump was quick to point the finger at his favorite person – Donald Trump. And shortly after these results were released the president tweeted, “Incredible number just out, 7,036,000 job openings. Astonishing – it’s all working!”

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Miscellaneous

Who needs a personal grocery shopper? Everybody does.

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Look out for… Instacart, the on-demand grocery delivery company that is now worth a whopping $7.6 billion. The company raised $600 million in its latest round of funding. Instacart launched in 2012 and gives ordinary people their very own grocery shopper.

 

Here’s how it works… customers get a personal shopper that goes to the grocery store, finds everything on your grocery list, purchases and delivers the items to you. And the continued investment is encouraging news because many thought this company didn’t stand a chance against AmazonFresh which provides a similar service.

 

Instacart partners with… many grocery stores, including Whole Foods, Kroger, Sam’s Club, Publix, and many others. The company has deals with over 300 grocery stores (national and local). Instacart now has services at 15,000 grocery stores in 4,000 cities with 50,000 customers. Pretty soon we will never need to the leave the house – that’s the ultimate goal in life, right?

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Blue Chip

Netflix is still the streaming K-I-N-G

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The results are in… and they are quite good. Netflix gained close to 7 million new subscribers last quarter which is 2 million more than expected. With the latest results, Netflix now has more than 137 million subscribers worldwide. And with the subscriber growth came a 14% price hike in the company’s stock (hopefully you didn’t sell last week).

 

Netflix has the last laugh… because the stock plummeted with last quarters subscriber results…and then again, last week, with the rest of the tech stocks. CEO Reed Hastings chalked the second quarter up to “forecasting issues.” Also, in the future, the streaming giant plans to only account for those who pay for their Netflix account – not you ‘free trial’ freeloaders.

 

Another big plus… is that 6 million of the total new subscribers were from overseas. So what’s next? Well, the company plans to keep investing heavily in original content – somewhere between $8-13 billion in 2018. Netflix is hoping the massive cash investment will pay dividends in the future.

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