🆓 Big Tech's Big Deal

Market Update

Down bad…but wait, that was expected, right?

The market struggled yet again today as all three major indexes are on pace for a losing month. However, this shouldn’t come as a surprise. Last week, we detailed that September is historically the worst month for returns. Couple that with the sh!tstorm that is the current financial state of the U.S., and it all adds up.

Make it make sense for me.

You got it. Here’s 3 key factors, broken down and explained in digestible bites. That’s right, we here at FF like to make it nice and easy, because who has the time to chew their food?

1. Looming Government Shutdown

   We combed over this topic last week, but we’ll explain it from an investor’s point of view: Investors view a government shutdown as uncertainty in the economy, meaning a couple of things. One, it will make some investors nervous, causing them to pull money from the market. Two, important data is delayed from the government, making it harder for investors to gauge the market.

2. Possible Rate Hikes

   Inflation rates look as though they will yet again rise before the end of the year. More specifically, the Fed is looking at a “higher for longer” play. When rates are low, businesses can borrow money at a cheaper rate and expand, which could boost stock prices. When rates are this high, economic growth slows and stocks become less attractive. Investors turn to safer methods like treasury bills and bonds which offer guaranteed returns.
   

3. Consumer Confidence Drops

   With inflation so high, consumers have lost buying power and are generally less optimistic about their financial situations. When consumers spend less, the market sags as investors lose confidence as well.

In the simplest way put, there is a lack of clarity for investors. Broken down like this, it’s much easier to connect the financial dots.

Quick Hits

Apple, Google, & the Deal You’ve Never Heard Of

Eddy Cue, Senior VP of Services for Apple revealed today that the company has a multi-billion dollar deal with Google to be the default search engine on iPhones. It’s estimated that Google will pay Apple around $19 billion this year for that right. Woof.

Cue argued:

• There isn’t a valid alternative to Google.

• Apple can’t afford to use an engine that “customers have never heard of”.

• Picking Google for the customer removes the paradox of choice.

Think Disney owns the world? Think again.

Target Shrinkage 🎯

Target announced today that it will be closing 9 stores by the end of October. New York, Seattle, San Francisco, and Portland will see stores say goodbye. Why, you might ask? Chalk it up to shrinkage, the industry terms for losses suffered from damage, misplacement and theft. It may not sound like much, but Target has lost $500 million in profit over the past year because of it. Or, could it be that Target is lying?

Personal Finance

Interest on Interest

Had enough interest rates yet? C’mon, you’ll actually like this one!

If you’re one of those lucky S.O.Bs with money burning a hole in your pocket, snag yourself a high-yield savings account. Do a little math and see how your money can work for you.

P.S.- the national average for savings accounts is 0.45%… however, you can get rates 4.5-5%. Are high-yield savings accounts the best-kept secret, or is it this newsletter? I’ll let you be the judge, but choose wisely.

Quote of the Day

“The only point in making money is, you can tell some big shot where to go.” - Humphrey Bogart, the greatest male screen legend of all time.

Meme of the Day