THE MARKETS

📈 Equity markets moved into correction territory, falling around 10% from July highs.

💼Economic News

The personal consumption expenditures price index rose 0.4% month-over-month in September, mirroring the pace in August. Based on this data, there is a strong possibility that the Federal Reserve will opt to maintain steady interest rates during its upcoming meeting. 

Speaking of the impact of interest rates, Americans are falling behind on their car payments at the fastest pace in nearly three decades. This is likely the result of high-interest rates, which are making car payments more difficult to manage. 

👀 What to Be on the Lookout for This Week

Here are the economic reports that you’ll want to keep an eye on:

• Monday: Dallas Fed Manufacturing Index

• Tuesday: Case-Shiller Home Price Index

• Wednesday: The Fed’s interest rate decision, 30-year fixed-rate mortgage, ISM Manufacturing PMI data, September job openings

• Thursday: Initial jobless claims

• Friday: October unemployment rate and payroll report

Additionally, these are the earnings reports scheduled for this week:

• Monday: McDonald’s, Pinterest

• Tuesday: BP, Pfizer, Sysco

• Wednesday: CVS, Kraft Heinz, DoorDash, Etsy, PayPal, Roku, Zillow, Airbnb 

• Thursday: Eli Lilly, Novo Nordisk, Marriott, Peloton, Shopify, Yelp, DraftKings

• Friday: Dominion Energy, Cinemark

📰 In Other News

Meta’s Legal Woes: Meta Platforms is no stranger to controversy, but it may find itself in the center of yet another string of lawsuits. This past week, Meta’s legal issues elevated to a new level as a bipartisan group of 42 attorneys general sued the company, alleging that its features are addictive and aimed at kids. 

The lawsuit alleges that the company deliberately designed its social media apps, Facebook and Instagram, to be highly addictive. This incentivizes young children to keep using the apps. The suit also accuses Meta of violating the Children’s Online Privacy Protection Act, which prohibits companies from collecting data from children. The states are seeking an end to what they perceive as Meta's harmful practices, seeking penalties and restitution. 

Bitcoin’s Breakthrough: Bitcoin topped $35,000 for the first time in over a year, mainly thanks to the excitement surrounding BlackRock’s pending Bitcoin ETF. As one of the world’s largest asset managers, BlackRock’s new ETF, if approved, would bring a much larger sense of legitimacy to the cryptocurrency. 

The Rent Is Too High: …for this reason. Most major landlords rely on just two software providers to help determine rent prices: RealPage and Yardi Systems. These firms collect market data, then help landlords set prices automatically. 

However, these algorithmic pricing models often encourage landlords to keep rents high to boost profits, even if it means losing tenants. The models also typically discourage landlords from lowering rent prices during tough times.  

Now, these firms are facing dual lawsuits alleging that they exchange confidential pricing information to set rents across buildings and markets. In other words, these two software providers could be colluding, keeping rent prices artificially high. 

X Usage Plummets: New usage numbers have been reported for the social media app formerly known as Twitter — and they’re not pretty. During Elon Musk’s regime, global app downloads were down 38% from October 2022 to September 2023. Additionally, the number of mobile users is down 17.8% in the U.S. 

This decline in usage is making it harder for the company to sell ads, and Musk admitted that the company’s ad revenue was down 60%.

YOUR ECONOMY

🎃 Halloween Spending Hits a New High

Setting Records

The National Retail Federation just released its annual holiday survey, and the results are in: Americans are embracing the spooky season cheer more than ever this year.  

In total, Americans are projected to spend $12.2 billion on Halloween costumes, decor, and candy. This marks an increase from $10.6 billion last year, also setting a new record. The dramatic surge in spending is likely a result of what's known as “revenge spending” — a reactive behavior of increased spending following a period of challenges.  

Halloween revenge spending is likely a lingering effect of the pandemic. During the pandemic, everyday pleasures like vacations, dinners out, and even trick or treating were temporarily put on pause. Now that these activities have resumed, many consumers are making up for lost time and memories by spending more than they usually would. 

When it comes to Halloween, some may feel they missed out on two years of trick-or-treating, decorating, and dressing up for Halloween. Now that Halloween has returned to normal, many are going all-out on costumes, decorations, and candy. In fact, a record 73% are set to participate in Halloween activities this year, up from 69% last year, according to the NRF.

Spooky Spending Stats

During Halloween, Americans typically focus their spending on three main categories: costumes, candy, and decorations.  

Here’s this year's spending breakdown:

• $4.1 billion on costumes. Spending on costumes accounts for the most significant increase this year — up almost 14% from last year.

• $3.6 billion on candy. Candy spending is projected to hit $3.6 billion, up from $3.1 billion last year.

• $3.9 billion on decor. Spending on decoration is expected to be $3.9 billion this year. Decoration purchases are up by 72% compared to pre-pandemic times.

Unfortunately for trick-or-treaters, candy prices have been on the rise, owing to a shortage of sugar. The average price of a piece of candy has increased by 7.5% compared to last year, possibly explaining the overall increase in candy spending.

Trick, Treat, Spend, Repeat

Holidays are always some of the most fun and lively times of the year, particularly in recent times, as in-person events are appreciated even more. But it’s also important not to let holiday excitement overpower financial restraint. It may be tempting to buy a 12-foot skeleton that will probably look amazing in a front yard — but at $300 per “set,” it might not be the best budgetary choice.  

Regardless of the holiday, it's important to set a spending budget and stick to it. This doesn't mean missing out on enjoyment. It just means ensuring it’s within your means. For example, budget-pressed consumers might consider options such as creating homemade costumes instead of purchasing new ones or buying Halloween candy from discount retailers.

As the holiday season nears, maintaining a budget enables a focus on what truly matters during these special times, promoting a mindful approach to appreciating every moment.

💸 Gen Z & Millennials Increasing Reliance on Gig Work

Slowing Spending

Despite the high inflation rate in recent years, consumer spending has held firm. The rising cost of living, however, is beginning to impact certain demographics.  

In particular, younger generations are slowing their spending while seniors continue to spend steadily. At the beginning of 2023, Gen Z and Baby Boomers had similar spending patterns. But as the year has gone on, Gen Z has reigned in their spending. This is a sign that younger Americans are facing more financial stress and have less cash to spend after covering their bills.  

This trend is at least partly due to the current housing market. Younger generations have a lower rate of homeownership compared to their seniors. Many Baby Boomers locked in stable, inflation-protected mortgage payments years ago. More than a few have paid off their housing loans entirely. 

In contrast, many members of Gen Z and younger Millennials looking to buy a home are priced out of the housing market. According to a study by the property data provider ATTOM, 99% of homes in 575 US counties are beyond the reach of the average earner, who typically earns around $71,000. Moreover, younger generations are compelled to take on hefty rent payments, adding to the challenge of making ends meet.

Turning To Gig Work

To make ends meet, the nation’s younger generations are increasingly reliant on part-time, contract, or gig work. These include temporary or project-based positions with companies like Uber, DoorDash, and Rover that have embraced the "Independent contractor” business model over the past decade.  

For many workers in their 20s and 30s, gig economy work offers a quick cash solution. Whether it’s driving or dog walking, part-time roles abound, giving people the opportunity to get paid fast and frequently. When rent or gas costs rise, picking up more gigs becomes an easy way to bridge the gap. 

Younger generations appear to be embracing the system. Although just 4.3% of Millennials and 3.6% of Gen Z are now earning from gig jobs, that’s more than double the rates from six years ago.

Is Gig Work Worth It?

In its early days, the gig economy received praise for offering quick income opportunities. Most gig jobs skip the interview process, allowing workers to get paid within days. Moreover, many gig jobs offer the flexibility of setting your own schedule — a universally appealing factor to workers in the modern age. 

However, gig work was initially designed for part-time employment. When relied upon as full-time income, the benefits start to erode. Moreover, the freedom to choose your schedule matters less if, for instance, a contract requires an eight-hour-a-day commitment anyway. 

Finally, despite full-time responsibilities, most jobs in the gig economy lack the benefits of full-time employment, such as access to healthcare, paid time off, or retirement plans. 

While it offers many short-term benefits, it remains to be seen if the gig economy is better for the workforce as a whole.

POCKET CHANGE

Most mothers want to scale back their careers to spend more time with their kids. But 93% of mothers anticipate encountering bias when reentering the workforce — a sign that changes around the “stay-at-home mom” stigma might be needed. 

99% of Gen Z is nervous about being able to save enough money to retire. But, despite this uncertainty, most of Gen Z expects to retire at 61. 

Airport lounges are soaring in popularity. In response to the increased demand, lounge providers are making changes to keep lounges exclusive without putting them too far out of reach. 

Roughly 52% of Americans share their voice online, which could lead to a spike in “interactive voice response” scams. This is when scammers use AI to call people you know and attempt to trick them using your AI-simulated voice. 

38% of recent homebuyers under 30 used family money to afford the down payment, according to a new Redfin report. Nearly 75% of aspiring homebuyers say affordability is the biggest obstacle to owning a house.