Oct 31, 2022
The Weekly Scan October 31, 2022
Find out what’s happening in the world of business this week
Welcome to the Weekly Scan. Here’s what we’re following for the week of October 10, 2022. Plus, our Certified Financial Planner™ Lauren Anastasio gives advice on how to respond to the news.
Twitter takeover. Tesla’s CEO Elon Musk completed his acquisition of Twitter last week in a $44 billion deal. Musk traveled to Twitter headquarters late last week, where he met with the social media platform’s engineers and advertising executives. Immediately upon taking over, Musk reportedly fired four top executives at Twitter, including the chief executive and chief financial officers. Twitter’s future remains uncertain, but Musk has said that he is a staunch supporter of free speech on the platform, and that he would make a controversial decision to reinstate former President Donald Trump’s Twitter account.
- Lauren’s take: Twitter will be delisted from the New York Stock Exchange (NYSE) next week and will no longer trade on the public market. Current investors will be able to claim the cash value of their shares.
GDPositive. The U.S. gross domestic product (GDP) increased 2.6% in the third quarter, marking the first period of positive growth in 2022. The GDP growth also exceeded predictions of 2.3% for the quarter. The first and second quarters of the year saw negative GDP growth, which is typically an indicator of a recession. This most recent quarterly growth has calmed some concerns of a recession. One reason for the increase is thought to be a narrowing trade deficit.
- Lauren’s take: GDP numbers are just one way to measure the health of a country’s economy. Positive growth numbers can be encouraging, but they are backward looking and may not show the whole picture.
Kanye’s last dance. Athletic brand Adidas dropped rapper Kanye West, also know as Ye, in response to public pressure after West made a series of antisemitic comments. Adidas will stop producing items from Ye’s fashion line Yeezy and will stop paying Ye and his companies. The decision will reportedly cost Adidas $248 million this year. The move is expected to be a blow to West, since $1.5 billion of his net worth comes from the deal.
- Lauren’s take: One way to invest in only companies you support is by picking and choosing individual stocks. Fractional shares allow you to invest in any company or fund regardless of the share price, ensuring your money is only going to companies whose values align with your own.
Debt is charged. Credit card debt has reached pre-pandemic levels, totaling $916 billion in September 2022, close to the December 2019 level. Credit card balances have increased 9% since January 2022 and are 23% higher than they were in April 2021, when spending slowed down significantly because of Covid-19 shutdowns. Now that things have reopened, consumers are reportedly spending and borrowing again even through signs of a recession. Missed credit card payments have not yet reached pre-pandemic levels but are increasing.
- Lauren’s take: Getting rid of credit card debt should be a high priority in a rising-interest rate environment. Expensive debt can make budgeting for saving and investing very difficult and most Americans will see this debt become more expensive as the interest rates credit card issuers charge go up.