EARNINGS SEASON BEGINS

Pepsi kicked off a new earnings season on Tuesday. The beverage company beat analysts’ expectations and raised its outlook for its full-year earnings. The company reported $2.25 EPS vs. $2.15 expected. Their revenue came in at $23.45 billion vs. $23.39 billion expected. For 2023, Pepsi has revised its prediction for constant currency earnings per share growth to 13%, an increase from the previously projected 12%. This marks the third straight quarter in which the snack and beverage titan has raised its annual outlook.

GRIT'S TAKE: Investors around the world are hoping that a positive earnings season will re-ignite stocks. Pepsi’s earnings were the first of the Q3 reports to drop after a summer of spending by many Americans. On Friday, JP Morgan, Wells Fargo, and Citigroup will announce their earnings.

ISRAEL RECLAIMS BORDER

Israel has reported that it has reestablished control over its border near the Gaza Strip, following four days of attacks from the Palestinian militant group Hamas on southern Israel. In response, the Israeli government has intensified its aerial bombardments over the Gaza enclave and halted the supply of water, electricity, and food to its approximately 2.3 million residents. The U.N. Relief and Works Agency indicates that displacements in the Gaza Strip have surged in the recent 24 hours, impacting over 187,500 individuals. Concurrently, Hamas claims to have around 150 Israeli captives. Both Israeli and Palestinian health authorities state that the death toll from the sudden and intense conflict has exceeded 1,500.

CHINA’S REAL ESTATE CRISIS WORSENS

On Tuesday, Chinese property developer Country Garden announced its inability to timely repay a loan amounting to 470 million Hong Kong dollars ($60 million). This serves as the newest indication of China’s financial strain as their real estate crisis worsens.

Headlines You Need To Know:

• Consumers are starting to buckle for the first time

• Worst US bond selloff since 1787

• Binance founder’s $1 billion plan to save crypto fizzled out

• Israel was prepared for a different war

• Special counsel interviews President Biden

• How America’s EV ambitions could affect the future of UAW

• Country garden caves to debt as China real estate crisis worsens

• Canadian autoworkers strike at GM

• RFK Jr. shifts to independent bid

Just for fun…

Young Warren Buffett and a Vegetable Oil Fraud

One of Warren Buffett’s greatest trades ever was due to a massive fake vegetable oil fraud. Warren Buffett is one of the greatest investors ever that has always stuck with a coreset of investing principles. However from time to time, he will throw those out the door to strike a massive deal. Allied Crude Vegetable was in the middle of a major fraud against American Express and other creditors. Essentially, the founder of Allied Crude was using their vegetable oil as collateral to receive loans from American Express up to $150 million. American Express received a tip, and they began to investigate. They eventually found out that Salt Water was being used as collateral instead of Vegetable oil. American Express stock tanked on the news, and they were in a very bad position financially. A 30 year old Warren Buffett purchased a 5% stake in the company for $20 million dollars. The stock eventually rose over 400% in the next 4 years allowing Buffett to make a massive profit.

CHART OF THE DAY

60/40 Portfolio

A 60/40 portfolio performance amid bond selloff

The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.