Core Viewpoint - Concerns regarding the US-China trade war are escalating, with potential risks to the market if negotiations fail [1] Group 1: Trade War Implications - Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, indicates that no threats have been implemented yet, but risks will continue to rise if a resolution is not reached [1] - The expectation of US soybean sales to China may not materialize, which could impact agricultural sectors [1] - China's potential restrictions on rare earth supplies pose risks to US supply chains, heightening market concerns [1] Group 2: Market Conditions - The risk of escalation in the trade war is currently the primary concern for the market [1] - Due to high valuations in the US stock market and signs of overheated investor sentiment, the market's buffer against negative news has diminished [1]

Core Insights - The market is closely monitoring trade policy developments following President Trump's response to China's rare earth export curbs with higher tariffs [1] - A federal government shutdown may delay the release of key economic reports, but corporate earnings from major banks and semiconductor companies are anticipated [1][3] Corporate Earnings - Major financial firms such as JPMorgan Chase, Wells Fargo, Goldman Sachs, and American Express are set to report earnings this week [2][5] - TSMC, the world's largest chip manufacturer, is expected to report a 40% revenue growth in the first half of 2025 due to strong AI chip sales [7] - Other financial institutions reporting include BlackRock, CitiGroup, Bank of America, and Morgan Stanley throughout the week [6] Economic Data and Federal Reserve - The ongoing government shutdown is likely to extend the blackout on economic data releases, affecting reports on retail sales, jobless claims, and housing starts [3][8] - Federal Reserve officials, including Chair Jerome Powell, are scheduled to speak, coinciding with the release of the Beige Book economic update [9] Key Events and Conferences - Oracle's AI World conference begins on Monday, while Salesforce's Dreamforce event starts on Tuesday [7] - The bond market will be closed on Monday for Columbus Day, but major stock exchanges will remain open [4]

Economic Outlook - The IMF updated its global economic outlook, coinciding with the release of the Federal Reserve's Beige Book, amidst concerns over tariffs and a significant drop in stock markets [1] - The Dow Jones fell by 2.73%, the Nasdaq by 2.53%, and the S&P 500 by 2.43% over the week, while European indices also showed declines [1] Market Focus - The market is closely monitoring the potential U.S. government shutdown and its implications for economic data releases, as well as signals from the Federal Reserve regarding possible interest rate cuts [1][2] - Key economic data releases, including the September Consumer Price Index (CPI) and retail sales, are delayed due to the government shutdown [2] Earnings Season - The upcoming earnings season will feature major companies such as JPMorgan Chase, Johnson & Johnson, Wells Fargo, Goldman Sachs, and Citigroup, among others, reporting their latest performance [3] Oil and Gold Markets - International oil prices weakened, with WTI crude oil dropping by 3.25% to $58.90 per barrel and Brent crude by 2.79% to $62.73 per barrel, amid fears of renewed trade tensions affecting oil demand [4] - Gold prices rose for the eighth consecutive week, with COMEX gold futures increasing by 2.45% to $3975.90 per ounce, driven by geopolitical risks and expectations of Federal Reserve rate cuts [4][5] Geopolitical Risks - The political situation in France remains a concern, with President Macron reappointing Le Maire as Prime Minister amid budget negotiation deadlocks [5] - Economic data from the Eurozone, including Germany's ZEW Economic Sentiment Index, is anticipated to show weakness, raising questions about the current economic outlook [5] UK Economic Indicators - The UK monetary market indicates a low probability of further rate cuts by the Bank of England before the end of the year, although weak economic data could change this outlook [6]

Core Insights - Wall Street is entering earnings season with reports from major financial institutions such as Wells Fargo, Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, and JPMorgan expected [1] - Despite a significant sell-off on Friday, there is an expectation that the market's multi-year rally is not over [1] Earnings Reports - Earnings season begins on Tuesday with Blackrock, Wells Fargo, and Goldman Sachs reporting; all three have performed well this year and are not heavily impacted by the trade war [3] - Johnson & Johnson and Domino's Pizza will also report on Tuesday, with expectations for Johnson & Johnson to have the best quarter in its sector, while Domino's may miss estimates [4] - On Wednesday, Bank of America, Morgan Stanley, and Abbott Laboratories will report; Morgan Stanley has shown positive results recently, and Abbott is considered reliable [4] - Thursday will see earnings from Taiwan Semiconductor, CSX, and Charles Schwab, with positive figures expected from Taiwan Semiconductor, which supplies chips to Nvidia and AMD [6] - American Express and SLB will report on Friday; American Express shares typically decline post-earnings, while SLB management is known for transparency [7] Market Context - The week is complicated by a sharp decline in Treasury yields, which usually indicates better economic conditions ahead, but current sentiment is negative [2] - Salesforce's annual conference begins on Monday, and clarity on President Trump's new tariffs on China is anticipated, following threats of a significant increase in tariffs on Chinese imports [2]

Market Overview - Stocks experienced a sell-off as President Trump threatened a "massive" tariff increase on China, particularly concerning rare earth minerals, which surprised the market given recent improvements in trade relations [1] - The S&P 500 index was down 1.9% and the Nasdaq fell approximately 2.6%, marking the first 1% drop for the S&P 500 since August 1 [1] Company Performance - Nvidia emerged as the best performer in the Investing Club portfolio, soaring approximately 1,527% over the three-year bull market [1] - Other top performers included Broadcom, which increased more than 665%, Meta Platforms with a gain of almost 458%, and CrowdStrike, which rose over 224% [1] - The bottom performers included Bristol Myers Squibb, down more than 36%, Nike, down nearly 26%, and both Danaher and Starbucks, each down nearly 9% [1] Upcoming Earnings - The third-quarter earnings season is set to begin, with over 30 S&P 500 companies scheduled to report next week [1] - Major banks such as Goldman Sachs, Wells Fargo, JPMorgan, and Citigroup will kick off earnings reports on Tuesday, along with BlackRock and Johnson & Johnson [1] - Other notable companies reporting next week include Abbott Laboratories, Bank of America, Morgan Stanley, American Express, CSX, Charles Schwab, SLB, and Prologis [1]

Core Insights - The investing landscape is rapidly evolving, with Robinhood Markets (HOOD) and Charles Schwab (SCHW) leading the transformation in digital investing and wealth management [1][2] Robinhood's Position - Robinhood has transitioned from a meme stock phenomenon to a diversified financial services provider, recently joining the S&P 500 index [3] - The company aims to cater to both novice and sophisticated investors, expanding its offerings to include managed portfolios, AI trading tools, and banking services [4] - New features such as short selling and tokenized stocks are attracting a broader investor base and generating recurring revenue streams [5] - Aggressive expansion through acquisitions, including Bitstamp and TradePMR, supports its goal of becoming a global financial services provider [6] Charles Schwab's Strengths - Schwab holds nearly $11 trillion in client assets, benefiting from strong client relationships and a diversified revenue base [7] - The company's net interest margin has improved due to rising interest rates, with a significant reduction in high-cost supplemental funding [8] - Schwab's RIA custody business is one of the largest in the U.S., and the integration of TD Ameritrade enhances its service capabilities [9] Comparative Performance - Robinhood's stock has surged 309.2% year-to-date, while Schwab has gained 27%, indicating stronger investor sentiment towards HOOD [18] - Schwab's return on equity (ROE) stands at 19.3%, higher than HOOD's 17.48%, reflecting efficient use of shareholder funds [20] - HOOD is trading at a trailing price-to-tangible book (P/TB) ratio of 18.49X, while SCHW is at 7.37X, indicating a valuation discount for Schwab [23] Future Outlook - Robinhood is focusing on innovation and growth, while Schwab leverages its asset base and stable earnings [21] - Rising earnings estimates for Schwab suggest reliability and growth potential, while HOOD appeals to growth-focused investors [22][25]

Core Insights - The Schwab U.S. Dividend Equity ETF (SCHD) has experienced significant underperformance recently, trailing behind major competitors in the dividend ETF space [1][2] - Once a leader in dividend investing, SCHD's performance has declined sharply, raising questions among investors about its future viability [2][4] Performance Overview - SCHD was historically a top performer, ranking in the top third of Morningstar's Large Cap Value category for nine consecutive years and achieving a 5-star Morningstar rating [3] - The ETF's total assets under management (AUM) reached over $71 billion, making it the second-largest dividend ETF globally, only behind Vanguard's VIG [3] Reasons for Underperformance - The decline in SCHD's performance began in 2023, coinciding with the rise of technology stocks, particularly the "Magnificent 7," which have driven the S&P 500 higher [4] - SCHD's allocation to technology stocks is only 9%, compared to approximately 35% in the S&P 500, which has hindered its ability to keep pace with market gains [4] - The ETF has invested heavily in underperforming sectors such as energy and staples, with over 50% of its portfolio in three of the worst-performing sectors year-to-date [4] - SCHD has minimal exposure to growth stocks, with only 0.27% of the fund allocated to this category, while the S&P 500 has 56% in growth stocks [4]

Core Viewpoint - The Charles Schwab Corporation (SCHW) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with the market closely watching how actual results compare to estimates [1][2]. Earnings Expectations - The consensus estimate for quarterly earnings is $1.22 per share, reflecting a year-over-year increase of +58.4% [3]. - Expected revenues are projected at $5.9 billion, which is a 21.8% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 0.2% lower, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for Charles Schwab is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +2.26% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Charles Schwab currently holds a Zacks Rank of 3, suggesting a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Charles Schwab exceeded the expected earnings of $1.09 per share by delivering $1.14, resulting in a surprise of +4.59% [13]. - The company has beaten consensus EPS estimates in each of the last four quarters [14]. Industry Comparison - Bank of America (BAC), a peer in the financial investment banking sector, is expected to report earnings of $0.94 per share, reflecting a year-over-year change of +16.1% [18]. - Bank of America also has a positive Earnings ESP of +1% and has beaten consensus EPS estimates in the last four quarters [19].

Core Insights - Qapita, a Singapore-based equity management platform, has successfully raised $26.5 million in a Series B funding round led by Charles Schwab, which will enhance its service offerings for U.S. startups [1] - The partnership with Charles Schwab introduces the Schwab Private Issuer Equity Services platform, enabling startups to manage cap tables, administer stock plans, and prepare for public listings [1][6] Company Overview - Founded in 2019 by Ravi Ravulaparthi (CEO), Lakshman Gupta (COO), and Vamsee Mohan (CTO), Qapita focuses on helping private companies track ownership, manage employee equity, and facilitate secondary share sales [2] - The platform serves approximately 2,700 companies, with around 70% based in India and 20% in Southeast Asia, including Singapore and Indonesia [4] Market Position - Qapita began as a cap table management platform, addressing the reliance on spreadsheets in many companies, and has since expanded its offerings based on customer feedback [3] - The startup has captured a significant market share in India, counting about half of the country's unicorns among its customers [4] Competitive Landscape - The partnership with Charles Schwab positions Qapita to compete more effectively in the U.S. market, where it has previously had limited presence [5] - This collaboration allows Qapita to automate cap table processes and integrate with Schwab's wealth management network, enhancing its competitive edge against firms like Carta and Morgan Stanley's Shareworks [6]

The Schwab International Equity ETF (NYSEARCA: SCHF ), which offers exposure to ~1500 developed market stocks outside the US, has been in existence since November 2009. Over these last 15 years, SCHF, which is issued by Charles Schwab InvestmentAnalyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving c ...