UK Challenges (even without BoJo); China's most powerful leader since Mao; Who's on Snapchat?; "Consensus Forecasts"????MoneyFitt Morning | Monday

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• US large-cap S&P 500 closed 87 points,?2.37% UP
• Tech-heavy Nasdaq Composite closed 245 points,?2.31% UP
• Pan European STOXX Europe 600 closed 2.5 points,?0.62% DOWN
• Japan's Nikkei 225 closed 116 points,?0.43% DOWN
• HK's Hang Seng Index closed 69 points,?0.42% DOWN

?IN THE MARKET

• UK Challenges (even without BoJo)
• China's most powerful leader since Mao;

?FOCUS STORY

• Who's using (and advertising on) Snapchat?;

?MoneyFitt EXPLAINS

• ?Consensus Forecasts

??IN THE MARKET

US stocks opened up and kept on going all day Friday and closed a volatile week on a high note despite US government bonds hitting 14-year highs and a few disappointing earnings reports. Some pointed to an article in The Wall Street Journal suggesting that the Fed rate-setters might slow down the rate of rate hikes.

The Japanese Yen continued to slide and hit a new 32-year low, among the factors which led inflation to an 8-year high of 3% in September. The low interest rate policy will continue as underlying demand is still weak.

UK Challenges (even without BoJo)

Meanwhile, the barely-there 0.4% rally in UK stocks and 1 whole US cent gain in the Pound Sterling on the prospect of a new prime minister suggests the country is not out of the woods. The competence of the incoming team at Number 10 to tackle the immense problems plaguing the country is far from assured (even with Boris Johnson pulling himself out of the race over the weekend).

Strike action is being planned by unions representing teachers, railway workers, port workers, postal workers and staff of the National Health Service. Meanwhile, soaring inflation, low consumer confidence and concerns of a looming recession led retail sales to fall more than expected in September.

China's most powerful leader since Mao

At the Saturday conclusion of the 20th Communist party congress, Chinese President Xi Jinping was re-elected as general secretary of the Chinese Communist Party and therefore president for an unprecedented third term. A new leadership team packed with loyalists showed that all rival factions have pretty much been sidelined.

Domestic and foreign politics aside, it reflects a continuing shift away from market principles. Specifically, the controversial zero-Covid policies that are increasingly out of line with practices elsewhere, and which have dramatically slowed economic growth, will most likely continue, as will the policies dealing, so far without much success, with the deepening property crisis.

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???FOCUS

Who's using (and advertising on) Snapchat?

Anyone wondering on Thursday with SNAP shares already down 77% this year, a "how much worse could it get?" had an answer on Friday. SNAP (mainly camera and messaging app Snapchat) dropped 28% in a day with results showing its slowest sales growth ever and losses ballooning by 5 TIMES.

The results were actually slightly better than the?consensus forecasts??from highly-paid Wall Street analysts, and the number of daily active users (DAU) even rose by 19% on the year earlier to hit 363 million. However, traders focused on management comments that it expected revenues to keep slowing and that advertising budgets were continuing to be slashed. Like Facebook (owned by META,) it was also having a hard time managing Apple's new App Tracking privacy measures, which upended social media ads from last year. And then there's the rise and rise of TikTok.

Snap had already warned back in May that the economy was weakening faster than expected, and in late August, it laid off one in five of its global employees. As a relatively weak social media platform, SNAP's results could be an early indicator of the scale of an advertising slowdown yet to hit others such as META (Facebook, Instagram and WhatsApp… and Giphy) and PINS (Pinterest).

The stock is now down 83% this year alone. How much worse could it get?

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?MoneyFitt EXPLAINS

?Consensus Forecasts

Consensus forecasts are simply some kind of average of forecasts from "expert" forecasters willing to tell people what they are expecting. (Sometimes it refers to the median, or the middle reading of a range sorted from highest to lowest.)

The range may actually be pretty wide, and it's possible that NOBODY actually forecast the actual consensus number itself. Technically there could be two or more clusters of experts' forecasts very far from one another despite looking at all the same available information (but most often they do cluster around the consensus reading.)

But it's still meaningful to be aware of what the combined IQs of tens or thousands of extremely well-paid individuals arrive at as it represents the distillation of all the publicly available information available at any one time, as well as how that number does or doesn't move upon new developments.

The danger, of course, is that forecasters can be influenced by the published consensus numbers and either be sucked into groupthink or possibly make some ludicrously out-of-range forecast of their own for the sake of making some sensational headlines.

(Note that "consensus" is different from "implied" forecasts derived from the actual price of traded instruments like derivatives.)