Wednesday, October 28, 2026

Flyover Finance

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Wednesday, October 28, 2026

Good Morning! Your home has probably gained value this year… but whether it’s kept up with inflation is another story. In a few big cities, prices are going backward. Our Chart of the Day shows where.

Elon Musk thinks a lot of AI companies are headed for trouble. He warned that more than 200 companies that rent out AI computing power face failure or mergers as lenders stop funding them, and several of their stocks fell early Monday after his warning.

Meta is selling new shares to pay for its data centers, which means every share you already own stands for a little less of the company. Do you own Meta, and would a move like this make you think twice about holding it? Hit reply and tell us.

Ever look at your grocery receipt and wonder what, exactly, cost that much? Today’s sponsor, The Penny Hoarder, put together a grocery challenge with practical ways to spend less and find extra cash for the essentials. Before your next shopping trip, take a look.

Consumer Confidence Is Up, but Spending Plans Aren’t

Let’s start with stocks. The S&P 500 rose 0.6% to 7,722.60 yesterday, pulling within 1.2% of the record high it set earlier this month. AI stocks led the market higher for another winning day after weeks of swings over how expensive it’s become to borrow money for data centers and chips. The Nasdaq gained 1.2% and the Dow barely moved, while most stocks in the S&P 500 actually fell.

Consumer confidence jumped in October as gas prices eased. The Conference Board’s index rose 7.5 points to 91.7, up from 84.2 in September. But Americans said they plan to spend less over the next six months on services and durable goods, products like cars and appliances that are built to last. The group said persistent inflation is eating into what their money can buy.

Big banks may have to charge stores less when shoppers pay with a debit card. A federal appeals court threw out the Fed’s 21-cent cap on those swipe fees this week, ruling that the fee limit includes costs Congress never meant to count. Store owners say the current fee lets banks collect billions of dollars a year more than the law intended. Bank groups said they were deeply disappointed and noted that a court in a similar case sided with the Fed.

What to watch today: The Fed announces its interest-rate decision at 2 p.m. ET, and Chair Kevin Warsh holds a news conference afterward. Traders expect the Fed to hold rates steady after raising them in September, but most see another increase coming in December. After the close, Alphabet, Microsoft, T-Mobile, and Chipotle will report earnings.

Flying together with our sponsor

Same Grocery List. Can You Leave With a Smaller Bill?

You went in for eggs, coffee, and a few things for dinner. Somehow, the total looks more like a car payment.

If that feels familiar, The Penny Hoarder’s grocery challenge is worth a look. It brings together simple shopping changes, cash-back opportunities, and ways to free up money elsewhere in your budget.

Some tips start right in the aisle, including where to look for lower-priced alternatives and how to tell whether that bigger package is actually a better deal. Others could help you earn money back on purchases you already make.

You don’t have to tackle everything at once. Start with the ideas that fit your routine and build from there.

See the challenge before your next grocery run.

➤ Buy: Morgan Stanley upgraded defense contractor Lockheed Martin (LMT) from Hold to Buy and raised its price target from $690 to $835. A new 10-year framework deal for 850 F-35 fighter jets eases worries that the Pentagon would cut the program to pay for more missiles. (More)

➤ Buy: UBS upgraded discount retailer Ross Stores (ROST) from Hold to Buy and raised its price target from $239 to $315. The bank expects Ross’ recent sales growth to last beyond this year as new CEO Jim Conroy works to close the gap with rival TJX in sales per store. (More)

➤ Hold: Morgan Stanley downgraded Cash App owner Block (XYZ) from Buy to Hold. The bank expects lending through Cash App to grow more slowly in the coming months and more of those loans to go unpaid. (More)

➤ Sell: JPMorgan downgraded lender First Citizens BancShares (FCNCA) from Hold to Sell. First Citizens plans to repay a low-cost $20 billion loan from the FDIC by the end of 2027, and JPMorgan thinks replacing the money will cost the lender more. (More)

Home Prices

U.S. home prices trailed inflation for the 15th straight month, rising 2.1%.

➤ Home prices across the U.S. rose 2.1% in the year through August, less than inflation. For anyone who owns a home, values have now trailed rising prices for 15 straight months. Only four of the 19 cities S&P reported kept pace with inflation, and prices fell in five.

S&P’s Rebecca Kaufman said mortgage rates in the mid-to-high 6% range are keeping homes hard to afford. She added that part of the slowdown is seasonal, and that prices look a bit stronger once normal summer-to-fall swings are taken out.

Source: S&P Dow Jones Indices, Cotality.

Company Spotlight

Meta is selling stock to pay for its AI bets.

Meta is selling $37.5 billion of new shares to pay for its AI buildout, and up to $60 billion more could follow starting in early 2027.

Every new share Meta sells shrinks the slice of its profits that each existing share owns. The first round is split between $25 billion of regular stock and $12.5 billion of preferred stock that is set to convert into regular shares in 2029. Last year, Meta did the opposite and spent about $26 billion buying back its own stock.

Meta expects to spend $135 billion to $145 billion this year on the computing power behind its AI. Its business is still growing, with revenue up 26% last quarter, but spending outran the cash Meta’s operations brought in.

Nvidia agreed to buy $3 billion of the new shares as part of a deeper AI partnership with Meta. The later $60 billion would come from new shares with no voting rights, so Mark Zuckerberg keeps control of the company.

Meta hasn’t signed an agreement yet for that $60 billion program. For now, shareholders are weighing what AI might eventually earn Meta against owning a smaller piece of the company.

By the Numbers: Meta

Market value: about $1.6 trillion
Stock, past year: down about 16%
Annual sales: $201 billion in 2025, up 22%
Profit: $60.5 billion, or about 30 cents of every dollar of sales
Employees: about 78,900
Dividend: $2.10 a share per year

➤ Microsoft offered voluntary buyouts to 60,000 employees, or about a quarter of its workforce, to help pay for AI. (More)

➤ EQT agreed to buy rival driller Range Resources for about $13 billion in stock to create the largest U.S. natural gas producer. (More)

➤ General Motors will move its stock listing from the New York Stock Exchange to the Nasdaq on Nov. 17. (More)

➤ Audi plans to spend about $4 billion on its first U.S. factory in Georgia to cut tariff costs, pending Volkswagen’s approval. (More)

➤ Verizon had its best third quarter for new phone customers in five years and raised its full-year forecast for the third straight quarter. (More)

➤ DoorDash is reportedly in advanced talks to buy grocery delivery company Instacart for about $17 billion as it competes with Walmart and Amazon. (More)