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The ice cream shop that makes money when it's cold
28 Wishes sells ice cream in Los Angeles. Below 70°F, sales fall about 20%. The weather is out of their hands. Rent isn't.
So the owners started putting about $20 a day into Kalshi weather markets, taking the cold side. The days that keep customers away now pay something back.
This is hedging. Big companies have done it for decades, buying protection against bad weather, fuel spikes and rising rates. It used to take a broker, a trading desk, and an order size no corner shop could meet.
Kalshi opens it up. Contracts on weather, fuel prices, inflation, tariffs and regulation, starting at a few dollars. Take a position on the outcome that would hurt you. If it hits, the payout softens it. If it doesn't, the contract expires and the good month was the point.
Good morning. After a hot inflation report and an AI-led sell-off sent the Nasdaq down almost 2%, today brings wholesale inflation, retail sales and Taiwan Semiconductor's earnings.
The Market Gauge
Wednesday was rough for growth stocks. The S&P 500 fell 86.51 points (-1.11%) to 7,718.94. The Nasdaq dropped 511.51 points (-1.88%) to 26,692.87. The Dow held up best, slipping 48.62 points (-0.09%) to 51,621.48. Small caps took a beating: the Russell 2000 fell about 1.9% to its lowest level in nearly six months.
Two things drove it. First, core consumer prices (inflation without food and energy) rose 0.3% in September and 2.6% from a year ago, both a notch hotter than the 0.2% and 2.5% economists expected. Traders now see roughly a one-in-three chance the Fed raises rates on Oct. 28, up from about 22% on Tuesday. Second, worries about AI spending came back. CoreWeave crashed 15.5% after Gartner predicted most AI cloud firms won't stay independent, chip stocks slid for a seventh straight day, and Dell fell 11.4% on an analyst downgrade. Healthcare was the bright spot, with the sector ETF up 2.5%. The 10-year Treasury yield spiked to 5.33% after the report, then closed lower at 5.19%. Oil rose 1% to about $95 a barrel.
IBD's read: the S&P 500 and Nasdaq tested their 50-day moving averages and just held them, but small caps and the average stock look worse, and recent breakouts haven't been working. IBD's advice is to go slow on new buys, cut losing positions quickly, and keep building watchlists, since both indexes are still not far from record highs.
Beginner note: The 50-day moving average is the average closing price over the last 50 trading days. Big investors often defend it, so it acts like a floor. A close above it after a test is a good sign; a decisive close below it is a warning that the uptrend is under pressure.
On today's calendar
Producer Price Index (PPI), 8:30 a.m. ET: Wholesale inflation, or what businesses pay for goods and services. After Wednesday's hot core reading, a firm PPI number would add to rate-hike worries.
Retail sales, 8:30 a.m. ET: How much Americans spent at stores and online in September. Consumer spending drives most of the U.S. economy.
Jobless claims, Empire State and Philly Fed surveys, 8:30 a.m. ET: Weekly first-time unemployment filings, plus two regional readings on how factories are doing.
Business inventories, 10:00 a.m. ET: How much unsold stock companies are holding. A smaller release that rarely moves markets.
Taiwan Semiconductor (TSM) earnings, before the open: The chipmaker for Nvidia, Apple, AMD and many others holds its call at 2:00 p.m. Taiwan time (2:00 a.m. ET). Analysts expect about $4.46 a share on $46 billion in sales (per IBD). Strong growth is expected, so watch the outlook. The stock fell 3.4% to 430.07 Wednesday, below its 50-day line.
Interactive Brokers (IBKR) earnings, after the close: Results around 4:00 p.m. ET, call at 4:30 p.m. ET. Brokerage results give a read on how actively people are trading.
On the radar: Halozyme Therapeutics
$HALO ( ▼ 0.23% ) Halozyme makes a technology that lets drugs usually given through an IV drip be given as a quick shot under the skin instead. It licenses that technology to big drugmakers and collects royalties on their sales. On a day when the Nasdaq fell 1.9%, Halozyme rose 6.57% (+7.20) to 116.82. It hit a new 52-week high of 119.21 during the day before closing about 2% below that level. Volume was about 3.77 million shares, roughly 73% above its 2.18 million daily average. IBD says the stock, an IBD 50 member, bounced off its 21-day and 10-week moving averages to clear a short consolidation. IBD did not give a specific buy point. Its next earnings report is expected in early November (date not yet confirmed).
Why it's worth watching: A stock that rises on heavy volume while the market falls is showing relative strength, a sign big investors want to own it. But IBD also warns that most recent breakouts have failed. That is the case for starting small and having a sell rule ready, like cutting a loss at 7% to 8% below your buy price.
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Educational content only. Not financial advice. Past performance does not predict future results. Read the full financial disclosure.
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