Edition #27-Tuesday, May 2nd 2023
Summary 📝
Another green week for the market as earnings reports continue to delight the market. Many investors suggest expectations were so low that companies had opportunities to impress. With May coming, and the tradition of “sell in May and go away” coming into the minds of investors, there may be some interesting moves coming in the market, but with today’s market always full of surprises, it’s never that easy!
For me, the key event this week is going to be the Fed’s next FOMC meeting, with a 97% chance of another 25BPS hike on Wednesday.
Source-CME Group- Federal Reserve Rates Likelihood
Looking further ahead, there is a 75% chance that the Fed chooses to pause at the next meeting in June, and a 2% chance of a 25BPS cut. This is going to dictate the direction of the market in the next few months, and will be essential viewing!
The Fear and Greed index was also fairly flat, but remained in Greed category at 57/100.
The Volatility Index at 17 remains low when compared to the last few years, but saw some spikes during the earnings reports and breaking news seen last week.
My gut feeling tells me that the VIX is low enough to require some caution. With volatility being this low for this long, it doesn’t take much for this to spike enormously, and you don’t want to be on the wrong side of the market during this!
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Quiz Question of the Week ❓❓
Answer at the bottom!
This Week in History 📰
May 1, 2004 - Eight former Communist nations and two Mediterranean countries joined the European Union (EU) marking its largest-ever expansion.
May 2, 2011 - U.S. Special Operations Forces killed Osama bin Laden during a raid on his secret compound in Abbottabad, Pakistan.
May 5, 1961 - Alan Shepard became the first American in space.
Major Events This Week 🔬
Economic Events
Provided by Unusual Whales
Monday
S&P U.S. manufacturing PMI
ISM manufacturing
Construction spending
Tuesday
U.S. job openings
Factory orders
Wednesday
ADP employment
S&P U.S. services PMI
ISM services
Federal Reserve interest-rate statement
Fed Chair Powell press conference
Thursday
U.S. productivity
U.S. trade deficit
Initial jobless claims
Continuing jobless claims
Friday
U.S. employment report
U.S. unemployment rate
U.S. hourly wages
Hourly wages year over year
Consumer credit
Incoming Earnings Reports
Provided by Earnings Whispers
Notable Upcoming Earnings
Provided by Unusual Whales
Monday
SOFI (premarket) Implied move: +/- 12.7% Sector: Financial Services
NCLH (premarket) Implied move: +/- 8.1% Sector: Consumer Cyclical
ON (premarket) Implied move: +/- 7.8% Sector: Technology
MGM (afterhours) Implied move: +/- 6.0% Sector: Consumer Cyclical
NXPI (afterhours) Implied move: +/- 5.6% Sector: Technology
CAR (afterhours) Implied move: +/- 11.4% Sector: Industrials
Tuesday
UBER (premarket) Implied move: +/- 9.4% Sector: Technology
PFE (premarket) Implied move: +/- 3.7% Sector: Healthcare
BP (premarket) Implied move: +/- 3.6% Sector: Energy
F (afterhours) Implied move: +/- 5.9% Sector: Consumer Cyclical
AMD (afterhours) Implied move: +/- 7.3% Sector: Technology
SBUX (afterhours) Implied move: +/- 5.0% Sector: Consumer Cyclical
Wednesday
CVS (premarket) Implied move: +/- 4.9% Sector: Healthcare
KHC (premarket) Implied move: +/- 3.5% Sector: Consumer Defensive
STLA (premarket) Implied move: +/- 5.7% Sector: Consumer Cyclical
PSX (premarket) Implied move: +/- 4.2% Sector: Energy
QCOM (afterhours) Implied move: +/- 6.3% Sector: Technology
Z (afterhours) Implied move: +/- 9.0% Sector: Technology
Thursday
PARA (premarket) Implied move: +/- 8.5% Sector: Consumer Cyclical
PTON (premarket) Implied move: +/- 16.6% Sector: Consumer Cyclical
MRNA (premarket) Implied move: +/- 6.7% Sector: Healthcare
PCG (premarket) Implied move: +/- 3.0% Sector: Utilities
SHEL (premarket) Implied move: +/- 3.1% Sector: Energy
AAPL (afterhours) Implied move: +/- 4.1% Sector: Technology
COIN (afterhours) Implied move: +/- 13.1% Sector: Technology
SQ (afterhours) Implied move: +/- 9.5% Sector: Technology
SHOP (afterhours) Implied move: +/- 10.1% Sector: Technology
CVNA (afterhours) Implied move: +/- 18.4% Sector: Consumer Cyclical
Friday
AMC (premarket) Implied move: +/- 11.5% Sector: Communication Services
WBD (premarket) Implied move: +/- 10.1% Sector: Consumer Cyclical
D (premarket) Implied move: +/- 4.7% Sector: Utilities
Market Futures
Provided by Unusual Whales Futures
Follow my CNBC Watchlist at- Oak Investing Watchlist
Post of the Week 💌
✅ Most of your investments are probably held in some of the biggest companies we all know and love, but how often do you explore new markets and new sectors?
✅ Over the last few years, the BRICS has been an interesting areas of focus. With international markets outperforming the S&P in 2022, we might start to see an area of real untapped potential in some of these.
✅ Investing directly in these markets may be more complex with OTC markets, but plenty of great companies with exposure to these market are traded on the NYSE and LSE.
Have you ever invested in BRICS companies? Let us know 🤔🤔
What’s Moving Markets? 🏃♂️
The First Republic deal has come at a crucial point for the markets and economy
JPMorgan Chase’s takeover of First Republic Bank started off an important week on Wall Street.
Ahead is a key decision on interest rates along with earnings from Apple and a jobs report expected to show a further deceleration in hiring.
“Crises don’t sort of end this easily. There will be other issues out there in the banking world,” said former Goldman Sachs executive Gary Cohn.
Most experts see tighter credit conditions ahead that could weigh on spending, particularly as inflation and interest rates both remain elevated.
BP beats first-quarter profit expectations but shares slide 5% on slowing buyback program
The British energy giant posted underlying replacement cost profit, used as a proxy for net profit, of $4.96 billion for the first quarter as lower oil and gas prices took a toll.
That compared with a profit of $4.8 billion in the fourth quarter and $6.2 billion for the first quarter of 2022.
The first-quarter results come after a year of whopping profits for Big Oil. Energy majors smashed previous annual records in 2022 during a period of volatile oil and gas prices.
Euro zone core inflation slows unexpectedly in April, blurring the picture for rate hikes
The latest figures come just days before the ECB is due to announce a new monetary policy decision.
The central bank embarked on its current hiking path in July 2022, when it brought its main rate from -0.5% to zero. The ECB’s main rate is currently at 3%.
Chart of the Week 📈
With inflation rapidly cooling, and the fallout from the collapse of major financial institutions potentially ending, the Fed is likely moving close to the final rate hike.
Once this happens, history tells us that the market performs well. This can be due to tech companies now pricing in rate cuts, and investors worrying less about economic conditions further restricting.
However, with so much time leading up to this moment, it could well be that history is not a true reflection, especially since we have not yet established if a recession is imminent.
Regardless, the worst of the market restriction is likely over. Whether there is a recession or not, the market feels ready to move again. There may be bumps in the road, but there is nowhere better for your money to be at work!
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Quiz Question of the Week- Answer ❓
Answer- A
It should be no surprise that a technology sector ETF heads this list of top performing ETFs. This semiconductor ETF from BlackRock’s iShares, one of the largest creators of ETFs, was up nearly 1.000% from its lows in 2011 to its highs in 2021, making it the best performing ETF over the last 10 years. The semiconductor industry is vital to virtually every piece of modern technology.
The SOXX fund is widely diversified, holding investments in more than 100 different US and foreign market tech stocks – primarily mid-cap and large-cap. Its top holdings include Broadcom Inc., Intel Corp., and NXP Semiconductors NV. SOXX is both a top performer over the past 10 years and over the past 5 years. It’s also the largest ETF in its sector, with more than $2.6 billion in assets under management (AUM).
Source- DayTradingZ
Thanks for reading, have a great day!
Gordon
Disclosure ✅
This newsletter provides general information only. Before making any financial or investment decisions, please consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.