Edition #28-Tuesday, May 9th 2023
Summary 📝
Last week was far more dramatic than the -0.6% return suggests. The Fed’s decision to hike interest rates by 25BPS on Wednesday, and subsequent press conference caused the market to sell off, as investors processed Fed Chair Powell’s comments.
Fortunately, the market’s biggest company seemed to save the week, with AAPL 0.00%↑ reporting strong earnings numbers, leading to a 2% rally on Friday.
The next round of inflation data lands on Wednesday, so be ready for market positioning on Tuesday, and some volatility for the rest of the week!
For the first time in over a year, markets are currently pricing in no interest rate hikes at the next FOMC meeting, with an 88% chance of a pause, and 12% chance of another 25BPS hike.
Source-CME Group- Federal Reserve Rates Likelihood
The Fear and Greed index was also fairly flat, but remained in Greed category at 60/100.
The Volatility Index at 17.7 remains low when compared to the last few years, but saw some spikes above 21 during the Fed press conference and breaking news seen last week.
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Quiz Question of the Week ❓❓
Answer at the bottom!
This Week in History 📰
May 10, 1994 - Former political prisoner Nelson Mandela was inaugurated as president of South Africa.
May 14, 1607 - The first permanent English settlement in America was established at Jamestown, Virginia, by a group of royally chartered Virginia Company settlers from Plymouth, England.
May 14, 1796 - Smallpox vaccine was developed by Dr. Edward Jenner, a physician in rural England.
Major Events This Week 🔬
Economic Events
Provided by Unusual Whales
Monday
Wholesale inventories
Chicago Fed President Goolsbee television interview
Fed Senior Loan Survey
Tuesday
Fed Senior Loan Survey
New York Fed President Williams speaks
Wednesday
Consumer price index
Core CPI
CPI year over year
Core CPI year over year
Thursday
Producer price index
Core PPI
PPI year over year
Core PPI year over year
Initial jobless claims
Continuing jobless claims
Fed Gov. Christopher Waller speaks
Friday
Import price index
Import price index minus fuel
Consumer sentiment (preliminary)
St. Louis Fed President Bullard and Fed Gov. Jefferson on panel on outlook for economy and monetary policy
Incoming Earnings Reports
Provided by Earnings Whispers
Notable Upcoming Earnings
Provided by Unusual Whales
Monday
$DISH (premarket) Implied move: +/- 16.6% Sector: Communication Services
$TSN (premarket) Implied move: +/- 6.1% Sector: Consumer Defensive
$KKR (premarket) Implied move: +/- 6.1% Sector: Financial Services
$PYPL (afterhours) Implied move: +/- 7.5% Sector: Financial Services
$PLTR (afterhours) Implied move: +/- 11.5% Sector: Technology
$LCID (afterhours) Implied move: +/- 15.5% Sector: Consumer Cyclical
$DVN (afterhours) Implied move: +/- 6.3% Sector: Energy
Tuesday
$NKLA (premarket) Implied move: +/- 18.9% Sector: Consumer Cyclical
$FSR (premarket) Implied move: +/- 22.0% Sector: Consumer Cyclical
$RIVN (afterhours) Implied move: +/- 16.1% Sector: Consumer Cyclical
$OXY (afterhours) Implied move: +/- 4.7% Sector: Energy
Wednesday
$TEVA (premarket) Implied move: +/- 6.3% Sector: Healthcare
$RBLX (premarket) Implied move: +/- 12.6% Sector: Communication Services
$LI (premarket) Implied move: +/- 8.9% Sector: Consumer Cyclical
$DIS (afterhours) Implied move: +/- 6.1% Sector: Communication Services
$BYND (afterhours) Implied move: +/- 17.4% Sector: Consumer Defensive
$HOOD (afterhours) Implied move: +/- 9.5% Sector: Technology
$TTD (afterhours) Implied move: +/- 13.1% Sector: Technology
Thursday
$JD (premarket) Implied move: +/- 9.3% Sector: Consumer Cyclical
$SLF (afterhours) Implied move: +/- 4.9% Sector: Financial Services
Market Futures
Provided by Unusual Whales Futures
Follow my CNBC Watchlist at- Oak Investing Watchlist
Post of the Week 💌
✅ Excited to announce a new series of posts called Dollars & Sense, where I’ll be having conversations with some of the best finance pages out there. 🎙️
✅ I’ll look to ask the tough questions about their journey so far, get to know them more, and get their advice for investors just getting started. 🥳
Let me know if you have questions you’d like to hear answered 🤔
What’s Moving Markets? 🏃♂️
China’s exports rose 8.5%, continuing its growth streak at a slower pace
China’s exports grew 8.5% in April in U.S. dollar terms, marking a second-straight month of growth.
Economists polled by Reuters estimated exports would rise 8% in April, while imports were forecast to remain unchanged.
China’s inflation is expected to slow down to a 0.3% rise year-on-year in prices when the data is released on Thursday, according to a Reuters poll.
The most important thing Warren Buffett said Saturday, and it isn’t good news for the economy
Warren Buffett, whose conglomerate is viewed as a barometer for the health of the U.S. economy, doesn’t sound so cheery about the near future.
The “Oracle of Omaha” believes that the “extraordinary period” of excessive spending on the back of Covid pandemic stimulus is over.
Many of his businesses are faced with an inventory build-up that they’ll need to get rid of by having sales.
Worries linger about financial stability following bank rescue, Fed report shows
The Federal Reserve issued its periodic report on the nation’s financial and economic health, a survey showing the biggest fears about current conditions.
Respondents cited “persistent inflation and tighter monetary policy, banking-sector stress, commercial and residential real estate and geopolitical tensions.”
Several sectors were identified as having elevated potential for trouble. They include money market funds, stablecoins and hedge funds, particularly larger firms.
Chart of the Week 📈
We all know how significant the Great Financial Crisis of 2008 was, but when we compare the amounts lost in bank failures, 2023 is already moving into the history books.
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Quiz Question of the Week- Answer ❓
Answer- A 30
We often think of "the Dow" as referring to the U.S. stock market, and it has often served as a proxy for it, but the Dow Jones Industrial Average is actually a stock index made up of just 30 companies.
The components change a bit every now and then, and the current roster includes names such as Apple, McDonald's, Nike, Walmart, and Visa. Interestingly, unlike many other indexes that weight their components by their market capitalization, the Dow is price-weighted, so a stock with a price of $267 will influence the index much more than a $21 stock.
Source- Motley Fool
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.