Monday, September 4th 2023
Hi Oak Investors,
Welcome to another recap on the week’s action and events!
At Oak Investing, I look to provide value for all levels of investor, whether it’s pulling together the week’s best articles, insights and breaking news, or clarifying new concepts for beginners.
I hope you enjoy this week’s recap, please get in touch if there’s anything more you’d like to see in The Acorn. If you like what you see, please like, subscribe and share to keep growing the Oak Investor community! 🌳
Thanks,
Gordon
Summary 📝
Last week’s jobs reports (ADP, unemployment, nonfarm payroll and JOLTs) showed that the economy is starting to creak under the pressure rising interest rates have been piling on over the last year and a half. At the moment, this is received positively by the market due to the reduced likelihood of further interest rate hikes.
As we’d expect, most of the market had a great week, with the more speculative and growth based stocks having very healthy returns over the week. This was further boosted by many of the companies reporting raising guidance for the coming quarters.
The S&P 500 rose 2%, NASDAQ 2.5%, and the Dow Jones Industrial Average 1.2%.
The Volatility Index dropped as markets priced out the need for the Fed to take surprise action if a strong jobs number came through.
At present, markets are pricing in a 93% chance of no change in rates at the next Fed meeting in late September.
The VIX remains at fairly normal levels, cooling off from last week’s Fed talk and wild Nvidia earnings.
I suspect more sideways moves will be likely as the market progresses through the next few weeks of seasonally poor performance, with a view to picking up towards the end of the year.
The Fear and Greed index climbed back into the Greed category, now at 56/100.
As I noted last week, with September being a seasonally poor month for the market, I like the idea of putting some cash to work here, especially if we see some pullbacks in the near term.
As always, keep to your strategy, don’t let the noise change your plan, and learn as much as you can!
This Week in History 📰
Source- The History Place
September 4, 1609 - The island of Manhattan was discovered by navigator Henry Hudson.
September 7, 1822 - Brazil declared its independence from Portugal after 322 years as a colony.
September 8, 2022 - Queen Elizabeth II of Great Britain died at Balmoral Castle in Scotland, after a 70-year reign, the longest in British history.
Major Events This Week 🔬
Economic Events
Source- Unusual Whales
Monday
US Markets closed for Labor Day
Tuesday
US Durable Goods Order
Wednesday
European Factory Orders
GB Construction PMI
European Retail Sales
US Trade Balance
US ISM
Thursday
Europe Industrial Production
US Non Farm Productivity
US Unit Labour Costs
Friday
Europe Industrial Production
US Wholesale Inventories
Incoming Earnings Reports
Source- Earnings Whispers
Post of the Week 💌
✅ My education has given me a lot, but one of the most notable exceptions was the ability to make my own informed financial decisions. 💰
✅ This won’t be the same for everyone, but giving yourself the skills and awareness of what benefit you could see from a solid financial strategy could be a real game changer. 📈
✅ Obviously plenty of these topics we learn have benefits and real life application, but I wonder how my financial situation would be if I had been educated about investing at school. 🤔
What do you think? Are there areas which you would like to learn more about? 🤔
What’s Moving Markets? 🏃♂️
Three stories I’m watching carefully this week. Source- CNBC
EU economics chief says Europe is gripped by a ‘double crisis’ — but it can avoid a recession
Russia’s full-scale invasion of Ukraine sparked serious fears in Europe that the region would enter a significant economic slowdown.
The euro area, in the end, grew at a rate of 3.5% in 2022, according to the International Monetary Fund.
“The slowing down started from the last quarter of 2022 and it is there, but please don’t call this a recession, because I think we can avoid a recession, we are avoiding recession,” Paolo Gentiloni, the European Commissioner for economic affairs, told CNBC.
BMW, Mercedes launch biggest EV push yet to catch Tesla with new models
On Sunday, Mercedes-Benz took the wraps off the Concept CLA Class, an electric vehicle built on a new architecture that will underpin future battery cars from the German auto giant.
Meanwhile on Saturday, rival BMW showed off the “Vision Neue Klasse,” another electric concept car that highlights the company’s EV ambitions.
European carmakers, which have been perceived to be behind Chinese companies and Elon Musk’s Tesla, have had to move quickly to show they’re ready to be major players in the electric era.
Xi to skip G20 summit in India, China to send Li instead
Premier Li Qiang will lead China’s delegation at a G20 summit in New Delhi this weekend, China’s foreign ministry said on Monday.
Chinese foreign ministry spokesperson Mao Ning declined to directly confirm that Li’s attendance meant that Xi would not go, although she did not correct reporters who made that assertion.
Chart of the Week 📈
Source- Chart of the Day
The unemployment rate rose sharply in August, as the summer of 2023 neared a close with a job market in slowdown mode.
Nonfarm payrolls grew by a seasonally adjusted 187,000 for the month, above the Dow Jones estimate for 170,000, the U.S. Bureau of Labor Statistics reported Friday. However, the unemployment rate was 3.8%, up significantly from July and the highest since February 2022, and nonfarm payrolls estimates for previous months showed sharp downward revision.
Average hourly earnings increased 0.2% for the month and 4.3% from a year ago. Both were below respective forecasts of 0.3% and 4.4% and another possible sign that inflation pressures are easing.
Investor’s Toolkit ⚒️
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Want to Work with Me? 📈
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Pick up a copy of The Investor’s Blueprint, and learn at your own pace 📚
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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.