Monday, September 25th 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 📝
And we are back!
I took a few weeks off posting to explore Morocco, and despite dealing with earthquakes and changing plans, it turned out to be an amazing trip!
In the market, things were less rosy as markets priced in a potential government shutdown, the UAW began strikes at several car makers, several IPOs led to major declines, and continued uncertainty around rising interest rates spooked investors.
Lots to think about as always!
The S&P 500 dropped 2.8%, NASDAQ 3.4%, and the Dow Jones Industrial Average 1.9%.
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 75% chance of no change in rates at the next Fed meeting in early November.
The VIX SOARED as the events of the week moved expectations of volatility upwards. This remains the largest spike we’ve seen in months, but is still relatively low.
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. Here’s hoping we finally get a Santa rally!
The Fear and Greed index is now comfortably back in Fear territory, at 35/100.
With September being a seasonally poor month for the market, and uncertainty rising, I like the idea of putting some cash to work here. This week will bring more data for the Fed to consider, mostly around the PCE inflation data, so don’t be surprised if there’s more volatility ahead!
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 26, 1960 - The first-ever televised presidential debate occurred between presidential candidates John F. Kennedy and Richard M. Nixon.
September 30, 1938 - British Prime Minister Neville Chamberlain returned to England declaring there would be "peace in our time," after signing the Munich Pact with Adolf Hitler.
October 1, 1908 - Henry Ford's Model T, a "universal car" designed for the masses, went on sale for the first time.
Major Events This Week 🔬
Economic Events
Source- Unusual Whales
Tuesday
8:30 am New home sales
9:00 am S&P Case-Shiller home price index (20 cities)
10:00 am Consumer confidence
1:30 pm Fed Gov. Bowman speaks
Wednesday
8:30 am Durable-goods orders
8:30 am Durable-goods minus transportation
Thursday
8:30 am Initial jobless claims
8:30 am GDP (revision)
1:00 pm Fed Gov. Cook speaks
4:00 pm Fed Chairman Powell speaks
Friday
8:30 am Personal income
8:30 am Personal spending
8:30 am PCE index
8:30 am Core PCE index
8:30 am PCE (year-over-year)
8:30 am Core PCE (year-over-year)
8:30 am Advanced U.S. trade balance in goods
8:30 am Advanced retail inventories
8:30 am Advanced wholesale inventories
9:45 am Chicago Business Barometer
10:00 am Consumer sentiment (final)
Incoming Earnings Reports
Source- Earnings Whispers
Post of the Week 💌
✅ The average age of when a person starts investing is 33, so if you’re thinking about investing while in your 20s, you’re already ahead of the curve. 😎
✅ I’m now in the 30s club, and have learnt a lot in my 8 years investing. I’ve put the following 5 points together to help you make your 20s a real success, so that future decades will have a strong foundation to build on! 📈
What do you think? Let us know 🤔
What’s Moving Markets? 🏃♂️
Three stories I’m watching carefully this week. Source- CNBC
Betting on a rate cut is ‘premature,’ European Central Bank member says
“We should remain at this level for a sufficiently long period of time,” Francois Villeroy de Galhau, France’s central bank governor, said about interest rates in the euro zone.
The ECB hiked rates once again earlier this month, bringing its main deposit rate to 4%.
A poll published by Reuters earlier this month showed that economists do not expect further rate hikes from the central bank this year and suggested that rate cuts could happen in the second half of 2024.
China-EU relationship is at a crossroads, top official says in Beijing
The four-day trip to China started in Shanghai late last week and had been some time in the making.
The visit came less than two weeks after the European Commission, the executive arm of the EU, opened an investigation into Chinese subsidies for electric car manufacturers.
Dombrovskis is using the trip to explain to his Chinese counterparts that the probe aims to create fairer trading practices, and that the EU does not plan to cut ties with Beijing.
Hollywood writers and studios reach tentative deal to end strike after nearly 150 days
Hollywood scribes initiated a work stoppage in early May as negotiations broke down with studios including Disney, Paramount, Universal and Warner Bros. Discovery.
Talks between the Writers Guild of America and the Alliance of Motion Picture and Television Producers resumed last week after months of starts and stops.
The WGA and AMPTP are still drafting the final contract language.
Chart of the Week 📈
Source- Chart of the Day
Regardless of the outcome, the United Auto Workers strike threatens to cause already high car prices to escalate.
Up until this point, the strikes targeted only certain models, such as Ford’s midsize Ranger and the Jeep Gladiator, which are also not considered the best-selling vehicles, according to Ivan Drury, Edmunds’ director of insights.
However, if the strike expands, or alternatively, if the striking autoworkers’ demands are met for a 40% pay raise along with other benefits, that could put pressure on automakers, dealers and, ultimately, car shoppers.
Investor’s Toolkit ⚒️
Unusual Whales- Options Flow and Analysis 🛠
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SimplyWallSt- Stock Analysis 🛠
5% Discount with code OAK
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.