Monday, October 2nd 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 📝
Q4 is underway! With the mess of August and September now behind us, investors will be hoping that the good times of 2023 we saw prior to the latest correction can resume!
The good times clearly weren’t happening this week, as fears around government shutdowns and interest rate hikes sent the S&P 500 down 0.5%, NASDAQ climbed 0.3%, and the Dow Jones Industrial Average down 1.8%.
The Volatility Index remains at monthly highs, with fears now gone around the government shutdown now likely to send this down once markets open this week.
At present, markets are pricing in a 71% chance of no change in rates at the next Fed meeting in early November.
I suspect markets will need to test the recent low before we get a clear idea of what is happening with the rest of the year, but with a minor correction hopefully in the rear-view mirror, I’m thinking this is a good chance to be picking up some beaten down stocks at great value.
The Fear and Greed index is now back in EXTREME Fear territory, at 25/100. This always remains a good place to be making purchases. Sure, we might go down further, but as investors, we want to capture the majority of a rally rather than trying to foolishly pick an exact bottom of the market. IT NEVER WORKS!
I’ve kept touching on seasonality in the last few editions, and with the next few months historically looking like good times to be in the market, the current levels of fear could be a great combination for long term investors looking to put money to work.
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
October 3, 1990 - After 45 years of Cold War division, East and West Germany were reunited as the Federal Republic of Germany.
October 4, 1957 - The Space Age began as the Russians launched the first satellite into orbit.
October 4, 1965 - Pope Paul VI became the first Pope to visit the U.S. and the first to address the United Nations.
Major Events This Week 🔬
Economic Events
Source- Unusual Whales
Monday
US ISM Manufacturing
Tuesday
Wednesday
ADP Employment Change
Thursday
EU Trade Balance
US Trade Balance
Friday
US Unemployment Data
US Non-Farm Payroll Data
Incoming Earnings Reports
Source- Earnings Whispers
Post of the Week 💌
✅ With ongoing war in Europe, geopolitical and economic tensions, it’s a scary time for the world, and this is reflected in the stock market. It’s exceptionally important to take care of yourself and make sure that your wellbeing and decision making remains resilient. 💪
✅ The steps I’ve listed are my go to points for these moments of extreme stress in markets and the global outlook in general. 🤯
✅ The most important takeaway is that the market always carries volatility over the short term, but grows back over the longer term following any sudden and negative news story. 📈
Don’t lose your nerve and sell at the bottom, and take care of yourself. ☺️
What do you think? Let us know 🤔
What’s Moving Markets? 🏃♂️
Three stories I’m watching carefully this week. Source- CNBC
Bill Ackman says the economy is starting to slow and the Fed is likely done hiking
Bank of Japan hikes bond buying as benchmark yields hit decade peak
BOJ said Monday it will conduct on Wednesday an unscheduled and unspecific amount of additional purchases of Japanese government bonds with tenures of more than five years and up to 10 years.
10-year JGB yields spiked to 0.775%, its highest in about a decade and nearing the BOJ’s stated 1% cap in movements from 0%.
A comment in the September BOJ meeting minutes that “the achievement of 2 percent inflation in a sustainable and stable manner seems to have clearly come in sight” reignited expectations the BOJ is laying the groundwork to exit negative rates.
China’s economy stabilises, factory activity returns to expansion
The purchasing managers’ index (PMI), based on a survey of major manufacturers, rose to 50.2 in September from 49.7, according to the National Bureau of Statistics.
The 50-point level separates contraction in activity from expansion. The reading beat a forecast of 50.0.
The China’s factory activity data adds to a run of indicators suggesting the world’s second-largest economy has begun to bottom out.
Chart of the Week 📈
Source- Chart of the Day
Many people’s wallets took a hit these last few years as inflation spiked higher than it’s been in decades.
That’s in part because wage growth hasn’t been keeping up. Bankrate recently compared various industries’ wage growth from January 2021 to the present versus inflation over the same period and found that, overall, wages lagged behind about 3%. Among the industries which faired the worst was education, which saw a 7.2% lag.
According to Bankrate’s analysis, however, three industries’ wage growth outpaced inflation. That was retail, leisure and hospitality and accommodation and food services.
Investor’s Toolkit ⚒️
Unusual Whales- Options Flow and Analysis 🛠
5% off with code OAK2022
SimplyWallSt- Stock Analysis 🛠
5% Discount with code OAK
Want to Work with Me? 📈
If you’d like to take your investing to the next level, there are 4 ways I can help:
Pick up a copy of The Investor’s Blueprint, and learn at your own pace 📚
Book a free discovery call with me, and discuss how you can take a step closer to financial freedom 🏆
Check out my regular articles on Motley Fool UK 📚
Follow me on social media, for daily financial education and market insights. 👏
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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.
Great coverage!!!