Monday, October 16th 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 was another heavy news week for the market, with the terrible events in the Middle East sending shockwaves through the world, and also impacting markets in a number of ways. Oil prices soared as concerns of further escalation in the region, and uncertainty again send volatility higher.
The latest inflation data came in higher than expected, indicating that the Federal Reserve may still have more work to do with interest rates.
Despite all the chaos, the markets had a good week, with banks beating earnings, tech mega-cap tech soaring, and healthcare stocks rallying. The S&P 500 climbed 0.45%, NASDAQ slid 0.2%, and the Dow Jones Industrial Average rose 0.8%.
The Volatility Index remains elevated, but still just below the magical 20 which people tend to pay more attention to.
At present, markets are pricing in a 90% chance of no change in rates at the next Fed meeting in early November.
The Fear and Greed index is now back in Fear territory, at 30/100.
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 19, 1987 - "Black Monday" occurred on Wall Street as stocks plunged a record 508 points or 22.6 per cent, the largest one-day drop in stock market history.
October 20, 1818 - The U.S. and Britain agreed to set the U.S.- Canadian border at the 49th parallel.
October 21, 1805 - The Battle of Trafalgar took place between the British Royal Navy and the combined French and Spanish fleets.
Major Events This Week 🔬
Economic Events
Source- Unusual Whales
Monday
NY Empire Manufacturing Index
Fed’s Harker speaks
Tuesday
Fed’s Williams speaks
NAHB Housing Market Index
Wednesday
UK PPI
UK RPI
Fed’s Williams speaks
Fed’s Harker speaks (again)
Thursday
Fed’s Powell speaks
Fed’s Harker speaks (again)
Friday
GB Retail Sales
EU PPI
Fed’s Harker speaks (again)
Incoming Earnings Reports
Source- Earnings Whispers
Post of the Week 💌
✅ If you’re investing long term in the market, you might be causing yourself far more stress than needed by paying attention to the daily market. 🤯
✅ Especially now, when it seems every day has a new geopolitical twist, economic calamity or enormous piece of breaking news. 😢
✅ Sure, if you’re trading daily these things are worth looking at, but over a 5 year period, will anyone really care what the interest rate change was in a specific month? 🤷
✅ Instead, focus on buying quality companies at great prices, and consider your own requirements for managing the news, and remove overthinking from your strategy. 🥳
What’s Moving Markets? 🏃♂️
Three stories I’m watching carefully this week. Source- CNBC
The UK Labour Party has a Biden-esque economic plan — but it’s very different to Bidenomics
Labour leader Keir Starmer promised to “speed ahead” with investment in the clean energy transition that he said would create half a million jobs and power economic growth.
Shadow Chancellor Rachel Reeves’ economic plan is rooted in the belief that growth is created “from the bottom up and the middle out” — a word-for-word echoing of U.S. President Joe Biden’s economic philosophy.
The key differentiator between “Bidenomics” and Reeves’ “securonomics” is in how the proposed investment is financed, according to Berenberg Senior Economist Kallum Pickering.
Key takeaways from the IMF-World Bank meetings
U.S. tackles loopholes in curbs on AI chip exports to China
Chart of the Week 📈
Source- Chart of the Day
Stock market analysts have been closely watching “The Magnificent Seven.”
The seven largest stocks in the S&P 500 are buoying the performance of the U.S. stock market. Since 2023 began, the S&P 500 has returned 12.4%. That index is weighted by market cap, meaning that larger companies make up a larger percentage of the index. Over the same period, an equal-weight version of the index, which gives the same slot to each company regardless of size, has gained 0.1%.
The difference is the “Magnificent Seven.” As a group, these stocks have returned 92% in 2023 on average.
Investors may think that means they should be applauding these firms as they ride into town on horseback, and maybe they should. But one expert says that their dominance is “not terribly healthy” for markets.
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? 📈
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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.
Great summary here. Thanks for the post.