Monday, December 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
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Summary 📝
As the year draws to a close, market strength remains evident, with key indices up by more than 20% year-to-date. This week, keep an eye on crucial data like Friday's unemployment figures and earnings reports from prominent firms such as Nio, Lululemon, and Docusign.
So what were the main events from last week?
OPEC countries recently declared voluntary reductions in oil production, causing a rapid increase in energy prices. They plan to decrease production by 2.2 million barrels per day in the first quarter of 2024.
Tesla has again made headlines with the Cybertruck shipment announcement. The starting price is set at $61,000, significantly higher than initially projected, and the maximum range is about 350+ miles, falling short of the expected 500 miles. The market's reception of this divisive and unique truck will become clear as production and sales accelerate in the following months.
Bitcoin's value has surged to $40,000, more than doubling from last year's post-FTX collapse figures. The price increase is fueled by optimism that regulators will greenlight a spot BTC fund and other entities' interest in Bitcoin ETFs.
S&P 500- 0.87%
NASDAQ- 0.46%
Dow Jones Industrial Average- 2.46%
The Volatility Index stayed relatively stable throughout the week, ending slightly up.
At present, markets are pricing in a 97.5% chance of no change in rates at the next Fed meeting in mid December, with a 2.5% chance of 25BPS hike.
All the data we’ve seen shows that inflation is now meaningfully coming down towards the central bank target of 2%, but whether the Fed will overdo things may become the next catalyst. The next few months will be a balancing act of harsh words to manage excitement, and limited actions in to keep things stable.
I suspect there won’t be any further rate hikes, but the Fed STILL need to remain firm in their language to prevent inflation from surging back.
Many analysts are now trying to guess when the next series of rate cuts will be, but this remains a very uncertain task.
The Fear and Greed index climbed further into the Greed category at 68/100.
As I noted last time, seasonality is never far from my mind at this time of year, and it looks like the market is thinking the same thing despite some negative headlines. The average across the last 20 years has been great for the next few months, and many institutions seemingly don’t want to miss out!
Of course, nothing is a guarantee these days, but as always, if you keep to your strategy, don’t let the noise change your plan, and learn as much as you can, you can’t go too wrong over the long term!
This Week in History 📰
Source- The History Place
December 6, 1921 - The Irish Free State became an independent member of the British Commonwealth.
December 7, 1941 - The U.S. Naval base at Pearl Harbor, Hawaii, was attacked by nearly 200 Japanese aircraft in a raid that lasted just over one hour and left nearly 3,000 Americans dead.
December 8, 1980 - Former Beatle musician John Lennon was assassinated in New York City.
What’s on my Watchlist? 👀
Three stocks I think have an interesting week ahead.
TSLA 0.00%↑ - With the release of the Cybertruck last week, more reviews and analysis will continue to flow in, impacting the stock.
COIN 0.00%↑ - With crypto in rally mode, anything relating to cryptocurrency is likely to have a volatile week.
NIO 0.00%↑ - With earnings this week, the company is always a big mover.
What’s Moving Markets? 🏃♂️
Three stories I’ve got my eye on this week. Sourced from CNBC.
Spotify to lay off 17% of employees — read the full memo CEO Daniel Ek sent to staff
Music streaming service Spotify’s CEO Daniel Ek announced that the company is laying off 17% of its workforce.
In a note to employees, Ek said Spotify invested too much in 2020 and 2021 and had to “rightsize” its costs for a new economic reality.
Spotify reported a 65 million euros ($70.7 million) profit in the third quarter, citing lower spend on marketing and personnel.
Crypto execs say the bull run is underway and could lead to $100,000 bitcoin in 2024
Executives in the cryptocurrency industry called the start of a new bull run with a growing number of voices calling for fresh all-time highs for bitcoin in 2024 above $100,000.
Excitement around a bitcoin ETF being approved in the U.S. next year as well as the bitcoin halving is fueling a rally in cryptocurrencies.
Many commentators also see the conclusion of the FTX case and the Binance settlement with the U.S. Department of Justice as the resolution of two outstanding issues that were plaguing the market.
COP28 president sparks outcry after claims there’s ‘no science’ behind fossil fuel phase out
COP28 President Sultan Al-Jaber is facing a backlash over his claim that there is “no science” behind calls for a phase out of fossil fuels.
Many believe the success of the U.N. climate conference hinges on a collective agreement to bring an end to the fossil fuel era.
A spokesperson for COP28 told CNBC that the story regarding Al-Jaber’s comments was “just another attempt to undermine the Presidency’s agenda.”
Major Events This Week 🔬
Economic Events
Source- Unusual Whales
Monday
10:00 am Factory orders
Tuesday
9:45 am S&P U.S. services PMI
10:00 am ISM services
10:00 am Job openings
Wednesday
8:15 am ADP employment
8:30 am U.S. productivity (revision)
8:30 am U.S. trade deficit
Thursday
8:30 am Initial jobless claims
10:00 am Wholesale inventories
3:00 pm Consumer credit
Friday
10:00 am Consumer sentiment
8:30 am U.S. employment report
8:30 am U.S. unemployment rate
8:30 am U.S. hourly wages
8:30 am Hourly wages year over year
Incoming Earnings Reports
Source- Savvy Trader
Notable Upcoming Earnings
Monday
GTLB (afterhours) Implied Move: +/- 12.46% Sector: Technology
Tuesday
NIO (premarket) Implied Move: +/- 9.14% Sector: Consumer Cyclical
AZO (premarket) Implied Move: +/- 4.00% Sector: Consumer Cyclical
MDB (afterhours) Implied Move: +/- 9.56% Sector: Technology
Wednesday
CPB (premarket) Implied Move: +/- 3.93% Sector: Consumer Defensive
OLLI (premarket) Implied Move: +/- 8.30% Sector: Consumer Defensive
GME (afterhours) Implied Move: +/- 17.82% Sector: Consumer Cyclical
AI (afterhours) Implied Move: +/- 12.07% Sector: Technology
CHWY (afterhours) Implied Move: +/- Consumer Cyclical
Thursday
DG (premarket0 Implied Move: +/- 7.62% Sector: Consumer Defensive
DOCU (afterhours) Implied Move: +/- 8.85% Sector: Technology
AVGO (afterhours) Implied Move +/- 3.83% Sector: Technology
LULU (afterhours) Implied Move: +/- 5.67% Sector: Consumer Cyclical
RH (afterhours) Implied Move: +/- 8.24% Consumer Cyclical
Volatility Watch 🔥
Provided by Seeking Alpha.
Monday - December 4
Volatility watch - Short interest levels pushed higher again on Faraday Future Intelligent Electric (FFIE) and Fisker (FSR). Options trading volume spiked on GameStop (GME) ahead of the retailer's earnings report. The most overbought stocks per their 14-day Relative Strength Index are Aveanna Healthcare (AVAH), Bluegreen Vacations Hold (BVH), Gyre Therapeutics Inc (GYRE). The most oversold stocks per their 14-day Relative Strength Index are ReAlpha Tech (AIRE), Ventyx Bio (VTYX), Eagle Pharma (EGRX).
Earnings watch - Notable companies due to report include Gitlab (GTLB) and Joann (JOAN).
10:00 a.m. The October Factory orders report will be released. Economists expect a 2.6% decline to be announced.
11:00 a.m. BetMGM will host a business update call. The sports betting company is jointly owned by MGM Resorts (MGM) and Entain plc (OTCPK:GMVHF).
Tuesday - December 5
Earnings watch - Notable companies due to report include AutoZone (AZO), Box (BOX), MongoDB (MDB), Toll Brothers (TOL), NIO (NIO), and J.M. Smucker (SJM). Options trading implies double-digit share price swing for Rent the Runway (RENT) and Stitch Fix (SFIX) after they report.
All day - Notable investor events scheduled include Informatica's (INFA) Investor Day event, Builders FirstSource's (BLDR) Investor Day, CVS Health's (CVS) Investor Day, and Deluxe Corporation's (DLX) Investor Day. Analysts also have Shopify's (SHOP) Investor Day circled as a potential share price mover, with a holiday update and long-term guidance both a distinct possibility.
All day - The closing arguments in the DOJ case trying to block the Spirit Airlines (SAVE)-JetBlue Airways (JBLU) merger will take place.
All day - Microsoft (MSFT) will hold its three-day Microsoft Azure + AI Conference.
All day - The post-IPO quiet period ends for Cargo Therapeutics (CRGX) and Hamilton Insurance Group (HG) to free up analysts to post ratings.
All day - Signet Jewelers (SIG), Macy's (M), and Solo Brands (DTC) are some of the companies participating at the Coresight Research AI Conference.
10:00 a.m. Johnson & Johnson (JNJ) will hold an Enterprise Business Review for the investment community. During the event, management will share a detailed review of the Innovative Medicine and MedTech businesses and their respective pipelines, as well as discuss the company’s long-term strategy to deliver sustained growth and value to shareholders.
Wednesday - December 6
Earnings watch - Notable companies due to report include Brown-Forman (BF.A), Campbell Soup (CPB), Chewy (CHWY), and Sprinklr (CXM). Options trading implies double-digit share price swing for GameStop (GME) and ChargePoint Holdings (CHPT) after they report.
All day - The Morgan Stanley Global Consumer and Retail Conference will include presentations from Delta Air Lines (DAL), Revolve Group (RVLV), and Rent the Runway (RENT).
All day - The Senate Committee on Banking, Housing, and Urban Affairs will hold its annual oversight hearing on Wall Street firms. Witnesses will include Wells Fargo (WFC) CEO Charles Scharf, Bank of America (BAC) CEO Brian Thomas Moynihan, JPMorgan Chase (JPM) CEO Jamie Dimon, Citigroup (C) CEO Jane Fraser, State Street (STT) CEO Ronald O’Hanley, BNY Mellon (BK) CEO Robin Vince, Goldman Sachs (GS) CEO David Solomon, and Morgan Stanley (MS) CEO James Gorman.
All day - The Barclays Global Technology, Media and Telecommunications Conference will feature presentations from a long list of companies that includes executives from Intel (INTC), Lyft (LYFT), and Microsoft (MSFT). Workday (WDAY) Co-CEO Carl Eschenbach will deliver a keynote address at the event.
All day - Notable investor events scheduled include CEVA's (CEVA) Investor Day, Peloton Interactive's (PTON) annual meeting, and OneMain Holdings' (OMF) Investor Day. The entire restaurant sector will be watching McDonald's (MCD) investor meeting that is expected to include updates on unit development in the U.S. and international markets, digital initiatives, Q4 trends, and the company's financial outlook.
All day - The two-day AI Summit New York will begin. Speakers on various AI topics include representatives from Microsoft (MSFT), CVS Health (CVS), FedEx (FDX), Lockheed Martin (LMT), and Wells Fargo (WFC).
10:00 a.m. Exxon Mobil (XOM) will host its 2023 Corporate Plan Update video call.
Thursday - December 7
Earnings watch - Notable companies due to report include Broadcom (AVGO), Lululemon (LULU), Dollar General (DG), DocuSign (DOCU), and Guidewire Software (GWRE). Options trading implies double-digit share price swings for Planet Labs (PL) and Smartsheet (SMAR) after their reports.
All day - There will be a hearing in the Tylenol autism case to determine whether the plaintiffs have enough expert evidence to prove their claims and to determine the admissibility of the evidence. Kenvue (KVUE) now owns the Tylenol brand.
All day - Notable investor events include Microsoft's (MSFT) annual general meeting, Domino's Pizza's (DPZ) Investor Day, Moderna's (MRNA) ESG Investor Day, NETGEAR's (NTGR) Financial Analyst Day, and Edwards Lifesciences' (EW) Investor Conference.
Friday - December 8
All day - It is the FDA action date on Vertex Pharmaceuticals (VRTX) for the investigational treatment exagamglogene autotemcel for severe sickle cell disease.
8:30 a.m. The November U.S. nonfarm payrolls report will be released. Economists forecast nonfarm payroll employment rose by 190K in November, following a 150K increase in October. The end of the United Auto Workers strike and Screen Actors Guild strike are anticipated to have impacted the monthly tally. The unemployment is expected to hold steady at 3.9%.
Seeking Alpha editor Josh Fineman contributed to this story
Chart of the Week 📈
Source- Chart of the Day
It can be hard to know exactly when to put money in the market to maximize your returns.
But if you’re a younger investor, the best time to invest was yesterday. And the second-best time is now.
That’s because the key to growing your investments over the course of a lifetime is compound interest. And the best way to maximize compound interest is to let it do its work for as long as possible.
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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.
Damn just when I thought these recaps couldn’t get any better, great job Gordon!