Monday, January 15th 2024
Hi Oak Investors,
Welcome to another recap on the week’s action and events!
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Thanks,
Gordon
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Summary 📝
Good times returned as the market saw green for the first time in 2024, as earnings season kicked off with the big banks.
Despite the latest inflation data being slightly hotter than expected, the more risky sectors of the market had a pretty good week. Many investors will be looking to balance their portfolios for the rest of the year now that the worst of tax selling and repositioning is over, but events like the Bitcoin ETF approval last week continue to show us that nothing is a guarantee in the market!
Market Summary
S&P 500 SPY 0.00%↑+ 1.8%
NASDAQ QQQ 0.00%↑+ 3.1%
Dow Jones Industrial Average DJIA 0.00%↑+ 0.3%
The Volatility Index fell throughout the week, ending substantially down as markets continued to move past interest rate fears and inflation concerns.
At present, markets are pricing in a 95.3% chance of no change in rates at the next Fed meeting in late January, with a 4.7% chance of 25BPS cut!
Despite the volatility, the Fear and Greed index remained in the Extreme Greed category at 71/100.
Surprise news events and catalysts are going to be everywhere this year, as over 2billion people have an election in 2024!
Despite this, don’t let your strategy be swayed by sudden volatility as news breaks or as the market moves without warning. Short-term chaos is all part of the deal when it comes to investing. If you can stick with it, you’ll be rewarded!
This Week in History 📰
Source- The History Place
January 15, 1535 - Henry VIII became Supreme Head of the Church in England as a result of the Act of Supremacy following his break with Rome.
January 20, 1649 - At the conclusion of the English Civil War, King Charles I was brought before a high court of justice at Westminster Hall on charges of treason.
January 20, 1996 - Yasir Arafat became the first democratically-elected leader of the Palestinian people with 88.1 percent of the vote.
What’s on my Watchlist? 👀
Three stocks I think have an interesting week ahead.
The banks continue to keep my interest as earnings reports filter through alongside the drama from the crypto markets. I expect GS 0.00%↑ , MS 0.00%↑ and SCHW 0.00%↑ to have a volatile few days ahead.
What’s Moving Markets? 🏃♂️
Three stories I’ve got my eye on this week. Sourced from CNBC.
Taiwan’s new president will face a divided parliament. Here’s why it matters
The Democratic Progressive Party’s Lai Ching-te won Taiwan’s 2024 presidential election on Saturday with 40% of the vote, but the ruling party failed to hold onto its parliamentary majority.
No party has an outright majority, thought Kuomintang, with 52 seats, has one more than DPP.
Lai has pledged to build consensus, which may moderate some of his policy agenda.
Ko Wen-je’s Taiwan People’s Party may have lost the presidential election, but it has eight seats, which could make it a king-maker as coalition partner.
Germany’s economy shrinks by 0.3% in 2023
The manufacturing sector, excluding construction, fell by a sharp 2%, led by lower production in the energy supply sector.
The fourth quarter recorded a similar 0.3% drop compared with the July-September period.
The office said that the German economy stagnated in the third quarter, implying the country has narrowly avoided a technical recession that is defined by two successive quarters of consecutive GDP declines.
Apple offers rare iPhone discount in China as demand fears rise
Between Jan. 18 and Jan. 21, Apple is offering 500 Chinese yuan ($70) off its iPhone 15 range, including the most expensive iPhone 15 Pro Max, ahead of the Lunar New Year in February.
While third party retailers in China sometimes offer discounts on iPhones around holiday periods, it’s extremely rare for Apple to do so on its own retail channel.
The discounts come as Apple faces rising competition from local players like Xiaomi and Huawei, which are offering competitive high-end products.
Major Events This Week 🔬
Incoming Earnings Reports
Source- Savvy Trader
Catalyst Watch 🔥
Source- Seeking Alpha.
Monday - January 15
All day - U.S. markets will be closed for the observance of the Martin Luther King Day holiday.
All day - The three-day National Retail Federation Big Show will feature speeches by Walmart U.S. (WMT) CEO John Furner, Honest Company (HNST) CEO Carla Vernon, FedEx (FDX) CEO Raj Subramaniam, Salesforce (CRM) CEO Marc Benioff, Signet Jewelers (SIG) CEO Gina Drosos, and Under Armour (UAA) CEO Stephanie Linnartz. Executives with Levi Strauss (LEVI), BJ's Wholesale Club (BJ), PepsiCo (PEP) and Dollar General (DG) will also make appearances.
Tuesday - January 16
Volatility watch - Options trading volume has moved higher on Cytokinetics (CYTK) amid report of takeover interest. TeraWulf (WULF) has also seen more options bets placed on it than normal activity. ESS Tech (GWH) and Bakkt Holdings (BKKT) both have an elevated level of short interest outstanding on them. The most overbought stocks per their 14-day Relative Strength Index include Elevation Oncology (ELEV), RayzeBio (RYZB), and Daseke (DSKE). The most oversold stocks per their 14-day Relative Strength Index include Global Mofy Metaverse (GMM), AAR (AIR), and DocGo (DCGO). Albertsons Companies (ACI) and Kroger (KR) will be watched, with the timing agreement on their merger due to expire.
IPO watch - Companies with blocks of share rolling off their IPO lockup period during the week include Oddity Tech (ODD), BioNexus Gene Lab (BGLC), and Abivax (ABVX). Of the three, Oddity Tech is the only one trading above its IPO pricing level.
Earnings watch - Notable companies due to report include Morgan Stanley (MS), Goldman Sachs (GS), PNC Financial (PNC), and Interactive Brokers (IBKR). All four of those financial stocks traded lower after their last earnings report. Options trading implies a double-digit swing in share price for Calavo Growers (CVGW) after it reports.
All day - The Needham Growth Conference will feature presentations and fireside chats by a large number of companies. The conference has led to some share price jolts in the past off of guidance updates. The list of participating companies includes Freshworks (FRSH), BlackBerry (BB), Chegg (CHGG), Beachbody (BODY), Planet Labs (PL), Fubo (FUBO), and MongoDB (MDB).
All day - Monster Beverage (MNST) will host an investor meeting to provide update on the business and operations. Goldman Sachs thinks the update will be a positive share price catalyst.
11:00 a.m. Federal Reserve Board Governor Christopher Waller will give a speech on the economic outlook.
Wednesday - January 17
Earnings watch - Notable companies due to report include Prologis (PLD), Charles Schwab (SCHW), U.S. Bancorp (USB), and Alcoa (AA).
All day - Samsung (OTCPK:SSNLF) will hold its Galaxy Unpacked event to showcase new products in the Galaxy S24 series and unveil Galaxy AI. The company has previewed that the AI system will be a comprehensive mobile experience and provide universal intelligence on users' phones. Cloud connectivity is expected to provide advanced capabilities for Galaxy AI.
All day - Investor events include Compass Diversified Holdings' (CODI) Investor Day, Ryman Hospitality Properties' (RHP) Investor Day, and Charles Schwab's (SCHW) business update call.
All day - OPEC will publish its Monthly Oil Market Report.
All day - Ethereum (ETH-USD) developers have a Goerli public testnet for Dencun scheduled. Ethereum has rallied 15% over the last week as part of a crypto rally tied to bitcoin ETF approval.
8:30 a.m. The December Retail Sales report will be released by the Census Bureau. Economists expect a 0.4% month-over-month increase.
2:00 p.m. The Federal Reserve Beige Book report will be released.
3:00 p.m. New York Federal Reserve Bank President John Williams will give opening remarks before a hybrid event titled "An Economy that Works for All: Measurement Matters."
Thursday - January 18
Earnings watch - Notable companies due to report include Truist Financial (TFC), KeyCorp (KEY), and Fastenal Company (FAST). Options trading implies a double-digit swing in share price for Birkenstock (BIRK) after it reports.
All day - Investor events include annual meetings for Intuit (INTU), Micron Technology (MU), and Costco Wholesale (COST).
All day - Circana will release U.S. video game results for a period (November 26-December 30) covering much of the holiday shopping season. The report could be of interest to game developers Microsoft (MSFT), Electronic Arts (EA), Warner Bros Discovery (WBD), Sony (SONY) (OTCPK:SNEJF), Take-Two Interactive (TTWO), Roblox (RBLX), Ubisoft (OTCPK:UBSFY), as well as Hasbro (HAS) and GameStop (GME).
All day - IEA will publish its monthly Oil Market Report.
All day - The ten-day Sundance Film Festival will begin in Park City, Utah. The acquisition decisions made by production companies can have big financial implications for movie studios down the road.
7:30 a.m. Atlanta Federal Reserve Bank President Raphael Bostic is scheduled to give brief remarks on the economic outlook before the Metro Atlanta Chamber board of directors meeting.
Friday - January 19
Earnings watch - Notable companies due to report include Ally Financial (ALLY), Comerica (CMA), Fifth Third (FITB), and Travelers (TRV).
All day - Shareholders with Spirit Realty Capital (SRC) will vote on the acquisition offer from Realty Income (O).
10:00 a.m. The December Existing Home Sales report will be released. Economists expect a print of 3.84M home sales vs. 3.82M in November.
10:00 a.m The January reading of the Michigan Consumer Sentiment Survey will be released.
Seeking Alpha editor Josh Fineman contributed to this story
Chart of the Week 📈
Source- Chart of the Day
On Wednesday, the SEC approved rule changes that allow for the launching of bitcoin ETFs in the U.S.
The ETF approval is a landmark victory for the crypto industry, which first sought to launch a bitcoin ETF more than 10 years ago. Optimism had been building since Grayscale’s big legal win against the SEC in August over the regulator’s refusal to let it convert its popular Bitcoin Trust (GBTC) into an ETF. The flagship cryptocurrency’s price has increased 80% since then.
Following the SEC’s decision, bitcoin initially edged lower, as expected by many traders. Although the volume of inflows into the new funds remains to be seen, bitcoin ETFs are still widely expected to drive the demand – and ultimately, price – of bitcoin higher.
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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.
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