Monday, April 15th 2024
Welcome to another recap on the week’s action and events!
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 📝
We’re back!
After a brief hiatus due to moving house, The Acorn is back on track, and what a few weeks it’s been!
Market Overview and Major News
This week in the financial markets witnessed significant volatility. The VIX, which measures market volatility, saw a notable increase amid geopolitical tensions and rising interest rate uncertainty. The S&P 500 ETF (SPY) experienced a turbulent week, dropping by 2%, rallying the subsequent day, but ultimately closing the week down by 1.62%.
Tax and Legislative Updates
Tax Deadline: US Taxes are due today. Notably, entrepreneur Mark Cuban revealed his tax payment amounts to $288 million.
Legislative Focus: Speaker Mike Johnson has expressed intentions to advocate for aid to both Israel and Ukraine in the coming week.
Geopolitical Developments
Middle East Tensions: An Israeli official indicated to NBC News that a response to Iran’s recent attacks is imminent, though the scale and timing remain uncertain. Despite Politico reporting that the U.S. will not support an Israeli counter-strike, Iranian military leadership, as reported by IRNA and WSJ, stated there are no plans to continue their aerial assaults. The New York Times detailed that Iran launched a substantial number of drones and missiles, with some originating from Iraq and Yemen.
Business and Economic News
Real Estate: The largest office building in St. Louis was sold for $3.5 million, a stark contrast to its $205 million price tag in 2006.
Tech and Investments: Elon Musk’s AI startup, X AI, seeks to raise up to $4 billion, targeting an $18 billion valuation. Cathie Wood’s ARKV reported investments in OpenAI and Anthropic.
Banking Sector: JPMorgan’s CEO, Jamie Dimon, voiced concerns about geopolitical and domestic political risks, the gravest since WWII. Morgan Stanley’s wealth-management unit is under federal investigation.
Additional Noteworthy News
Debt and Economy: The White House is set to cancel an additional $7.4 billion in student debt. The Bank of Canada maintained its interest rates, reflecting a cautious approach.
Cryptocurrency and Tech: Bitcoin’s value plummeted by nearly 15% amid Middle Eastern tensions. Intel announced its new AI accelerator processor, potentially surpassing Nvidia’s capabilities.
Legal and Regulatory Actions: SEC plans to sue Uniswap. Sam Bankman-Fried is appealing his 25-year sentence related to the FTX collapse.
Cultural Notes: Baltimore plans to rejuvenate crime-ridden neighborhoods by selling houses for $1 each. OJ Simpson, the former NFL star, has passed away.
Market Summary
S&P 500 SPY 0.00%↑-1.7%
NASDAQ QQQ 0.00%↑-1.2%
Dow Jones Industrial Average DJIA 0.00%↑-2.4%
VIX Volatility Index +6.5%
At present, markets are pricing in a 97.4% chance of no change in rates at the next Fed meeting in early May, with a small 2.6% chance of a cut by 25BPS.
The Fear and Greed index slipped down to the Neutral category at 46/100.
For me, this is a very healthy pullback after a period of elevated bullishness. As I’ve said previously, this is an interesting time of year for the market, where seasonality suggests there may be a short term peak in place, but remember that this is only an average, and that the future is as uncertain as ever!
As always, stick to your strategy, and make sure your money is working as hard as you are!
This Week in History 📰
Source- The History Place
April 15, 1912 - In the icy waters off Newfoundland, the luxury liner Titanic with 2,224 persons on board sank at 2:27 a.m. after striking an iceberg just before midnight. Over 1,500 persons drowned while 700 were rescued by the liner Carpathia which arrived about two hours after Titanic went down.
April 17, 1961 - A U.S.-backed attempt to overthrow Premier Fidel Castro of Cuba failed disastrously in what became known as the Bay of Pigs fiasco.
April 19, 1995 - At 9:02 a.m., a massive car-bomb explosion destroyed the entire side of a nine story federal building in Oklahoma City.
What’s on my Watchlist? 👀
Three stocks I think have an interesting week ahead.
With earnings season well underway, I’ll be keeping my eye on SCHW 0.00%↑ GS 0.00%↑ and also BA 0.00%↑ as the senate hearing for whistle-blowers kicks off.
What’s Moving Markets? 🏃♂️
Three stories I’ve got my eye on this week. Sourced from CNBC.
Oil prices could see ‘super spike well above $100’ if conflict escalates after Iran’s attack on Israel
Oil prices could soar to $100 per barrel and beyond, said market watchers, after Iran mounted an aerial attack against Israel reigniting fears of a regional war.
Iran is home to vast oil resources, and any disruption to its capacity to supply global markets could push prices higher.
While Biden reiterated U.S. commitment to Israel’s security, he told Netanyahu that Washington would not participate in offensive operations against Iran, a senior administration official told NBC News.
Green hydrogen tech boss warns of AI energy consumption risk
“What scares me is the energy consumption if you’re using ChatGPT,” Ceres Power CTO Caroline Hargrove said on a CNBC-moderated panel.
An IEA report said that by 2026, the AI industry is expected to consume at least 10 times the electricity demand it had in 2023.
Mary de Wysocki, chief sustainability officer at Cisco, said that it was important to be “responsible users of [AI] where we know where can add the benefit and not just use it because it’s potentially fun.”
Israel vows to ‘exact a price’ after Iran’s attack. Here’s what analysts expect could happen
Israel has vowed to “exact a price” from Iran in retaliation for the large-scale aerial assault this weekend.
“Right now, they certainly are seriously considering direct strikes on Iran, because that is a clearest path back to deterrence,” according to Ryan Bohl, senior Middle East and North Africa analyst at risk intelligence platform Rane Network.
But Israel will need to strike a delicate balance, he noted, highlighting that “they don’t want an overt conflict with Iran.”
Major Events This Week 🔬
Incoming Earnings Reports
Source- Savvy Trade
Catalyst Watch 🔥
Source- Seeking Alpha.
Monday - April 15
Volatility watch - Options trading volume is elevated on electric vehicle stocks Nikola (NKLA) and Rivian Automotive (RIVN). The most overbought stocks per their 14-day Relative Strength Index include Iczoom Group (IZM), Galectin Therapeutics (GALT), IMPACT Silver (OTCQB:ISVLF). The most oversold stocks per their 14-day Relative Strength Index include Perion (PERI), Sirius XM (SIRI), and Globe Life (GL). Investors will also have their eyes on Capri Holdings (CPRI) and Tapestry (TPR) amid concerns about the Federal Trade Commission's review of the planned $8.5B merger. The European Commission Phase 1 investigation on the CPRI-TPR deal expires on April 15. Trump Media & Technology (DJT) is also on watch again after a 24% slide in just a week.
All week - The Bitcoin (BTC-USD) halving event will be a major focus in the cryptocurrency world. The halving event will reduce the rate at which new Bitcoins are created by cutting the reward to so-called miners who maintain the Bitcoin network. Some of the stocks that have been volatile around speculation on the impact of the Bitcoin halving event include Coinbr Global (COIN), Riot Blockchain (RIOT), Marathon Digital Holdings (MARA), Hut 8 Mining (HUT), CleanSpark (CLSK), and MicroStrategy (MSTR). Bitcoin appreciated on average 59% in the six months after the last two halvings.
All week - Data reports expected to be released include the latest update from credit card lenders on delinquencies and charge-offs. Delinquency rates at American Express (AXP), JPMorgan Chase (JPM), Citigroup (C), and Bank of America (BAC) are currently below their pre-pandemic levels of February 2020.
All week - TED2024 will run all week. Some of the notable speakers related to the stock market include Bill Ackman talking about the activist investor playbook and Google (GOOG) DeepMind CEO Demis Hassabis talking about the future of AI.
All week - The four-day NAB Show in Las Vegas will have a focus on topics such as broadcast cybersecurity, the rise of 5G, and the role of AI in media. Sony (SONY), Verizon (VZ), Sinclair (SBGI), Fujifilm (OTCPK:FUJIY), Beamr (BMR), InterDigital (IDCC), and Backblaze (BLZE) are some of the companies that will be showcasing their products and innovations.
All week - Ibotta (IBTA) and Centuri (CTRI) are expected to price their IPOs and start trading. The IPO quiet periods expire on Reddit (RDDT), Astera Labs (ALAB), Intelligent Group (INTJ), and Auna (AUNA) to free up analysts to post ratings.
Earnings watch - Notable companies due to report include Goldman Sachs (GS), Charles Schwab (SCHW), and M&T Bank (MTB).
8:30 a.m. The March Retail Sales report will be released. Economists forecast a 0.4% month-over-month increase in the headline number.
10:00 a.m. Ancora's candidates for the CEO, COO position, and board seats at Norfolk Southern (NSC) will participate in a fireside chat with Deutsche Bank.
Tuesday - April 16
Earnings watch - Notable companies due to report include UnitedHealth (UNH), Johnson & Johnson (JNJ), Bank of America (BAC), Morgan Stanley (MS), Rio Tinto (RIO), and United Airlines (UAL).
All day - Baidu (BIDU) will host its annual flagship AI developer conference at the Shenzhen World Exhibition and Convention Center. Robin Li, Co-founder, Chairman and CEO of Baidu, will deliver a keynote speech, which will be his first major public speech of 2024.
All day - The IMF will release its latest World Economic Outlook.
8:30 a.m. Housing starts for March will be reported. Economists forecast a drop to 1.48M for the month from 1.52M in February.
Wednesday - April 17
Earnings watch - Notable companies due to report include Abbott Laboratories (ABT), U.S. Bancorp (USB), Kinder Morgan (KMI), VinFast Auto (VFS), Las Vegas Sands (LVS), and CSX (CSX).
All day - Volkswagen (OTCPK:VLKAF) workers at the automaker's plant in Chattanooga, Tennessee, will hold a three-day vote on joining the United Auto Workers union.
All day - The Federal Reserve will release its Beige Book report.
All day - A Senate subcommittee hearing will feature testimony from Boeing (BA) CEO David Calhoun. Engineer Sam Salehpour is expected to detail safety concerns involving the manufacturing and assembly of the 787 Dreamliner. Shares of Boeing are down 33% on a year-to-date basis.
All day - Shareholders with Kaman (KAMN) will vote on the $1.8B buyout offer from Arcline.
4:15 p.m. GreenPower Motor (GP) will hold a webinar to share insight into the company's strategic positioning and growth trajectory.
5:30 p.m. Cleveland Federal Reserve Bank President Loretta Mester will give an update on the Fed before the South Franklin Circle Dialogues Series.
Thursday - April 18
Earnings watch - Notable companies due to report include Netflix (NFLX), Blackstone (BX), Ally Financial (ALLY), Taiwan Semiconductor Manufacturing (TSM), and Intuitive Surgical (ISRG).
All day - It is the five-year anniversary date of the IPOs for Zoom Video (ZM) and Pinterest (PINS).
9:00 a.m. Benitec Biopharma (BNTC) will host a virtual R&D Day. The event will feature two key opinion leaders who will discuss the clinical symptoms and the natural history of oculopharyngeal muscular dystrophy, a rare genetic muscle disorder.
9:15 a.m. New York Federal Reserve Bank President John Williams will participate in moderated discussion before the Semafor World Economy Summit.
11:00 a.m. Atlanta Federal Reserve Bank President Raphael Bostic will speak on the economic outlook, monetary policy and real estate in a moderated armchair chat at the University of Miami Herbert Business School.
Friday - April 19
Earnings watch - Notable companies due to report include Procter & Gamble (PG) and American Express (AXP).
8:30 a.m. Procter & Gamble (PG) will hold its earnings conference call. Colgate-Palmolive (CL) and Walmart (WMT) are the two stocks with the highest trading correlation to P&G on earnings day.
10:30 a.m. Federal Reserve Bank of Chicago President Austan Goolsbee will participate in a Q&A session.
Seeking Alpha Editor Josh Fineman contributed to this story.
Chart of the Week 📈
Source- Chart of the Day
Some consumer categories have seen improvement.
Prices fell for used cars and trucks, new vehicles and airline tickets between February and March, for example. They’re also down over the past year, by 2.2%, 0.1% and 7.1%, respectively, according to CPI data.
Lower prices for new and used cars should lead auto insurance and repair costs to fall as well, economists said.
Grocery prices are another bright spot, they said. While some categories, such as eggs and pork chops, have seen recent upward movement, the overall “food at home” index stood at 0% on a monthly basis in both February and March.
Post of the Week 💌
Source- Oak Investing
✅ Transparency is everything when it comes to talking about the market. Everyone should have their own strategy; their own thesis for each company; and a close understanding of their own financial situation. 💰
✅ I am currently in a stage where I can invest a decent proportion of my income, primarily in companies I have closely analysed, and plan to hold for the next 5-10 years. Some companies are very short term holdings for acquisitions, mergers and spin offs, and some are pure speculation. 📈
✅ By knowing what your plan is for each company, and having a risk balance you can live with, your portfolio can be an incredibly powerful accelerant to the financial independence we all want. 💰
✅ It’s not always easy. Some companies will have poor quarters and years, but with sufficient diversification, analysis and management, the trend is your friend over the long term. 📈
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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.