Edition #10
Monday December 5th, 2022
Quiz Question of the Week
(Answer at the bottom…)
This Week in History 📰
5th December 1952- A Deadly Smog Covered London
6th December 2006- NASA Mars Global Surveyor Finds Evidence of Water on Mars
7th December 1941- Pearl Harbour is Attacked
Major Events This Week 🔬
Thursday 8.20am EST- US Jobs Data
Friday 10am EST- UMich consumer sentiment index
Friday 10am EST- UMich 5-year inflation expectations
Summary 📝
Last week saw a nice 1% gain for the S&P thanks to a somewhat dovish speech from Fed Chair J Powell, indicating that the Fed may well be open to slowing down their rate hikes at the December FOMC meeting. This would be great news for some of the more beaten down stocks from 2022, with plenty of the heavy lifting already priced in, but all eyes remain on inflation.
With the next CPI data arriving on December 13th, just days before the meeting, I think a lot of speculation and discussion will largely be irrelevant until we know which direction inflation is moving.
If we see further declines, and a Fed will to take their foot off the accelerator, then we might see some very friendly Santa Rallies in the market, but if inflation remains stubbornly high, and the Fed responds with another 75BPS rate hike, then the pre-Christmas market party is in for a nasty surprise!
All we can do in the meantime is to keep an eye on the volatility index, DXY Dollar Index, 10yr treasury yields, and watch out for any surprises.
However the market is behaving, keeping a long-term view, buying into quality, and staying resilient will always work out!
Market Recap 📈
Post of the Week 💌
❗️ 2022 Investing Wrapped 🎁
🔹As we approach the last few weeks of the year, it’s always important to look back on the happenings of the year, the movements of the market, and how we did. 📈
🔹Of course, it’s not been the easiest year, with the fastest and steepest rise in interest rates in decades, war in Europe, and looming recessions across the world. 🤯
🔹If you owned any companies in the energy sector, you may have had a decent year, but almost anything else struggled. The usual winners in tech and finance collapsed as rising rates slammed future earnings potential. 📉
🔹There may well be a recession coming, but with some light emerging at the end of the tunnel, and the markets always being ahead of the wider economy, there’s hope that 2023 might be a better year, both for the markets, and for the world. 🌎
How did you do this year? Let us know 🤔🤔
🚨Concept Credit to Spotify Music
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Investing World Cup- Week 2 Update
We’re now into the knockout round of the Investing World Cup, with market giants all dreaming of being crowned the Oak Investor Community champion!
Get involved by voting every day for your favourite!
What’s Moving Markets?
Incoming Earnings Reports this week- provided by Earnings Whispers.
Reuters- OPEC+ keeps steady policy amid weakening economy, Russian oil cap
No discussions about Russian price cap - delegates
Oil prices have come under pressure from weak economy
Next meetings to take place Feb. 1 and June 3-4
CNBC- Finding the market tough right now? Here’s how young investors can be smart with their money
CNBC- iPhone maker Foxconn reports slump in revenue after unrest and Covid outbreak at key China plant
Foxconn said November revenue totaled 551.1 billion new Taiwan dollars ($14.7 billion), down more than 29% versus October and over 11% lower compared to Nov. 2021.
The Taiwanese firm said the fall was due to “production gradually entering off-peak seasonality and a portion of shipments being impacted by the epidemic in Zhengzhou.”
Zhengzhou, a city in China, is home to the world’s largest iPhone assembly plant, which is run by Foxconn. In late October, the factory had a Covid outbreak which Foxconn battled to get under control.
CNBC- Chinese stocks rally on reopening hopes; Morgan Stanley upgrades to overweight
Chinese stocks rallied after Beijing and Shenzhen said they would lift measures that required commuters to show negative Covid test results before travel.
The Hang Seng TECH index, which represents the 30 largest technology companies listed in Hong Kong, surged 8% in Asia’s trade.
Events today- provided by Unusual Whales.
Analyst Upgrades and Downgrades- provided by MarketWatch
Highest Short Interest Companies- provided by MarketWatch
Chart of the Day 📈
Another week, another knife edge…
Not for the first time, we see the market teetering on the edge of a breakout, but with some stiff resistance above.
Since fresh lows in October, we’ve seen an impressive 15% rally, all as negative news and the same 2022 sentiment we’ve been enduring. As we said, this is the fastest interest rate hike ever seen, now at 3.75-4.00%, the highest since before the financial crisis.
Would anyone be too surprised if that led to one of the steepest declines as a result?
The big moment is going to be whether we can recapture the S&P level at around 4300, or if we likely hit the level of resistance, and fall back down to the 3000s.
We’re going to need a few things to go our way, namely around inflation.
If we see a decline, and the Fed are happy to cool off their response, then we might be able to break through the ceiling, but since this is still a week or so away, I wouldn’t be surprised to see some of that uncertainty be reflected in a red week for the market ahead.
Investor’s Toolkit ⚒️
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Disclosure
✅
This newsletter provides general information only.
Investments can fall and rise. Capital at risk. Any information in this content should not be construed as investment advice. 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.
Quiz Question of the Week- Answer
Answer- C 53%
53% of all families in the U.S. are invested in the stock market.
Source- Daytradingz
I think the percentage of UK household who owns stock is much less than the US. Like way less