Edition #18-Monday February 6th 2023
Quiz Question of the Week ❓
Answers at the bottom!
This Week in History 📰
February 6, 1952 - King George VI of England died. Upon his death, his daughter Princess Elizabeth became Queen Elizabeth II.
February 11, 1990 - In South Africa, Nelson Mandela, at age 71, was released from prison after serving 27 years of a life sentence on charges of attempting to overthrow the apartheid government.
February 12, 1999 - The impeachment trial of President Bill Clinton in the U.S. Senate ended.
Summary 📝
Last week promised a rollercoaster of emotions in the market as Meta Platforms soared 28% after a promising earnings report, the Fed switched to a more Doveish tone, and some of the megacap tech names disappointed.
Despite selling off on Friday, the S&P finished up 1.6%, keeping the positive momentum of 2023 going.
We have some more interesting earnings this week, with Disney and PayPal, but markets will be looking to digest some of the information learned last week before the January CPI data is released next week.
I’m taking a cautious approach as markets start to get overbought with the appetite for risk flowing back. The Fear & Greed Index crept back into Extreme Greed for the first time in months, so taking some profits off the table might be the way to go if we have bumps in the road ahead!
Fear & Greed Index- Provided by CNN
Major Events This Week 🔬
Monday- No major events
Tuesday- Fed Chair Jerome Powell speaks at Economic Club of Washington
Wednesday- New York Fed President John Williams speaks
Thursday- Initial jobless claims
Friday- UMich consumer sentiment index (early)
Incoming Earnings Reports This Week
Provided by Earnings Whispers
Market Recap 📈
Provided by Unusual Whales Futures
Post of the Week 💌
✅ By now, approximately 80% of people have given up on their new year’s resolution, so what better time to do a check on your investment style, and maximise your potential? 📈
✅ I’ve compiled the activities I like to make sure everyone have considered as part of good investing. The core of this is knowing what you own, why you own it, and how to establish value, but also how to reduce the fees you’re paying as part of your investing. 💰
✅ The part most investors miss out on is building a community and support network. This can come from regularly talking about finance with friends, having others around you who enjoy investing, and finding media such as podcasts which bring the markets to life. 🥳
What other activities would you include in the challenge? And how many of these can you tick off before the end of the month? 🤔
What’s Moving Markets? 🏃♂️
CNBC- Adani rout deepens despite soothing words from India’s government and billionaires
“There will be more volatility in India this year; hence the market is prone to a correction,” Bernstein analyst Venugopal Garre wrote in a Monday note as Adani shares continued to tumble.
The Reserve Bank of India said, “the banking sector remains resilient and stable,” citing its own assessment of the current situation.
The Bloomberg Billionaires Index showed founder and chairman Gautam Adani’s net worth further on Friday, as his net worth fell by more than 51.1%, or $61.6 billion, year-to-date.
CNBC- Second earthquake rocks Turkey and Syria as death toll from first quake reaches 1,300
CNBC- U.S.-China relations just got more fragile
KEY POINTS
“The nascent US-China détente is now in critical condition, if not entirely dead, and any future détentes would be similarly vulnerable to derailment by domestic politics,” Gabriel Wildau, managing director at Teneo, said in a note.
The U.S. Department of Defense said a U.S. Air Force fighter shot down an alleged Chinese spy balloon over the weekend.
China’s Ministry of National Defense and Ministry of Foreign Affairs both called the U.S. move to shoot down the balloon an “overreaction.”
Chart of the Week 📈
If you asked anyone in 2022 whether a recession was likely, the likely response was “obviously…”, but in 2023, that seems to be changing.
With record jobs data coming out of the US on Friday, and inflation climbing down steadily, it looks ‘possibly’ that the soft landing the Fed has been claiming would be their baseline might actually be in sight.
JP Morgan’s pricing of the equity, bond and credit markets all suggest less than a 60% chance of recession. This is far less than the 80% of CEOs who were positioning for a recession back in October.
So are we out of the woods? I think we still need to wait another few months to see how the economy performs. With businesses only just being hit by rising rates, they may not want to make any short term moves with employment until they really need to.
We know from history that rate increases usually take about a year to reach the wider economy, so whether spending and employment start to decline into 2023 will be the real data to watch before making any decisions about a recession.
Investor’s Toolkit ⚒️
Unusual Whales- Options Flow and Analysis
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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.
Quiz Question of the Week- Answer
Answer A- 1%
According to Forbes, less than one percent of the 27 million companies in the United States are publicly traded. Furthermore, among U.S. firms with 500 or more employees, 86.4 percent are privately held companies. Therefore many companies that are privately held cannot be classified as small businesses.
In addition, in recent years, there has been a trend of publicly traded companies going private. A report from the SEC calls this phenomenon “going dark,” the idea that instead of going public, many companies or markets are choosing to privatize. This report describes private markets, which includes private companies as having the “power to make positive contributions to innovation” and to “shift paradigms.”