Edition #9
Monday November 28th, 2022
Quiz Question of the Week
Answer at the bottom
This Week in History 📰
28th November 1893- Women vote in a national election for the first time, in the New Zealand general election
1st December 1918- Iceland was granted independence by the Danish parliament.
December 2, 1804- Napoleon Bonaparte was crowned Emperor of France by Pope Pius VII in Paris.
Major Events This Week 🔬
Consumer confidence index- Tuesday 10am EST
Fed Chairman Jerome Powell speaking at the Brookings Institution at 1:30 p.m. EST on Wednesday
Initial jobless claims- Thursday 8.30am EST
Core PCE price index- Thursday 8.30am EST
Summary 📝
Last week saw a nice 1.5% rally in the S&P, with Thanksgiving front of mind for US investors. This rally keeps us floating around the critical $4,000 level, but since this was a lower volume week, this week is going to be a lot more insightful, as some more key inflation data and important job data comes out on Thursday.
The wider market remains an uncertain place to be, as the cryptocurrency markets continue to spiral downwards amid the collapse of FTX, further protests to Covid lockdowns in China, and amid continued geopolitical tensions in Ukraine.
As we’ve always said, there’s always a good reason to sell if you look for it, so staying vigilant, only buying companies which you consider to be great companies at great prices, and avoiding the noise is the strategy I’d always encourage.
If you think an investment is going to be worth more in 5-10 years, then even if we see some further downside, you’ve put your money to work in a more effective place than sitting in a low interest bank account. We’re already over 25% down in the S&P YTD, so even if you’re only doing some monthly deposits in an index fund, you’ll likely see some solid returns over the long term!
Market Recap 📈
Post of the Week 💌
❗️ Black Friday Sales👇
✅ We’re being flooded by discount codes and sales at the moment as Black Friday comes around, but are there bargains to be found in the stock market? 🤔
✅ Putting your money to work is at the heart of all we do, and picking up a quality company at a discounted price might be a far better use of your money than that cheap waffle maker or new TV which might be tempting you. 📺🧇
✅ Of course, not all discounted stocks are good investments, since some are down for a reason, but sifting through the bargain bucket in the market during times of uncertainty has long been a lucrative approach. 📈
Have you been shopping in the stock market during the Black Friday season? What’s the best bargain you’ve found? 🤔
Trading212 Offer- Up to £100 Free Shares
Do you want to get free shares worth up to £100?
Join Trading 212 Invest with my link, and we will both get free shares!
Investing World Cup- Week 2 Update
The Group Stage of the World Cup in Qatar is coming to a close, and the Oak Investor Coaching equivalent is also drawing crowds from all over the world, as some of the biggest companies go head-to-head to take the crown.
Get involved by voting every day for your favourite!
What’s Moving Markets?
Incoming Earnings Reports this week- provided by Earnings Whispers.
CNBC- China might not make major changes to its Covid policy any time soon, despite weekend protests
China won’t likely make major changes to its Covid policy in the near future, despite this weekend’s protests, analysts said.
“Without a clear guidance from the top, local officials are inclined to play safe by sticking to the existing zero-Covid stance,” said Larry Hu, chief China economist at Macquarie. “It upset many people, who expect[ed] more loosening following the ’20 measures’” announced earlier this month.
“In the short term, the Covid policy will only be fine-tuned without moving the needle,” said Bruce Pang, chief economist and head of research for Greater China at JLL.
CNBC- UK property demand slides 44% after market-rocking mini-budget, study shows
Demand for U.K. residential properties nearly halved year-on-year in the four weeks to Nov. 20 following the government’s chaotic budget, property website Zoopla found.
New sales fell 28% over the period.
Zoopla’s report said current dynamics were a “shake-out rather than a pre-cursor to a housing crash”. Prices are widely expected to fall next year.
CNBC- Treasury yields slip as China unrest grows, traders await key data
U.S. Treasury yields slid Monday as unrest in China grew over the country’s Covid policies, while trades awaited a slew of economic data releases — which are due this week and will provide insights into how the U.S. economy is faring as interest rates and inflation remain high.
Events today- provided by Unusual Whales.
Analyst Upgrades and Downgrades- provided by MarketWatch
Highest Short Interest Companies- provided by MarketWatch
Chart of the Day 📈
The market has been in a bad way for pretty much all of 2022, but whether the economy is yet to experience a similar shock is still up for debate.
As you’d expect, the market is more forward facing, usually about 6 months ahead of the wider economy, but as the chart below shows us, we haven’t really seen any movement in the overall value of the US economy.
2023 is very likely to bring a recession, with almost all indicators flashing. This isn’t a major surprise, with debt levels flying through previously agreed ceilings.
Eventually, the piper needs to be paid, and the growth needs to come down, otherwise the risk of a spiralling debt crisis becomes all too real, especially when twinned with rampant and stubborn inflation.
With some luck, the recession will be short and mild, merely resetting consumer expectations and helping companies to develop more sustainable models after some highly disruptive years, but as investors, we need to be ready for an outcome.
Looking into bonds, commodities, and additional investment classes are all likely to be part of the solution. Stock ownership is always the place to be putting the majority of your money to work, but good portfolio management requires diversification in as many variables as possible!
I like to consider the following variables as part of my portfolio management:
Country
Market
Market Sector
Customer Location
Supply Chain Type
General Volatility
Primary Risk
P/E Level
Time Horizon
Investment Type (Dividend?)
Expected Rate of Return
Allocation %
Investor’s Toolkit ⚒️
Unusual Whales- Options Flow and Analysis
5% off with code OAK2022
5% Discount with code OAK
5% discount with my signup link
Follow for More 🎉
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- D 80%
An amazing 80% of the stock market is now automated by various algorithms and software products. To me, this means we need to consider what these are likely to do, when they are likely to trigger their buying and selling, and how to take advantage of this new trend!
Source- Sovereign Boss