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- The Weekly Wrap-Up - January 13th, 2023
The Weekly Wrap-Up - January 13th, 2023
Inflation, Bank Earnings, Bitcoin and more
CMG Venture & Mark Roussin
January 13, 2024
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Market Talk
Despite all of the bad news, including a rise in inflation, poor bank earnings and further trouble in the Red Sea, markets ended the week higher.
*Note - premium subscribers received our “Earnings Recap” earlier this morning where we covered JPMorgan, Bank of America, BlackRock, Delta and UnitedHealth. Become a member of the IE community today to check it out.
5 Stories Moving the Market
These are some of the biggest stories from the past week that had an influence on market action.
Rising shelter, healthcare costs lift consumer inflation in December
Consumer prices increased more than expected in December, with Americans paying more for shelter and healthcare, suggesting it was probably too early for the Federal Reserve to start cutting interest rates.
The consumer price index (CPI) rose 0.3% last month after increasing 0.1% in November. The cost of shelter, which includes rents, hotel and motel stays as well as school housing, accounted for more than half of the increase in the CPI. Other contributors included gasoline prices, which rebounded 0.2% after dropping 6.0% in November, food prices, which rose 0.2% for a second straight month, and healthcare costs increasing 0.6%.
In the 12 months through December, the CPI rose 3.4% after increasing 3.1% in November, while the core CPI advanced 3.9%.
SEC approves 11 bitcoin ETFs
The SEC said it approved 11 spot Bitcoin ETF applications, including from BlackRock, Grayscale, Ark 21Shares, Fidelity, Invesco and VanEck.
A decade in the making, the ETFs are a game-changer for bitcoin, offering investors exposure to the world's largest cryptocurrency without directly holding it. They will test whether digital assets - still viewed by many professionals as risky - can gain broader acceptance as an investment.
Bitcoin ETFs saw $4.6 billion worth of shares trade hands in its first day of trading, as investors jumped into the landmark products.
Shares of Boeing tumbled 12% last week as investors digested the news that the Federal Aviation Administration had ordered airlines to ground more than 170 Boeing 737 Max 9 aircraft for urgent inspections.
The FAA issued the order on Saturday after a door plug blew out in the middle of an Alaska Airlines flight on Friday, January 5th when the nearly brand-new aircraft was flying at around 16,000 feet.
The FAA on Friday said it will audit Boeing’s production line and is considering using an independent third party to oversee Boeing inspections and quality of its manufacturing. “The results of the FAA’s audit analysis will determine whether additional audits are necessary,” said the agency.
BlackRock strikes $12.5 billion deal for Global Infrastructure Partners
BlackRock announced on Friday it would buy Global Infrastructure Partners (GIP) for $12.5 billion in a major bet on alternative assets. The deal, which includes $3 billion in cash and 12 million BlackRock shares, will put the asset management giant at the heart of investing in ports, power, and digital infrastructure projects around the globe.
Once the deal closes, the firm will hold approximately $150 billion in infrastructure assets across a portfolio that ranges from the U.S. liquified natural gas export market to wastewater services in France to airports in England and Australia.
Soaring demand for logistics and digital infrastructure, and the trillions of dollars needed for the transition away from high-carbon energy, have made the asset class increasingly popular among institutional investors. “Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts re-shape the global economy," said chief executive Larry Fink.
Citigroup is cutting 10% of its workforce in CEO Jane Fraser’s corporate overhaul
Citigroup said it was cutting 10% of its workforce in a bid to help boost the embattled bank’s results and stock price. About 20,000 employees will be let go over the “medium term,” Citigroup said Friday in its fourth quarter earnings report.
Citigroup CEO Jane Fraser announced a sweeping overhaul of the third-largest U.S. bank by assets in September. The company has been left behind by peers since the 2008 financial crisis as Fraser’s predecessors couldn’t get a handle on expenses and is the lowest valued among the six biggest U.S. banks.
Citigroup booked a $780 million charge in the fourth quarter tied to Fraser’s restructuring project, and that it may post another $1 billion in severance and other expenses in 2024. The moves could help trim up to $2.5 billion in costs over time, the bank said.
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Premium Posts of the Week
We continue to push out more and more content every week to give investors that edge. Here are the posts premium subscribers received this week.
Edge Report
Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even get a sneak peek into our systems and models. This week we nailed the uptick in inflation as well as most of our earnings predictions. See the full report here:
Monthly Portfolio Update
Every month we share a full access look into our portfolios, including holdings, performance, activity and our watchlists for the upcoming month. You can see both of our portfolios here:
Stock Deep Dive - Home Depot
Our Deep Dive focused on Home Depot this week. We not only broke down the financials of the home improvement company but we also shared our valuation models and price targets for 2024. You can see the full analysis here:
The Week Ahead
It’s another big week ahead for the market as Q4 earnings season warms up.
Earnings Reports
Earnings season continues on as several more major banks are set to report. We will be covering Goldman Sachs, Morgan Stanley, Charles Schwab, and Taiwan Semiconductor.
Economic Reports
Retail sales, housing reports and several Fed speeches will be the main drivers of markets next week.
Poll of the Week 📊
Will you be investing in a Bitcoin ETF? |
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Mark & Chris
The Investor’s Edge
Disclosure
This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
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