Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of more than 16,000 subscribers striving to be better investors with an edge in the market.

Every weekend we publish “The Weekly Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

Grab your coffee and let’s dive in.

Market Talk

Another week down, another record high for both the S&P 500 and Nasdaq. Mega cap tech continues to pull these indexes higher as the underlying market continues to struggle.

3 Stories Moving the Market

These are some of the biggest stories from the second half of the week that had an influence on market action.

U.S. economy added 206,000 jobs in June, unemployment rate rises to 4.1%

The U.S. economy again added slightly more jobs than expected in June though the unemployment rate increased.

The economy added 206,000 nonfarm payroll jobs, slightly exceeding the forecast of 200,000 but less than May's revised 218,000. This increase was largely driven by a 70,000 rise in government jobs. Other sectors with notable gains included health care, with 49,000, social assistance, with 34,000, and construction, with 27,000.

Despite the job growth, the unemployment rate rose unexpectedly to 4.1%, the highest since October 2021, conflicting with expectations of it holding steady at 4%.

The labor force participation rate increased to 62.6%, and the prime age participation rate reached 83.7%, its highest in over 22 years.

Average hourly earnings grew by 0.3% for the month and 3.9% year-over-year, aligning with estimates, while the average work week remained unchanged at 34.3 hours.

Over $170 billion wiped off cryptocurrencies as market tanks on Mt. Gox bitcoin payout fears

Cryptocurrencies dropped significantly this week as investors reacted to the nearly $9 billion payout to users of the collapsed bitcoin exchange Mt. Gox.

Bitcoin fell to around $56,300, briefly dipping below $55,000 for the first time since February 27th. Ethereum also declined by 5% to $2,930.

The total cryptocurrency market lost over $170 billion in market capitalization within 24 hours.

Nobuaki Kobayashi, the trustee for the Mt. Gox bankruptcy estate, announced that repayments in bitcoin and bitcoin cash had started to some creditors through designated crypto exchanges. The total amount transferred was not specified, and remaining funds will be returned once certain conditions are met.

📚 EDGE-UCATION: What is Mt. Gox and what happened to it?

Mt. Gox, short for "Magic: The Gathering Online Exchange," was a Tokyo-based cryptocurrency exchange that at one point handled over 70% of all Bitcoin transactions worldwide. It was established in 2010 by Jed McCaleb and later sold to Mark Karpelès in 2011.

The exchange suffered a major security breach and subsequent insolvency in 2014. Here's a summary of the key events:

1. Hacks and Theft: Between 2011 and 2014, Mt. Gox experienced multiple security breaches, leading to the theft of approximately 850,000 Bitcoins, worth about $450 million at the time. This was due to both hacking and alleged mismanagement.

2. Bankruptcy Filing: In February 2014, Mt. Gox suspended trading, closed its website, and filed for bankruptcy protection in Japan, claiming it had lost track of the Bitcoins due to a bug in the Bitcoin software that allowed transactions to be altered.

3. Revelations and Legal Issues: It was later revealed that the theft was ongoing for years, and a significant portion of the stolen Bitcoins was never recovered. Mark Karpelès was arrested and charged with embezzlement and data manipulation but was acquitted of embezzlement in 2019. He was, however, found guilty of falsifying financial records.

4. Repayment to Creditors: The trustee for the Mt. Gox bankruptcy estate, Nobuaki Kobayashi, has been working to repay the creditors. In 2021, a rehabilitation plan was approved, which involved repaying creditors in Bitcoin and Bitcoin Cash. The recent developments indicate that these repayments are now underway.

The collapse of Mt. Gox had a significant impact on the cryptocurrency market and highlighted the need for better security measures and regulatory oversight in the industry.

Saks parent HBC, Neiman Marcus reach $2.65B acquisition deal

HBC, the parent company of Saks Fifth Avenue, has agreed to acquire Neiman Marcus Group for $2.65 billion.

The merger will create a new entity, Saks Global, with Amazon becoming a minority stakeholder. The deal aims to enhance their bargaining power with luxury brands. Saks operates 39 stores, while Neiman Marcus, which went bankrupt in 2020, has 36 stores and also owns Bergdorf Goodman.

Leadership changes include Saks.com CEO Marc Metrick becoming CEO of Saks Global, and HBC Properties and Investments CEO Ian Putnam leading Saks Global’s property and investments business, both reporting to executive chairman Richard Baker.

HBC’s Canadian business, including Hudson’s Bay stores and $2 billion in property, will remain separate, focusing on serving its Canadian customers and supporting growth.

In Other News

In this section, we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• Nvidia gets rare downgrade as analyst warns about future upside

• Tesla stock rises again, extending monster 40% rally over the last month

• Novo Nordisk and study linking weight loss drugs to rare eye condition

• Gold rises as cooling US employment data backs rate cuts

• Britain’s Labour Party pulls off a huge election victory

• Disney heiress, wealthy Democratic donors say they won’t finance the party until Joe Biden drops out

IE+ Posts of the Week

We continue to push out more and more content every week to give investors that edge. Here are the posts Investor’s Edge+ 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 share a sneak peek into our systems and models. This week we discussed the upcoming jobs reports and how we were positioning in the holiday shortened week. See the latest full report here:

Stock Deep Dive - Palo Alto

Our Deep Dive focused on Palo Alto Networks this week. We not only broke down the financials of the largest cybersecurity company but we also shared our valuation models and price targets for 2024. You can see the full analysis here:

The Week Ahead

Next week’s focus will be inflation data and banks kicking off earnings season.

Earnings Reports

Banks kick off earnings season this week, along with a few other key names. Here is the list of names we will be covering:

• Monday 7/8: --

• Tuesday 7/9: FedEx

• Wednesday 7/10: Micron

• Thursday 7/11: Pepsico and Delta

• Friday 7/12: JPMorgan and BlackRock

Here is the full calendar of scheduled earnings releases:

Economic Reports

Next week’s major catalysts will be the inflation reports, though we also get jobless claims, consumer sentiment and speeches from several from Fed members, including Jerome Powell.

The Investor’s Edge Discord is growing!

Our brand-new Discord server is growing quickly and we are excited to hear from so many intelligent minds!

The channel is tailor-made for investors like you who want to dive deeper into stocks, share insights, and engage directly with us.

Here's what happened in the Discord this week:

🗨️ Chat rooms: Investors discussed the the huge moves from mega cap tech and the crypto sell-off. Members also dove into the number of jobs reports and shared their views on the overall economy.

🚨 Trade Alerts: Chris and Mark shared several trades, including additions to the portfolio and trades that set up their portfolios for the week.

Join us on Discord and let's level up our investing game together. The future of trading awaits—and you're invited to be a part of it! 🌟

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Thank you for reading this edition of the Weekly Wrap-Up. Have a great weekend!

Until next time investors!

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.