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- The Weekly Wrap-Up - March 23rd, 2024
The Weekly Wrap-Up - March 23rd, 2024
Fed keeps rates steady again
CMG Venture & Mark Roussin
March 23, 2024
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Good morning investors!
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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
The Fed kept rates steady and maintained its forecast for three rate cuts this year. The market liked the news with the S&P 500 making new all time highs.
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5 Stories Moving the Market
These are some of the biggest stories from the past week that had an influence on market action.
Fed holds rates steady and maintains rate cut forecast despite raising GDP and inflation outlook
The Federal Reserve kept interest rates unchanged, maintaining its benchmark rate between 5.25% and 5.5%, and hinted at multiple cuts by the end of the year.
Fed officials anticipate three quarter-percentage point cuts by the end of 2024, based on projections in the "dot plot" from the 19 members of the Federal Open Market Committee. Market expectations suggest a 75% chance of the first cut occurring at the June meeting.
Chair Jerome Powell stated that the timing of these cuts is contingent on economic data. Powell indicated that the Fed may begin dialing back policy restraint this year if the data progresses as expected.
Meanwhile, the Fed’s own economic projections show accelerated GDP growth, with the economy expected to run at a 2.1% annualized rate, a decrease in the unemployment rate forecast to 4%, and a slight increase in core inflation to 2.6%.
DOJ sues Apple over iPhone monopoly in landmark antitrust case
The Department of Justice and 16 attorneys general sued Apple, alleging that its iPhone ecosystem constitutes a monopoly, leading to inflated prices and limited choices for consumers, developers, and competitors.
The lawsuit accuses Apple of anti-competitive practices across various services beyond just iPhones and Apple Watches, including advertising, browsing, FaceTime, and news offerings.
The government is considering structural remedies, potentially including breaking up Apple, which would be a rare move under the Sherman Act.
Apple has stated its disagreement with the lawsuit, arguing that it would stifle innovation and set a precedent for government overreach in technology design.
Nvidia announces new AI chips at developer’s conference
Nvidia unveiled a new line of artificial intelligence chips and accompanying software at its developer's conference, aiming to reinforce its dominance as the leading supplier for AI technologies.
The announcement comes amidst Nvidia's exponential growth in sales and share price since the onset of the AI boom in late 2022. The high-end server GPUs offered by Nvidia are crucial for training and deploying large AI models, with major companies like Microsoft and Meta heavily investing in these chips.
The new generation of AI graphics processors, named Blackwell, features the GB200 chip, set to be released later this year. Nvidia is enticing customers with more powerful chips to drive new orders, especially as demand remains high for current-generation chips like the Hopper H100s.
Additionally, Nvidia introduced revenue-generating software called NIM, simplifying AI deployment and providing customers with further incentive to choose Nvidia over emerging competitors.
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Alphabet shares surged after reports emerged of Apple's discussions to license Gemini, Google's suite of generative artificial intelligence tools, for future iPhones.
The report stated that Apple and Google are actively negotiating for Gemini to power new features in iPhone software expected to launch later this year, potentially introduced during Apple's Worldwide Developers Conference.
This move suggests Apple's significant investment in AI, as indicated by CEO Tim Cook during the company's recent shareholder meeting.
Apple also recently held discussions with OpenAI and has considered using its model, according to the same report.
Intel awarded up to $8.5 billion in CHIPS Act grants, with billions more in loans available
The White House disclosed that Intel has been granted up to $8.5 billion in funding from the CHIPS Act to bolster semiconductor manufacturing in the United States, with the potential for an additional $11 billion in loans from the CHIPS and Science Act.
While Intel has faced challenges relative to its competitors like Nvidia and AMD, it retains a unique position due to its operation of chip factories alongside chip design.
Other chipmakers operate on a fabless model, where they design the chips and then use Taiwan’s TSMC for the manufacturing and production process.
This move aims to maintain America's leadership in innovation within the semiconductor industry. The funding will be allocated to Intel's facilities and research centers across several U.S. states, supporting the company's previously announced plans to spend $100 billion to enhance its leading-edge manufacturing capabilities by 2026.
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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 get a sneak peek into our systems and models. This week we discussed the Nvidia conference and the FOMC rate hike decision. See the full report here:
ETF Deep Dive - SCHD
Our Deep Dive focused on SCHD, Charles Scwhab’s dividend ETF, this week. We not only broke down the latest reconstitution of the index but we also explored the ETF’s historical performance and dividend growth. You can see the full analysis here:
Earnings Recap
Every week during earnings season we share a recap of the quarterly reports from stocks that we cover. You can see this week’s earnings recaps here:
The Week Ahead
There’s a lot on the calendar next week but all eyes will be on the jobs report.
Earnings Reports
It’s a relatively calm week in terms of earnings next week, but it’s especially quiet here at The Investor’s Edge as none of the stocks we cover are scheduled to report.
Here is the full calendar of scheduled earnings releases:
Source: Earnings Whispers
Economic Reports
Next week is another busy week. We get important inflation data on Friday as the Fed’s preferred metric, the PCE index, is set to be released. We also get several housing reports after last week’s data indicated a strong rebound in real estate as well as the all important GDP report.
Here is the full calendar of events we will be watching:
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Mark (Dividend Seeker)
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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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