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- The Weekly Wrap-Up - March 9th, 2024
The Weekly Wrap-Up - March 9th, 2024
Bitcoin and Gold shine!
CMG Venture & Mark Roussin
March 09, 2024
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 S&P 500 cooled off last week while Bitcoin and Gold both made 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.
Record week for the markets after jobs reports and Powell testimony
The market rallied again last week, leading to record-high share prices for multiple prominent companies as well as all time highs for several indexes. This surge was fueled by relatively neutral comments from Federal Reserve Chairman Jerome Powell and mixed data from jobs reports.
The S&P hit a record 5,189 while the Nasdaq touched 16,450 before both indexes cooled down on Friday. The Dow Jones Industrial Average is also hovering near all time highs, just 500 points from its record levels.
Numerous companies hit their highest share prices ever during this market upswing, including semiconductor giants Applied Materials, Micron, and Nvidia, retailers Costco, Walmart, and Williams-Sonoma, biomedical technology leader Boston Scientific, banking powerhouse JPMorgan Chase, and social media giant Meta. Additional companies achieving all-time highs included Broadcom and Asian chipmaker Taiwan Semiconductor Manufacturing Company.
In addition to the record-setting performance of indexes and individual stocks, both commodities and cryptocurrencies also experienced a surge with Bitcoin and gold reaching new record levels during this latest rally.
Powell reinforces position that the Fed is not ready to start cutting interest rates
Federal Reserve Chair Jerome Powell reiterated his expectation for interest rates to decrease later this year but did not specify when.
In his prepared remarks for congressional appearances, Powell emphasized the Fed's cautious approach, stating that policymakers are attentive to inflation risks and do not want to ease up too quickly. He emphasized the need for greater confidence in sustained inflation movement toward 2 percent before reducing the target range.
Powell highlighted the strength of the economy and labor market, expressing confidence that the Fed could carefully and thoughtfully approach rate adjustments sometime this year. The goal is to avoid driving the economy into a recession and instead normalize policy as the economy returns to normal.
Market outlooks now anticipate the first rate cut in June, with a total of four reductions by the end of 2024, reflecting a shift from earlier expectations of more aggressive rate cuts. Mixed labor data, including better-than-expected nonfarm payrolls in February but an increase in the unemployment rate to 3.9%, and the Fed’s stance has influenced the adjusted outlook.
Apple hit with more than $1.95 billion EU antitrust fine over music streaming
The European Commission has imposed a €1.8 billion ($1.95 billion) antitrust fine on Apple for abusing its dominant position in the music streaming app distribution market.
The commission found that Apple placed restrictions on app developers, preventing them from informing iOS users about alternative and cheaper music subscription services available outside the app. Apple also allegedly prohibited developers from giving instructions on how users could subscribe to these more affordable services.
This marks Apple's first antitrust fine from the European Commission and is one of the largest fines issued to a technology company by the EU.
The investigation, triggered by a 2019 complaint from Spotify, focused on contractual restrictions lasting nearly 10 years that may have led iOS users to pay higher prices for music streaming subscriptions due to Apple's commission fees imposed on developers.
Apple shares were down -5.0% last week following the announcement.
JetBlue, Spirit end $3.8 billion merger agreement after losing antitrust suit
JetBlue and Spirit Airlines have decided to terminate their planned merger, following a federal antitrust lawsuit that led to a court ruling against the proposed deal.
The judge, William Young, sided with the Justice Department in January, blocking JetBlue's attempt to acquire budget carrier Spirit. The judge expressed concerns that the takeover would harm cost-conscious travelers who rely on Spirit's low fares.
Despite an appeal filed by both airlines, industry analysts viewed the chances of a successful appeal as slim.
With the merger no longer in play, Spirit is now addressing its financial challenges independently. The airline is working on refinancing its debt and, despite the setback, has expressed optimism about returning to profitability due to better-than-expected demand, projecting first-quarter revenue above analysts' expectations.
New York Community Bancorp (NYCB) has announced a $1 billion capital raise and leadership changes, including the addition of former Treasury Secretary Steven Mnuchin. The capital infusion involves a deal with investment firms such as Liberty Strategic Capital (led by Mnuchin), Hudson Bay Capital, and Reverence Capital Partners, exchanging funds for equity in the struggling regional bank.
As part of the agreement, Mnuchin will join the bank's board of directors alongside three other new members. Joseph Otting, former comptroller of the currency, is set to become the new CEO. And the bank has appointed Alessandro DiNello as executive chairman, who briefly served as CEO before the recent disclosure of material weaknesses in internal controls related to internal loan review.
This move follows a turbulent start to the year for NYCB, marked by a significant increase in the allowance for potential loan losses in January, leading to a credit rating downgrade to junk status by Moody's Investors Service, and last week’s disclosure that it had “identified material weaknesses in the company’s internal controls related to internal loan review”.
The capital raise and leadership changes are aimed at addressing NYCB's financial challenges and improving its outlook.
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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 seasonality and our expectations for the jobs data and Powell’s testimony. See the full report here:
Top Stocks to Watch - March
Last month we introduced a new article for IE+ subscribers where we share our top stocks that we are watching in the month ahead. This week we released the second edition of this new report where we performed a full analysis of 10 stocks and shared our price targets.
We decided to unlock one stock’s analysis so everyone can see the value IE+ members get. Get your sneak peek 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
Earnings season may be coming to an end, but there are still a few names we will be watching here at The Investor’s Edge. We will be covering the quarterly reports from Oracle, Adobe, Dollar General, Dollar Tree, Ulta Beauty and Dicks Sporting Goods.
Here is the full calendar of scheduled earnings releases:
Source: Earnings Whispers
Economic Reports
Next week is all about inflation data. Both the CPI and PPI reports will be released and we will see if the hot inflation data in January was a one-off or the start of inflationary pressures starting to rise again.
We can also expect retail sales and consumer sentiment data.
Here is the full calendar of events we will be watching:
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Mark (Dividend Seeker)
Chris (CMG Venture)
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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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