🍾 S&P 500 closes over 5,000 for the first time in HISTORY!

1. Genevieve’s Corner

S&P 500 CLOSES OVER 5,000 FOR THE FIRST TIME IN HISTORY!

What a week!

Let’s recap: 👇

- NVIDIA is now worth as much as the entire Chinese stock market (represented by the H shares of the Hong Kong stock market)

- ARM beats on earnings, and stock jumps +62%

- Alibaba beats earnings & announces +$25 billion buy-back

- Ford beats earnings and stock jumps +5.5%

- Eli Lilly stock hits record high

- Snapchat beats earnings, but stock tanks -35% this week

- PayPal beats earnings, but stock drops -5%

- Magnificent Seven tech stocks accounted for 45% of January's S&P 500 return

- Layoff announcements: Cisco to cut up to 14% of the workforce, DocuSign to cut 6%, Snap to cut 10%, Estee Lauder to cut 3-5%, Warner Music to cut 10% of the workforce and BCE (Canada’s largest telco) to cut 9% and Worldline (Europe’s largest payment processor) to cut 9%

- Job postings are down 15% over the past year, plummeting 31% in finance and 44% in software development roles

- Over +34,000 tech employees have lost jobs so far in 2024, according to Layoffs.fyi

- Bitcoin jumps +12% this week and hit $48k

- BlackRock & Fidelity now hold 151,950 BTC worth +$7.16 billion for their spot Bitcoin ETF

- Deutsche Bank provisions for losses in US commercial real estate more than FOUR TIMES bigger in the last quarter, as it warned that refinancing poses the greatest risk to the struggling sector

- Janet Yellen warns of potential failure of non-bank mortgage lenders

- Moody’s downgrades New York Community Bankcorp (NYCB) to junk status

- Vladimir Putin says the US Government is killing the dollar with their own hands; many countries, including major oil producers, are accepting payments for oil in Chinese yuan.

- Jim Cramer says Tesla has bottomed at $180/share

- Gold demand hit a record last year and is expected to rise again in 2024

- Chinese indices rebound on more stimulus efforts

- A record amount of Chinese money is flowing into overseas equities as investors seek a haven away from domestic stocks

- Hedge fund billionaire Bill Ackman to launch a NYSE-listed fund for regular investors

- Corporate bond sales hit $176 billion in the US in January, setting a record for the month

- U.S credit card delinquencies surged +50% in 2023 as total consumer debt swelled to $17.5 trillion

- OpenAI CEO Sam Altman seeks $7 trillion for new AI chip project

- JPMorgan is embarking on one of its most aggressive bank branch expansions in recent years, adding 500 new U.S. locations by 2027

- Adam Neumann tries to buy back WeWork

- Mark Zuckerberg sold $134 million in META shares this week, marking his largest individual sale since 2018. Since November, he has sold $765 million in shares.

- Nancy Pelosi has made +$1.2 MILLION on her $NVDA trade. She has added now six times her Congressional salary in 79 days on one trade (according to Unusual Whales)

Let’s see what stock I’m watching this week: 👀 📈

Brookfield Asset Management (BAM-US):

Brookfield Asset Management just reported… Upgrade to GRIT VIP to read why I’m watching this stock! Get VIP for 50% off now, sale ends Feb 14th! ❤️

Have a spectacular weekend – you deserve it!

Genevieve Roch-Decter

2. Matt Allen’s Corner

HOW TO READ A BALANCE SHEET

Hi Everyone! Today, I’m highlighting one of our sections in GRIT VIP! Below, I share part of my article, How To Read A Balance Sheet 

A balance sheet shows how much a company is worth and balances its assets against its liabilities and stockholders' equity. If you’re going to be a sophisticated investor and give yourself the best shot at investing wisely, reading balance sheets is a critical step. Investing isn’t easy, but with our help, you’ll be set up for success!

Assets = Liabilities + Shareholders' equity

• Assets: Any resource with economic value that a company owns. Ideally, a company's assets will provide future benefits to the company's stakeholders.

• Liabilities: Obligations or claims to a company's assets.

• Shareholders' equity (aka book value of a business): The residual claims on a company's assets once all liabilities have been paid down.

The balance sheet reports a company's assets, liabilities, and shareholder's equity at a specific time.

Assets on the balance sheet refer to what the company owns, liabilities refer to what the company owes, and shareholders' equity represents a company's net worth.

Assets will always equal the sum of liabilities and shareholder equity.

You want the cash and equivalents to be more than the short-term debt and fewer accounts receivable.

This article will use Apple’s balance sheet as an example.

Assets

Assets are valuable and measurable resources controlled by a company, acquired or developed with the anticipation that they will generate future economic benefits. These assets are financed through debt and the equity shareholders hold, ensuring the balance sheet remains balanced.

The balance sheet categorizes assets into current (short-term) and non-current (long-term) assets. As exemplified in Apple’s balance sheet, assets are arranged based on their liquidity, which refers to how quickly they can be converted into cash. "Cash and cash equivalents" typically appear at the top of the list under current assets due to their high liquidity. In contrast, a non-liquid asset like "goodwill" is positioned lower on the balance sheet under non-current assets, reflecting its longer-term nature.

Current Assets

When dissecting a balance sheet, current assets are pivotal for assessing a company's short-term financial health. These assets are expected to be converted into cash, sold, or consumed within a year or operating cycle. Using Apple as an example, we can illustrate various current assets in a company's balance sheet.

1. Cash and Cash Equivalents: This includes readily available funds in cash and short-term investments that can be quickly converted into cash. Apple, known for its robust financial position, often reports substantial cash and cash equivalents, reflecting its liquidity and ability to fund immediate operations or investments.

2. Accounts Receivable: This represents money owed to Apple by its customers for products or services already delivered but still need to be paid for. For a company like Apple, this could include payments due from retailers or direct sales to consumers where payment terms are allowed.

3. Inventory: This asset comprises products that are ready for sale or in the process of being made. For Apple, inventory includes finished products like iPhones, iPads, MacBooks, and components used in manufacturing these devices.

4. Prepaid Expenses: These are payments made in advance for goods or services to be received in the future. Apple might prepay for things like advertising services, utility services for its facilities, or long-term service agreements, which are recorded as current assets until used.

5. Marketable Securities: These are liquid financial instruments that Apple holds, such as stocks or bonds, which can be quickly sold for cash. Apple often invests excess cash in these securities to earn a return while keeping the funds accessible.

By analyzing Apple's current assets, investors can gauge how effectively the company manages its short-term assets to support ongoing operations and growth.

Upgrade to GRIT VIP 🚀 and get access to ALL of our investing resources, like this full article here. 📚

Happy Super Bowl Sunday!

Cheers,

Matt Allen

3. Comin’ Up

EARNINGS AND ECONOMIC DATA

💰 Earnings:

Monday: Arista Networks

Tuesday: Coca-Cola, Shopify, Airbnb, Marriott

Wednesday: Cisco, Sony, CME, Occidental, Kraft

Thursday: Deere & Company, Applied Materials, DoorDash

Friday: TC Energy

📈 Major Economic Events:

Monday: Monthly U.S. Federal Budget

Tuesday: CPI

Wednesday: N/A

Thursday: Initial Jobless Claims

Friday: PPI

The author of this newsletter owns ETF’s (exchange traded funds) that may hold ownership interests in the companies discussed in this newsletter as of the published date of this newsletter.