- GRIT
- Posts
- 👉 The Investing Week Ahead: 11/13/23
👉 The Investing Week Ahead: 11/13/23
T-Bills, Holidays, Spain, San Francisco, and more...
Welcome to your new week.
Before we get started — let’s talk about what many believe to be the ‘boring’ stuff.
As of today (11/13), the yield on the US 30-year Treasury bond is at 4.75% – the highest level since July of 2007.
At the same time, the yield on the US 10-year Treasury bond is at over 4.6% — also the highest level since July of 2007.
Remember — bond yields go up as bond prices fall. But why are bond prices falling?
When interest rates increase, existing bonds pay out lower interest rates and become less attractive. This causes their price to fall below their initial par value in secondary markets.
Let’s play out a quick scenario:
Scenario #1: An investor buys a 10-year bond for $1000 with a coupon rate of 2%. The investor receives annual interest payments of $20. After 10 years, the investor receives back $1000 (the principal), and has made a total profit of $200 (the interest).
Scenario #2: An investor buys a 10-year bond for $1000 with a coupon rate of 4%. The investor receives annual interest payments of $40. After 10 years, the investor receives back $1000 (the principal), and has made a total profit of $400 (the interest).
As you can see — the buyer of the bond in Scenario #1 has purchased something that’s become less valuable because it’s producing less income. Markets are driven by supply and demand — and when bond investors believe that interest rates will continue to be elevated or rise higher… the demand for bonds naturally goes down.
Enter T-bills | Presented by Public.com
Treasury bills (T-bills) are short-term debt obligations backed by the US Treasury Department. These may be one of the ways to take advantage of the high-interest rate environment — without needing to have your money ‘locked’ for years on end.
Let’s be real here — inflation sure does feel a lot higher than what the reports each month are telling us.
Sure, it might actually be around 3%... but I bought a gallon of almond milk for over $8 last week. A GALLON OF MILK!
The process of purchasing T-bills used to requiring going through the Treasury Direct website and its complex user interface — but these days you can buy the T-bills on Public in a few clicks, right from your phone.
Click here to get started on Public.com — and make sure to follow your boy on the platform!
Key Earnings Announcements:
Walmart is at all-time-highs, while Target just wants to get back on track.
Monday (11/13): Fisker, Monday.com, Rumble, Tower Semiconductor, Tyson Foods,
Tuesday (11/14): Aramark, Canadian Solar, Home Depot, On Holding, Paysafe, Pioneer Power Solutions, Sea Limited, Workhorse Group
Wednesday (11/15): Advanced Auto Parts, Cisco, Fiserv, JD.com, Palo Alto Networks, Target, TJ Maxx
Thursday (11/16): Alibaba, Applied Materials, Bath & Body Works, Dolby, Gap, Macy’s, Ross, Walmart, Warner Music Group, William-Sonoma
Friday (11/17): BJ’s Wholesale, Spectrum Brands, Twist Bioscience
What We’re Watching:
Walmart’s most recent earnings report (August) was highlighted by a +24% rocket in e-commerce sales, as well as heightened guidance. Walmart stock (below) is at an all-time-high. We’ll see if they can live up to the hype.
There’s no two ways about it — Target has not been seeing the same success as Walmart. The company saw PR turmoil with its Pride Month clothing line for children, and shoppers that are spending less discretionary money have shifted to cheaper retail options (including Walmart). Target shareholders are begging for a “comeback quarter” — we’ll see how this one plays out.
Investor Events / Global Affairs:
Spain protests aren’t getting the attention they deserve and China’s President is set to visit a very clean San Francisco.
Spaniards Protest Amnesty Agreement
Hundreds of thousands protested throughout Spain against acting Prime Minister Pedro Sanchez's plans to grant amnesty to Catalan separatists in exchange for political support.
China’s President Visits San Francisco
President Biden is set to meet Chinese President Xi Jinping on Wednesday during the Asia-Pacific Economic Cooperation (APEC) summit in the San Francisco Bay area.
Major Economic Events:
Retails Sales and Core CPI will be getting the most attention.
Monday (11/13): Monthly U.S. Federal Budget, Speech by Fed Gov. Lisa Cook
Tuesday (11/14): Consumer Price Index (CPI), NFIB Optimism Index, Speeches by Fed Vice Chair Jefferson and NY Fed President Williams
Wednesday (11/15): Business Inventories, Empire State Manufacturing Survey, Producer Price Index (PPI), U.S. Retail Sales, Speech by Richmond Fed President Barkin
Thursday (11/16): Capacity Utilization, Home Builder Confidence Index, Import Price Index, Industrial Production, Philadelphia Fed Manufacturing Survey, Speech by Fed Vice Chair Barr
Friday (11/17): Building Permits, Housing Starts, Speeches by Boston Fed President Collins, Chicago Fed President Goolsbee, and SF Fed President Daly
What We’re Watching:
As we mentioned earlier this month, the National Retail Federation (NRF) expects holiday sales to be very strong — between $957.3 billion and $966.6 billion in total spend.
October is always the “look ahead” month for the chaotic end of the year — so this week’s retail sales numbers will show us if the sector picked up steam in anticipation.
The CPI excluding food and fuel (Core CPI) — a measure favored by economists as a better indicator of underlying inflation — is expected to increase +0.3% for a third straight month.
If you’re starting your investing journey or are interested in buying T-bills yielding 5% or more, consider visiting Public.com.
Disclaimer:
This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
Public Disclosures:
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
*Yield is an annualized 26-week T-bill rate (as of 10/09/2023) when held to maturity. Rate is gross of fees. T-bills are purchased in increments of $100 par value at a discount; any remaining balance after purchase is held in cash. See U.S. Treasuries Risk Disclosure for full risks.
This is not an investment recommendation or a tax advice. Investment income on T-bills is taxed federally by the Internal Revenue Service. Income earned from T-bills is not subject to state tax, and is not subject to local income taxes. Brokerage services for US-listed, registered securities are offered by Open to the Public Investing, Inc., member FINRA & SIPC. Brokerage services for alternative assets are offered by Dalmore Group, LLC, member FINRA & SIPC. Cryptocurrency trading services are offered by Bakkt Crypto Solutions LLC (NMLS ID 1828849), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Brokerage services for U.S. Treasuries are offered by Jiko Securities, Inc., member FINRA & SIPC. Banking services are offered by Jiko Bank, a division of Mid-Central National Bank.
Securities investments: Not FDIC Insured; No Bank Guarantee; May Lose Value.
ETFs, alternative assets, cryptocurrency, and treasury services are available to US members only. See public.com/#disclosures-main for more information.
Reply