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- The Investing Week Ahead: 5/9/22
The Investing Week Ahead: 5/9/22
Stocks are likely to go lower, Musk joins vehicle leaders for a summit, and the most important inflation print in recent memory.
Happy (delayed) Mother’s Day!
If you’re a mother receiving this email — cheers to you. If you’ve got a mother to text or call — do it. There is no more difficult job!
Remember this chart?
For those unaware — The Buffett Indicator is the ratio of total US stock market value to GDP.
According to the site: “By our calculation that is currently 36% (or about 1.2 standard deviations) above the historical average, suggesting that the market is Overvalued. These are near historical, all-time highs. However, with interest rates at historic lows, there is reason to suspect that the adage "this time is different" may hold true.”
It’s important to note that Buffet has called the ratio “the best single measure of where valuations stand at any given moment.” Since then, he’s walked back those comments — not endorsing any single measure as perfect over time. However, this is still a great gauge of seeing when the market isn’t quite operating properly.
The main point? Stocks can go lower. It’s easy to look at a 1-year chart of the S&P 500 and see that it’s down -4%. How about flipping to the 5-year chart? It’s up +69%.
Stocks can, and likely will, go lower. More on that here.
The Investing Week Ahead - Too Long, Didn’t Read:
⚡ Earnings from Affirm, Builders FirstSource, Coinbase, Roblox, and Unity.
⚡ Financial Times’ Car Summit brings together the world’s A-List vehicle execs.
⚡ The market’s short-term hope weighs in the balance of this week’s CPI reading.
Key Earnings Announcements:
A generally weak earnings period — highlights by a major holding of mine and tech newcomers.
Monday (5/9): AMC, BioNTech, Lemonade, Novavax, Palantir, Plug Power, Tyson, Upstart
Tuesday (5/10): Builders FirstSource, Coinbase, Peloton, Roblox, SoFi, Sysco, The Trade Desk, Unity
Wednesday (5/11): Beyond Meat, Bumble, Coupang, Disney, Dutch Bros, Fiverr, Rivian, Sonos, Yeti
Thursday (5/12): Affirm, Aurora, Bakkt, Brookfield Asset Mgmt, US Foods
What we’re watching:
Investor Events:
Analyst and Investor Days are becoming increasingly important to give shareholders hope during turbulent market activity, and Elon Musk steps back into the spotlight.
Monday (5/9): Western Digital Corp. Investor Day
Tuesday (5/10): Dish Network Analyst Day, Elon Musk Interview at FT Car Summit, Fortinet Investor Day
Wednesday (5/11): Kohl’s Annual Meeting, Lucid Group CEO Speaks at FT Car Summit, Under Armour Annual Meeting
Thursday (5/12): BetMGM Virtual Business Update, Fastly Investor Day
All Week: Bank of America 2022 Healthcare Conference, Financial Times Future of the Car Summit, Goldman Sachs Industrials & Materials Conference
What we’re watching:
Major Economic Updates:
New CPI print is coming — the Federal Reserve prays that the ‘Manages Inflation’ role (depicted below) is actually working.
Monday (5/9): Inflation Projections (1-Year, 3-Year)
Tuesday (5/10): Small Business Index, Speeches from Three Fed Presidents
Wednesday (5/11): Consumer Price Index, Federal Budget
Thursday (5/12): Producer Price Index
Friday (5/13): Speeches from Two Fed Presidents
What we’re watching:
Events-Driven Winners:
What specific events are moving stocks the most?
Our friends at LevelFields scrub through thousands of data points each week to determine how events impact stock prices.
It’s going to be incredibly interesting to see what takes places with both ‘Big Oil’ companies and stock buyback rules moving forward.
A few weeks ago, the market discovered that ExxonMobil has tripled its buyback cadence and Chevron has posted its highest profits since 2012. Around the same time, Congress has been pressing the leadership of energy companies to determine if any price gauging malpractice is taking place. If Congress sets some sort of buyback restrictions in place for publicly traded companies — not just oil leaders — it could negatively impact the stock market.
If you find these Week Ahead posts helpful, please consider sharing with a friend! Have a great start to your week!
If you’re starting your investing journey or want to change to a cleaner, social-focused investing platform, 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.
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