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- 👉 The Investing Week Ahead: 8/7/23
👉 The Investing Week Ahead: 8/7/23
Tupperware up +534% in a month...
Welcome to your new week.
With so much chatter about the US credit downgrade by credit rating agency Fitch — it’s important to understand why it happened.
The US is now spending 44% of GDP per year — the same levels as World War 2.
In 2020, the US spent a record breaking 54% of GDP in one year.
This is what Fitch meant by “fiscal deterioration” when they downgraded the US credit rating.
We are now spending a higher percentage of GDP than what was seen in 2008.
Let’s jump right into the Investing Week Ahead — and don’t forget about our 40% off subscription discount that ends on Wednesday!
Key Earnings Announcements:
Berkshire, BABA, and Disney.
Monday (8/7): Berkshire Hathaway, Beyond Meat, BioNTech, Chegg, Five9, KKR, Lucid Motor, Palantir, Paramount, Skyworks, Tyson, Viatris
Tuesday (8/8): AMC, Barrick, Datadog, Celsius, Cronos Group, Eli Lilly, LI Auto, Luminar, Marathon Digital Holdings, Novavax, Rivian, Twilio, UPS, Upstart
Wednesday (8/9): Brookfield Asset Management, Canopy Growth, Disney, GoodRx, Illumina, Magnite, Penn National Gaming, Plug Power, Roblox, Sonos, Sony, The Trade Desk, Wendy’s, Wynn Resorts
Thursday (8/10): Alibaba, Bakkt, Indie Semiconductor, IONQ, Novo Nordisk, Ralph Lauren, Sientra, Six Flags, US Foods, Yeti
Friday (8/11): Air Canada, AirSculpt, NYC REIT, Soho House
What We’re Watching:
Remember — Berkshire Hathaway releases earnings on a Saturday each quarter. This came out over the weekend!
Alibaba has been clouded by regulatory concerns and the general America vs. China crossfire. However, the company will be facing easier comps over the coming quarters and the regulatory issues seem to be less detrimental to the company than anticipated. With a much cheaper Forward P/E (less than 12) than many other $200B+ market cap companies — BABA could be positioned to fly with a strong earnings beat and having the industry comparable of Amazon.
Disney is at an incredibly interesting chapter in its history. Considered one of the most iconic brands in America for quite some time — many believe that its business model is antiquated. Whether it’s the streaming sector, ESPN, parks, IP & licensing, the actors strike, or anything in-between — there seems to a be major worries about Disney. We are very interested to see if Disney announces intent for a much leaner business model — less of “owning and doing everything.”
Investor Events / Global Affairs:
Mortgages are expensive and August can be dull.
30-Year Mortgage Rates Hit Highest Level of Century
As of Friday — the average 30-year fixed-mortgage rate is 7.39 percent, an increase of +5 basis points over the last seven days. Last month on the 4th, the average rate on a 30-year fixed mortgage was lower, at 7.38%.
At the current average rate, you'll pay principal and interest of $691.70 for every $100k you borrow. Compared to last week, that's $3.41 higher.
“We do expect mortgage rates to trend down once the [Federal Open Market Committee] clearly signals that they have reached the peak for this cycle, as the reduction in uncertainty with respect to the direction of rates should narrow the spread of mortgage rates relative to Treasury benchmarks.”
— Mike Fratantoni, Chief Economist at the Mortgage Bankers Association
August Typically Ain’t Great for Stocks
Over the past 30 years, September and August have been the two worst months for the S&P 500, with a 0.4% drop in the former and a 0.2% decline in the latter.
Patterns and history are just that — things we can look back on. We’re presenting this as an FYI, not something to necessarily invest around.
“The market is giving us a clear signal that bullish momentum has been building… There’s an incredible level of confidence that the Fed can manage a ‘soft landing,’ with weaker growth and lower inflation without a recession. But if something goes wrong, it will be related to [the economy].”
Major Economic Events:
Consumer Credit, Inflation for Consumers, and Inflation for Producers.
Monday (8/7): Consumer Credit
Tuesday (8/8): NFIB Optimism Index, Speeches by Fed Presidents Barkin (Richmond) & Harker (Philadelphia) US Trade Balance, US Wholesale Inventories
Wednesday (8/9): N/A
Thursday (8/10): CPI & Core CPI, Treasury Budget
Friday (8/11): Consumer Sentiment (Preliminary), PPI & Core PPI
What We’re Watching:
Events-Driven Winners:
Which stocks moved the most last week.
Our friends at LevelFields shared the above message to us about Tupperware Brands. Which one of you wild meme stock traders on our email list is participating in this?!
+534% in a month — what!
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.
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