Quick Note: This post is gonna be too long for your email. I added A LOT of pictures
IMPORTANT UPDATE
HAPPY BIRTHDAY to my Big Sis Uche.
Thanks for always keeping the rest of us siblings in check. Pray for a great new year and more celebrations in Jesus name.
Rewind The Tape
On last week’s newsletter, I referenced that the focus would be all about Banks and what they had to tell us about consumers. Especially with inflation refusing to transitory itself (CPI aka Inflation for September came in at 5.4%) and leave. I made a funny about Papa Powell seeing the numbers.
But it seems people are seeing higher prices and shrugging them off like Derek Henry in the NFL. (Look at this man amongst boys)
JPMorgan reported credit card spending increasing 30% but the even better news (for my Personal Finance Nerd side) outstanding balances only grew 2%. Bank of America actually saw outstanding balance decrease 3% Year over Year. Meaning people are spending more money but are not going into debt to do it. And I LOVE TO SEE IT!!
I guess when savings rates are higher than normal at 9% (historically 5%), People have fire power and money burning a whole in their pocket. This shows in the higher than expected retail sales. Estimates were for retail to grow only 0.2% but it grew 0.7%.
Overall, things are looking on the up and up. Unlike the prediction of some people **cough Michael J. Burry (My bad Dr. Michael J. Burry)**. We are in no real danger of seeing any kind of major recession happening in the short term.
All of that seemed to have been good enough news for the markets cause they went into over drive on Thursday and Friday.
BUT I do worry about one thing. Consumer Sentiment which continues to fall. I tend to believe that how people feel about the economy is much more important than how the economy actually is. Usually, this should be trending up as we heading into the holiday season. I mean look at 2020 even with the pandemic. This is what I fear more than any other economic indicator.
Back to Present Day
Last week was the primer, only 19 companies in the S&P 500 reported earnings.
This week things get REAL! We have 78 companies in the S%P 500 reporting earnings and over 260 companies overall will be reporting earnings. So here is a few things to pay attention to
More Financial Companies will be reporting earnings. Expect the finance sector keep flying next week as they should follow in lock step with all the other Banks that reported last week. My focus, ALLY Financial $ALLY (Luckiest investment of all time)
Tech is slowly gonna be reporting earnings.
Netflix will be the first of the FAANG stocks to report earnings (question: do you think Nvidia should replace Netflix in the FAANG?). It will be interesting to see how many subs they have added due to Squid Game.
Speaking of chips, Intel $INTC will be reporting earnings as well. I will be watching this one. I expect the stock to fall as it has done every time they report as they are in a transitional phase of their business. We might get some updates on the chip supply constraints
Tesla also reports on Wednesday as well. There should be a lot of gloating from Elon as they continue to beat delivery expectations. He has been on a roll recently
Expect a lot of discussion about Inflation due to supply constraints which will cause them to have to “begrudgingly” raise prices. Expect a few downgrades in earnings expectations for the rest of the year.
Other Earnings for the week
OH! MAN U, MAN U, MAN U
I just …
I have no words
I hope you all have A WONDERFUL week. I will see you back here on Wednesday for another post. In the mean time, Go subscribe to Rambling Mind Podcast for mid week stock market updates. You can also catch me on TikTok, Instagram, and YouTube everyday.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
✌🏾
-Kelechi