Must Revise History
Two Weeks ago, the Nasdaq took a back seat to its bigger brothers the S&P and the Dow. But this week, it is the direct opposite. Tech Stocks especially the FANG gang reported explosively good earnings. Which sent the NASDAQ on a major rally…….
That was how I would have liked to start the newsletter. But at the end of the week, Amazon and Apple decided to be party poopers and ruin the all-time high fun by missing earnings expectations.
However, the month of October has been great for investors. The bulls were back in control as all indexes (indices?) hit all-time highs in October. For the month, the S&P 500 rose 6.9%, the Dow was up 5.8%, and the Nasdaq gained 7.3%. (Editing note: moving forward at the end of the month, I will show the Year to Date returns of the indexes)
But the most important part of the Stock Market last week was the fact that Microsoft became the most valuable company in the world (again) surpassing Apple.
As some of you may know, Microsoft is my favorite investment of all time and I am an Apple hater. So I was very happy on Friday to see this.
Planning for the Future
This week we get a little bit of everything. From Oil & Energy companies like BP and Dominion Energy to Entertainment and Gaming companies like Activision, EA, Roku, and Take-Two Interactive to Leisure and Travel companies like Marriott, Airbnb, Uber, and Lyft all reporting earnings this week.
However, my focus will be on the macroeconomic news. The Federal Reserve will be having its two-day FOMC (Federal Open Market Committee) meeting beginning on Tuesday with a press conference on Wednesday.
We are expecting an announcement for tapering to begin probably this month. But I do not expect them to make any moves to interest rates, unlike the Bank of Canada who surprised everyone with the announcement that they will raise rates in April of 2022. Expect a discussion around GDP, GDP growth slowed in the Third Quarter according to the Bureau of Analysis. It came in at just 2% which is way below expectations of 4% GDP growth and much further away from the GDP growth in the Second Quarter of 6.7%. I think the Delta wave hampered growth in the third quarter because remember Consumer Spending accounts for 70% of GDP calculations. However, from all signals seems everyone has moved on from the Delta wave and there should be a nice rebound in the fourth quarter.
An aside
Recently, Kyla (you should check out here deep dives on macroeconomics) got me thinking about if the way we calculate GDP is the right way for us to calculate GDP. Because it leaves a lot to be desired and can incentivize investment in some of the wrong things. Things that do not directly lead to Consumer Spending can end up being underinvested for years i.e. our entire infrastructure system that is stuck in the middle ages. While incentivizing investments in more ways to sell you things online, Do we really need another social media platform? Anyway, that is not whsat this newsletter is about.
On the bright side, weekly unemployment claims continue to fall. It came in at 281,000 for the week ending October 23. On Friday, we will get October Jobs Report. Economists are estimating employers added 425,000 jobs in October. The key thing to remember is Economists have been wrong throughout this post-pandemic period.
The Earnings Calendar for the Week
Unfortunate Man U Update
I am done. You would think after Man U won a game I would be happy. Nope, I am not. Because being a Man U fan is like being in a toxic relationship. One week, they promise you the world, and the next they destroy your heart.
Everything may look good on the surface but the problems persist. I think regardless of how well Ole Gunnar Solskjær does for the remainder of the season, Man U has to replace him. He has shown he does not have the managerial prowess to coach this team at the level necessary to win championships. This reminds me of Chelsea with Frank Lampard but then they replaced him with Thomas Tuchel. All of a sudden, Chelsea started dominating with pretty much the same team.
So until that move is made. I will not allow MY HEART to be played with anymore.
Before I Let You Go
I have teamed up with a group of creators to raise money for Men’s Health. As part of an organization called Movember. We will be doing No Shave November to raise awareness of the various health issues that men face. If you can please donate by clicking the image above or here. If you cannot please share to raise awareness. THANK YOU!!
I hope you all have A WONDERFUL week. I will see you back here on Wednesday for another post. In the meantime, Go subscribe to Rambling Mind Podcast for mid-week stock market updates. You can also catch me on TikTok, Instagram, and YouTube every day.
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God bless Each and Everyone of y’all
✌🏾
-Kelechi