I took an unplanned break but WE BACK. So let’s get right on it. We got a wild week ahead of earnings and economic news ahead of us.
For some strange unknown reason, the market decided it was time to clean itself up and get its life back on track. All of last week (minus Friday because Snapchat) the market actually went in a positive direction. But it isn’t just a one-week sensation. Since the beginning of July (the best month on the calendar), the Stock Market has actually been positive.
It’s kinda like how we are seeing gas under $4 (in GA). It is a nice pleasant surprise. But I guess that is what is playing a role. Oil prices have been falling which has eased the pain of inflation just a bit. Maybe investors are taking that as good news. As I have been saying unless inflation comes to a moderate level. I have no expectations of stocks going up. Guess that might just be happening. However, Snapchat might just be proving everyone wrong on that front (more below).
Tale of the Tape
Market of Stocks
Snapped Streak
On Thursday, Snapchat reported earnings which normally would be quickly ignored by non-Snapchat shareholders. However, their forecast was so bad that for one day, Snapchat became a bellwether stock for other companies in its industry
Shortly after reporting, Snapchat stock fell nearly 40% dragging other social media stocks with it but then the entire Tech sector of the market
So what was so bad?
In their earnings report, Snapchat said, “In certain high-growth sectors, businesses are reassessing investment levels amid the rising cost of capital, which is further reflected in campaign budgets and the level of bids per action.”
Translation: companies are slowing their spending on advertising because of the threat of a recession.
This one line sent ripples through the entire Stock Market on Friday. It took out all the air of optimism that people had been experiencing. However, one other piece of news also caused issues
Pause those New Hires
Also on Thursday, Microsoft and Google announced they were both reducing hiring.
Sundar Pichai, CEO of Alphabet sent a memo to employees at Google saying, “we’ll be slowing the pace of hiring for the rest of the year, while still supporting our most important opportunities.”
Microsoft said it would be eliminating many jobs opens as it prepares for a downturn even for the area of the business that it has been trying to grow massively, Azure Cloud computing.
These are not the only ones announcing cut back in hirings: Amazon, Apple, Meta, Netflix, Salesforce, Spotify, and Tesla. Are amongst the names that have announced either hiring freezes or layoffs.
This is not good for a recovering economy. Hence, the less optimism from the Stock market
As always my advice is get your emergency fund in place and keep investing
Usually, the stock market will bottom much sooner than the economic picture changes.
Random Interesting Facts
The wage growth those 16-24 are seeing. More than twice the growth of those in the 24-54 age bracket (you know the people in the prime earning years of their life)
According to Axios, “Younger Americans are outperforming the old, even in absolute dollar terms. A 3.7% raise on the over-55 median weekly wage of $1,240 is $46; a 12.5% increase on the under-24 median wage of $707 is $88.”
The winners of this inflationary period have been largely those in the lower age bracket.
The level that Lake Mead, the largest water reservoir in the US, is filled to
This is the lowest level EVER!
NASA released the images above to show just how bad things are right now with respect to droughts being experienced across the world
Looking Ahead
Because I am not original and I am still rusty I will allow Investopedia to have this section:
Next week will be a highly eventful one for the financial markets, featuring a multitude of corporate earnings reports from dozens of prominent companies, including big tech firms. Earnings from Microsoft and Google will be closely monitored on Tuesday, with Meta Platforms—the parent company of Facebook—scheduled to report on Wednesday. Apple and Amazon will report their second-quarter earnings on Thursday. Meanwhile, a variety of well-known companies from various industries will also report, including Visa, Mastercard, The Coca-Cola Company, McDonald’s, Ford Motor Company, General Electric, Boeing, Southwest Airlines, and ExxonMobil, among many others.
On Tuesday and Wednesday, officials from the Federal Reserve will meet for the two-day July policy meeting of the Federal Open Market Committee (FOMC), where the nation’s central bank is widely expected to hike its benchmark federal funds rate by a minimum of 75 basis points. In the meantime, several important economic data points will be released this week. Further updates on the housing market will arrive with the Case-Shiller National Home Price Index tracking price growth in May, along with new and pending home sales for the month of June. On Thursday, the advance estimate for second-quarter gross domestic product (GDP) growth will be released, providing clues as to whether the U.S. economy is headed toward a recession. Lastly, the final July reading for the University of Michigan’s Consumer Sentiment Index (MSCI) will be released Friday, providing a valuable update to consumer confidence.
TL;DR
Big Tech reports earnings
Fed will host the bimonthly FOMC meeting and probably announce another interest rate hike.
Some people think it will be 100 basis points (1%), others 75 basis points (0.75%)
A boat load of economic data about housing
GDP for the second quarter will be released so we can know if we are in a recession or not.
If you wanna stay up to date on any of these things, follow me on IG, YouTube, and TikTok. Many videos shall be made around the earnings and various economic news.
Sports I Care About Update
Well, no update cause all the sports I care about are still on hiatus for the summer. However; here is a picture of me and my boy Darius at a recent Atlanta United game.
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Remember GENEROSITY > greed
God bless Each and Everyone of y’all
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