"Very Gold! Very Demure!"

Hi There! This past weekend, Grenada came together for a heartwarming two-day celebration to welcome home our six Paris 2024 Olympic athletes. Among them were the three Olympic finalists—Anderson Peters (Bronze - Javelin), Kirani James, and Lindon Victor (Bronze - Decathlon). With a red carpet rollout and a grand ceremony at the airport, they were greeted by the Prime Minister, government officials, sports executives, and their loved ones, while Grenadians gathered outside the airport to join the celebration.

The festivities continued with a national motorcade that traveled westward through Gouyave, the hometown of Kirani, down the east coast, including Soubise, home to Anderson, and ended in La Sagesse, the home parish of decathlete Lindon. The weekend concluded with a recognition rally at La Sagesse Playing Field, where additional state medals and prizes were awarded to our deserving athletes.

One of the most touching moments was seeing the youths speak to the athletes, take pictures, and proudly touch their medals. The overwhelming reception this weekend filled my heart with pride and gratitude. The outpouring of love from across Grenada reminded me of the deep bond we share as a nation.

473 to the world!

Alright, let’s dig in!

Last Week (August 12 - 17, 2024) Recap

Last week, U.S. markets showed resilience as optimistic economic data and strong earnings from major tech companies pushed indexes higher, calming fears of a potential recession. Internationally, positive economic signals from Japan and a focus on U.S. data helped most global markets close in the green. U.S. Treasury bonds gained, while oil prices faltered, weighed down by mixed signals from the Middle East and a slowing Chinese economy.

U.S. Markets

Amidst a volatile trading week, U.S. stocks surged, led by strong performances from big tech. The S&P 500 gained 3.9%, while the tech-heavy Nasdaq soared 5.3%. The Dow Jones added 2.9%, driven by positive earnings and key economic data, such as the cooler-than-expected Producer Price Index (PPI) and Consumer Price Index (CPI) reports. Retail sales data and solid jobless claims further fueled the rally. Despite a dip in housing starts, the overall market momentum remained positive, with notable earnings beats from Walmart, Home Depot, Cisco Systems, and Deere & Co.

• Fixed Income: U.S. Treasury bonds climbed, lowering the 10-year yield by five basis points. While rate cut expectations for September have moderated, there is still a 20%-30% chance of a 0.50% cut. Market volatility remains a concern, especially with low summer liquidity influencing bond pricing.

• Commodities: The Bloomberg Commodities Index rose 0.36% last week. Oil prices fluctuated before closing 2% lower, affected by weak U.S. housing data and economic concerns in China. However, fears of supply disruptions from the Middle East provided some support. Gold hit a new record high.

Currencies:

• U.S. Dollar: The U.S. dollar weakened to a seven-month low as positive economic data and rate cut expectations pressured the greenback. 

• Japanese Yen: The Japanese yen experienced its largest weekly drop since June.

U.S. Economic Recap (August 11 - 17, 2024)

• Retail Sales: July retail sales rose 1%, boosted by auto sales, as manufacturers offered the highest incentives in three years. This rebound underscores the strength of consumer spending, even as the Fed remains cautious about cutting rates.

• CPI Report: Consumer prices increased by 0.2% in July, bringing the annual inflation rate down to 2.9%. While shelter costs were the primary driver, declining prices for used cars, medical care, and energy signaled a broader slowdown in inflation.

Global Markets Recap

• Europe: European markets rose 2.5%, buoyed by stable second-quarter GDP data and decreasing fears about the U.S. economy. Although mixed data from the U.K. and a decline in the German ZEW sentiment index briefly dampened sentiment, rate cut expectations for the Bank of England (BoE) supported gains.

• Asia: Asian markets advanced, led by Japan's better-than-expected GDP growth. Despite challenges like rising unemployment and slowing exports in China, technology stocks helped lift markets. South Korea, Taiwan, and New Zealand also posted gains, with New Zealand cutting rates by 0.25%.

Crypto Recap (August 11 - 17, 2024)

• Bitcoin: Development continues with the introduction of BitVM2, which enhances Bitcoin's programmability. Meanwhile, 94% of Bitcoin’s total supply has now been mined, highlighting its scarcity as a valuable asset.

• Ethereum ETFs: U.S. spot Ether ETFs saw their first positive net inflows since their July launch, despite ETH’s price dropping 23% this month.

Here are other key highlights from last week:

• Mt. Gox’s suspected $2.1B BTC Bitgo wallet activated.

• Studies showed that 97% of Meme Coins don’t last a year.

• Aavegotchi Studio Revealed ‘Members Only’ Ethereum Layer-3 Gaming.

• Arthur Hayes and Oyl launched whitelist for Bitcoin Ordinal NFT.

• How POL fuels Polygon’s aggregated blockchain future.

This week investors and analysts are on edge!

So Far (August 19 - 23, 2024):

• FOMC Minutes: Most Fed officials favour a rate cut in September, citing risks to employment and labour market concerns. Continued disinflation is expected, but delaying cuts too long could weaken the economy.

• Jobless Claims: Increased slightly to 232,000.

• Manufacturing PMI: Fell to 48, signaling a 14-month low in output.

• Services PMI: Expanded, showing resilience in the service sector.

• Existing Home Sales: Rose to 3.95 million in July, a 1.3% increase from June.

What to Watch for Friday:

• Fed Chair Powell’s Speech & Jackson Hole Symposium: Markets will closely monitor comments from central bankers, especially Fed Chair Powell, who will discuss the economic outlook on Friday.

• New Home Sales: Another key indicator of the housing market's health.

Fed Speakers This Week:

• Monday, August 19: FOMC Member Waller spoke at a workshop in D.C. but did not address the economy or policy.

• Tuesday, August 20: FOMC Members Bostic and Barr discussed general topics at separate events without significant policy insights.

• Thursday, August 22: FOMC Member Collin, in a Fox Business interview, indicated rate cuts could be gradual, highlighting confidence in inflation control and noting a still-healthy labour market.

Earnings Releases:

Key earnings reports expected to influence market sentiment this week are shown below.

Key Global Economic Events this week:

• China Loan Rates (Monday)

• Canada CPI (Tuesday)

• Eurozone and UK PMIs (Thursday)

• BoE Governor Bailey’s Speech (Friday)

Trading Tip:

If the low price of the entire week is achieved on a Friday, expect much lower prices next week!

Week 8/11/24 - 8/17/24 Recap

Special Tools and Strategies

In Issues 92 and 93, we explored how to use Google Finance for analyzing charts and key metrics. This week, let's focus on understanding Financials, particularly Income Statement, using Starbucks (SBUX) as an example.

After scrolling past the chart and key metrics, you'll find a table called Financials, which shows the Income Statement for SBUX. Here’s how to read it:

1. Quarterly vs. Annual Data: Use the toggle on the top left to switch between quarterly and annual figures, allowing you to compare short-term and long-term trends.

2. Y/Y Change: On the right side, you'll see the Year-over-Year (Y/Y) change, which shows how much each metric has improved or declined over the past 12 months. This is key for identifying growth trends.

3. Revenue: This represents the total sales generated before expenses. Consistent revenue growth is typically a positive sign.

4. Operating Expense: This includes costs related to running the business, such as salaries and utilities. Along with the Cost of Goods Sold (COGS), these are subtracted from revenue to determine Operating Income—an important indicator of a company's core profitability.

5. Net Income: This is the company's profit after all expenses, including taxes and interest, have been deducted from revenue.

6. Net Profit Margin: Calculated as Net Income divided by Revenue, this metric indicates how much of the revenue is converted into profit. A higher margin generally means greater efficiency.

7. Earnings Per Share (EPS): EPS is calculated by dividing Net Income by the total number of shares outstanding. It tells you how much profit is attributable to each share of stock.

8. EBITDA: This stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s a measure of a company's overall financial performance and is often used for comparing similar companies.

9. Effective Tax Rate: This metric shows the percentage of profits the company pays in taxes, giving you insight into its tax obligations.

A solid grasp of these Income Statement components will equip you with insights into a company’s financial health and profitability, empowering you to make more informed and confident investment decisions.

Disclaimer: This newsletter is strictly educational. The information this report provides does not constitute investment, financial, trading, or any other advice. You should not treat any of the report’s content as such. Please be careful and do your research.