“Ready or Not!”

Hi There! With the days growing shorter and morning fog gently rolling in, there’s no denying that the season has changed. Soon, I’ll be gaining back that extra hour, and I’m looking forward to it. Lately, I’ve been using this shift as an opportunity to recharge. Typically, my daily walks have been a time to catch up on podcasts, audiobooks, or return calls and messages. But recently, I’ve tried something different—I’ve been walking tech-free, putting my phone away and simply soaking in the moment.

It’s amazing how this small change has ignited my senses and rejuvenated my spirit. Now, I’m more aware of the gentle melodies of birds, the deep honks from the geese, and the occasional car passing by. I feel the crisp, cold air on my face, the warmth of the sun on my skin, and I marvel at the kaleidoscope of colours in the trees. I exchange greetings with familiar faces I pass each day, and cheerfully acknowledge the new ones.

My daily walks have become my own form of Shinrin-yoku (a Japanese practice), a chance to simply be. It’s a routine, but now it feels richer, more intentional, and deeply calming.

I encourage you to take a little time to step outside, let your mind wander, and take in the season’s changes.

Alright, let’s dig in!

Last Week’s Market Overview (October 13 - 19, 2024) Recap

Last week, the S&P 500 hit an all-time high, extending its streak to six consecutive weeks of gains, the longest for 2024. Despite choppy trading in tech and a mid-week shift that favoured economically sensitive sectors, U.S. stocks continued their upward trend. Earnings season brought strong performances, particularly from the financial sector, while bond yields slipped as rate expectations fluctuated. Overseas, the Eurozone received a rate cut, while oil prices slumped due to easing geopolitical risks and concerns about China's economy. Meanwhile, gold continued its upward climb as investors sought safe havens.

U.S. Markets

U.S. stocks continued their winning streak, with the S&P 500 (+0.85%) and Nasdaq (+0.80%) marking gains for the sixth week straight. The Dow (+0.96%) also advanced, driven by positive earnings and economic data. Value stocks outpaced growth, while small caps surged 1.80% after a sector rotation mid-week.

• Financials: Big banks led the charge as Morgan Stanley (MS), Goldman Sachs (GS), Bank of America (BAC), and Citigroup (C) all exceeded earnings expectations, boosting investor sentiment.

• Technology: Mixed performance was observed, especially among semiconductor stocks. ASML Holding (ASML) weighed on the sector with a lowered forecast, but Taiwan Semiconductor (TSM) lifted spirits with positive earnings. Netflix (NFLX) shares also soared after a better-than-expected report, signaling resilience in select tech names.

• Fixed Income: The Bloomberg U.S. Aggregate Index remained steady, with modest changes in Treasury yields. The two-year yield edged up to 3.97%, while the 10-year yield dipped to 4.08%. Retail sales data exceeding expectations caused a temporary spike in yields mid-week, but markets soon recalibrated as discussions leaned towards a gradual rate cut path. Investors are still largely betting on Fed rate cuts in November and December. 

• Commodities: The Bloomberg Commodities Index ended lower, driven by a slump in oil prices. West Texas Intermediate (WTI) crude declined after Israel's decision to avoid targeting oil facilities, which eased supply concerns. China’s economic uncertainty further pressured crude. Meanwhile, gold reached new heights, surpassing $2,700 per ounce, benefiting from continued global uncertainties. Silver gained alongside gold, while copper dipped as doubts over China’s property market stimulus persisted. 

Currencies: The U.S. dollar continued its upward trend, logging its third straight weekly gain. Positive economic data and evolving Fed expectations kept the greenback strong, while the euro weakened following the European Central Bank’s (ECB) rate cut. The Japanese yen showed slight improvement against the dollar, reflecting ongoing adjustments in global monetary policy.

U.S. Economic Recap (October 13 - 19, 2024)

• Retail Sales: Surpassed forecasts with a 0.4% rise in September, highlighting strong consumer spending, especially in the restaurant and grocery sectors.

• Jobless Claims: Initial claims decreased, while continuing claims indicated a tightening labour market.

• Real Estate: Single-family housing projects saw a boost, suggesting potential easing in home prices, though permits remain lower for both single-family and multi-family units.

Global Markets Recap

• Europe: The STOXX 600 index rebounded after the ECB implemented a back-to-back rate cut, the first in over a decade, aimed at supporting economic growth. Despite the move, European luxury stocks like LVMH and Christian Dior underperformed, reflecting weak demand from China. The U.K. showed positive GDP figures, but mixed results from Germany added to broader concerns about the region's economic stability.

• Asia: Chinese markets were in focus as the government introduced new stimulus measures, but the announcements failed to excite investors. Following weaker-than-expected spending data, Chinese equities dropped mid-week but recovered as third-quarter GDP data beat expectations. Japan and Hong Kong struggled, while Taiwan saw gains driven by positive earnings from TSM.

Crypto Recap (October 13 - 19, 2024)

• Bitcoin Surge: Bitcoin rallied 9%, nearing $70,000. Technicals suggest further gains if it breaks past resistance, with targets set around $72,000. Increased ETF inflows following SEC approvals are likely bolstering the rally.

• Ethereum Upgrades: Vitalik Buterin announced plans to cut transaction times drastically, aiming to enhance network efficiency and user experience.

• Tokenized Gold: Swarm Markets (SMT) broke new ground by tokenizing physical gold bars on the Bitcoin blockchain, allowing owners to redeem NFTs for real gold.

• Top Crypto Gainers: APE, DOGE, DYDX, JUP, and MEW (MemeCoin).

Here are other key highlights from last week:

• Bitcoin Dominance reached a 3-year high.

• NFT activity on Telegram surged 400% in Q3.

• Avalanche-Based 'Off the Grid' tops Epic Games' free game charts.

• Polygon zkEVM - Servicing update coming to mainnet beta.

This is a Light Week in the Markets!

Key U.S. Economic Developments This Week:

• Wednesday: Existing Home Sales

• Thursday: Jobless Claims, Services & Manufacturing PMI, New Home Sales

• Friday: Durable Goods Orders, Consumer Sentiment

Fed Speakers:

• Recent Highlights: FOMC Members, including Logan, Kashkari, Schmid, and Daly, provided mixed signals on rate cuts, with expectations leaning towards gradual easing.

• Upcoming:

  • Tuesday: FOMC Member Harker

  • Wednesday: FOMC Members Bowman and Barkin

  • Thursday: FOMC Member Hammack

Also, keep an eye on the Fed Beige Book release, scheduled for mid-week.

Earnings:

Key Q3 Earnings reports this week include:

• Wednesday: Tesla (TSLA) - The first of the Magnificent Seven tech firms to report this season. Shares are under scrutiny after underperforming this year.

• Semiconductors: Texas Instruments (TXN) and Lam Research (LRCX) are also on deck. Analyst will use these reports to gauge the health of the chip sector after a volatile period.

  

  Source: Jesse Cohen via X

Global Economic Events This Week:

• IMF & World Bank Meetings: Global leaders will gather in Washington to discuss growth challenges and rising debt levels, with the IMF projecting public debt to exceed $100 trillion this year.

• Oil Market Dynamics: Continued pressure on oil prices due to China’s demand outlook and Middle Eastern developments.

• The 16th BRICS Summit in Kazan (October 22-24, 2024) will focus on partnerships in politics, economy, and culture, explore alternatives to the U.S. dollar, and include new members Egypt, Ethiopia, Iran, and the UAE amid ongoing global tensions.

Other high-to-medium impact global economic releases are shown below.

Trading Tip:

Learn to identify market consolidation to avoid chasing unclear moves!

Week 10/13/24 - 10/20/24 Recap

Special Tools and Strategies - Brokerage Account

Before you start investing, it is important to understand the tools that will help you reach your financial goals. One essential tool is a brokerage account, which gives you the flexibility to grow your money in the markets. Whether you're saving for retirement, a down payment on a house, or just want to start building wealth, a brokerage account is a great place to begin.

What is a Brokerage Account?

A brokerage account is an investment account that allows you to buy and sell various assets such as stocks, bonds, mutual funds, and ETFs. Think of it as a bridge between your money and the investment markets. Unlike retirement accounts, there are no limits on how much you can invest, and you have the freedom to access your funds at any time.

Safety and Security

While investing always carries some risk, brokerage accounts themselves are generally secure under the SIPC.

• SIPC Protection: Most brokerage firms are members of the Securities Investor Protection Corporation (SIPC), which covers up to $500,000 of your assets (including up to $250,000 for cash). Note that this protection is only against the brokerage firm's failure, not against market losses.

Benefits of a Brokerage Account

Here are some key advantages:

• No Contribution Limits: Unlike retirement accounts, you can invest as much as you want.

• Flexibility: You can withdraw money whenever you need, making it suitable for both long-term and short-term financial goals.

• Diverse Investment Options: Brokerage accounts allow you to invest in a wide range of assets, including stocks, bonds, ETFs, and more.

How Does a Brokerage Account Work?

• Opening an Account: You can quickly set up a brokerage account online. Many platforms allow you to start with no minimum deposit. Simply transfer funds from your bank account to get started.

• Trading and Investing: Once funded, you can buy and sell assets as you see fit. You have full ownership of the money and investments in your account, and you can decide when to trade or cash out.

• No Limits: Unlike retirement accounts, there are no annual contribution caps. You can open multiple accounts to diversify your investments.

Types of Brokerage Accounts

1. Full-Service Accounts:

   • Managed by financial advisors who provide personalized advice and support.

   • Higher fees but great for those wanting expert guidance.

2. Discount Brokerage Accounts:

   • Ideal for DIY investors who want to make their own investment choices.

   • Lower fees, with no commissions on most stocks and ETFs.

3. Robo-Advisor Accounts:

   • Automated investment platforms that use algorithms to manage your investments based on your goals and risk tolerance.

   • Suitable for those seeking a low-maintenance, hands-off approach.

How is a Brokerage Account Different from Other Accounts?

• Goal Setting: Decide what you're investing for—be it retirement, buying a home, or a vacation.

• Diverse Investments: Spread your money across different assets to manage risk.

• Long-Term vs Short-Term: Use your account for both long-term growth and short-term trading, depending on your goals.

Understanding your brokerage account is the first step in building a successful investment strategy. Ask yourself: What are my financial goals? What is my investment type? Am I comfortable with risk? Knowing your answers can help you choose the right type of brokerage account and investment approach. Once you're clear, you're on your way to achieving your financial aspirations.

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.