“See, I Told Y’all!”

Hi There! As life pens the final lessons in Chapter 46 of my journey, I’ve been reflecting deeply on the experiences and growth this year has brought me. One of the most profound lessons I’ve learnt is that there can be great power in suffering silently. When I took the time to disconnect and rebuild my life piece by piece, I realized that while the process was far from easy, true greatness rarely is.

Facing challenges head-on has made me stronger, shaping me in ways I never imagined. I’ve also come to understand that my goals aren’t just checkpoints to be reached and left behind. They are ongoing journeys, requiring both persistence and adaptation.

As I prepare to step into Chapter 47 of my life, I do so with a newfound sense of peace. I’m excited to continue sharing these lessons with you as we all navigate our journeys toward growth and fulfillment.

Thank you for being a part of this chapter with me—I’m looking forward to seeing where the next one leads me.

Alright, let’s dig in!

Last Week (September 15 - 21, 2024) Recap

Global markets were in focus as central banks took the stage. In the U.S., the Federal Reserve delivered a bold 0.50% interest rate cut, boosting investor confidence and sending stocks higher. While the initial market reaction faded, the Dow hit another record high, and Intel spiked on takeover rumors from Qualcomm. Treasury yields rose despite the Fed’s rate cut, and gold reached new all-time highs as geopolitical tensions increased.

U.S. Markets

Stocks continued their September rally, with the Nasdaq and S&P 500 gaining near 1.4%, and the Dow climbing 1.6%. Small caps outperformed, with the Russell 2000 up 2.1%. The Fed’s rate cut of 0.50% last Wednesday was the key event, igniting a brief rally. However, Fed Chair Jerome Powell signaled that larger cuts were not on the horizon, which dampened some enthusiasm. On the corporate front, Intel (INTC) gained on a potential deal with Qualcomm (QCOM), while Microsoft (MSFT) announced a $60 billion buyback.

• Fixed Income: Despite the Fed’s rate cut, Treasury yields rose, with the 10-year yield reaching 3.72%. The yield curve steepened, signaling a potential return to normalcy after a long period of inversion. Investors are locking in yields before further rate cuts take effect.

• Commodities: The Bloomberg Commodities Index rose over 2%, with gold hitting new highs due to lower U.S. rates and geopolitical tensions. Silver and copper also gained, while oil prices saw volatility amid supply disruptions and China’s sluggish economic outlook. 

Currencies:

• U.S. Dollar: The dollar fell by 0.2% last week as Treasury yields declined and speculation about further rate cuts mounted. The greenback neared a key inflection point, and a break below its 2023 lows could signal a longer-term downtrend.

• Japanese Yen: The yen weakened against the dollar after the Bank of Japan (BoJ) kept interest rates unchanged. BoJ Governor Ueda’s dovish comments provided little indication of when the central bank might decide to raise rates, further pressuring the yen.

U.S. Economic Recap (September 15 - 21, 2024)

• Fed’s Bold Move: The Fed cut rates by 50 basis points, signaling a focus on full employment. The neutral rate is expected to rise closer to 3%, which could limit further declines in Treasury yields.

• Q3 Growth Outlook: Retail sales were strong, boosted by online shopping. However, spending in physical stores and restaurants showed signs of slowing, suggesting a cautious consumer as we head into Q4.

Global Markets Recap

International markets had a mixed week. European stocks ended slightly lower, weighed down by weaker-than-expected economic data and less dovish comments from the European Central Bank (ECB). In Asia, markets gained ground, led by Japan, where the BoJ kept rates steady. Chinese markets also recovered from weak economic data and concerns about the central bank’s inaction on lending rates.

Crypto Recap (September 15 - 21, 2024)

• Bitcoin Rallies After Fed Rate Cut: Bitcoin surged after the Fed’s 50 basis point rate cut, rising above $60,000. Analysts expect short-term volatility but anticipate long-term growth as liquidity improves. Some forecasts suggest Bitcoin could dip in the near term, but long-term investors are advised to focus on the potential for substantial gains.

• Central Banks Explore Tokenization: More than 40 financial institutions joined the Bank for International Settlements (BIS) to explore tokenization in cross-border payments as part of Project Agorá. This initiative aims to integrate tokenized commercial bank deposits with central bank digital currencies (CBDCs), streamlining international settlements.

• Key Takeaways from Token2049 in Dubai:

  • Solana Unveils New Web3 Phone: Solana revealed its next-generation Web3 phone, 'Seeker,' at Token2049. The device, scheduled for release in 2025, promises a more integrated crypto experience, featuring built-in wallets and enhanced dApp support. The Seeker already has over 140,000 pre-orders after the success of Solana’s previous phone, the Saga.

  • TON Foundation’s Ride-Hailing Partnership: TON Foundation partnered with the ride-hailing app Tada to allow payments using Toncoin or Tether (USDT). This collaboration was promoted at Token2049, with Tada offering free rides and discounts in Singapore as part of the partnership.

  • Sui Foundation Partners with MoviePass: The Sui Foundation announced a partnership with MoviePass, enabling the movie subscription service to accept payments in USD Coin (USDC) through the Sui blockchain. This collaboration will also see Sui taking an equity stake in MoviePass.

Here are other key highlights from last week:

• Sony chooses AMD over Intel for PS6 chip contract.

• Louisiana takes first crypto payment over Bitcoin Lightning.

• MoneyGram and Stellar join CEX.io for global crypto cash conversions.

• Puma X Web3 mobile game in ‘pivotal moment’ for mainstream adoption.

• Infinex NFTs top $40M sales in first four days, despite NFT bear market.

This is the last trading week in September 2024!

Key U.S. Economic Developments So Far This Week

• Services and Manufacturing PMIs (Mon.): U.S. services PMI came in at 55.4, slightly above expectations, while manufacturing PMI remained weak at 47.0, reflecting continued divergence between the sectors. Composite PMI held steady at 54.4.

• CB Consumer Confidence (Tues.): U.S. consumer confidence sank to 103.0 in September, down from 108.7 in August, marking the lowest level since May 2023. Rising concerns over inflation and the economic outlook contributed to the decline.

Upcoming U.S. Events to pay close attention to:

• New Home Sales (Wed.)

• Q2 GDP (Thurs.)

• Durable Goods Orders (Thurs.)

• Pending Home Sales (Thurs.)

• Jobless Claims (Thurs.)

• Core PCE Inflation (Fri.)

• UoM Consumer Sentiment (Fri.)

Fed Speakers:

This week, several FOMC members shared their views on the economy and recent rate cuts:

• Bostic (Mon. 8:00 AM) supported the 50 bps rate cut as a balance between inflation and job market risks but emphasized it doesn’t set a future pace for cuts. He noted the economy is near “normal” conditions.

• Goolsbee (Mon. 10:15 AM) backed the cut, highlighting that more rate reductions will likely be needed over the next year to support employment.

• Kashkari (Mon. 1:00 PM) expects smaller steps ahead, noting unemployment is a bigger risk than inflation.

• Bowman (Tues. 9:00 AM) voiced concerns that the 50 bps cut might have been too aggressive, potentially signaling premature victory over inflation.

Upcoming Fed Speeches:

• Wed

  • FOMC Member Kugler

• Thursday

  • FOMC Members Collins, Kugler, Bowman, Williams, Barr, Cook, Kashkari

  • Fed Chair Powell

  • Treasury Secretary Yellen

• Friday

  • FOMC Member Bowman

Earnings Releases:

Earnings releases are light again this week. The ones to watch closely are highlighted in red.

Global Economic Events This Week:

• Monday, September 23: Euro Area & UK Flash Manufacturing PMI

• Thursday, September 26: Swiss National Bank (SNB) Interest Rate Decision

• Friday, September 27: Spain & Japan CPI Data

Trading Tip:

When using the 800 EMA, if the price stays above or bounces off it, it could signal a chance to buy, as it shows the market might be heading up!

Week 9/15/24 - 9/21/24 Recap

Special Tools and Strategies

In Issue #76, I introduced Fundamental Analysis and how it helps assess a company’s financials to determine if it’s a good investment. This week, let’s dive into Technical Analysis, another key tool for traders and investors. While fundamental analysis looks at a company’s overall value, technical analysis focuses on price trends and trading patterns to help you decide the best time to enter or exit a trade.

What is Technical Analysis?

Technical analysis evaluates price movements and trading volumes to predict future market behavior. It doesn’t focus on financial data but rather on how market trends and patterns form over time.

How Beginners Can Use Technical Analysis:

1. Identify Trends: Beginners can use technical analysis to spot whether a stock is in an upward or downward trend. Understanding these trends can help you decide whether to buy or sell.

2. Use Key Indicators: Moving averages, trendlines, and volume indicators are useful tools. They help pinpoint entry and exit points, offering guidance on when to act.

3. Recognize Patterns: Learning to spot patterns like "double tops" or "head and shoulders" can indicate a potential shift in the market. These patterns are often key signals for price reversals or continuations.

Core Principles of Technical Analysis:

1. The Market Discounts Everything: Technical analysts believe all market influences—like news, company earnings, and investor sentiment—are already reflected in an asset’s current price.

2. Price Moves in Trends: Whether over days, months, or years, prices often follow clear trends that technical analysts aim to identify.

3. History Repeats Itself: Market behavior often follows predictable patterns, driven by human emotions like fear or greed (Issue #46). Recognizing these recurring patterns can help traders anticipate future movements.

Why Technical Analysis is Useful:

Technical analysis offers a way to make more informed decisions by analyzing charts, spotting trends, and recognizing market patterns. While it won’t guarantee success, it helps traders better understand market momentum and minimize risks when trading or investing in stocks, cryptocurrencies, or other assets. Used together with other research methods, it’s a valuable tool for finding opportunities in the market.

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.