“Shawty What You Drank!”

Hi There! Last week, on my way to cryotherapy, I had a special encounter. As I reached for the door, a monarch butterfly greeted me—this beautiful little creature, wings fluttering softly, as if waiting for me. Butterflies have always held a special place in my heart, especially monarchs. Growing up in Grenada, they were the butterflies I saw the most, and they’ve come to symbolize so much for me over the years.

Did you know that Missouri is actually a stopping point in the annual monarch migration? Every fall, thousands of these delicate yet resilient creatures pass through our state on their 2,000-mile journey from Canada to Mexico. It’s a mind-blowing feat, considering they return to the exact same tiny patch of forest where their ancestors started the journey. Talk about intentionality.

This particular monarch was more than just a sight—it was a reminder. To me, monarchs symbolize strength, endurance, and transformation. They embody trust and spirituality. As I stood there, looking at this magnificent creature, it was as if the universe was telling me to be still and listen. In that moment, I was reminded of the importance of living with purpose and letting every word be full of grace.

I have those moments in life where the weight of challenges can feel overwhelming, where change feels intimidating, or where the next step is unclear. Just like the monarch’s journey, my path is full of twists and turns. But it’s through persistence and trust that I transform and evolve.

I encourage you to take a moment to embrace the lesson of the monarch: never quit, trust the process, and move forward with intention.

Alright, let’s dig in!

Last Week’s Market Overview (October 06 - 12, 2024) Recap

Last week, global markets finished strong, with the U.S. leading the charge. Major banks kicked off the earnings season on a high note, pushing the S&P 500 and Dow Jones to new record highs. This marked the fifth consecutive winning week for stocks, despite some choppy trading due to economic data surprises and shifting expectations around the Fed’s next rate move. The Nasdaq also joined the rally, buoyed by earnings and another higher-than-expected jobs report.

Meanwhile, Chinese stocks faced challenges amid weak holiday spending and cautious outlooks from economic press briefings. European investors focused on central bank policy, while U.S. Treasury yields continued to rise, signaling reduced expectations for aggressive rate cuts.

U.S. Markets

U.S. markets extended their weekly gains despite a volatile start. The S&P 500 and Dow Jones each gained over 1.1%, while the Nasdaq added just over 1%. Key earnings from Wells Fargo (WFC) and JPMorgan Chase (JPM) exceeded expectations, reinforcing optimism around the strength of the U.S. economy.

• Top Movers:

  • Amazon (AMZN) and Alphabet (GOOGL) faced legal pressure due to antitrust lawsuits but managed to stay afloat.

  • Tesla’s Robocab unveiling didn’t faze Uber and Lyft, both of which rallied following the news.

• Fixed Income: Treasury yields continued their upward march, with the 10-year yield climbing to 4.08% last Friday, while the 2-year yield settled at 3.94%. Rising yields reflect changing market sentiment, with traders now pricing in a smaller 0.25% rate cut at the next Fed meeting in November.

• Commodities: Oil saw wild swings last week as geopolitical tensions flared. West Texas Intermediate (WTI) crude prices ended higher after falling mid-week, driven by the uncertain outlook on potential supply disruptions in the Middle East plus increased buying in Florida prior to Hurricane Milton’s landfall. Gold rose slightly after a surge in U.S. unemployment claims, but silver and copper posted losses.

Currencies:

• The U.S. dollar strengthened against most major currencies, supported by solid U.S. economic data that reduced the likelihood of aggressive Fed rate cuts. In contrast, the Japanese yen weakened against the greenback, reflecting Japan’s softer inflation data. Emerging market currencies like the Brazilian real also came under pressure amid a stronger dollar.

U.S. Economic Recap (October 06 - 12, 2024)

• September CPI: Inflation data came in hotter than expected, with core CPI rising 0.3%, exceeding estimates of 0.2%. Year-over-year, core inflation stood at 3.3%.

• Jobless Claims: U.S. unemployment claims rose unexpectedly, signaling some cooling in the labour market.

• Producer Price Index (PPI): September's PPI was flat, with gasoline prices dragging down the index, indicating continued progress in curbing inflation.

Global Markets Recap

• Europe: European stocks enjoyed a modest rise, driven by rising hopes for further rate cuts from the European Central Bank (ECB). However, luxury goods and automaker stocks faced pressure after China hinted at new taxes on high-end European imports.

  • U.K. GDP came in as expected, while Germany delivered mixed results, with industrial production falling but some surprise upside in retail sales.

• Asia: Asian markets were mixed, with Chinese equities slipping due to weak holiday spending data and underwhelming stimulus measures. Japan's stocks ended higher, despite a surprise uptick in inflation, while South Korea and Taiwan saw gains, led by strong performances from tech companies like Taiwan Semiconductor Manufacturing Company (TSMC).

Crypto Recap (October 06 - 12, 2024)

• FTX Bankruptcy Settlement: A Delaware court approved FTX’s plan to return $16 billion to customers, providing some relief to creditors after nearly two years of legal proceedings.

• Crypto ETFs on the Rise: A survey by Charles Schwab revealed that 45% of investors plan to allocate funds to crypto ETFs, making it the second-most popular asset class after equities.

• Top Crypto Gainers last week:

  • Meme Coins - NEIRO, MOG, BRETT

  • AltCoins: ENA, CHZ

Here are other key highlights from last week:

• AMD plans to start mass production of next AI chip later this year.

• Bitcoin rewards app Fold submits S-4 SEC Filing for IPO as it adopts FLD ticker.

• XCOPY NFT sells for $2 Million.

• Argentina’s Football Association to start tokenizing players' training tights.

• Use cases on Polygon’s Agglayer.

This Week’s Markets Outlook!

Key U.S. Economic Developments This Week:

• NY Fed Manufacturing Index (Tuesday): Tumbled to -11.9, missing estimates of +3.4 and falling from the previous +11.5. This is the lowest reading since May 2024, signaling weakness in the manufacturing sector (based on surveyed manufacturers in New York State).

Other Events to Watch:

• Thursday:

  • Retail Sales

  • Jobless Claims

  • Philly Fed Manufacturing Index

  • Industrial Production

• Friday:

  • Building Permits and Housing Starts

Fed Speakers:

Several Fed officials have already spoken this week, providing hints on the central bank's outlook:

• FOMC Member Kashkari (Monday, 9:00 AM): Spoke at the Central Bank of Argentina's Money and Banking Conference, noting that the neutral rate is likely higher post-pandemic and that the economy is in the final stages of getting inflation back to 2%.

• FOMC Member Waller (Monday, 3:00 PM): Signaled that future interest rate cuts will be more modest compared to the September move, suggesting a gradual reduction of policy rates over the next year.

• FOMC Member Daly (Tuesday, 11:30 AM): Emphasized that the Fed's monetary policy remains restrictive, with the goal of lowering inflation while maintaining a strong job market. Daly also warned of potential bumps in the economy.

Remaining Fed Speeches This Week:

• Thursday:

  • FOMC Member Goolsbee: Speaking at the Exploring Career Pathways event in Chicago.

• Friday:

  • FOMC Waller: Will discuss decentralized finance at a macroeconomics workshop in Vienna.

Also, keep an eye on the Fed Budget Balance and Treasury Currency Report this week.

Earnings:

Key Earnings reports this week include Bank of America (BAC) and Citigroup (C) on Tuesday, followed by Netflix (NFLX) and Taiwan Semiconductor Manufacturing Company (TSM) on Thursday. Procter & Gamble (PG) and American Express (AXP) will wrap up the week on Friday.

Global Economic Events This Week:

China's Q3 GDP will be released late Thursday (US time), along with key metrics like retail sales and industrial production. Other high-to-medium impact global economic releases are shown below.

Trading Tip:

October is a great time to buy!

Week 10/06/24 - 10/12/24 Recap

Special Tools and Strategies - Investor Types

Are You Conservative? Aggressive? Or In Between?

The first step to successful investing is understanding who you are as an investor—this cannot be emphasized enough. Everyone has a unique approach influenced by their risk tolerance, time horizon, and financial goals. Recognizing your investor type is essential in aligning your strategy with your personality and objectives.

There are six primary types of investors, each with distinct characteristics.

Let’s explore these categories to help you identify where you fit and how that can shape your investment strategy.

1. Data Diver Investor

The Data Diver thrives on data and research, using in-depth analysis to make decisions.

• Key Characteristics: Analytical, objective, methodical, and detail-oriented.

• Risk Tolerance: Moderate to high. They assess risk carefully based on data, so they’re comfortable taking calculated risks.

• Investment Horizon: Long-term, aiming for steady growth.

• Typical Assets:

  • Individual Stocks: Data Divers focus on specific stocks with thorough research.

  • Sector-Specific ETFs: They target industries with strong growth potential.

  • Real Estate: In-depth analysis helps them identify undervalued properties.

Example: If a tech company reports strong fundamentals but weak stock performance, a Data Diver investor might see an opportunity to buy in while it’s undervalued.

2. Rookie Investor

New to investing, Rookie Investors are eager learners just starting their financial journey.

• Key Characteristics: Enthusiastic, curious, and open to exploring various investment options.

• Risk Tolerance: Low to moderate. They prefer low-risk options as they build knowledge and confidence.

• Investment Horizon: Long-term, with a focus on learning the ropes and steady growth.

• Typical Assets:

  • Index Funds: These offer diversification with low risk, ideal for beginners.

  • CDs: Safe and low-risk, great for locking in steady interest returns.

  • Single-Family Real Estate: Ideal for those with some familiarity with homeownership, providing rental income and potential long-term appreciation.

Example: A Rookie Investor might start with an index fund tracking the S&P 500, gradually increasing their contributions as they gain confidence.

3. Visionary Investor

Visionaries are forward-thinking and invest in cutting-edge sectors with the potential for disruption.

• Key Characteristics: Innovative, risk-tolerant, and willing to invest in new ideas.

• Risk Tolerance: High. They embrace risk for the possibility of high rewards.

• Investment Horizon: Short to long-term, depending on the opportunity.

• Typical Assets:

  • Venture Capital: Visionaries invest in startups or early-stage companies with transformative potential.

  • Cryptocurrencies: They’re drawn to digital assets like Bitcoin and Ethereum, seeing their potential to reshape finance.

  • Green Energy Projects: Investing in solar or wind energy appeals to their desire to drive sustainable change.

Example: A Visionary might invest in a groundbreaking tech startup or a new blockchain project with the potential to disrupt traditional industries.

4. Impact Innovator Investor

Impact Innovators invests not just for profit but to make a positive impact, focusing on causes close to their heart.

• Key Characteristics: Purpose-driven, values social and environmental impact alongside financial returns.

• Risk Tolerance: Moderate. They accept some risk in pursuit of creating positive change.

• Investment Horizon: Long-term, with a focus on sustainable growth and community impact.

• Typical Assets:

  • Multifamily Housing: Provides affordable housing, directly benefiting local communities.

  • Renewable Energy Ventures: Clean energy investments align with their values of reducing carbon emissions.

  • Local Businesses: Investing in small businesses strengthens the local economy.

Example: An Impact Innovator might fund the development of affordable housing or invest in a community solar energy project.

5. Autopilot Investor

Prefers a hands-off, automated approach, focusing on simplicity and long-term growth.

• Key Characteristics: Passive, disciplined, and long-term oriented.

• Risk Tolerance: Low to moderate. They prefer low-maintenance investments with predictable growth.

• Investment Horizon: Long-term, with minimal portfolio adjustments.

• Typical Assets:

  • Target Date Funds: Automatically adjust asset allocation as retirement approaches.

  • Dividend Stocks: These provide steady income, which can be reinvested for growth.

  • REITs: Offer exposure to real estate without the hassle of managing properties.

Example: An Autopilot investor might choose a target date retirement fund and contribute regularly without worrying about market fluctuations.

6. Slow and Steady Investor

Prioritizes stable, long-term growth with a methodical, cautious approach.

• Key Characteristics: Patient, risk-averse, and focused on slow, consistent returns.

• Risk Tolerance: Low. They avoid volatile investments in favour of safer options.

• Investment Horizon: Long-term, focused on wealth accumulation over decades.

• Typical Assets:

  • Index Funds: Low-risk, diversified investments that offer steady growth.

  • Precious Metals: Safe-haven assets like gold help hedge against market downturns.

  • Private Lending: Offers predictable income through interest payments while minimizing risk.

Example: A Slow and Steady investor might favour a low-cost index fund to capture steady market growth over time.

Summary Table:

While there are six distinct types of investors, understanding which category you fall into comes down to three differentiators:

1. Your comfort with risk: Are you risk-tolerant or risk-averse?

2. Your investment style: Are you an active or passive investor?

3. Your approach: Do you prefer working with financial professionals, or do you want to manage everything yourself?

No matter your type, the following habits are important for success:

• Know who you are: Your personality matters.

• Set clear goals: Knowing why you’re investing guides your strategy.

• Establish a timeline: Consider how long you plan to hold your investments.

• Maintain discipline: Stick to your plan even during market fluctuations.

• Cultivate patience: Avoid making decisions based on short-term volatility.

• Assess risk tolerance: Be honest about how much risk you can handle without stress.

• Diversify: Spread your investments across different asset classes to manage volatility.

• Understand tax implications: Work with tax professionals to optimize your returns.

• Be aware of fees: Account for fees that may impact your total returns.

• Remain flexible: Be open to adjusting your strategy as life circumstances change.

By identifying your investor type and practicing these habits, you’ll be well-equipped to build a solid, personalized investment strategy for long-term financial success.

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.