Our Weekly Digest is circulated every Friday to provide members with an SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance.
See our archived digests below!
Weekly Digest 6/3/22
Happy Friday, June 3!
Hope you all had a great Week 10. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real-world finance that may be useful to you!
The Dow closed the week at 32,900 and fell 348.5 points or -.9% on the week. The S&P500 lost 68.28 points and was at 4,109 or down 1.2% on the week. The NASDAQ declined 304.16 points to 12,013.
The 10-yr Treasury yield was at 2.94% and .2% on the week. Oil is at $120.27 ($/bbl), up 4.5% on the week. Bonds are at $102.77, down about 1.3% on the week.
The unemployment rate stayed steady throughout May at 3.6% – the best rate since the pandemic. No recession in the last 50 years has begun with unemployment below 4%. There has consistently been an increase in unemployment greater than 14% over a year or more before past recessions, but given the aggressive approach from the Fed, it isn’t guaranteed the economy won’t enter another downturn. The economy added 390,000 jobs in May.
Tesla had one of the biggest declines of the week at -9.2%, continuing a period of volatility for the EV market. Elon Musk also plans to cut 10% of Tesla’s staff.
Walmart is pushing automation. By 2024, Walmart plans to open 4 new fulfillment centers in the USA relying heavily on automation. The combination of robotics, machine learning, and people will be the first of its kind for Walmart. “This could alone provide 75% of the US population with next or two-day shipping on millions of items,” according to the Senior VP of innovation and automation at Walmart.
Dave Clark, Amazon consumer CEO, is stepping down. This is the second big executive exit in Big Tech this week as Sheryl Sandberg, COO of Meta, is also stepping down.
Gasoline prices keep surging and benchmark future prices hit a new high of $4.19 per gallon. If these trends continue, we are likely to see gasoline hit an average of $5.15 per gallon across the country soon.
Have a great weekend and good luck on finals! We look forward to seeing you again in the fall.
Cheers to the summer!
SWS Investment Committee
Weekly Digest 5/27/22
Happy Friday, May 27!
Hope you all had a great Week 9. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real-world finance that may be useful to you!
The Dow, S&P 500, and Nasdaq broke an eight-week losing streak as stocks rose across the economy. The reopening in Shanghai and China policy support, M&A, a much lower bar for retailers, declining Treasury yields, and a strong household balance sheet was in focus. Moreover, according to Bloomberg, global equities attracted ~20B in the week to May 25 – the most in 10 weeks.
Despite this, sentiment is still down. The Goldman Sachs Sentiment Indicator was below -2.0 for a fifth-straight week, the first five-week streak since 2011.
S&P 500 Sector Performance:
Outperformers: Consumer Disc. +9.24%, Energy +8.09%, Tech +8.07%, Financials +8.05%
Underperformers: Healthcare +3.21%, Telecom +3.59%, Utilities +5.00%, REITs +5.79%, Materials +5.93%, Consumer Spls. +6.15%, Industrials +6.33%
The tail end of the earnings session has put retailers into the consumer backdrop. Some of the week's well-received retail earnings included DG +21.7%, DLTR +29.0%, ULTA +23.9%, BBY +16.1%, WSM +21.0%, RL +6.0%, M +29.1%, JWN +25.4%, FTCH +23.8%. Reports with more cautious takeaways included COST +13.1%, BURL +13.9%, DKS +9.3%, GPS +6.1%, AEO -1.7%, ANF -19.4%, and BIG -2.2%. Reuters highlighted spending differences between higher- and lower-income consumers.
This week saw more press around how the Fed’s rate hikes and the start of quantitative tightening (QT) have already started cooling the economy and dampening inflationary pressure. Friday's April PCE data on inflation showed a third-straight month of core PCE growth of 0.3% m/m, while the headline fell from 0.9% in March to 0.2%.
SNAP -33.0% said this week that Q2 revenue and EBITDA would come in below guidance, due to the macro environment deteriorating faster and further than anticipated.
MSFT +8.2% will slow hiring in its Windows, Office, and Teams groups, with management citing the need to realign resources and priorities for the new fiscal year, according to Bloomberg.
Have a great weekend!
Cheers,
SWS Investment Committee
Weekly Digest 5/21/22
Happy Saturday, May 21!
Hope you all had a great Week 8. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real-world finance that may be useful to you!
With the Dow Jones Industrial Average down for five consecutive days, the Nasdaq Composite down 3.2%, and bitcoin down 8.5%, stocks are continuously falling alongside higher-than-anticipated inflation. Check out this WSJ article to learn more.
As stocks fall, European Central Bank President Christine Lagarde argues that crypto is worth nothing and that buyers should be warned before investing their life’s savings in crypto assets. Read this Bloomberg article to learn more about Lagarde’s argument for the regulation of crypto purchasing.
For the first time in twenty years, the value of the euro is nearly the same as that of the U.S. dollar, suggesting that currencies could perhaps reach parity this year. Check out this Wall Street Journal article to discover more about the strengthening of the U.S. dollar and the weakening of the euro.
This week, the environmental, social, and governance (ESG) index dropped Tesla from the lineup, resulting in backlash from Elon Musk but also a potential benefit for investors. Read this Market Watch article to learn more about ESG cutting Tesla from the list and the reasoning behind their decision.
With the S&P 500 down nearly 19% from its high in January, the 20 million amateur investors who started trading stocks during the pandemic are either strategizing with their portfolios or leaving the market. Check out this New York Times article to read more about the stock market bear that new investors are struggling to wrangle.
Have a great rest of the weekend!
Cheers,
SWS Investment Committee
Weekly Digest 5/16/22
Happy Monday, May 16!
Hope you all had a great Week 7. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real-world finance that may be useful to you!
Overall, global stocks are on the worst losing streak since the 2008 financial crisis. Analysts at Morgan Stanley and Citibank do not expect this trend to turn around in the near future due to high inflation, hawkish central banks, and slowing economic growth. Check out this Bloomberg article to learn more about the growing discussion around the chance of a recession.
Over the weekend, nearly two weeks after the leak of the Supreme Court opinion that could overturn Roe v. Wade, protesters across the country gathered to support abortion rights. Read this New York Times article to learn more about the rallies and the larger political implications of the SCOTUS opinion leak.
Last week, Netflix updated its culture guidelines, adding a new section called “artistic expression.” The section explains that it curates its content based on users’ preferences and suggests that employees should quit if they find it difficult to work on the content that they disagree with. For further reading on the effects of Netflix’s actions, check out this Wall Street Journal article.
Sweden and Finland are applying to join NATO. Finland’s Prime Minister said that this is because they can no longer trust that the country will have a “peaceful future” bordering Russia without an alliance with NATO. Learn more about these new potential additions to NATO in this Bloomberg article.
Walmart, along with other retail giants including Home Depot, Target, and TJX, will report Q1 earnings this week. This will be very telling in terms of how consumers have been responding to increasing inflation. Keep an eye out for news on Walmart’s earnings report tomorrow, and, in the meantime, check out this Investopedia article on what to look for.
Have a great week!
Cheers,
SWS Investment Committee
Weekly Digest 5/6/22
Happy Friday, May 6!
Hope you all had a great Week 6. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real-world finance that may be useful to you!
As the world gradually returns to normal, travel has rebounded and Airbnb revenues have increased 70%. Bookings on Airbnb hit a new high thanks to a resurgence of travel and increasing host rates due to inflation. Airbnb’s share rose more than 5% in after-hours trading after it announced the earnings results.
Moderna had $5.9 billion in COVID-19 vaccine sales in Q1, over triple that of the same period last year. The biotech company’s shares soared by more than 7% in premarket trading Wednesday before falling. CFO David Meline said there is uncertainty in the 2022 sales guidance due to ambiguity on the necessity for additional doses.
Uber’s Q1 revenue more than doubled YoY as demand for rides rebounded from the COVID-19 downturn and the company’s food delivery grew despite restaurant reopenings. However, the stock price fell after Lyft warned of increasing driver costs.
Elon Musk has told potential investors that he plans to stage an IPO of Twitter in as little as three years of buying it, after fixing the company’s problems. He has agreed to take Twitter private in a $44 billion deal.
Shares of Etsy, Shopify, Wayfair, Poshmark, and a number of other e-commerce retailers fell Thursday. E-commerce transactions have declined 1.8% from a year ago, while in-store sales rose 10%, Mastercard SpendingPulse said in a new report. These changes may be due to a combination of factors, namely the return of in-person shopping post-pandemic as well as a reduction in consumer spending due to inflation.
Enjoy the weekend!
Cheers,
SWS Investment Committee
Weekly Digest 4/30/22
Happy Saturday, April 30!
Hope you all had a great Week 5. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
Elon Musk acquires Twitter. The Twitter board agreed on Monday to a $44 billion buyout from Tesla CEO Elon Musk. The fact that Twitter is likely to now go private could have rippling impacts on other social media companies like Meta and tech giants like Apple. With unilateral control over Twitter’s popular platform, Musk could institute changes that put pressure on other tech companies.
The center holds in France. Emmanuel Macron stormed to a second term in France’s presidency, surpassing the nationalist-populist rival Marine Le Pen by 58.5% to 41.5%. Although this has not led to an increase in the Euro, it is believed that this fall is due to Macron being re-elected as a default choice with a low support in public opinion. There are also still questions of who will be his prime minister, which would completely condition his presidency.
Ukraine, Russia & energy. With the current Ukraine war, the IMF forecasts much higher inflation and weaker growth in Europe due to supply shock emanating from the Ukraine war. There are smaller supplies for food, fertilizers and other necessities, as well as energy sanctions to Russia, causing a drastic increase in prices all.
Musk sold $8.5 bn in Tesla stock after agreeing on Twitter deal. In the three days after Elon Musk engineered a deal to buy Twitter, he sold roughly $8.5 billion worth of shares in Tesla to help fund the purchase.
KKR to take Hitachi Transport in $5bn deal. Hitachi will sell its 40 per cent stake in logistics company Hitachi Transport System to US private equity group KKR as part of a $5bn deal that is a major step in the sprawling Japanese group's drive to focus on digital services.
Enjoy the weekend!
Cheers,
The SWS Investment Committee
Weekly Digest 4/22/22
Happy Friday, April 22!
Hope you all had a great Week 4. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
Netflix Inc. shares fell 35.1% on Wednesday, recording their worst day since 2004. This occurred after they recorded a substantial loss in subscribers in the first quarter. Check out this Wall Street Journal article to learn more about Netflix’s current financials.
The dollar is reaching two-year highs, lifted by interest-rate increases by the Federal Reserve. Read this article to learn more about how the dollar is reaching levels hit during pandemic market panic of March 2020 when investors worldwide piled into the currency.
The U.S. economy is growing moderately as Covid cases decline and high inflation ripples through the economy. This article goes more into depth on the uncertain outlook for future growth due to geopolitical developments in Ukraine and rising prices.
U.S. stocks closed lower on Monday as treasury yields kept rising. The yield on the 10-year Treasury note reached 2.861%, its highest closing level since December 2018. Check out this article to read more about the surprising route of Treasurys given yields have already climbed to levels that are attractive for long-term investors.
Blackstone made a huge $12.8 billion acquisition, one of the largest of this quarter. The investment management firm acquired student-housing owner American Campus Communities. The deal strongly bets on rents continuing to rise as more college students return to campus. It is their first acquisition in the sector. Read more here.
Enjoy the weekend!
Cheers,
The SWS Investment Committee
Weekly Digest 5/22/20
Happy Friday, May 22!
Hope you all had a great Week 7. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
Check out this New York Times article outlining ways Americans have been spending their money since the shelter-in place restrictions were enforced.
Check out this article from the Washington Post detailing the potential long-term repercussion on small-business.
The New York Times released a market update including the status of Hertz, Amazon, Alibaba, and China’s decision to not set a growth target for their economy. Read more here !
Curious to learn more about the role of technology in slowing the spread of COVID-19? Check out this article about the smartphone app Apple and Google are releasing to notify people who might have been exposed to the virus.
Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 5/15/20
Happy Friday, May 15th!
Hope you all had a great Week 6. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
This New York Times article discusses the recent bankruptcy filings of retailers like Neiman Marcus and J. Crew. The article illustrates the role of Private Equity in the Retail industry and how Private Equity firms introduced enormous debt burdens to retailers from leveraged buyouts.
Check out this article on how COVID-19 is disrupting globalization by slowing the flow of people, trade, and capital. The article addresses how globalization was previously disrupted by trade wars but claims the magnitude of disruption that will be caused by the pandemic and its aftermath is unprecedented.
This article explores how Big Tech like Amazon, Facebook, and YouTube could emerge stronger than ever after the coronavirus pandemic. For example, Amazon claims it was hiring 100,000 warehouse workers to meet demand, and Microsoft’s software for online collaboration “climbed nearly 40 percent in a week.”
On May 12th, House Democrats released their proposal for a fourth relief package of $3 trillion. This proposal includes $10 billion for small businesses, $500 billion for state governments, $375 billion for local governments, and $75 billion in housing assistance.
With increased government spending, this article reports on the record U.S. budget deficit that totaled $738 billion in April.
Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 5/8/20
Happy Friday, May 8th!
Hope you all had a great Week 5. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
The latest US Jobs Report came out today and the damage to the economy is the worst since the Great Depression; women fared the worst, a reversal from past recessions.
Check out this Wall Street Journal article for a comprehensive look at the U.S. labor market. April unemployment data and the decline in payrolls are expected to show U.S. employers in one month cut all the jobs they added in the past decade.
This McKinsey & Company briefing suggests that the current economic shocks are accelerating the demise of brick-and-mortar retail – some apparel, fashion, and luxury companies won’t survive the crisis; others will emerge better positioned for the future. Much will depend on their digital and analytics capabilities.
This piece published by the Harvard Business Review explores “shock geometry” – the concept of a recession is binary and blunt; the bigger question revolves around the shape of the shock and its structural legacy.
Data shows there was a drop in spending and working even before any official mandates to stay at home. This New York Times article analyzes change in economic measures before, during and after state closures.
Another article by McKinsey & Company looks down the line and argues that to emerge stronger from the COVID-19 crisis, companies should start reskilling their workforces now.
Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 5/1/20
Happy Friday, May 1!
Hope you all had a great Week 4! Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to COVID-19’s impact on real world finance that may be useful to you!
This Article from the WSJ unpacks the notion of social distancing as ‘a new economic indicator’. Just as GDP tries to capture the vast diversity of economic activity in a single number measuring national output, modelers and statisticians are looking to synthesize a large array of data for social distancing indicators to understand economic activity.
This is a great read to summarize the position of different states as a number start to reopen.
As the current leader in confirmed COVID19 cases, the U.S. is expected to account for 31% of this year’s decline in worldwide gross domestic product, according to Bloomberg. Though the U.S. and global economy has taken a hard hit, this article touches on the growth expected to rebound as of 2021.
“The rising economic toll of pandemic-induced shutdowns is fueling suspicions that government leaders are listening too much to epidemiologists and not enough to economists.“ As the pandemic continues to fuel a ‘stand off’, so to speak, between epidemiologists and economists, this WSJ read unpacks how and why policy responses must balance input from both disciplines.
The Food and Drug Administration granted an emergency-use authorization for a new antiviral drug, cleared for emergency use for covid19 patients. This drug, ‘Remdisivir’ has become the first medication backed by early clinical data made available to fight the novel coronavirus. Read more here!
Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 4/24/20
Happy Friday, April 24!
Hope you all had a great Week 3. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to global finance in COVID-19 that may be useful to you!
To learn more about how the 350 million dollars from the government’s Paycheck Protection Program is not as much as it initially appears, check out this podcast which walks through how small businesses, lobbyists, and even bigger businesses are all trying to access government money set aside for small businesses. You can also read a bank’s perspective from this JP Morgan article and online lenders’ stance from this New York Times article.
To read about how the pandemic could hurt the US dollar and boost China’s financial dominance, check out this article.
Check out this report from BOND Capital, a leading investment firm, detailing economic shocks from past pandemics and the implications of rapidly improving technology on small businesses, healthcare, sports, and overall business efficiency. Long, but contains a lot of interesting information and lots of charts!
Still having trouble understanding the implications for the government shutdown on the economy? Check out this very clear and digestible Q&A with Invesco investment strategists. They also include a video concerning why the market is so volatile.
If you are looking for current job opportunities, here is a spreadsheet (updated every week by Stanford students) with current remote jobs opportunities and here is an article to make you feel less alone!
Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 4/17/20
Happy Friday, April 17th!
Hope you all had a great Week 2. Please find below our SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you!
Watch an interview of Stanford professor Dr. Jay Bhattacharya on Fox News discussing “What is the actual death rate of COVID-19”. Professor Bhattacharya teaches ECON 126: Economics of Health and Medical Care and has been working with antibody testing in Santa Clara among other projects related to COVID-19. He also wrote an op-ed for the WSJ a few weeks ago which you can check out here.
If you are looking to learn more about finance, but don’t know where to start, you should read Matt Levine’s Bloomberg Column titled “Money Stuff”. This column addresses topics that deal with banks, hedge funds, the Fed and more. At first, it may be difficult to understand, but I assure you after a few articles, you will understand it a lot more.
Check out a conversation titled “Has China Won?: The Chinese Challenge to American Primacy”conducted by The Chicago Council on Global Affairs. This discussion between Richard Fontaine, CEO, Center for a New American Security and Kishore Mahbubani, Distinguished Fellow, Asia Research Institute (moderated by Ivo H. Daalder) breaks down the geopolitical contest for technological, ideological, and military supremacy between China and the US that will define the 21st century.
If you want to learn one of the basics of Microfinance, check out this segment on Last Week Tonight with John Oliver which explains predatory lending and payday loans in a very understandable way.
Looking for some more challenging reading? Here is a Seeking Alpha article on position weighting in Wealth And Income Portfolios, QQQ, and SPY. There are summary statements along the way for clarity and a portfolio example.
As always please feel free to reach out if you have any questions, comments, or concerns. Enjoy the weekend!
Cheers,
The SWS Exec Team
Weekly Digest 4/10/20
Happy Friday, April 10th!
Hope you all had a great Week 1. This quarter, we are launching a Weekly Digest to provide you with an SWS-curated round-up of interesting articles, resources, information, and opportunities related to real world finance that may be useful to you! This week’s edition specifically focuses on the impact of COVID-19 on markets and the world economy.
Check out the Economy & Business section of CoviDB.org, the community-built, expert-curated, platform organizing resources across a comprehensive set of topics relating to the COVID-19 (coronavirus) pandemic for public use! [Your fellow co-CIO Lauren McLaughlin helped work on the team that put this project together over spring break :)]
This Harvard Business Review article on Understanding the Economic Shock of the Coronavirus uses “shock geometry” and comparisons to the 2008 Global Financial Crisis to investigate how the economic path of the COVID-19 shock fits into our understanding of “shock geometry,” so far.
This McKinsey & Co. briefing on COVID-19 Implications for Business goes through the epidemiological “swing factors” for the Coronavirus, as well as different scenarios regarding the impact that the pandemic (and corresponding public health and economic policies) could have on the U.S. GDP.
J.P. Morgan’s report, Assessing the Fallout from the Coronavirus Pandemic, examines what lies ahead for the markets as we head into a global recession, the series of policy responses around the globe and which sectors will be hit the hardest.
As countries are rapidly adjusting monetary policy to respond to the financial shocks caused by COVID-19, this resource provides an overview of the current interest rates around the world.
CNN has a really helpful Coronavirus-related live markets dashboard so that you can track the stocks, sectors and indicators most impacted by COVID-19, in real-time!
As always please feel free to reach out if you have any questions, comments, or concerns. Enjoy the weekend!
Cheers,
The SWS Exec Team