…and SBF's day of reckoning
| J. Powell, probably: "Why you so obsessed with me?" (Liu Jie/Getty Images) | |
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Last Week's Market Moves | | Dow Jones
39,476 (+1.97%) | S&P 500
5,234 (+2.29%) | Nasdaq
16,429 (+2.85%) | Bitcoin
$62,862 (-9.56%) |
| Dow Jones
39,476 (+1.97%) | S&P 500
5,234 (+2.29%) | Nasdaq
16,429 (+2.85%) | Bitcoin
$62,862 (-9.56%) |
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Hey Snackers, The new "hi, Barbie": hi, Sim. Margot Robbie's production company is set to produce a movie based on "The Sims," the game where characters speak Simlish, the Grim Reaper is real, and missing pool ladders are extremely dangerous. Stocks hit record highs last week. The S&P 500 and the Dow had their best weekly gains of the year so far as investors welcomed Fed rate-cut comments. Nvidia's AI conference (aka "AI Woodstock") boosted tech optimism, with the Nasdaq closing at a record on Friday. | Btw... Do you want to start getting Snacks daily? Or prefer to unsubscribe? Manage your subscription preferences here. | |
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Fed officials expect three rate cuts this year, and markets are pre-popping champagne | Fed up… with high interest rates. Rate cuts are investors' Roman Empire (always thinkin' about 'em). Last week the Fed kept its federal-funds rate target untouched at a range of 5.25% to 5.5% (FYI: the highest level in 20+ years). The federal-funds rate — the rate at which banks borrow and lend extra cash to each other overnight to meet their legal reserve requirement — isn't particularly sexy. But investors are obsessed with it. The Fed's high rate has led to elevated interest rates on credit cards, bonds, mortgages, and savings accounts. It can also affect stocks. Rates are headed south: Despite this month's hotter-than-expected inflation #s, last week most Fed officials maintained their forecast of three rate cuts this year. J. Powell conference > "Love is Blind" reunion: Investors dissected every word of the Fed Chair's Wednesday speech, hoping to glean when cuts will come. J. Pow said the Fed still needs more proof of inflation's continuing decline in order to start trimming. Hot cut summer? After last week's comments from Fed officials, traders' bets on a June rate cut rose to odds of 75%, up from 50%.
Why everyone's talkin' rates… Low rates (which make borrowing cheaper) tend to stimulate the economy and investment. High rates have the opposite effect, which is exactly what the Fed's trying to achieve now to cool inflation. In March 2020, the US central bank slashed rates to near zero to juice a pandemic-stalled economy. That, plus trillions in gov't stimulus, worked well — perhaps too well (see: sky-high inflation). Then the Fed started hiking rates in 2022, and US stocks fell into a bear market for most of that year. Markets don't like high rates: When rates rise, so do potential returns from lower-risk investments (think: US gov't bonds, savings accounts). That makes riskier investments like stocks less attractive in comparison, and investors demand higher stock returns to justify the shift.
|  | THE TAKEAWAY |
| Anticipation can be better than payoff… The stock market is forward-looking, and company valuations are tied to growth expectations. High rates aren't great for growth. Now that investors see cuts ahead, stocks have rallied on those expectations, with the S&P 500 notching its 20th record close of the year last week. Still, it could be a long time before the fed funds rate drops to prepandemic levels of around 2%. The Fed isn't expected to make major cuts this year. | |
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| | The biggest disruption to $martphones in 15 years 🤳🏼 | 🌟 Here's a novel concept… Turn your phone from a cost to an income source. Enter Mode's Pre-IPO Offering: the latest in a series of impressive raises among smartphone innovators, likely spurred by Apple's recent $3T valuation. 🦄 Beast Mode… Mode Mobile reported 32,481%* revenue growth rate from 2019 to 2022, landing them at #1 in software on the 2023 Deloitte Technology Fast 500 list. Their debut release, "EarnPhone," is a budget smartphone that has earned consumers globally $250M+ for activities like listening to music, playing games, and even charging their devices. 20,000+ shareholders have participated in sold-out allocations — but investors can still get in before Mode's pre-IPO raise closes in 3 days – and even lock in 160% bonus shares for doing so! 📈 Get up to 160% Bonus Shares Before March 28th** *Source: Deloitte. |
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| Shuttin' the door… on crypto winter's darkest days. Sam Bankman-Fried's day of reckoning arrives this week. The founder of FTX, the crypto exchange that imploded in late 2022, is set to be sentenced Thursday by a federal judge. The former billionaire was convicted of stealing $8B in customer funds, and prosecutors have asked for a 40- to 50-year sentence (SBF's lawyer called that "barbaric"). Meanwhile, crypto's thriving with bitcoin hitting an all-time high this month. SBF's sentencing could bring (some) closure as investors bask in crypto spring. Revenge cruise szn… Carnival reports on Wednesday as more vacationers hit the high seas. One of the world's largest cruise companies, Carnival sailed past earnings and sales expectations in Q4 as scorching demand allowed it to raise prices. Last month Norwegian Cruise reported its first profitable year since 2019, and Royal Caribbean touted record annual bookings. Thanks to revenge travel and the rise of remote work, nearly 36M passengers will set sail this year, up from 31M last year. Carnival's expected to report double-digit sales growth. | |
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| Mifepristone takes the stand… The US Supreme Court's scheduled tomorrow to hear its first abortion-related case since it struck down Roe v. Wade. Up for debate: proposed restrictions on the abortion pill mifepristone, including that it only be prescribed in person. 63% of US abortions last year were through medication, often prescribed via telemedicine. CVS and Walgreens started supplying mifepristone this month in states where it's legal. Related: the first daily OTC birth control pill went on sale last week, and experts think it may also face restrictions. The AI "Bluey" grindset… YouTube last week updated its AI disclosure rules, requiring genAI content to be labeled. The big exception: animation, leaving the (purportedly) lucrative hustle of AI-generated kids' cartoons free to grow undisclosed. YouTube holds a commanding lead over Netflix for kids' content, and some parents worry their kids are consuming unvetted AI slop. YouTube isn't new to kids' content blindspots: a BBC investigation last year found 50+ kid-focused channels promoting pseudoscience, conspiracy theories, and other misinfo. | |
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What else we're Snackin' | OzempOff: Americans are looking to ditch pricey weight-loss drugs like Wegovy, which can cost $1K/month. Telehealth companies are charging hundreds/month to help folks stay trim while weaning themselves off the meds. KillBill: France's lower parliament house approved a "kill bill" banning advertisements for ultra-fast fashion brands like Shein and Temu, aiming to combat an industry where over half of all clothes end up as waste. Expat: Last year, 120K millionaires moved countries (double the # from a decade ago). The US, home to 37% of millionaires, had the highest rate of alt-residence seekers as some sought to ease fears over political turmoil and wealth taxes.
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Snack Fact Of the Day | Americans will place an estimated $2.7B in legal bets on March Madness tourneys | | |
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This Week | Monday: Earnings expected from BuzzFeed Tuesday: Earnings expected from McCormick and GameStop Wednesday: Earnings expected from Carnival, Cintas, Paychex, Restoration Hardware, and Rumble Thursday: Sam Bankman-Fried's sentencing. Major League Baseball's Opening Day. Earnings expected from Hut 8, Planet Labs, and Walgreens Friday: US stock market closed for Good Friday. New York International Auto Show. Fed Chair Jerome Powell speaks
Authors of this Snacks own bitcoin and shares of: Alphabet, Carnival Cruise Line, CVS, Norwegian Cruise Line, Nvidia, and Planet Labs **Mode Mobile disclosure: Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile's Regulation D/S Offering. Equity crowdfunding investments in private placements, and start-up investments in particular, are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest in start-ups. Companies seeking startup investment through equity crowdfunding tend to be in earlier stages of development and their business model, products and services may not yet be fully developed, operational or tested in the public marketplace. There is no guarantee that the stated valuation and other terms are accurate or in agreement with the market or industry valuations. Further, investors may receive illiquid and/or restricted stock that may be subject to holding period requirements and/or liquidity concerns. DealMaker Securities LLC, a registered broker-dealer, and member of FINRA | SIPC, located at 105 Maxess Road, Suite 124, Melville, NY 11747, is the Intermediary for this offering and is not an affiliate of or connected with the Issuer. Please check our background on FINRA's BrokerCheck. ***TurboTax disclosure: As the leader in tax preparation, more federal returns are prepared with TurboTax than any other tax preparation provider. Visit http://turbotax.intuit.com/lp/yoy/guarantees.jsp for TurboTax product guarantees and other important information. Limited time offer for TurboTax 2023. Discount applies to TurboTax federal products only. Actual prices are determined at the time of print or e-file and are subject to change without notice. Terms, conditions, features, availability, pricing, fees, service and support options subject to change without notice. Intuit, TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. | |
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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate... See more | |
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