Hello all,
Hope you’re all having a great Sunday.
Unfortunately last night I had my car windows smashed. There was nothing to take in my car besides $15 dollars in the middle console, but I’ve spent the majority of this morning speaking to claims adjustors and body shops. Luckily, I have full coverage auto insurance and my deductible is $0 dollars for glass repair - it’s just an annoying situation to say the least. In times like these I like to think about how if this is my biggest problem - then life is still pretty alright. Today’s Sunday Primer is excellent IMO, so I hope you enjoy it and get caught up on the news. If you’re rooting for a football team today, may the odds ever be in your favor.
On Wednesday, we opened a free Discord community where you can gather, talk personal finance / investing / financial news and ask me questions which I will personally get back to you on. This is a great opportunity if you have personal finance or investing questions you want my opinion on. We have over 500+ strong in there and so come join us!
👾 Join Here: https://discord.gg/udDDPRrd74 👾
— Humphrey, Tim & Rickie
Market Report
Inflation Accelerates But Outlook Leaves Room for Optimism
In December 2023, U.S. inflation accelerated, with CPI rising by 0.3% monthly and 3.4% annually, surpassing estimates. Core CPI, excluding volatile food and energy, also increased by 0.3% for the month and 3.9% year-over-year.
A significant factor was the rise in shelter costs, contributing to over half of the core CPI increase.
Despite this, real wages adjusted for inflation showed modest gains.
The data indicates a challenging path for the Federal Reserve in achieving its inflation target and is further complicated by potential disruptions in shipping and geopolitical tensions.
However, there are signs of inflation expectations stabilizing, with a possibility of easing housing costs contributing to a gradual return to the Fed's 2% target.
Banks Report Mixed Earnings as JPMorgan Sets Profit Record
In 2023, JPMorgan recorded the highest annual profit ever for a U.S. bank, totaling $49.6 billion, a 32% increase from 2022.
Growth was partly attributed to the bank's acquisition of First Republic, which contributed $4.1 billion.
Despite the success, CEO Jamie Dimon expressed caution about the future, citing potential challenges such as persistent inflation, higher interest rates, and geopolitical risks, including ongoing conflicts in Ukraine and the Middle East, and the impact of central banks' policy shifts.
Citigroup reported a significant $1.8 billion loss for the fourth quarter of 2023, primarily due to large charges related to overseas risks, the regional banking crisis, and some corporate restructuring. The charges impacted earnings by $4.66 billion.
Meanwhile, Wells Fargo also faced higher-than-expected costs due to severance charges and contributions to the FDIC's fund, spending $15.8 billion in the quarter.
Both banks are under pressure to improve performance, with Citigroup planning to cut 20,000 jobs and Wells Fargo aiming to reduce costs further while navigating challenges in its commercial real estate business.
Bank of America reported a significant drop in net income for the fourth quarter, falling to $3.1 billion from $7.1 billion a year earlier.
The decline was largely due a special $2.1 billion fee imposed by the FDIC following the failures of Silicon Valley Bank and Signature Bank.
The bank also experienced a decrease in net interest income due to higher deposit costs and lower deposit balances, despite expectations of benefiting from higher interest rates.
Historic Launch of Bitcoin Spot ETFs This Past Week
The launch of the first U.S. ETFs investing directly in Bitcoin marked a significant milestone in the cryptocurrency sector, with nearly a dozen funds, including those from BlackRock and Fidelity, starting strongly.
The ETFs witnessed record-breaking trading activity on their debut day, with over $4.6 billion in shares traded.
Despite the strong start, the long-term success of these ETFs hinges on accessibility and investor acceptance. The launch also sparked a fee war among issuers, with many offering low or waived fees to attract investors.
Forecast Ahead
Big Number: $128 billion
Nvidia has already experienced an incredible start to the year, with its market cap rising by $128 billion, a 10% rise, marking its strongest beginning of any year in terms of value gain.
Sell-side analysts remain optimistic, projecting a target price indicating a 19% upside, buoyed by the company's dominance in its market, strong customer relationships, and rapid growth.
Thank you