Weekend Stock Market Updates - 3|8|26

Welcome to my weekend updates

Congratulations to Indian Cricket team for winning the T-20 World Cup consecutively!!

Last week the US stock market was extremely volatile due to Iran war, weak jobs report and more importantly oil surged 35% for the week. This was the biggest gain in oil futures trading history dating back to 1983. The oil price currently traded at $91.27. It can be noted that oil price has surged almost 50% in last one month. This has panicked the Wall Street because higher the oil prices, higher would be the inflation because price of goods and commodities may go up due to higher transportation cost. Furthermore, FED can't cut interest rate on higher inflationary environment. The Gold and Silver prices surged too. The US, Israel and Iran war continues for 9th days and no sign of slowing down. The stock market goes one step forward and 2-3 steps backward. At this time of writing, the Oil futures are up another 20% to $110 a barrel, meaning up more than 70% in last one month. If someone has a Tesla or any other TVs, it's time to make use of that, not gas car. Nasdaq futures are down 1.67%. This is chaos and all fear! Now let's se the indexes for last week:

• Dow Jones: Down 3% (closed at 47,502, -1,476 points )
• S&P 500: Down 2% (closed at 6,740, -139 points )
• Nasdaq: Down 1.2% (closed at 22,388, -281 points )

Economic News Last Week
  • On Wednesday ADP reported that, Companies added 63,000 workers in February vs. 48,000 expected.
  • On Friday, the Nonfarm Payrolls for February came much worst than expected, -92K vs. expected +59K 
  • Unemployment Rate (Feb): Actual 4.4% vs. Expected 4.3% (higher)
  • Average Hourly Earnings MoM (Feb): Actual 0.4% vs. Expected 0.3%
  • Retail Sales MoM (Jan): Actual -0.2% vs. Expected -0.3% to 0% (slightly better)
Broadcom (AVGO) Earnings: earnings per share (EPS) of $2.05 on revenue of $19.31 billion. That topped analysts' estimated EPS of $2.03 and revenue of $19.26 billion. For Q2, Broadcom said it sees revenue of about $22 billion. Wall Street was expecting $20.5 billion.
The company also approved a new $10 billion share buyback.

Economic Report this week
WED, 3/11: Consumer Price Index (CPI)
FRI, 3/13: Personal Consumption Expenditure (PCE), Q4 GDP (1st revision)

Other News
Hims and Hers (HIMS) was up about 40% on after hours on Friday after a report that Novo Nordisk (NVO) will sell its obesity drugs via the online pharmacy following a legal fight. Per Bloomberg, the companies are expected to announce their partnership as soon as Monday.

Equity to Watch
HIMS, GLD, SLV, TSLA, NVDA, SOXL, Oil stocks

What to expect?
Overall, the market sentiment is negative due to the current Geopolitical situation,  surging oil prices, rotation from tech stocks, uptick in inflation. There is no catalyst in the market for upward movement. Basically, it's a terrible environment for the stock market, particularly for tech investors. Let's see how the CPI/Inflation report on Wednesday goes. I think the oil price impact will come in the next CPI, not in the current report. So, I expect that we may see higher inflation next month. Sometimes fear can create opportunities, but volatility is expected to continue in the short term. Hence, I think it's better to sit on the sidelines and wait for the dust to settle. We may worry but can't do too much in such an environment. Oil and defense stock may be good but most of them do not seem to be cheap. I think Gold and Silver ETF may be still good, though not to overdo on anything in this type of uncertain market. I guess it's better to stay hold and stay patient, not panic!

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