Mar 26 min
by Ben Weiss, for the Call to Leap Team
Happy first day of March! Also, apparently, Happy National Peanut Butter Lover's Day... because why not? More significantly though, today is National Day of Unplugging, so I plan to finish writing to you all, having a nice family dinner, and disconnecting from my devices (as much as possible) for the day. Get out and say hi to nature, right? #HealthyHeadspace
But before I wish this wonderful community a fun and safe weekend, let's take a look at what happened this week and what's coming up...
The market this week
The market had another positive-trending week, capping off its 4th consecutive winning month dating back to 2023. While ups and downs are part of healthy market cycles, I'm certainly glad to see this continued bull run through the post-holiday winter months—I'm happy to dig deeper for fresh positive GIFs for these articles each week 😉
By the numbers, the S&P 500 (+0.87%), Dow Jones (-0.15%), Nasdaq (+1.63%), Russell 2000 (+3.15%) finished broadly positive for the week. We definitely saw more green than red this week. The Dow Jones is approaching the $40,000 mark for the first time. While this level is largely arbitrary, it could serve as a psychological target or barrier for investors.
The Magnificent 7 stocks were mixed, as AAPL and GOOGL appear to be lagging behind the broader market's advance. AMD wasn't about to let anyone keep them down, however. Its stock surged an additional 11% this week after a banner week just last week. Just within the past month, AMD climbed 22%, not to be outdone by NVDA climbing 34%. The market just can't seem to get enough of the anticipated opportunity from artificial intelligence (AI). Personally, AMD and NVDA are a bit too hot to handle to trade as single stocks, but investing in the Nasdaq index ETF "QQQ" has allowed me to enjoy the companies' successes from a safer, more diversified position.
Historically, the market on average has posted lower returns and can sometimes "take a break" in the first few months of the new year. The market again bucked that trend this week, so we'll see if the Nasdaq and S&P 500 can keep the momentum heading into next week and beyond. I wouldn't be too surprised to see investors take a breather at some point from the solid bullish run we've been seeing, at least in the short term, but we haven't seen that play out just yet.
In the news
We received February's personal consumption expenditure price index data this week from the US Bureau of Economic Analysis, which tells us how much American consumers paid for goods and services and serves as a preferred inflation indicator for the Fed. Data showed prices increased 0.4% in February and 2.8% year-over-year, which matched expectations. Personal income also rose 1%, far exceeding expectations of 0.3%. From a macro perspective, consumer prices continue to rise modestly, but wages grew faster last month. Who doesn't want to be paid more? The market seemed to breathe a sigh of relief and reacted positively to the news, driving the major indices higher in the second half of the week.
Buying in bulk...While we've taken a pause from the crush of "earnings season", next week we will receive earnings results popular wholesaler Costco (COST). The stock has been on a tear ever since October last year, advancing 40% to an all-time high around $750. As an owner of a few shares of COST, I'll surely be paying attention Thursday afternoon.
A quick bit about Bitcoin...In case you missed it, Bitcoin saw explosive growth in February climbing nearly 45% to over $62,000. Bitcoin and cryptocurrency (or "crypto") can be a very polarizing topic in the finance world, including here at CTL. But just because something is polarizing (and highly speculative) doesn't mean it's not worth talking about.
Yes, I own Bitcoin and Etherium, I admit it! But I want to offer some context. My crypto holdings represent less than 0.1% of my total investment portfolio—a very tiny sliver of the pie. I decided a few years ago to open a small position that I both plan to hold forever but also that I'm ok with losing significant or all of its value. I view this asset as purely speculative—honestly, a gamble—but also an opportunity to dip a toe in the crypto world for minimal exposure. Finally, I want to add that Steve is openly not an advocate of cryptocurrencies, meme stocks, penny stocks, and other high-risk investments. I just want to offer my own perspective!
Speaking of Bitcoin, the US Securities & Exchange Commission (SEC) recently approved for the first time the trading of "spot Bitcoin ETFs"—funds that actually buy and sell physical Bitcoin currency, rather than ETFs that merely invest secondhand in companies involved in the crypto sector (think: Robinhood, Coinbase, PayPal). These spot ETFs facilitate an easier way to invest in Bitcoin and open buying and selling to a broader pool of investors, as not everyone is comfortable using cryptocurrency platforms. Personally, I find this development fascinating from a macroeconomic view, but it doesn't make Bitcoin any less risky or change my humble plan one bit(coin)!
For any curious nerds out there like me, you can learn more about spot Bitcoin ETFs here 🤓
SPY
On the daily charts for both SPY and QQQ here, you'll see two sets of channel lines (orange and green). In both cases, I see a greater macro upward trend dating back to early 2023, however I continue to observe a secondary, steeper breakout trend which the indices seem to be following. The skinnier, steeper green channels appear to be narrowing or "consolidating" so I'll be watching to see if the indices breakout in either direction from the channel lines.
Do you agree with how I drew my lines or do you see it differently? Let's chat on Discord!
QQQ
You got this, everyone! Stay disciplined, pay yourself first, and always invest in your greatest asset—yourself. 🙌🏻
-Ben and Steve
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