Top 5 financial posts of the 4/2024 trading week

In this series, I’ve been bringing out 5 financial posts of the week with the largest number of interactions from my feed on the X platform. I am aware that not everybody uses X regularly so I thought it could provide some value to your analysis, and investment process.

1. Trading week recap. The S&P 500 again ended the week near its all-time record driven by the big Tech. Notably, Tesla dropped by 14% following disappointing fourth-quarter earnings results and dismal guidance. Going forward, we have other important technology companies reporting next week accounting for 25% of the S&P 500 market capitalization: Apple, Amazon, Advanced Micro Devices, Microsoft, Google, and Meta. As it was not enough, the Federal Reserve is holding its first meeting this year. The US central bank is expected to keep its interest rates unchanged with a 97% probability priced in by the market. Lastly, on Friday US Bureau of Labor Statistics is going to release non-farm payrolls and unemployment data for January.

2. Bitcoin had a pretty rough 2 weeks after the ETFs approval, even briefly falling below $40,000 this week. On Friday, however, the sentiment has changed in the short-term, and currently, the largest cryptocurrency is hovering near $42,000. Is the beginning of the next bear market in Bitcoin? Time will show but if history is any guide then similar market events such as launching new market products related to Bitcoin used to be peaks in the past.

1. Quick update to the Russell 2000 as it could not be able to break above 2,000 points four days in a row. It looks like the Federal Reserve interest rate decision and Chair Powell’s conference should show further direction. Below 2,000, it does not look bullish.

2. It’s been a lost decade for Chinese stocks as over the last 10 years there was a negative return when nominated in US dollars. Furthermore, as you can see from the below post the market value of the US stock market is now $38 trillion larger than the combined China and Hong Kong capitalization. China looks pretty cheap right now but it is still very risky and might be going through a secular bear market. A secular bear market can last anywhere from 10 to 20 years and is characterized by below-average returns on a sustained basis according to the Investopedia definition.

1. Lastly, time to bring out Netflix’s Q4 of 2023 earnings results in which the streaming service provider surprised the market expectations to the upside. Despite the company missing its Q4 earnings per share (EPS), the company beat streaming paid memberships by more than 4 million: 260.28M reported, +13% growth year over year versus the consensus-estimated number of 256.11M memberships. Going forward, Netflix expects Q1 2024 EPS of $4.49 versus the consensus-estimated $4.09, adding to the positive sentiment.

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