Morning Market Preview for September 19th, 2024

We are thrilled to announce that Arena Investor has partnered with Altruist.com, an industry-leading custodian designed for the modern era, to elevate the investment management services we offer to our clients. Altruist is recognized for its advanced technology, intuitive design, and innovative custodial solutions, and trustworthy safe-keeping of people’s assets, making it the perfect partner for delivering a seamless and efficient investment experience for Arena Investor Investment Management clients.

‍Why Altruist.com?

Altruist has set a new standard in the custodial space with its user-friendly platform that is specifically tailored for the needs of today’s investors. Its modern, streamlined interface simplifies the process of reviewing your investments, providing you with clear, real-time insights into your portfolio, and beautiful performance reports. By integrating Altruist into our investment management services, Arena Investor is enhancing your ability to monitor your investments with greater transparency and ease.

‍Enhanced Investment Management Experience

The integration of Altruist brings a superior level of convenience to your investment management experience. The platform’s sleek design allows you to effortlessly navigate through your investment data, track performance, and stay informed about your portfolios. With Altruist, Arena Investor can offer a more engaging and informative investment management service, ensuring that you have all the tools you need to make informed decisions and stay on track with your financial goals.

‍Value for Investment Management Clients

As an investment management client, you will benefit from Altruist’s comprehensive and real-time data, which provides a clearer picture of how your investments are performing. The platform’s robust and ever-growing tools and insights enable us to offer precise and personalized investment strategies, suitable to your unique financial objectives. Whether you’re focused on building wealth, saving for retirement, or achieving long-term growth, Altruist’s technology enhances our ability to manage your assets effectively and align them with your broader financial goals.

Features such as tax-loss harvesting and rebalancing are key factors in our decision to integrate with Betterment.

The like-minded culture of providing ever-improving and ever-increasing value to customers and clients that Altruist uses is a beautiful match for Arena Investor’s same approach.

‍Looking Ahead

At Arena Investor, we are always striving to improve the services we provide and the value we deliver to our clients. Our partnership with Altruist is a significant step forward in this mission, allowing us to offer a more modern, efficient, and client-centric investment management experience. We believe that this collaboration will greatly enhance your ability to manage and grow your investments, providing you with the support and resources you need to achieve your financial aspirations.

We are excited about the benefits this partnership will bring and look forward to helping you navigate your investment journey with greater confidence and clarity. If you have any questions about how Altruist will enhance your experience with Arena Investor, please feel free to reach out to us.

Truly,
The Arena Investor Team

‍Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

Good morning, Heroes!

Here’s your Morning Market Preview for September 3, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports:

• ISM Manufacturing PMI for August is due, which could influence market sentiment regarding manufacturing activity. A higher than expected PMI might bolster confidence in economic recovery.

5 Key Earnings Reports Today:

• Broadcom (AVGO) - Broadcom is expected to report its fiscal third-quarter results after the market closes. Analysts are looking forward to this tech giant's performance, especially given its significant acquisitions and the ongoing demand for its products in various technology sectors.
  
  
• Dick's Sporting Goods (DKS) - Ahead of Wednesday's open, Dick's Sporting Goods will release its second-quarter results. The retail sector's health, particularly in sporting goods amidst consumer spending trends, makes this report crucial for insights into consumer behavior.
  
  
• DocuSign (DOCU) - DocuSign's earnings are anticipated after the market close. Given the shift towards digital signatures and electronic document management, its performance could reflect broader trends in digital transformation and remote work environments.
  
  
• NIO Inc. (NIO) - NIO, a key player in the electric vehicle market, especially in China, will report its earnings. The EV sector's volatility and NIO's strategic moves in a competitive market make this report significant for investors tracking the automotive industry's shift towards electric.
  
  
• Zscaler (ZS) - Zscaler, known for its cloud security solutions, will report its earnings. With cybersecurity being a top priority for businesses globally, Zscaler's performance could influence investor sentiment towards cloud and security stocks.

The Fed:

• No direct actions or statements from the Federal Reserve are scheduled for tomorrow, but market participants will be analyzing recent comments from Fed Chair Powell, particularly his stance on maintaining economic strength.

Stocks:

• Pre-market futures suggest a mild bearish sentiment, with S&P 500 E-Mini futures slightly down. Investors might be cautious, awaiting economic data and earnings reactions.

Bonds:

• The 10-Year T-Note futures indicate a slight decrease, signaling potential increased yields, which could affect borrowing costs across various sectors.

Crypto:

• Bitcoin hovers around $58,500, facing a bearish September trend. Regulatory developments include SEC warnings to FTX and Nasdaq's interest in Bitcoin options. Ethereum experiences its worst month in years, while crypto funds see outflows. Global markets show mixed sentiments with Japan supporting Web3 and Brazil's crypto moves.

Gold:

• Gold prices are noted at $2,535, with stability in crude oil possibly influencing investor decisions towards safe-haven assets like gold.

Real Estate:

• No specific real estate market updates for tomorrow, but general economic health indicators like manufacturing PMI could indirectly affect real estate through interest rate expectations.

Geopolitical Aspects:

• Geopolitical tensions, particularly the Iran-Israel escalation and ongoing Ukraine conflict, have heightened market volatility. Investors are pulling back from risky assets, with oil prices reacting to potential supply disruptions. The U.S.-China relations add to the uncertainty, influencing global trade and investment flows, while elections worldwide could sway economic policies and market sentiments.

Worldwide Market News:

• Asian markets opened mixed, which could influence U.S. markets as investors gauge global economic health. Positive cues from global markets might support a cautious optimism in U.S. trading.

Understanding these concepts helps you see why markets move the way they do, turning the financial news from confusing noise into a story about the world's economic pulse.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

Note: Growth in a national economy is measured in Gross Domestic Product (GDP). If GDP goes up 3%, then the economy grew 3%. When GDP is adjusted for the effects of inflation it is called Real GDP. So, Real GDP is the better measure of whether or not a country's economy is growing.

It wasn’t going well in Europe for a while

In Europe, there was little to no quality of life improvements economically for the general population for hundreds of years between the collapse of the Roman Empire and the formation of capitalist nations in the 1800s. 

Since capitalism and the Industrial Revolution, a 1-2% Real GDP growth rate has occurred in most countries. But, before the formation of capitalist nations institutions of many types were formed, which were essential in developing and sustaining market economies. For instance, printing and the press became an institution after Gutenberg's press was invented; this allowed the promotion of ideas further and more consistently than by voice alone.

The spreading of good ideas and best practices was critical to the world economy.

Real GDP growth enables increased standards of living for masses of people 

Note: This has historically been true for those individuals and states (countries) that have been able to fully participate.

To determine a country’s standard of living, Real GDP is divided by the number of people in a country to get Real GDP/person. There is an index of goods and services used to calculate Real GDP, and the population of a nation is determined during the census by counting everyone. 

There are other economic ways to measure standard of living too, but they correlate highly (match closely) with Real GDP/person, so economists continue to use Real GDP and make decisions with it. 

Since Real GDP/person is good and useful, but not perfect, it is important to add in additional measurements to determine the healthiness and desirability of an economy. The number of measurements is really endless. Perhaps we will write more about them in the future.

There are economic trade-offs

In economics, there are trade-offs like there are in health care. For instance, there are “side effects” that are observed in economics. 

Healthy economies are not simple. But remember, it is within the complexities and inconsistencies that opportunities live — so if you want investment opportunities you need an environment you can trust (the market goes up over time), but is also dynamic (but it is an up-and-down climb along the way).

What is Nominal GDP?

Aside from Real GDP economists also use Nominal GDP, which is a measure of the dollar value of goods (such as iPhones) and services (such as Apple Music) sold. 

Nominal GDP does not consider inflation. If you want inflation considered you use Real GDP.

Note: When you see or hear “Real” used in economic terms it means that inflation has been considered in that number or statistic.

So how do economists do their work? 

One way they do their work is by measuring GDP in two consecutive years. The first year they consider “a basket of items” or “a basket of goods” (maybe it’s milk, eggs, coffee, rent, sweaters, etc.) and add them up. This basket helps economists calculate the CPI (Consumer Price Index). This is then called the base year.

The next year they evaluate a basket of goods and see if it costs more or less. If it costs more then there is inflation. (If it costs less then there is deflation.) If it costs 2% more then there is 2% inflation. So when economists measure current prices it is called Nominal GDP, and when they measure versus base year prices it is called Real GDP since it considers inflation. This process can get complicated, but those are the basics.

Economists don’t stop there

They don’t just want to know if we had a good year of growth, and an increase in standard of living. They want to compare it against many countries and across time. After all, if you had 2% growth and Mantanistan (a made up country) had 5% growth, you should evaluate why. You may have felt good about your 2% until you realized you missed a lot of growth that others were experiencing. This is a major concept to understand as an investor:

Putting it into perspective 

It is not simply about if you are up or down, but moreso it’s about whether or not you maximize your gains without exceeding your comfort level.

Similarly, economists look around to see if the economy maximized its performance relative. In the US, it is also important to do so because the US economy is so dynamic, global, and intertwined that looking around helps you see opportunity or avoid economic problems.

Measuring GDP across countries

Measuring GDP across time is done by using Real GDP, as mentioned. Measuring GDP across countries is done by comparing Real GDPs with each other. To do so you would need to determine if that other country is presenting an accurate Real GDP. Remember, there is a basket of items to be measured.

When looking at data from another country are there items that were not counted in the base year, but then counted in the next year? That could present the world with a Real GDP that is higher than it really is. For this reason and others, investors get shy about investing around the world, and if they do they set limits on how much of their money they will invest abroad. That’s wise. 

Investors (and economists) need accurate data

If they feel like the data is questionable, they invest less in those countries – or they’d be wise to use much more caution. Heck, there are investors that only invest in one industry! Maybe they are experts in that industry and only feel comfortable investing there.

With standard of living the increases compound

Even small differences in Real GDP make a big difference in standards of living because the increased standards of living compound. So it turns into gains on top of gains on top of gains. Countries that have even 5% Real GDP growth will double the size of their economy in 14 years. Wow. Now investors start looking abroad again. Ensure the associated risk (Is their data accurate?) versus reward (Their economy will be 2x’d in just 14 years!) is suitable for your financial situation though.

The Penn World Tables

economically.

Historically, there have been shifts in which countries and regions have had the biggest and most powerful economies. After the fall of the Roman Empire, China became the economic leader; during the 1600s Europe transitioned to becoming the economic leader; during the 1800s the UK became the economic leader; and during the 1900s the US became the economic leader. Nowadays, the US, China, and the EU are the 3 biggest economies, but India is set to pass the EU by 2030.

If you go abroad as an investor, do so in a suitable way for your financial situation – and perhaps keep India in view as you look.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.