UPDATE

🌤️ Happy Tuesday

Good morning. We wanted to officially wish you a Happy New Year and MLK Day yesterday. If you had the day off from work or school, we hope you could enjoy the long weekend and were able to stay warm with the arctic blast affecting the central US.

Read time: 4 minutes

📆 So What’s Our Resolution?

With a new year, people and companies like to shift gears and maybe focus on something different. While we’re not planning on fundamentally changing here at MARK IT., we do want to add some things to our newsletters:

• We recognize that following the stock market is core to our weekly newsletters, but there are many ways in which you practice personal finance. Picking individual stocks for companies you value and believe in may only be one part of your investing approach.

• That's why in recent months we have also started to focus on index investing and tracking the larger market. We've had MARK IT. Explained pieces on ETFs (Exchange Traded Funds) and mutual funds which are investment vehicles that usually sit in retirement accounts.

MARK IT. Subscribe Page

But when we talk about the larger economy, there is much more at play than the stock market and big banking actions. That’s why we’re looking to start incorporating news about GLOBAL supply chain issues like gas prices and international trade.

• From the beginning of this newsletter, we’ve had one lasting goal: help readers like you learn more about finance. From discounted cash flow to market cap, we believe we’ve inched closer to that goal, yet there’s much more to cover. 

• For example, understanding the reasons why gas is more expensive at the pump can help us all be more financially fluent. 

From gas prices to banking crises: MARK IT. provides weekly insights about what’s moving markets and global supply chains. If this sounds interesting to you and you have friends who might also benefit, please help us out by sharing this with them using the share buttons above. Thanks!

WEEK IN REVIEW

📈 Market Performance

S&P 500 (1-month), via Google Finance

We touched briefly in our last issue, Higher Highs From Here? about a concept called the Santa Claus rally. To summarize, this refers to a period of growth that consistently seems to happen around mid-December to early January when the S&P 500 and other markets start to rise. 

• Save for any sort of macro news that may weigh down market growth during this time of year, the Santa Claus rally is one of those periods in the year where investors almost expect some sort of positive movement. 

Looking at the 5-year S&P 500 chart below and tracing upwards, we see that in the month leading up to the new year, the market undergoes a routine rally:

S&P 500 (5-year), via Google Finance

2023 was perhaps one of the best-performing Santa Claus rallies in recent memory, and it started during a period when investors were worried that the economy would lunge into a recession after almost a year of high interest rates and less-than-ideal inflation. 

Nevertheless, the Fed’s signaling (also called forward guidance) that interest rates would hold for a while gave investors hope that economic growth could once again be in an optimal position once 2024 came around. 

From here on out, all anyone can do now is hypothesize about what will happen. Past trends in the market don’t equal future performance and 2024 has some of its challenges that the market must overcome to deliver the growth that many are after. 

Some of the big macro events to look out for this year:

• The 2024 Presidential election 

• Any potential regional escalation of the Israel-Palestine conflict

• New moves by Nato, Russia, or Ukraine in the ongoing war

We’ll be breaking down all headlines as they come.

🍎 Apple’s New Year’s Surprise

Apple Watch Ultra, via Trusted Reviews

Last issue, we also had a chance to touch on the Apple Watch/Masimo situation, which saw Apple’s latest watch models being pulled from shelves for potentially violating a patent on blood O₂ sensors that Masimo has held for some time now. 

• We noted how the Biden Administration had the power to step in and veto the decision to pull watches from shelves but a president dabbling in patent law is rare. As expected the White House was quiet on the issue.

In good news for Apple, a federal court temporarily blocked the ban which has now brought the watches back to market for the time being. Apple is using this time to increase availability pending reinstatement of the ban. (Source: CNN Business)

ENERGY & COMMODITIES

⛽️ Gas Prices on the Decline

Southwest Flight in a Snowstorm by Bill Wilt, via Flickr

AAA tracks national and state averages for gas prices and updates them daily. Per the tracker (and at the time of this issue) the national average sits at $3.068 per gallon. On a state basis, we see higher gas prices on the east and west coasts, with California being the highest at $4.569 per gallon.

• Moving inwards from both coasts, we see lowering gas prices with Texas and a few midwest states in the lowest bracket. The good news in all of this is that the current average is down from the week-ago average of $3.077 and significantly lower than the year-ago average of $3.300. (Note all prices are for a gallon of regular-grade fuel).

Gas Per Gallon Chart, via AAA

Declining gas prices, especially in November and December, were being attributed to a warmer winter in many places. Texas and much of the south were still reporting temperatures into the 90s even as late as November. However, this trend might just be over as the arctic blast will increase demand for heating.

• This can put upward pressure on the larger energy market in the US which can be translated to the pump, despite the forms of energy not being the same.

• Per the NYT, one of the main indicators of falling gas prices is falling oil prices.

BRAIN TEASERS

📝 Crossword

ONE MORE THING

🤝 Keep in Touch

• For general announcements or updates on what we're working on, follow Abbas on Twitter 👉 @RealAbbasAkhtar

• Also, we want to hear your feedback! Send any comments or suggestions to [email protected]

Thanks again for reading!

Nothing MARK IT. publishes constitutes professional and/or financial advice, nor does any information published by MARK IT. constitute a comprehensive or complete statement of the matters discussed.