š¢ Apple, Bitcoin, Crypto, Oil, Iran and Stocks with Upside Potentialš„
In under 5 minutes, let us introduce you to the investing opportunities found in the latest market headlines. Grow your portfolio with knowledge.
Market Snapshot (Past Week)
S&P500:Ā $5,123.41 (-1.69%)
Dow Jones Industrial Average:Ā $37,983.24 (-2.40%)
Nasdaq Composite:Ā $16,175.09 (-0.68%)
Russell 2000:Ā $2,003.17 (-3.45%)
S&P/TSX Composite Index:Ā $21,899.99 (-1.64%)
PHLX Gold and Silver Sector:Ā Ā $136.11 (-1.28%)
Investing Unlocks: How to Capitalize on the Biggest Stories From The Last 7 Days
We decode the biggest stories from the last week to highlight how you can take advantage and unlock opportunities to grow your portfolio.
Financial markets are bracing for increased volatility in the coming week due to geopolitical tensions following Iran's unexpected strike on Israel. This incident adds to existing market pressures from persistent inflation and high interest rates. Investors are concerned about potential oil price surges and are turning to safe-haven assets like Treasuries, gold, and the U.S. dollar.
Letās get into itā¦
ļ£æ Apple AI
AAPL 0.00%ā Apple shares surged 4.3%, adding $112 billion in market value, following its announcement of an AI-driven overhaul of Mac computers, marking a new direction for growth. Despite trading below its peers and the Nasdaq 100 average, Apple's future prospects could be significantly influenced by extending AI technology into iPhones. Concurrently, iPhone shipments dropped 10% to 50.1 million units in the first quarter, falling short of analyst expectations and weakening sales in China, which enabled Samsung Electronics to regain the top position in the smartphone market. Apple stock investors should evaluate the long-term effects of these developments, stay updated on Appleās strategic initiatives, consider diversifying their investments, and remember that Apple's substantial cash reserves position it well to pursue mergers and acquisitions without needing to borrow, even during an economic downturn.
š¦ Economic Uncertainty
JPMorgan Chase JPM 0.00%ā predicts an "uncertain" year for the global economy and markets, citing persistent inflation and geopolitical tensions. In its first quarter results, JPMorgan reported a 6% profit increase, while Wells Fargo and Citigroup saw declines. JPMorgan CEO Jamie Dimon highlighted risks from geopolitical conflicts, high government spending, and inflation. Despite outperforming expectations, JPMorgan's stock fell after projecting lower future net interest income. Wells Fargo exceeded earnings forecasts despite a profit drop, and Citigroup's profits fell 27% amid restructuring.
Assessing the value for investors ā>
šØš³ Chinaās Trade Dip
China's exports fell by 7.5% in March, reversing gains from the early year and highlighting the country's patchy economic recovery from the pandemic. Imports also decreased by 1.9%. The downturn in exports is partly attributed to a high base from March 2023 and challenges in the property sector. Despite the decline, China posted a $58.55 billion trade surplus for March.
Why investors should pay attention ā>
š¤· Truth Turmoil
Donald Trump has encouraged his followers to support his social media app, Truth Social, while its parent company, Trump Media DJT 0.00%ā faces a share price decline. Trump linked the app to his "Make America Great Again" campaign in a post. Despite a recent stock price drop, Trump Media still boasts a market cap of over $4.2 billion. Trump owns a significant share of the company but is restricted from selling until a lockout period expires. Investors should exercise caution and avoid speculative investments in Trump Media, given its inflated valuation and the uncertainty surrounding its financial performance.
šŖØ Metal Price Surge
Aluminum and nickel prices surged on the London Metal Exchange following the imposition of U.S. and UK sanctions that banned new deliveries of Russian supplies. These sanctions are part of efforts to limit President Vladimir Putin's funding for his military activities. Investors should monitor the impact of the sanctions on aluminum and nickel prices, consider diversifying their portfolios to hedge against potential volatility, and stay updated on geopolitical developments that could affect commodity markets.
š« Cocoa Challenges
Cocoa prices continue rising, presenting challenges for Germany and Switzerland, renowned for their premium chocolate production and high per capita chocolate consumption. Investors should anticipate potential impacts on chocolate manufacturers and retailers, as rising cocoa prices may lead to increased production costs and potentially affect profit margins in the chocolate industry.
Hot Topics
Earnings season continues with key reports from Goldman Sachs GS 0.00%ā and Netflix NFLX 0.00%ā, the latter of which has seen significant recent price gains. In the UK, upcoming employment and inflation data will help shape expectations for a Bank of England rate cut.
M&A Chatter: Salesforce CRM 0.00%ā is reportedly in advanced talks to acquire Informatica, a provider of cloud-based data management services. The potential acquisition price is below Informatica's current market value. If completed, this deal would be Salesforce's largest since its $28 billion acquisition of Slack Technologies in 2020. This comes as Salesforce responds to investor pressure by implementing cost-cutting measures and adjusting its strategy amidst a surge in tech sector mergers and acquisitions.
Bitcoin Halving: The Bitcoin halving is an event that cuts the cryptocurrency's supply in half every four years, drawing increasing interest from Wall Street and retail investors alike. Recognized for creating scarcity and boosting Bitcoin's value, the 2024 halving is unique as it coincides with an all-time high in Bitcoin's price and heightened demand from Bitcoin ETFs. This combination could lead to a significant market impact, despite the trend of diminishing returns from previous halvings. As mining rewards decrease, the reduced Bitcoin supply is expected to drive prices up, influenced by strong demand and limited new issuance.
Crypto Custody Services: Germany's largest federal bank, Landesbank Baden-WĆ¼rttemberg, is set to launch cryptocurrency custody services in collaboration with Bitpanda exchange. The partnership aims to provide institutional and corporate clients with crypto custody starting in the second half of 2024, responding to increasing demand for digital assets among corporate customers. This move aligns with the growing involvement of German banks and asset managers in the crypto space, ahead of anticipated EU regulations.
Inflation: UK inflation appears to be declining faster than the US, potentially allowing the Bank of England to cut interest rates ahead of the US Federal Reserve. However, market sentiment remains cautious due to lingering concerns about inflationary pressures and the Fed's influence, despite forecasts suggesting a drop in UK inflation to below the 2% target in April.
Oil Market: Iran's attack on Israel had minimal impact on oil futures, with analysts suggesting that prices could surpass $100/barrel if tensions escalate further. While the situation underscores oil security importance, uncertainties remain about Israel's response and the broader geopolitical landscape. However, the lack of immediate escalation may alleviate market tensions, with attention turning to potential outcomes, including stricter sanctions on Iran or heightened oil security risks.
VTM Stock Picks
This week, VTM's stock screeners have identified the following promising stocks, with a focus on value, growth, and dividend potential.
š Value Stock Pick š
Coterra Energy Inc (NYSE: CTRA)
P/E Ratio: 13
PEG Ratio: N/A
Coterra Energy CTRA 0.00%ā is engaged in hydrocarbon exploration with operations in the Permian Basin, Marcellus Shale, and the Anadarko Basin. Coterra Energy's Q4 earnings call highlighted increased investment in the Anadarko Basin and a potential shift in Marcellus drilling. The company remains open to strategic mergers and acquisitions but emphasizes stringent evaluation criteria.
š Growth Stock Pick š
Ag Growth International Inc (TSX: AFN)
ROE: 21.7%
Mean Sales Growth Rolling 12 Months: 2.5%
Ag Growth International AGI 0.00%ā specializes in supplying farmers, processors, and commercial clients with essential equipment and tailored engineering solutions. Ag Growth International's 2024 guidance forecasts stable margins with an EBITDA of 6% and consistent revenue growth. The company targets organic growth investments in India, North America, and Brazil, with notable initiatives beginning in India by late 2024. Operational enhancements have increased margins by 200 basis points, though mix changes may impact 2024. The order book visibility has extended to five to seven months due to longer commercial projects.
š¦ Dividend Stock Pick š¦
Darden Restaurants, Inc. (NYSE: DRI)
Dividend Yield: 3.4%
Dividend Payout Ratio: 60.6%
Darden Restaurants DRI 0.00%ā stands out as a strong dividend stock for several reasons. Firstly, it showcases a solid financial performance with a return on equity (ROE) of 47.1%, indicating efficient management and profitability. The company's stable earnings are reflected in its positive earnings per share (EPS) growth of 10.6% year-over-year. Additionally, DRI maintains a consistent dividend payout with a dividend yield of 3.4% and a dividend payout ratio of 60.6%, which are attractive to investors seeking regular income.
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