📈 Financial Insights: Bitcoin, BTFP, Gold, Private Credit & Stock Info💡

This edition of Investing Intel highlights this week's top investing stories, spotlighting everything from regulatory shifts to global market trends.

Mar 11, 2024

Market Snapshot (Past Week)

S&P500: $5,123.69 (-0.14%)
Dow Jones Industrial Average: $38,722.69 (-0.63%)
Nasdaq Composite: $16,085.11 (-1.10%)
Russell 2000: $2,082.71 (-0.24%)
S&P/TSX Composite Index: $21,737.53 (+0.89%)
PHLX Gold and Silver Sector: $117.36 (+6.70%)

The Biggest Investing Stories From the Last 7 Days

Explore the latest investing highlights, covering top financial stories from the past week.

🟡 SEC Delays Bitcoin Options

The US Securities and Exchange Commission (SEC) has extended the timeline for deciding on approving the trading of options on Bitcoin ETFs.

SEC Delays Decision on Bitcoin ETF Options Trading —>

💰 Private Credit Boom

Private credit has emerged as a $1.7 trillion industry offering an alternative to traditional bank lending. It has gained popularity since the 2008 financial crisis due to its flexibility and ability to accommodate borrowers who may not meet strict bank loan criteria.

Private Credit: A $1.7 Trillion Alternative to Bank Lending —>

⛩️ BOJ Rate Shift

Investors are preparing for a pivotal moment as the Bank of Japan (BOJ) considers exiting its negative-rates regime and potentially increasing borrowing costs.

Bank of Japan Considers Exiting Negative-Rates Regime —>

💵 Rising Money-Market Fund Assets

Money-market fund assets reached a new record high, driven by expectations of higher short-term rates and reduced bets on Federal Reserve rate cuts.

Money-Market Fund Assets Reach New Record High —>

🏦 Fed Comments

Rising oil prices due to the Keystone pipeline shutdown present opportunities for investors in energy sector investments.

Fed Reserve Comments and Pipeline Suspension Boost Oil Prices —>

🔐 Cybersecurity Boom

Crowdstrike Holdings Inc CRWD 0.00%↑ delivers impressive Q4 results, driving revenue growth and gaining industry recognition.

CrowdStrike Strong Q4, Expects 30%+ Revenue Growth in 2025 —>

🫧 Are US Stocks in a Bubble?

JP Morgan JPM 0.00%↑ and Goldman Sachs GS 0.00%↑ analysts are at odds on a potential market bubble in US stocks.

Are US Stocks in a Bubble? Diverging Views from Wall Street Experts —>

🇨🇳 China’s Growth

China's goal of 5% annual growth presents challenges but also investment possibilities.

China Sets Ambitious 5% Growth Target Despite Challenges —>

🛢️OPEC+ Cuts

Oil prices stabilize near yearly highs as OPEC+ extends production cuts.

Oil Prices Hold Firm as OPEC+ Maintains Production Cuts —>

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Hot Topics

Investors anticipate Tuesday's Consumer Price Index (CPI) data for clues on inflation trends and potential Federal Reserve policy easing, following a mixed jobs report that showed a rise in unemployment and slower wage growth.

Federal Reserve: Jerome Powell, head of the U.S. Federal Reserve, told lawmakers that the Fed might lower interest rates in the future if inflation continues to drop. He said the Fed aims to focus on job creation and keeping prices stable, especially during the election year. Powell mentioned the economy is doing well, with low unemployment and expected growth. He noted that while future rate cuts depend on economic data, the current high interest rate probably won't increase further.

CRE Risks: Fed and Treasury officials, including Jerome Powell and Janet Yellen, acknowledge potential bank failures due to bad commercial real estate (CRE) loans but see no systemic risk. They're focusing on banks with high exposure, especially in retail and office sectors. Despite some challenges, including a notable profit drop in the banking sector and increased non-current loans, the overall banking industry remains robust, with measures in place to manage and monitor risks. The FDIC's actions and the banking sector's resilience amidst economic pressures highlight ongoing vigilance against potential financial instabilities.

BTFP: The Bank Term Funding Program (BTFP), set to expire on March 11, has been seen by some as a potential crisis event, but with mechanisms allowing banks to extend loans for another year, coupled with the recovery of small banks and the closure of an arbitrage loophole, imminent banking stress is unlikely.

Weight Loss: Novo Nordisk's NVO 0.00%↑ market valuation surpassed Tesla's TSLA 0.00%↑ following positive trial results for a new obesity drug, shooting its shares up by more than 8%. The company, known for the weight-loss drug Wegovy, revealed promising early trial data for a pill version of the experimental drug amycretin, showing significant weight loss in participants. This success not only elevates Novo Nordisk's global ranking but also highlights its potential growth with a pipeline of experimental drugs.

Saudi Arabia: Saudi Arabia has recently transferred a $164 billion stake, or 8%, of Aramco to the Public Investment Fund (PIF), reducing the government's direct ownership in the world's largest oil company to 82%. This strategic move is designed to enhance the PIF's cash flow, which is heavily invested in extensive local projects as part of Crown Prince Mohammed bin Salman's vision to diversify the Saudi economy.

Meanwhile, Saudi Arabia has announced over $10 billion in investments from global tech companies like Amazon Web Services (AWS) AMZN 0.00%↑, Google GOOGL 0.00%↑, Microsoft Corp. MSFT 0.00%↑, DataVolt, IBM Corp. IBM 0.00%↑, ServiceNow NOW 0.00%↑, and Dell Technologies Inc. DELL 0.00%↑ to develop data centers and tech infrastructure in the kingdom. This move, revealed at the LEAP tech event in Riyadh, aims to diversify Saudi's oil-dependent economy and establish it as a Middle Eastern tech hub.

Gold: In January, central banks globally increased their gold reserves by 39 tonnes, marking the eighth consecutive month of net purchases. Turkey and China led these acquisitions, with no significant sales reported during the month. This ongoing trend underscores the continued importance of gold for central banks, especially in emerging markets, driven by its role in crisis response, diversification, and as a store of value. The recent update indicates a strong start to the year, suggesting sustained central bank interest in gold for 2024.

China Chip Fund: China is advancing its semiconductor capabilities by setting up its largest chip fund to date, aiming to raise over $27 billion. This initiative, led by the National Integrated Circuit Industry Investment Fund, or the Big Fund, is a response to increasing US technology restrictions. The fund aims to accelerate China's progress in cutting-edge technologies by pooling capital from local governments and state enterprises.

VTM Stock Picks

This week, VTM's stock screeners have identified several promising stocks, with a focus on value, growth, and dividend potential.

💎 Value Stock Picks 💎

Toll Brothers Inc (NYSE: TOL)

P/E Ratio: 9.3
PEG Ratio: 0.9

Toll Brothers, Inc. TOL 0.00%↑ presents a solid opportunity for value investors, with its relatively low P/E ratio and a moderate PEG ratio suggesting balanced growth and valuation, complemented by a low price/book value ratio, making it an attractive investment in the consumer cyclicals sector.

Toll Brothers' strong quarterly performance, characterized by exceeding earnings expectations and a nearly 10% revenue increase, alongside a resilient US housing market with accelerating demand despite high interest rates, points to a promising growth outlook and supports the company's positive momentum, with its stock nearing double performance over the past year and expectations for further gains.

🚀 Growth Stock Picks 🚀

MercadoLibre Inc (NASDAQ: MELI)

ROE: 32.1%
Mean Sales Growth Rolling 12 Months: 34.8%

MercadoLibre MELI 0.00%↑ stands out for its earnings per share growth and robust sales growth over the past year. Its high return on equity suggests efficient management and a strong competitive position, making it an attractive pick for growth investors.

DexCom Inc (NASDAQ: DXCM)

ROE: 26.2%
Mean Sales Growth Rolling 12 Months: 24.9%

DexCom DXCM 0.00%↑ showcases significant sales growth and a healthy increase in earnings per share, combined with a solid return on equity. These factors underscore its potential for sustained growth, driven by its innovative healthcare solutions.

🏦 Dividend Stock Picks 🏦

Crescent Point Energy Corp (NYSE: CPG)

Dividend Yield: 4.5%
Dividend Payout Ratio: 38.3%

Crescent Point Energy Corp. CPG 0.00%↑ , based in Calgary, Alberta, specializes in the production of light oil, primarily focusing its operations in southern Saskatchewan and central Alberta, Canada. The stock offers an attractive dividend yield, complemented by a moderate dividend payout ratio, indicating a commitment to returning value to shareholders while maintaining reinvestment in the company's growth.

Whitecap Resources Inc (TSE: WCP) (OTC: SPGYF)

Dividend Yield: 7.6%
Dividend Payout Ratio: 42.0%

Whitecap Resources is a Canadian public oil company based in Calgary, Alberta. With a high dividend yield and a sensible payout ratio, this stock represents a valuable income-generating investment, suggesting a balance between rewarding shareholders and sustaining future growth.

Investing Intel