😆 Apple enters AI

Together with Masterworks

Good morning investors! After a dull phase, the market climbed yesterday ahead of the Fed meeting.

Today we cover:

• Homebuilders are happy.

• Nvidia offers new chips.

• Cheaper EV on the market?

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📊 Economy and News 

Homebuilder sentiment finally turns positive

Finally, U.S. homebuilders are feeling more confident about their businesses due to increased demand despite prevailing high mortgage rates.

Homebuilder sentiment jumped 3 points in March to 51, gaining for the fourth-straight month, hitting its highest level since July.

Sentiment also moved into positive territory for the first time since July. Fifty is the line between positive and negative sentiment.

The popular 30-year fixed mortgage rate has hovered around 7% since February.

Mortgage rates came down in the first week of March, only to shoot back up in the second week. The average rate on the popular 30-year fixed mortgage has hovered around 7% since early February.

Regionally, on a three-month moving average, sentiment rose most in the Midwest and West. 

The report also noted that fewer builders are lowering home prices to attract buyers. In March, 24% of builders reported cutting home prices, down from 36% in December 2023 and the lowest share since July.

The average price cut remains steady at around 6%. Builders are still using sales incentives such as buying down mortgage rates.

Global hits:

• UAW seeks breakthrough as it files union vote at Volkswagen’s Tennessee plant.

• China’s all-important property market shows no sign of rebound in new year.

• Biden wants to make student loan forgiveness tax-free permanently.

Good to know: Amid fierce competition in China’s EV market, Xpeng to launch cheaper brand. This may impact not just Chinese brands but also big names like Tesla.

📈 Stocks

S&P 500 5,149.42 (+0.63%)
DJIA 38,790.43 (+0.20%)
NASDAQ 17,985.01 (+0.99%)
BRENT CRUDE 13 (-%)
* Prices as of Mar 3rd, 12:20 AM UTC

New things are coming

Yesterday we heard some major announcements from big companies, here are the most important details:

• Nvidia announced a new generation of artificial intelligence chips and software for running AI models. The new AI graphics processors are named Blackwell and are expected to ship later this year.

• Audi is now officially a part of the EV race after introducing its new all-electric Q6 e-tron SUV, the first production vehicle on its next-generation EV architecture. Ordering for the Q6 e-tron quattro and a performance variant will open this month in Europe. Audi plans to introduce about 20 new or significantly redesigned models and derivatives globally through 2025, more than half of which will be electric.

• Apple is serious about AI and is “in active negotiations” with Alphabet for Gemini to power some features coming to the iPhone this year. The company is expected to unveil several new AI features at its developer conference in June.

• MrBeast, the popular video creator known for big philanthropic gestures and extreme stunts, is making the leap from YouTube to Amazon Prime with a new reality competition show. The show, called “Beast Games,” will be released on Prime Video and feature “over 1,000 contestants, $5,000,000 prize, and many other world records.

Reminder: Standard Chartered thinks Bitcoin will rally to $150,000 this year and could touch $250,000 in 2025.

Sponsored by Masterworks

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$47 million in artwork sales equals profits for these everyday investors

Over the last 20 years, record prices achieved for Banksy’s art have grown at an astounding 63% compound annual rate. Even more impressive? It's not just the ultra-wealthy benefiting from this phenomenal growth. Thanks to Masterworks.  

Masterworks enables its 820,000+ users to access investments in multi-million dollar artworks by artists like Banksy, Basquiat, and Picasso for just a fraction of the cost of an entire piece. 

When Masterworks sells a painting, like the 16 it’s already sold, investors can get a return on their investment. With 3 recent sales, Masterworks investors realized net annualized returns of 17.8%, 21.5% and 27.3%.

Every offering is limited, and shares can sell out in just minutes, but Morning Download readers can skip the waitlist with this exclusive link.

💵 Personal Finance

Identifying a great value stock

This is the tricky part. You have to find stocks that are lower than their market value. Analysts provide estimates but they aren't always true, you will have to look at other factors too.

Value stocks typically have a good history, i.e: companies are old with strong financials. Moreover, they’re consistent and usually also offer dividends.

Warning ⛔️ : Just because a company has a good history or excellent financials doesn’t mean it’s safe. Sometimes a stock only appears to be a good value for investors but is actually a value trap. Value traps can continue to suffer share price declines even when their stocks seem attractive.

Value trap examples:

• Some industries such as construction and manufacturing are known for being value traps as their earnings often rise substantially during boom times, which is only temporary. When investors see a possible bust coming for a stock, its valuation will look very inexpensive compared to recent earnings -- but much less so once earnings fall during the weaker part of the business cycle.

• The same thing can be said for stocks related to intellectual property. For instance, if a drug company has a high-selling treatment but is losing patent protection for it in the near future, much of its profits can disappear in no time.

We have seen this happen to big companies like Ford, which rewarded investors with a dividend of 65 cents a share. This boosted the company's image but isn't a reason good enough to invest as it was a one-time move.

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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