Morning Download 

Personal finance + economics + markets

Good morning investors! It is a new week and one that is going to be pretty exciting because it’s the earnings season.

💰 Fun fact: Earnings season lasts from about a week and a half after the quarter ends until the end of that month. At peak times around 100 firms report each day.

Today we cover:

• Oil is up.

• Earnings: so far so good.

• Stocks’ exit strategies.

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📊 Economy and News 

Oil goes up

Oil prices rose above $91 a barrel on Monday due to increased tension in the Middle East. Some experts believe that it will cross the $100 mark in a few weeks if things do not improve and the war spills to other countries.

Analysts from ANZ Research expect oil prices to hit $100 a barrel in the short term because of the growing risk of regional escalation despite the two parties (Israel and Hamas) not being linked to oil supplies.

Then why? Because Iran might get involved. If it happens, we might see a reduction of up to 20 million barrels per day of oil.

Global hits:

• Rite Aid files for bankruptcy.

• Hollywood is missing out on the growing Chinese movie market.

• Indian market is not cheap.

📈 Stocks

S&P 500 4,327.78 (-0.50%)
DJIA 33,670.29 (0.12%)
NASDAQ 14,995.12 (-1.24%)
VIX 19.19 (14.98%)
* Prices as of Oct 16th, 12:20 AM UTC

Good earnings reports so far

The earnings season is here and initial reports seem promising:

• JPMorgan Chase tops profit expectations: JPMorgan topped analysts’ expectations for both profit and revenue in the third quarter.

  The company reported a revenue jump of 21% to over $40.69 billion, mainly due to increased net interest income.

  Profit surged 35% to $13.15 billion, or $4.33 a share, from a year earlier, including 17c in securities losses and 22c in legal expenses. The bank accepted that it was 'over earning' on interest income. Furthermore, it has increased guidance from $87 billion to $88.5 billion this year.
  

• Wells Fargo impresses: Higher interest rates helped Wells Fargo offset slowing lending activity as the company reported impressive numbers on Friday causing shares to jump 3.1% after hours.

  The organization reported earnings per share of $1.48 in the quarter, or $1.39 excluding discrete tax benefits.
  

• Citigroup surprises investors with a better-than-expected earnings report: The organization saw growth in both institutional clients and personal banking. Reported revenue stood at $20.14 billion, higher than the expected figure of $19.31 billion.

More to come: Finance might have surprised but all eyes are now on consumer and tech sectors. But, some financial companies are still remaining. FB Financial, HDFC Bank, and Charles Schwab report today. Bank of America reports tomorrow and big tech join from Wednesday with Tesla and Netflix.

🔐 Crypto

Bitcoin $27,914.60 (2.68%)
Ethereum $1,580.9 (1.42%)
Total market cap $1.08T (2.72%)
* Prices as of Oct 16th, 12:20 AM UTC

Here’s all you need to know about the world of crypto:

• Ferrari to accept crypto as payment for its cars in the US.

• Ripple's win elevates XRP with Hong Kong's top crypto index inclusion.

• SEC does not plan to appeal loss in Grayscale case – news sends cryptos higher.

💵 Personal Finance

Exit strategies in stocks

We often encourage people to invest but it isn’t the most important thing, you also need to know when to stop investing and sell. Also known as taking profits (hopefully) or cutting your losses, or exiting. 

Exit strategies represent the pathways through which investors can realize their returns on investments in stocks and walk away. Let's delve into some of the most common exit strategies:

1. Setting Price Targets: Determine the price at which you plan to sell your stock. This can be based on a specific price target you've set in advance, fundamental analysis, technical analysis, or a combination of these factors. When the stock reaches your target price, consider selling some or all of your holdings. This is the most popular strategy to make money off stocks because prices will go down after a point. It’s all about recognizing and benefitting from that point.
   

2. Stop-Loss Orders: Implement stop-loss orders to limit potential losses. A stop-loss order is a predefined price at which your stock will automatically be sold if it falls to that level. This strategy helps protect your capital by preventing significant losses in case the stock's price declines. Again, this is important because prices will go down after a point. No stock only goes up. However, as we have mentioned in previous newsletters, stocks will always end up going higher (eventually) unless it’s a dead horse. So, a lot depends on how much time you have in hand.
   

3. Trailing Stop Orders: A trailing stop order allows you to set a percentage or dollar amount below the current market price. As the stock's price increases, the trailing stop automatically adjusts, locking in profits. If the stock price drops by the specified percentage or dollar amount, the trailing stop order triggers a sale.
   

4. Time-Based Exit: Set a specific time frame for holding your stocks. For instance, you might decide to hold a stock for one year, and at the end of that period, reevaluate its performance and your investment goals. If the stock hasn't met your expectations, consider selling it. This strategy can, however, be a little risky but it works in situations where you expect a company to pull something off within a specific time. For example, if you are invested in a pharma company that promised to release new drugs by 2027, you can decide to sell in 2028 to benefit from the new drug.
   

5. Fundamental Analysis: Continuously assess the fundamentals of the company you've invested in. If there are negative changes in the company's financial health, business model, or outlook, it may be a signal to exit your position.
   

6. Technical Analysis: Use technical indicators and chart patterns to identify potential exit points. Common technical signals include moving average crossovers, overbought or oversold conditions, and trendline breaks. These can help you make informed decisions about when to sell.

A few things to remember:

• Stay diversified. If you pull out of an industry, consider replacing it with something else so your investment remains diversified.

• Conduct regular portfolio reviews to assess the performance of your holdings.

• Be aware of macroeconomic events, news, and market trends that can impact your stocks.

• Revisit your financial goals and life circumstances periodically. If your goals change or you encounter significant life events (e.g., retirement, college expenses, medical bills), your exit strategy for certain stocks may need to be adjusted.

• Factor in tax implications when planning your exit strategy since gains will be taxed.

• Instead of selling all your shares at once, consider gradually scaling out of your position. This approach allows you to capture potential gains while maintaining exposure to any further price appreciation.

Check this video for more:

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