💴 Earnings reports

and falling US retail sales

Good morning investors! Yesterday was a great day for investors with a lot of positive news from different companies as earnings continued to flow.

Today we cover:

  • US companies are worried due to falling sales

  • More earnings data

  • Tax-free incomes – part II

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🔈 Audio version: Apple Podcasts | Spotify | YouTube

📊 Economy and News 

US retail sales fall more than expected

Spending at US retailers tumbled much more than expected in January, surprising investors. Retail sales fell 0.8%, breaking a two-month streak of increases.

It is believed that cold weather played an important role in keeping shoppers at bay.

Almost all major sectors, including online sales (-0.8%), gas stations (-1.7%), and home improvement stores (-4.1%) fell in January. One section, however, saw a jump of +0.7% (restaurants).

Experts think that the report is not a sign of worry since it is common for sales to decline when the weather gets cold. However, a large number of companies are worried due to the waning interest of consumers in purchasing goods.

"There’s a section of the population that has come under pressure from disposable income,” said James Quincey, Coca-Cola chief executive. Other companies like McDonald’s and Target also made similar statements.

Inflation and rising rates are causing people to be cautous, which is forcing retail brands to issue lower guidance.

A few more major economic events include increasing import prices during January, with the 1.2% MoM increase being driven by fuel and food prices. Moreover, industrial output remained soft in January.

On the plus side, homebuilder confidence rose for the third straight month in February.

Global hits:

Warning: After Japan, the UK is now also in a recession.

📈 Stocks

S&P 500 5,029.73 (+0.58%)
DJIA 38,773.12 (+0.91%)
NASDAQ 17,845.72 (+0.21%)
BRENT CRUDE 82.75 (+1.22%)
* Prices as of Feb 16, 12:20 AM UTC

More earnings are here

  • Shake Shack (SHAK, 26.04%) shares surged following the company’s strong earnings results. The chain reported a total revenue of $286.2 million and a strong 2024 outlook. For 2024, Shake Shack expects to grow total revenue by 11% to 15% and open 80 new restaurants.

  • Coinbase (COIN, 16.94%) went up after the bell. The company reported robust earnings, beating expectations. It saw 100% more trading volume during the quarter versus the third quarter. Fourth-quarter volume amounted to $154 billion, ahead of the estimate of $142.7 billion.

  • Doordash (DASH, -7.33%) revenues and orders exceeded expectations for the fourth quarter, although its net losses failed to shrink as quickly as Wall Street had hoped, sending the stock lower after the bell.

Roku (ROKU, -14.03%) fell after reporting a bigger than expected loss and Yelp (YELP, -7.83%) fell despite solid earnings due to a soft outlook.

Also, shares of Intuitive Machines (LUNR, 34.54%) spiked on Thursday, as the space company began its first mission to the moon’s surface. A SpaceX rocket launched Intuitive Machines’ IM-1 mission successfully. The company went public via a SPAC merger last year and, despite nearly doubling so far this year, trades at about half the stock’s debut price.

End of Tesla? Ford CEO Jim Farley urged Wall Street to forget about Tesla as the future of the auto industry, arguing investors should instead focus on Ford’s “Pro” fleet business.

Investors, however, seem to still have faith in Tesla, which jumped 6.22% yesterday, whereas Ford remained flat.

Just in: Warren Buffett’s Berkshire Hathaway sold off 10 million shares of Apple stock in the final three months of 2023, representing about 1% of its holdings in the company.

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🔐 Crypto

Bitcoin $51,819 (-0.33%)
Ethereum $2.817 (-0.29%)
Total market cap $1.96t (-0.13%)
* Prices as of Feb 16th, 12:20 AM UTC

A look at the crypto world

Here’s what’s happening in crypto:

Also, BTC is finally at $52,000 and some say will hit $60,000 by halving. However, some see two major sell events in the next few weeks.

💵 Personal Finance

Incomes that are tax free - Part II

Here are some more incomes that are not taxed in the US:

Employer-Provided Insurance

"In most cases, the value of accident or health plan coverage provided to you by your employer is not included in your income," according to the IRS.

This includes everything from employer-provided long-term care insurance to health insurance provided by your employer through companies like Blue Cross, and reimbursement and coverage for medical care provided through a health reimbursement arrangement.

Furthermore, there are other exceptions, including no tax on the cost of up to $50,000 of employer-provided group term life insurance.

Complicated? Let’s make it simple. ⬇️

It means that you do not owe any tax on the amount your employer pays to give you a life insurance policy. for as long as the death benefit does not cross $50,000 death benefit. However, if the benefit crosses this amount (say $70,000), you will pay tax on the cost paid by the employer to cover the extra $20,000.

Life Insurance Payouts

Losing your loved ones can be devastating and the government understands that. This is why life insurance benefits are tax free; however, there are some exceptions.

You will pay taxes in these conditions:

  • You cash in or convert a life insurance policy

  • You receive accelerated benefits because you're terminally ill (with some exceptions)

Retirement Account Income

Income from qualified retirement accounts, including 401(k) plans, IRAs, and 403(b) plans, comes with tax benefits.

In most cases, tax on your investment income is deferred until you withdraw the funds. On the other hand, withdrawals are not taxable when it comes to Roth 401(k)s and Roth 403(b)s, given that you meet all the terms and conditions.

Municipal Bond Interest

Now that bonds are again gaining popularity, it’s time to talk about the tax advantages of municipal bonds.

Bond-related income is usually taxed; however, municipal bonds, issued by states and other government entities, are an exception. You will have to pay no federal or local tax on municipal bonds-related income if you live in the state where the bonds were issued.

This exemption applies to both ETFs and individual bonds but with some limitations. ETF income, however, is subject to federal income tax but no state and local income taxes.

💰 Be a Better Investor

Wealth consists not in having great possessions, but in having few wants.


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