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Good morning investors! Yesterday proved to be a very ‘green’ day for the market with almost all big names doing great and positive earnings continuing to flow in.

Today we cover:

• Jobless claims rising.

• Companies are smashing earnings.

• Using AI to predict crypto prices.

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📊 Economy and News 

Jobless claims hit a new high

Jobless claims jumped by 9,000 last week to a nearly 3-month high, mainly due to increasing layoffs and the lowest planned hiring level since 2009.

The trend is continuing with Deutsche Bank planning another 3,500 job cuts, and Okta letting 7% of its workers go.

• The financial sector laid off 23,238 workers making it the worst month for the category since September 2018.

• Tech laid off 15,806 workers, the highest since May 2023.

• Food producers fired 6,656 employees, the highest since November 2012.

On the plus side, labor costs are cooling and productivity is on the rise.

Global hits:

• Disney+, Hulu and ESPN+ will start cracking down on password sharing.

• Divided Bank of England leaves policy unchanged, says interest rates are ‘under review’. On the other hand, Brazil, Chile, and Colombia have cut interest rates again.

• Volvo shares jump 26% on higher sales, plans to stop Polestar funding.

📈 Stocks

S&P 500 4,906.19 (+1.25%)
DJIA 38,519.84 (+0.97%)
NASDAQ 17,344.71 (+1.21%)
BRENT CRUDE 79.10 (-0.52%)
* Prices as of Feb 2nd, 12:20 AM UTC

Stocks preparing to go higher – positive earnings

• Meta is having a gala time with a great earnings report. It reported an EPS of $5.33 (Est. $4.91) and revenue of $40.11 billion (Est. $39.01B). The company’s ad revenue beat expectations of $37.81 billion with $38.71 billion. Most notably, the company announced a $50 billion boost in share buyback and a 50 cent per share dividend. This news, combined with the fact that Facebook Daily Active Users now stand at 2.11 billion, higher than the estimated figure of 2.07 billion helped the company gain 15% after the bell.

• Amazon also impressed with better-than-expected results. Revenue is 14% higher YOY and advertising topped estimates by $500 million. The company has plans to invest big in AI, which could help it even more. The stock is trading 10% higher after the bell.

• Apple stood like a sore thumb yesterday despite a growth in revenue ($119.58 billion versus $117.97 billion estimated). The stock fell 2.9% after the bell due to slow growth in China ($20.82 billion versus $23.5 billion estimated).

• Ferrari topped Wall Street’s expectations for the fourth quarter to finish off a record year of profits. The company’s revenue increased 17% to $6.46 billion, including an 11% increase in the fourth quarter. It generated a net profit of $1.36 billion, for 2023, including $317.9 million, in the fourth quarter.

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🔐 Crypto

Bitcoin $42,946 (-0.33%)
Ethereum $2,296 (-0.31%)
Total market cap $1.65 (-0.01%)
* Prices as of Jan 3rd, 12:20 AM UTC

Can AI predict crypto prices?

AI is everywhere and it’s now even making investment decisions. But, is it reliable and can you trust AI to call the shots when it comes to crypto? Experts are divided.

Predictive tools aren’t new. A 2015 paper discussed a stock market forecasting system that used the latest tools to make predictions. According to the paper, it offered an average error of 1.84 percent.

A paper published in 2021 used AI to predict crypto prices and reported positive outcomes with the algorithm reaching error percentages of 0.2454%, 0.8267%, and 0.2116% for Bitcoin, Ethereum, and Litecoin, respectively.

The model used 80% of the historical data for two years for training and 20% for testing. Still, it is unclear how the model would perform in the longer term, with ever-changing market conditions.

We don’t yet have a fully reliable AI prediction tool for cryptocurrencies but some names are making a mark, including Santiment, and PionexGPT.

But, beware because The Commodity Futures Trading Commission (CFTC) called AI trading bots a "cover-up story for scams.”

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Reminder: You can use Bitcoin to Buy anything on Amazon with Zellix.com.

💵 Personal Finance

5 best states to buy a house in

A home is a major investment. If you’re looking to buy one, whether to invest or live in, it is important that you pick a state where prices are good and increasing at a decent rate.

Here are some of our best picks:

#1 Pennsylvania

With the average home costing $254,722, Pennsylvania is a great choice to buy a house in. Pennsylvania House Price All-Transactions Index is at a current level of 622.77, up 2.88% from last quarter and 5.85% from one year ago.

#2 North Carolina

The average home in the state costs $323,487, which makes it a little costly but still worth it. Prices have been increasing at the rate of 4.4% per year. The median price has gone from $201,000 to $302,459 in 2023.

#3 Utah

Utah is expensive but in demand. The average home in the state costs $518,806. Still, we think it can be great due to its family-friendly environment and affordability in terms of cost of living. Prices have gone up insanely in the last few years with some areas having an appreciation rate of 16.8%

#4 Kentucky

Those looking for an affordable option can consider Kentucky where the average home value stands at $197.948. Also, prices have been declining in the state. In August 2023, 26.2% of homes in Kentucky sold below list price, down 0.4 points this year. This makes it a good time to invest in the state.

#5 New York

There are few states as interesting as New York where the average home costs $733,845. And while reports suggest that people are looking to move out of New York due to the price factor, we feel it’s still a good investment, especially for people looking to earn rental income. New York rentals average $3,495 for a studio rental to $7,495 for a 4-bedroom rental (main cities). The cumulative appreciation rate for homes over the past ten years stands at 80.72%, making it a great investment.

This doesn’t mean other states are bad. In fact, names like Mississippi, Ohio, and Nebraska often make it to lists that talk about the best states to own a home in.

The key lies in knowing where and when to buy. Check this video for some tips:

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

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