🧢 Jobless data gives hope

and time to invest in India?

In partnership with

Good morning investors! The market took a major turn yesterday with even crypto rising up and BTC hitting the $60K mark.

Today we cover:

  • Weekly jobless claims give hope.

  • More earnings.

  • Time to invest in India?

Which stock to buy? Ready to elevate your investment game? Go Pro and unlock exclusive access to top stocks, handpicked by our experts.

As a Pro member, you'll receive our Investment of the Week, complete with in-depth reports highlighting what to buy, sell, and hold.

But that's not all—Pro members also get FREE access to our $500 Financial Freedom course!

All this for just $9.50 per month at our limited-time 50% discounted rate. Act fast—the discount ends soon!

📊 Economy and News 

Weekly jobless claims give positive news

The latest weekly jobless claims came in below forecasts, helping to allay some recent concerns on the strength of the labor market.

First-time filings for jobless benefits came in at 233,000 last week, down 17,000 from the previous week and lower than the Dow Jones estimate for 240,000, the Labor Department reported Thursday.

Stock market futures, which had been negative earlier, turned sharply positive after the release.

Weekly jobless claims data, however, can be highly volatile and is frequently revised. It remains near pre-pandemic levels.

The 10-year Treasury yield hit 4% following the jobless claims data, a level seen before the disappointing July jobs report Friday sent markets reeling.

Global hits:

Worrisome: JPMorgan raises 2024 recession odds to 35%.

📈 Stocks

S&P 500 5,319.31 (+2.30%)
DJIA 39,446.49 (+1.76%)
NASDAQ 16,660.02 (+2.87%)
BRENT CRUDE 79.15 (+1.06%)
* Prices as of Aug 9th, 12:20 AM UTC

S&P 500 notches its best day since 2022

Stocks climbed Thursday aided by the job market and a weaker Japanese yen versus the U.S. dollar. A yen surge that caused the unwinding of a popular so-called carry trade with hedge funds was a main culprit cited for Monday’s stock drop.

The major averages are still lower week to date but have recovered much of their losses from Monday’s rout. The S&P 500 is down 0.5% for the week, while the Dow and Nasdaq are lower by around 0.7% each.

  • Under Armour beat Wall Street’s quarterly estimates on the top and bottom lines. The company reported a loss of $305.4 million, or 70 cents per share, compared with a profit of $10 million, or 2 cents per share, a year earlier. Excluding one-time expenses, it reported a profit of $4 million, or 1 cent per share. The company adjusted its full-year profit guidance after settling a securities lawsuit from 2017 for $434 million. Sales fell in North America, online and across apparel, footwear and accessories. The stock rose +17% after the report.

  • Restaurant Brands International’s quarterly revenue was better than expected. Canadian coffee chain Tim Hortons was the restaurant company’s strongest performer during the quarter. It reported second-quarter net income of $399 million, or 88 cents per share, up from $351 million, or 77 cents per share, a year earlier. Excluding items, the company earned 86 cents per share. Net sales rose 17% to $2.08 billion, boosted by recent acquisitions of Burger King restaurants in the U.S. The company’s same-store sales increased 1.9%.

  • Eli Lilly reported second-quarter earnings and revenue that blew past expectations and hiked its full-year revenue outlook by $3 billion as sales of its blockbuster diabetes drug Mounjaro and weight loss injection Zepbound spike. The drugmaker now expects full-year adjusted earnings of $16.10 to $16.60, up from a previous guidance of $13.50 to $14 per share. The company also expects revenue for the year to come in between $45.4 billion and $46.6 billion, an increase of $3 billion at both ends of the range. The report sent the company up +9%.

  • Paramount Global’s revenue dropped 11% in the second quarter, the company’s biggest miss relative to analyst estimates since February 2020. Revenue fell as TV licensing fees dropped 48%, compounding declines in subscription fees and advertising sales. Paramount’s streaming division swung to a profit of $26 million. Moreover, it plans to cut 15% of workforce.

  • E.l.f. Beauty beat Wall Street’s quarterly estimates on the top and bottom lines as sales jumped 50%. Tarang Amin, the CEO of the cosmetics company, said its new “Bronzing Drops” have been wildly popular. Despite the big sales beat, the beauty retailer posted cautious guidance. The company fell -10% after the bell.

Check this: Costco is cracking down on membership moochers.

Delta mess: Delta says chaos after CrowdStrike outage cost it $380 million in revenue. Delta has said the carrier will pursue legal action against Microsoft and CrowdStrike to recoup the cost of the incident. Moreover, passengers also appear to be suing Delta over flights.

Sponsored by Vinovest

The Rising Demand for Whiskey: A Smart Investor’s Choice

Why are 250,000 Vinovest customers investing in whiskey?

In a word - consumption.

Global alcohol consumption is on the rise, with projections hitting new peaks by 2028. Whiskey, in particular, is experiencing significant growth, with the number of US craft distilleries quadrupling in the past decade. Younger generations are moving from beer to cocktails, boosting whiskey's popularity.

That’s not all.

Whiskey's tangible nature, market resilience, and Vinovest’s strategic approach make whiskey a smart addition to any diversified portfolio.

💵 Personal Finance

Is India the best option for investors now?

This week global stock markets saw significant drops—Japan’s Nikkei fell over 12%, and the S&P 500 dipped by 3%— but India's Nifty 50 index only decreased by 2.7%. This relatively better performance suggests resilience in Indian markets amidst global volatility.

Hence, it’s natural for investors to show interest in the growing economy. It is, in fact, outperforming the S&P 500.

Potential Future Performance

  • Impact of U.S. Recession: If the U.S. enters a recession, it could lead to a reallocation of funds into safe-haven assets like U.S. dollars, Treasurys, and gold, typically resulting in a decline in risk assets like stocks and emerging market currencies. However, India's performance during these times might be different due to several factors:

  • Localized Shocks: Recent events, such as bank failures in the U.S. and Europe and China's housing slump, have shown that significant shocks can be contained regionally, potentially limiting their global impact.

  • Interest Rate Differential: The Reserve Bank of India's decision to hold interest rates at 6.5%, coupled with decreasing inflation, might help cushion the Indian rupee from a severe sell-off.

Factors Favoring India

  • Commodity Price Impact: As a net energy importer, India could benefit from a U.S. recession if it leads to a drop in global crude oil prices. Lower oil prices would ease pressure on the Indian rupee, potentially supporting its value.

  • Consumer-Driven Economy: Unlike China and Japan, which rely heavily on exports, India's economy is primarily driven by domestic consumption. The U.S. is not a major market for Indian manufactured exports, and services like IT and business process outsourcing (which account for 75% of exports) are expected to remain competitive.

  • Economic Maturity: India has made strides in maturing its economy, evidenced by a lower budget deficit forecast and disciplined spending pledges, which have been well received by investors and could drive stock prices higher.

Risks and Concerns

  • High Valuations: Despite the positive outlook, a significant risk for investors is the lofty valuations of Indian stocks. Even with analysts downgrading earnings expectations by 1% for nearly half of the 200 largest companies, Indian equities continue to reach new all-time highs.

  • Market Corrections: Indian stocks have not been immune to global market trends. The Nifty 50 index, which rose 11% this year, has seen a 2.4% decline this week in line with other global markets.

  • Bond Market Trends: The benchmark 10-year Indian government bond yield has fallen to 6.87%, mirroring trends in other global bond markets, which could be a sign of caution among investors.

Conclusion: Is India the Best Option?

India presents a mixed picture for investors. On one hand, the country's resilient market performance, consumer-driven economy, and prudent economic policies make it an attractive option. On the other hand, high valuations and global market uncertainties pose significant risks.

Investors should weigh these factors carefully when considering India as a potential investment destination, especially in the context of global economic conditions.

💰 Be a Better Investor

“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”

Pablo Picasso

Resources:

What did you think of today's newsletter?

Login or Subscribe to participate in polls.

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