🎊 Nasdaq hits a new high

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Good morning investors! Yesterday was a very happening day with crypto bouncing back and Morgan Stanley’s Mike Wilson raising his 12-month S&P 500 target from 4,500 to 5,400.

Today we cover:

• Nasdaq hits a new high.

• Crypto soaring again.

• Investing in uncertain times.

📊 Economy and News 

Fed still not sure?

Federal Reserve officials remain cautious about declaring that inflation is on track to reach the central bank's 2% target, despite last week's data indicating a welcome easing in consumer price pressures for April. Several officials on Monday emphasized the need for continued prudence in policy decisions.

"It is too early to tell whether the recent slowdown in the disinflationary process will be long lasting," Fed Vice Chair Philip Jefferson told the Mortgage Bankers Association conference in New York, even as he called the April data "encouraging."

Jefferson described current monetary policy as restrictive and declined to say if he expected rate cuts to commence this year, only noting that he will be carefully assessing incoming economic data, the outlook, and balance of risks.

Global hits:

• China launches its own anti-dumping probe following Biden’s monster tariffs.

• Saudi Arabia’s biggest-ever plane order goes to Boeing's rival Airbus.

• Scarlett Johansson lawyers up over ChatGPT voice that ‘shocked and angered’ her.

Also check: How Macy’s, Kohl’s and Nordstrom are chasing Millennial, Gen Z shoppers.

📈 Stocks

S&P 500 5,308.13 (+0.092%)
DJIA 39,806.77 (-0.49%)
NASDAQ 18,674.19 (+0.69%)
BRENT CRUDE 83.14 (-0.68%)
* Prices as of May 21st, 12:20 AM UTC

Nasdaq closes at a record

The Nasdaq Composite rose on Monday, driven by gains in Nvidia and other tech companies. Conversely, the Dow Jones Industrial Average underperformed the broader market, with JPMorgan Chase leading the losses.

Shares of JPMorgan dropped -4.5% after CEO Jamie Dimon indicated during the bank's annual investment meeting that his retirement might come sooner than previously expected. Dimon also announced that the bank would not repurchase shares at their current levels. Despite this, the stock is up about 15% year to date.

Nvidia shares gained more than +2% on Monday, buoyed by multiple bullish analyst calls highlighting the company’s leading market position. Several Wall Street firms also raised their price targets for the chipmaker ahead of its earnings report, suggesting the shares could rise by as much as 30% from their current levels.The stock is up 91.4% in 2024 alone and is 203.2% higher over the past 12 months.

Nvidia’s market cap is now the third-largest in the S&P 500 at $2.3 trillion. Options traders are also pricing in an approximate move of 8% on earnings for the chipmaker.

We must mention that Nvidia is also our Asset of the Week. Here’s what we said about the company in this week’s Pro issue:

Worth knowing: Microsoft announces new PCs with AI chips from Qualcomm.

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🔐 Crypto

Bitcoin $71,128 (-0.21%)
Ethereum $3,668 (-0.01%)
Total market cap $2.61 (-0.02%)
* Prices as of May 21st, 12:20 AM UTC

Crypto hits new highs

It was a ‘normal’ Monday for crypto until around 3:20 to 3:30 pm EST when the market went haywire due to the following tweet:

The ‘tweet’ sent crypto flying with BTC once again crossing the $70K mark.

Ether was the biggest winner with it climbing over 20%.

Investors are reconsidering the probability that the SEC greenlights spot ether ETF applications amid reports that the SEC has requested document updates from potential ETF issuers and exchanges.

The previous consensus was that such funds would likely not be approved.

On the other hand,Bitcoin price gained over 8% and surged above $70,000. BTC is now consolidating gains and showing signs of more upsides in the near term.

💵 Personal Finance

Is war a good time to invest?

This isn’t a topic that we wanted to cover but it seems to be the need of the hour given the current situation in Ukraine and Israel. Some experts think this war escalate soon, so in this currently unpredictable situation, would it be wise to invest in stocks?

There is no one answer to this question as it depends on several factors, including your investment goals, risk tolerance, time horizon, and the specific circumstances surrounding the conflict.

Here are a few things to consider:

1. Diversification: Diversifying your investments across various asset classes, including stocks, bonds, real estate, and commodities, can help spread the risk.

2. Long-Term Perspective: Investors looking to invest money for a good few years usually do not have to worry about the changing geopolitical situation as they will not have much of an impact on your portfolio. Historically, markets have shown resilience and the ability to recover from geopolitical crises over time. But, it can take a while.

3. Risk Tolerance: Assess your risk tolerance. Geopolitical conflicts can introduce uncertainty and volatility into financial markets. If you are uncomfortable with the potential for significant short-term fluctuations in the value of your investments, you may want to consider a more conservative allocation.

4. Research and Analysis: Stay informed about the specific conflict and its potential implications for the global economy and financial markets. Things are changing rapidly these days. Nobody expected the Palestine-Israel conflict to escalate like this and now some experts believe Iran might jump on the bandwagon, which may push oil prices, thus impacting the global economy. Analyze how the conflict may affect industries, companies, and regions where you have investments. Keep an eye on what others have to say but don’t be very quick to jump the gun.

5. Geographic Exposure: Consider the geographic exposure of your investments. If you have significant exposure to regions directly impacted by the conflict, it may be prudent to assess the potential risks and take appropriate actions to protect your portfolio. For example, big Israeli firms like Teva Pharmaceutical Industries and Bank Leumi might suffer due to the current situation but firms with no presence in Israel and no links to the country will typically not have much of an impact. For example, look at McDonald’s which is currently offering free meals in Israel, which has resulted in a backlash in some Muslim-majority countries. This backlash could impact the company’s bottomline as it might result in reduced sales.

6. Safe Haven Assets: During periods of geopolitical uncertainty, investors often seek safe haven assets such as U.S. Treasuries, gold, or cash. These assets tend to be less volatile and may provide a degree of protection in turbulent times. Hence, we’d suggest that you consider investing in these assets. Precious metals, for example, have proven to do very well in such situations.

7. Psychological Factors: Be aware of emotional responses to geopolitical events. Fear and panic can lead to impulsive decisions that may not align with your long-term financial goals. Having a well-thought-out investment plan can help you stay disciplined. Also, it might be a good idea to get in touch with a professional to help you make the right call.

8. Monitoring and Adaptation: Continuously monitor your investments and the evolving geopolitical situation. Be prepared to adapt your investment strategy as circumstances change.

What else should you do in such times? Wait for tomorrow’s issue as this topic will continue.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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