Stocks on hold

as US awaits election results

Good morning investors! The U.S. presidential election is happening today (I’m sure you’ve heard). Markets are pretty quiet as investors await results.

Today we cover:

  • Not a lot of 1st time home buyers

  • A look at hedge funds

  • Nvidia passes $1 Trillion market cap (and not slowing down)

📊 Economy and News 

Home Buyers are Changing with First Time Buyers Hitting a Historic Low of 24%

This year, a record number of Americans used inheritances to help fund down payments on their first homes, highlighting the challenges of today’s housing market. A survey by the National Association of Realtors found that first-time buyers between July 2023 and June 2024 were older (median age 38) and wealthier (median income $97,000) than past buyers.

A record high 26% of buyers paid cash for their homes and more seem to be interested in multigenerational homes with the share hitting an all time high of 17%.

One-fourth of first-time buyers received financial help from family or friends, and 7% used inheritances specifically. Repeat buyers are also older (median age 61) and paid larger down payments (23% vs. 9% for first-timers), with 31% paying in cash.

High demand allows sellers to secure full asking prices, while rising home costs have increased multi-generational living to a record 17%, often for cost savings.

Global hits:

** We don’t get political here, unless we’re talking policy that will affect our investments, but I’d love to know what you think of the election. Vote below and make a comment (which will not be shared publicly)

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📈 Stocks

S&P 500 5,712.69 (-0.28%)
DJIA 41,794.60 (-0.61%)
NASDAQ 18,179 (-0.33%)
BRENT CRUDE 71.49 (+0.03%)
* Prices as of Nov 4th, 12:20 AM UTC

Market Performance: The Dow Jones Industrial Average hit a fresh record (again), influenced by strong performances in the tech sector, particularly Nvidia and other chip stocks. This surge was partly due to positive retail sales data suggesting a potentially reaccelerating economy.

Tech Sector: Nvidia and other semiconductor stocks saw significant gains following an upbeat outlook from TSMC (Taiwan Semiconductor), pushing its market cap past $1 trillion! Alphabet (Google) reported earnings above expectations, with Google Cloud showing impressive revenue growth.

Economic Data: Retail sales increased by 0.4%, surpassing expectations and adding to the narrative of a robust economic recovery. However, this data also fuels debates on future Federal Reserve actions regarding interest rates, with most expecting another rate cute on November 7th.

Interest Rates and Mortgage Rates: The average 30-year fixed mortgage rate has increased, reflecting broader trends in interest rate movements which could impact housing market dynamics.

Trump Media (DJT) was one of the most active stocks yesterday, posing a gain of 12.37% to close at a market cap of $6.8 Billion. Trump has a lot more than politics riding on this election. The value of his companies has risen and fallen in the past year based on how likely he is to win.

Palentir (PLTR) beat expectations by $0.01 today and shot up 12.65% and was added to the S&P 500 in September. Revenue also beat at $726 M for the quarter vs. $701 M expected.

Stock to watch:

  • Intel: Experienced an 8.4% premarket rise due to strong Q3 results and guidance.

  • Boeing: Up 3.4% following news of a new union contract, potentially averting a strike.

  • Cardinal Health: Increased by 7.7% after beating Q1 earnings and raising 2025 guidance.

  • Globalstar: Received funding from Apple, indicating strategic partnerships in tech.

  • Lyft: Agreed to pay a $2.1M fine for misleading advertisements to drivers.

  • Musk's Legal News: Elon Musk lost a bid to move his election lottery lawsuit, which might have implications for his businesses, including Tesla and SpaceX.

Market Sentiment: Investors are navigating through a volatile period due to upcoming elections and Federal Reserve decisions, with significant attention on how these events might influence market policies and economic outlook.

Looking Ahead: The market is anticipating earnings from other tech giants like Amazon, Apple, and Microsoft, which could further dictate market movements due to their significant influence on major indices.

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💵 Personal Finance

A look at hedge funds

Said to be worth around USD 4.53 trillion, the hedge fund industry is massive and very profitable with the average equity hedge fund yielding 3% YTD, but up to 14%. That’s considered a down year.

Popular among investors, hedge funds involve using pooled money and a variety of tactics to earn returns for their investors. Money is invested directly in companies, by either purchasing private firms or buying a controlling interest in publicly traded companies.

Some of the top hedge funds include Citadel, Bridgewater Associates, and AQR Capital Management.

This investment option is said to be suitable for investors with a high net worth.

This method is known for being quick but there are risks involved. As a result, investments are primarily in highly liquid assets, enabling the fund to take profits quickly on one investment and then shift funds into another investment that is more immediately promising.

In addition, hedge fund managers typically use leverage to get more profit but this also increases the risk factor.

Most hedge funds invest in a variety of things, including individual stocks (including short selling and options), currencies, bonds, commodities, arbitrage, and derivatives.

Interested in more? Check this video:

💰 Be a Better Investor

“If you don’t value your time, neither will others. Stop giving away your time and talents. Value what you know and start charging for it.”

Kim Garst

Resources:

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