😔 Snap crashes

and day trading strategies

Good morning investors! Earnings are calling the shot and more big names are expected to announce with eyes set on Disney today.

Today we cover:

  • Americans in debt.

  • Earnings galore.

  • Making money as a day trader.

Follow us on Twitter for more.

🔈 Audio version: Apple Podcasts | Spotify | YouTube

📊 Economy and News 

Americans are now more in debt

Credit card debt has hit a high of $1.13 trillion as more Americans now use credit to make purchases.

Prices are higher, which is forcing consumers to also turn to savings.

Furthermore, a new report found that young adults, especially those under student loans, are regularly falling behind on payments. Moreover, auto loan delinquencies are also at a 13 year high.

Another report found that millennials and those with lower incomes have been badly hit. During the fourth quarter, US household debt hit a fresh high of $17.5 trillion, up 1.2% from the three months before.

Global hits:

📈 Stocks

S&P 500 4,954.23 (+0.23%)
DJIA 38,521.36 (+0.37%)
NASDAQ 17,572.73 (-0.23%)
BRENT CRUDE 78.60 (-0.01%)
* Prices as of Feb 7th, 12:20 AM UTC

More earnings are here

Snap had a crazy day yesterday after the company reported revenue that trailed estimates and issued a forecast that came in a bit below expectations.

Here are the numbers to know:

  • EPS: 8 cents adjusted vs. 6 cents expected.

  • Revenue: $1.36 billion vs. $1.38 billion expected.

  • Global daily active users: 414 million vs. 412 million expected.

  • Average revenue per user: $3.29 vs. $3.33 expected.

The company appears to be struggling in some departments. It is the sixth straight quarter that it has reported single-digit growth.

The company attributed it to the situation in the Middle East.

The stock fell over -30% after the bell mainly due to future guidance. The company is expected to grow between 11 and 15%, lower than competitors.

Snap expects an adjusted EBITDA loss between $54 and $95 million in the first quarter of the year, higher than the projected figure of $21.9 million by analysts.

In positive news, Chipotle crushed earnings as restaurant traffic grew 7.4%. It reported fourth-quarter net income of $282.1 million, or $10.21 per share, up from $223.7 million, or $8.02 per share, a year earlier.

It accepted that charging more for burritos helped boost profits by 37% to $1.1 trillion last year, but higher ingredient prices may have a slight impact on profits this year.

The company has plans to expand this year and introduce new menu items.

Another company that did well is Ford that beat top and bottom-line expectations for the fourth quarter while forecasting better-than-expected results for 2024.

The company rose 7% after the bell due to positive earnings and the move to issue a special dividend of 18 cents per share in addition to a first-quarter regular dividend of 15 cents per share.

Some other names that reported good earnings yesterday include Eli Lilly, Spotify, and Sonos.

Good to know: Toyota is investing $1.3 billion in Kentucky to build all-electric, three-row SUV. Moreover, JPMorgan Chase has plans to open over 500 new branches in the next 3 years.

Reminder: According to an NTSB report, bolts appeared to be missing from the Boeing 737 Max door plug that blew off midflight. Also, Disney is set to announce earnings today and some major names, such as ESPN, Fox, and Warner Bros. Discovery have plans to launch a joint streaming service later this year, which will be owned by a newly formed company with its own leadership team.

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💵 Personal Finance

Making money as a day trader

We don’t endorse day trading as it’s very risky. Only about 5% of day traders actually profit from their endeavors. However, it’s too rewarding to ignore and everyone loves to trade, so let’s talk about it.

Wikipedia defines day trading as “a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day to avoid unmanageable risks and negative price gaps.”

But can anyone do it? Yes, but you shouldn’t until you know all the strategies.

Remember this:

  • Start with a demo account to learn how day trading works.

  • Make sure to only invest in assets you know about.

  • Don’t risk more than what you can afford to lose.

Ready to try day trading? Here are some strategies

Market opening gap

Most smaller opening gaps are typically filled, but larger breakaway gaps aren’t. They indicate where the market is heading. Hence, look for opening price gaps in markets to decide your move.

Pre-market stock scanning tools can be used for this task. The chart below highlights a huge gap of 80%.

When you come across a situation like this, your next step should be to:

  • Find why this is happening. Does it make sense?

  • Look for an entry point and use the ‘limit order’ option to buy.

  • Place stop loss support

End of day trading strategy

You will need to be active before the market closes as stocks typically become very dynamic at this point.

Who is it for? This is for people who are short on time as this strategy removes the need to sit in front of a screen all day.

This strategy involves studying the day’s price action and then speculating how the price could move based on the price action. Risk management orders such as a limit order​ and a take-profit order can be used to reduce the risk.

Day trading is largely about luck but learning to study charts and keeping an eye on the latest happenings can be a great way to predict the market.

Do you day trade?

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💰 Be a Better Investor

“Waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.”

Charlie Munger

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