🦢 Rates Are Rising, Banks Are Failing, What's Next?

Good Afternoon!

It’s Friday, the week is over, and the swan has swam in. Get ready for the best weekly stock market summary you’ll ever read.

This week was a crazy one, and we’re going to cover it all. This is what we got for you:

• Stock Market Summary 🦢

• Fed Raises Interest Rates to Highest Levels Since 2006 📈

• Other News In The Stock Market 🌎

• Next Week In The Stock Market 🔮

Let’s get into it ↓

Stock Market Summary 🦢 

How Did the Market Perform This Week:

Earnings Summary This Week:

Best Performing Large Cap Stocks This Week:

Worst Performing Large Cap Stocks This Week:

Fed Raises Interest Rates to Highest Levels Since 2006 📈

The Federal Reserve has raised interest rates by 0.25%, or 25 basis points. This marks the 10th hike in the last 14 months. When the Fed ‘raises rates’, they are raising the federal funds rate, and the benchmark rate is now between 5% and 5.25%. Although the federal funds rate is the interest rate at which commercial banks borrow and lend their excess reserves to each other overnight, it still has drastic impacts on consumers.

The federal funds rate rising will also correspond with a rise in the prime rate or the rate that commercial banks loan to their most creditworthy customers. In essence, it will make borrowing more expensive, which has an impact on mortgages, auto loans, credit card debt, and much more.

The average credit card interest rate has reached 23.8%.

According to USA Today, “the median U.S. home sold for about $450,000 in 2022. In the past year, Freddie Mac’s reported 30-year mortgage rates have risen from 3.6% to 6.4%. That would raise the monthly payment on a new $450k mortgage - assuming $90,000 down payment - by 31% or about $615.”

Alright, enough of being a Debbie-downer because guess what…

Higher interest rates mean you’ll also earn more money on your deposits!!

That’s right. Your savings account that’s earnings a measly 0.24% APY could potentially now be a colossus 0.50% APY!!! We’re getting rich!

Something else to note: The Yield Curve is currently inverted. This means short-term treasuries have higher yields than long-term treasuries.

The relationship between a bond's yield and price is inverse, meaning when the price goes up, the yield goes down, and vice versa.

Knowing this… An inverted yield curve shows a surge in demand for long-term government bonds compared to short-term bonds.

So, what the h*ll does all this mean?

So, what the h*ll does all this mean?

Recession. Inverted yield curves is one of the most widely used indicators in forecasting a recession.

Obviously, no single indicator is the tell-all, but one thing is for sure: Tread carefully.

Other News In The Stock Market 🌎

• Chegg shares drop more than 40% after company says ChatGPT is killing its business - CNBC

• Morgan Stanley plans to cut 3k jobs - RT

• Icahn Enterprises shares tumble after short seller attack by Hindenburg - FT

• Shopify to cut 20% of its workforce and sells most of logistics business - YF

• Paramount slashes quarterly dividend by 79% - MW

• PacWest says it’s exploring options as shares plunge - NYT

• TD Bank and First Horizon agree to call off $13 Billion Merger - YF

• First Republic Bank sold to JPMorgan Chase

• Jobs report beat: April jobs report shocks with 253,000 jobs created, unemployment falls - YF

• World Health Organization declares end to COVID global health emergency - MW

• Biopharma firm Acelyrin valued at $2.1 billion in strong market debut - RT

Next Week In The Stock Market 🔮

Next Week’s Earnings Reports with Estimates:

What the Swan is Watching:

Monday: Tyson, PayPal, Palantir, BioNTech, McKesson, Lucid

Tuesday: Under Armour, Airbnb, Warner Music Group, Electronic Arts, Occidental Petroleum Corp

Wednesday: Roblox, Disney, Wendys, Robinhood

Thursday: JD

Economic Calendar Next Week:

That’s all we got for this week!

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research