50. SMU: NVDA Earnings, Market Participation & Fed Expectations

08/30/24 • 35 min

1 Listener

Stock Market Update (SMU)

Let's discuss and demystify the recent volatility in the stock market, NVDA earnings, Jackson Hole highlights including rate cuts, and the dreaded "R" word (recession). 🔮

"If the Mag 7 is coming down, and the other 493 are participating, that is a recipe for sideways action."

~Jess Inskip

Who Are The Magnificent 7?

⁠Alphabet⁠ (GOOGL; GOOG), ⁠Amazon⁠ (AMZN), ⁠Apple⁠ (AAPL), ⁠Meta Platforms⁠ (META), ⁠Microsoft⁠ (MSFT), ⁠NVIDIA⁠ (NVDA), and ⁠Tesla⁠ (TSLA)

NVDA is the Taylor Swift of the Stock Market 🤡

Nvidia surpassed earnings, but saw its stock price decline 6.5% today. There's a supply issue, not a demand issue here. And just like there was a let-down for Swifties when Taylor didn't announce Reputation TV, just like Nvidia didn't meet expectations of the market and there was a let-down. But we're still betting on Taylor Swift, so take that correlation how you will (not advice). 😉

The Broadening: Group Participation in the Class Project

Earnings growth is now happening in the other 493 stocks of the S&P 500, indicating a broadening of the market. Check out our episode: What Is Market Breadth (⁠Ep. 45⁠).

Fed (Papa) Powell Finally Gonna Cut Rates 🙌

The recent Jackson Hole meeting indicated that a rate cut is likely, with Fed Chair Jerome Powell focusing on the labor market and the need to avoid further pai

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About Us 🌚🌞 Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective. Important Disclosures:
Investing involves risk. There is always potential to lose money when investing in securities. Market MakeHer LLC provides educational content and resources for informational purposes only. We are not registered financial advisors & do not provide personalized investment advice. Consult with a l...

Stock Market Update (SMU)

Let's discuss and demystify the recent volatility in the stock market, NVDA earnings, Jackson Hole highlights including rate cuts, and the dreaded "R" word (recession). 🔮

"If the Mag 7 is coming down, and the other 493 are participating, that is a recipe for sideways action."

~Jess Inskip

Who Are The Magnificent 7?

⁠Alphabet⁠ (GOOGL; GOOG), ⁠Amazon⁠ (AMZN), ⁠Apple⁠ (AAPL), ⁠Meta Platforms⁠ (META), ⁠Microsoft⁠ (MSFT), ⁠NVIDIA⁠ (NVDA), and ⁠Tesla⁠ (TSLA)

NVDA is the Taylor Swift of the Stock Market 🤡

The Broadening: Group Participation in the Class Project

Earnings growth is now happening in the other 493 stocks of the S&P 500, indicating a broadening of the market. Check out our episode: What Is Market Breadth (⁠Ep. 45⁠).

Fed (Papa) Powell Finally Gonna Cut Rates 🙌

The recent Jackson Hole meeting indicated that a rate cut is likely, with Fed Chair Jerome Powell focusing on the labor market and the need to avoid further pai

Support the show

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49. Better w/ My Finance-Sis, Pt 2: Funds

1 Recommendations

Continuing our "Better with my Finance-Sis" Mini-Series, in part 2 we talk all about Funds! But not just the different types of investment funds, also the difference between Passive and Active Funds.

Passive Funds vs Active Funds

What is a passive fund?

Passive funds usually have lower expense ratios, with a more simplified investment strategy and less involvement of fund managers (or they can also be managed by computers).

They do still follow a benchmark and aim to deliver returns with that benchmark, and are still subject to 2 important items we need to cover called: expense ratio and tracking error.

Tracking Error Defined: Tracking error is a measure of how closely a portfolio follows the index to which it is benchmarked.
Expense Ratio Defined: The expense ratio is how much of a fund's assets are used towards administrative and other operating expenses. Because an expense ratio reduces a fund's assets, it reduces the returns investors receive.

What is an active fund?

Active funds typically feature higher expense ratios, attributed to the fund manager's in-depth research, analysis, and management efforts.

Funds We Discuss:

Money Market Funds
Mutual Funds
Target Date Funds
ETFs - Exchange Traded Funds
Fixed Income Funds

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51. What is the Business Cycle? Why Does it Matter NOW?

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We are revisiting the business cycle and how it relates to the menstrual cycle, much like we did in ⁠Episode 13⁠ on Recessions, but we compare the phases in each cycle, side-by-side this time and break it down further.

What Is The Business Cycle?

The Business Cycle is Periods of economic expansion and contraction based on the 3-Ds we discussed last time: depth (how bad is it?), diffusion (how widespread?), and duration (how long?) of a broad range of economic indicators.

The periods of expansion and contraction begin and end with what is called “turning points” as defined by the ⁠NBER⁠ (National Bureau of Economic Research). The turning points become peaks and troughs. Peaks are when the economy is slowing down. Trough is when it picks back up.

Why Does It Matter?

Monitoring economic data, such as GDP and unemployment, is crucial for assessing the health of the economy and making informed investment decisions. The stock market is not the economy, but it is closely related to the business cycle and the health of the consumer. Understanding the business cycle can help investors anticipate market trends and adjust their investment strategies accordingly.

Hard Landing vs Soft Landing vs No Landing

Soft landing is a slowdown in economic growth with a controlled reduction in inflation (think of a pilot making a slow controlled descent under the cloud cover to safely land a plane) and it’s usually followed by a period of growth.

Hard landing occurs when the economy contracts sharply due to the central bank's efforts to control inflation (raising interest rates too high for too long).

No-landing occurs when the economy continues to grow despite a series of contractions in monetary policies.

"The business cycle, it's like the menstrual cycle, more than just a period."

In this analogy: