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Wall Street Whispers: Your Weekly Financial Briefing & Final Part (9) in our "Taxing It Easy" Series

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Chakkani Newsletter
April 13, 2024

Hey Chakkani Fam! Welcome to Your Weekly Financial Briefing! We've got bite sized market moves, big tech bets, and whispers of change from all over the world. Grab a cup of joe (or your preferred drink) and let's dive:

Bears & Bulls: Markets Notes & Numbers

  • S&P 500: 5,123.41 -75.65 (-1.46%)

  • NASDAQ: 16,175.09 -267.10 (-1.24%)

  • Dow Jones: 37,984.24 -475.84 (-1.24%)

  • 10-Year Treasury Yield: 4.518 -0.0.58

  • Bitcoin: $67,006 -3,339.04 (-4.75%)

    All data as of last trading day's market close time read more…

Market Bites::

  1. Investors Do the ‘Equity Shuffle’ Amid Inflation Tango:

    Global investors are doing the financial equivalent of a cha-cha slide, shimmying away from equity funds like they’re dodging a hot potato. Why? Well, it’s all about that pesky inflation monster lurking in the shadows. Economic data recently did a little shimmy of its own, revealing that U.S. consumer prices have been doing the Macarena—increasing more than expected in March. Now, the big question is whether the Federal Reserve will bust out the interest rate scissors in June.

    Here’s the scoop: Last week, equity funds saw a whopping $2.9 billion escape hatch. U.S. and Asian equity funds were like synchronized swimmers, diving out with $2.7 billion and $1.9 billion, respectively. But wait, there’s a plot twist! European equity funds were the cool kids at the party, sauntering in with an $891 million cash bouquet.

    Tech stocks, though? They’re feeling a bit like Cinderella after midnight. Investors yanked a net $708 million out of the tech sector, breaking a 12-week buying streak. Ouch, that stings!

    But hold your horses (or bulls, if you prefer). Global equity funds had a wild spring fling, waltzing in with a sizzling $60 billion during Q1. Why? Because they’ve got a crush on those Federal Reserve rate cuts. Riskier global equities suddenly look like the prom queen, and investors are lining up for a dance.

    Meanwhile, global bond funds are having their own little soirée, raking in a cool $12.8 billion. Why? Well, someone whispered that the U.S. rate cut might be fashionably late to the party. Mark Haefele, chief investment officer of UBS Global Wealth Management, probably said it best: “Investing—it’s like a tango. Sometimes you lead, sometimes you dip, and sometimes you just hope your partner doesn’t step on your toes.” 💃🕺

  2. Consumer Sentiment Does the Limbo, Inflation Expectations Cha-Cha Upward:

    Picture this: U.S. consumer sentiment doing the limbo under the shadow of rising inflation expectations. It’s like a dance-off where the economy’s got its groove on, but the audience is holding its breath.

    The University of Michigan’s sentiment index waltzed in at 77.9 this month, a tad lower than its March finale of 79.4. But here’s the twist: It’s been doing the tango within a tight 2.5-point range since January. Apparently, it’s not ready to break out the disco ball just yet—5 points are needed for a statistically significant difference, and it’s playing it cool.

    Now, let’s talk inflation. The one-year expectations? They’ve got their salsa shoes on, shimmying up to 3.1% in April from 2.9% in March. That’s right, inflation’s doing the cha-cha, and it’s just above the pre-COVID-19 range of 2.3-3.0%. Meanwhile, the five-year outlook? It’s practicing its foxtrot, stepping up to 3.0% from 2.8% last month.

    Joanne Hsu, the Director of Surveys of Consumers, summed it up: “Economy, you’ve got some moves, but that election over there? It’s like a surprise twist in the choreography.” 💃🕺

  3. Supreme Court Cha-Cha: Truckers Dodge Arbitration Tango:

    In a legal showdown that’s got more twists than a country line dance, the U.S. Supreme Court just gave truck drivers and other transportation folks a backstage pass to the courtroom. Forget private arbitration—these road warriors can now waltz right into court with their employment grievances.

    Picture Neal Bissonnette, a delivery driver for LePage Bakeries Park Street (a Wonder Bread sidekick). He’s been singing the blues about Flowers Foods treating him like an indie contractor instead of a full-fledged employee. And guess what? The justices gave his case a standing ovation, tossing out a lower court’s dismissal like yesterday’s stale baguette.

    But here’s the spicy salsa move: The court ruled that the exemption from arbitration isn’t just for transportation industry insiders. Nope, any ol’ transportation worker can join the party. Chief Justice John Roberts, in his best cowboy boots, declared, “Y’all don’t need a CDL to ride this exemption train.”

    Now, let’s talk about the bread and butter (pun intended). LePage’s customers were gobbling up loaves, not shipping services. But the court said, “Hold your horses! A transportation worker’s a transportation worker, whether they’re hauling freight or baguettes.”

    So, Amazon and Walmart, consider this your wake-up call. The road ahead just got bumpier. And as they say in legal circles, “When life gives you arbitration lemons, make a lawsuit margarita.” 🌮🎉

  4. Consumer Sentiment Does the Limbo, Inflation Expectations Cha-Cha Upward:

    Picture this: U.S. consumer sentiment doing the limbo under the shadow of rising inflation expectations. It’s like a dance-off where the economy’s got its groove on, but the audience is holding its breath.

    The University of Michigan’s sentiment index waltzed in at 77.9 this month, a tad lower than its March finale of 79.4. But here’s the twist: It’s been doing the tango within a tight 2.5-point range since January. Apparently, it’s not ready to break out the disco ball just yet—5 points are needed for a statistically significant difference, and it’s playing it cool.

    Now, let’s talk inflation. The one-year expectations? They’ve got their salsa shoes on, shimmying up to 3.1% in April from 2.9% in March. That’s right, inflation’s doing the cha-cha, and it’s just above the pre-COVID-19 range of 2.3-3.0%. Meanwhile, the five-year outlook? It’s practicing its foxtrot, stepping up to 3.0% from 2.8% last month.

    Joanne Hsu, the Director of Surveys of Consumers, summed it up: “Economy, you’ve got some moves, but that election over there? It’s like a surprise twist in the choreography.” 💃🕺

  5. World Bank’s Dance of Reform: Cha-Cha with Accountability, Tango with Private Capital:

    In the grand ballroom of global finance, World Bank President Ajay Banga is leading a spirited dance of reform. Picture him twirling in his tuxedo, whispering sweet nothings about process improvements and accountability.

    First move: Speed up the loan approval waltz. The World Bank’s been practicing its footwork, trimming the average 19-month project approval time by three months. But wait, there’s more! By mid-next year, they’re aiming for another three-month haircut. Talk about a quickstep!

    Now, let’s salsa into the lender’s expansion plans. Banga, who swapped his MasterCard CEO hat for a World Bank crown last June, isn’t just doing the cha-cha with poverty alleviation. Nope, he’s got climate change and global crises on his dance card. But here’s the catch: These moves need serious moolah. The World Bank’s lending capacity was a cool $128.3 billion in the last fiscal year, but that’s like bringing a feather to a heavyweight bout.

    So, they did a little financial tango. Adjusted the loan-to-equity ratio, unlocked an extra $40 billion over a decade. But hey, it’s still pocket change compared to the trillions needed for the energy transition and climate fixes. Cue the dramatic violin music.

    But wait, there’s an encore! Banga’s team is partnering up—multilateral development banks, credit ratings agencies, and even the emergency capital stashed away like a secret treasure. They’re all joining the dance floor, ready to samba their way to sustainable development.

    So, here’s to you, World Bank. Keep those reform shoes polished, and may your moves be as bold as your mission. 💃🌎

  6. BlackRock’s Trillion-Dollar Tango: AUM Hits Record High Amid Market Surge:

    Ladies and gentlemen, step right up to witness the financial spectacle of the century! BlackRock, the heavyweight champion of asset management, just pulled off a trillion-dollar tango. 🎩💼

    In the first quarter, their assets swirled and twirled, hitting a jaw-dropping $10.5 trillion. Yes, you heard that right—trillion with a capital “T.” It’s like they’re juggling skyscrapers while riding a unicycle. How did they do it? Well, the global stock markets decided to join the party, shimmying up 7.7% according to the MSCI’s fancy gauge. And the S&P 500? It moonwalked its way to a 10% jump. 📈🌎

    But wait, there’s more! BlackRock’s AUM (that’s Assets Under Management for the uninitiated) surged 15% from last year. And those investment advisory and administration fees? They’re doing the cha-cha, pirouetting to a sweet $3.63 billion. 💰💃

    Larry Fink, the maestro behind this financial symphony, declared, “Opportunities are raining down like confetti!” He’s got his eyes on the prize: artificial intelligence, those mysterious emerging markets, and infrastructure dreams. 🌟🚀

    And guess what? BlackRock’s not done yet. They recently snagged Global Infrastructure Partners for a cool $12.5 billion. It’s like they’re building a financial Eiffel Tower—one trillion-dollar brick at a time.

    So, raise your glasses to BlackRock, the dance floor dominators. As they say in Wall Street waltzes, “When the music stops, make sure you’re holding the biggest portfolio.” 🥂🕺💍

  7. Wall Street’s Earnings Tango: Banks Disappoint Amid Inflation Jitters:

    Ladies and gentlemen, welcome to the Wall Street ballroom, where the dance floor is hot, the stakes are high, and the moves matter. Today’s performance? A dramatic tango of earnings reports, inflation fears, and geopolitical tensions.

    Major U.S. banks took center stage, but alas, their routines fell flat. JPMorgan Chase, that behemoth of assets, managed a 6% profit bump, but its net interest income forecast? A swing and a miss. Cue the disappointed sighs as its shares slid 6.5%.

    Wells Fargo, not to be outdone, dipped its toes in the shallow end. Profits down 7%, net interest income doing the limbo. And Citigroup? Well, it stumbled and lost its footing, posting a loss after splurging on employee severance and deposit insurance. Its stock? A modest dip of 1.7%.

    But wait, there’s more drama! Inflation has crashed this party, uninvited and unwelcome. The macro space is buzzing—companies sweating under the spotlight, investors nervously eyeing the dance floor. “How good do earnings need to be?” wonders Mike Dickson from Horizon Investments. Jittery vibes all around.

    And the grand finale? Economic data, hotter than a salsa night, especially that Consumer Price Index report. Suddenly, rate cuts are looking like a distant dream. Fed, are you listening? No data point screams “cut rates” right now.

    As the curtain falls, geopolitical tensions linger. Iran’s embassy airstrike adds fuel to the fire. Wall Street, take a bow. Your tango may be offbeat, but the show must go on. 💃🕺

  8. Fed’s Schmid Rejects Preemptive Rate Cuts, Favors ‘Patient’ Approach:

    In the grand ballroom of monetary policy, Federal Reserve Bank of Kansas City President Jeffrey Schmid has taken the lead in a graceful waltz. The music? Interest rates. The steps? Deliberate and patient.

    Schmid’s message is clear: No need to rush. Inflation, like a persistent dance partner, is still above target. Economic growth? It’s got rhythm. And those elevated asset prices? They’re doing the tango.

    So, what’s the verdict? The current stance of monetary policy is spot-on. Rather than a hasty rate cut, Schmid prefers to wait for “clear and convincing” evidence that inflation is on track to hit the Fed’s 2% target. It’s like waiting for the perfect beat drop before hitting the dance floor.

    And the encore? Recent price pressures have been doing the cha-cha in the services sector, fueled by a tight labor market. But for true price stability, we need a harmonious balance between supply and demand.

    So, fellow dancers, let’s be patient. The Fed’s playlist is set, and the choreography is deliberate. As they say, “Inflation, you’ve got moves, but we’re waiting for the grand finale.” 💃🎶

  9. Bitcoin’s Volatility Tango: Nerves Jitter as Halving Approaches:

    Ladies and gentlemen, step right up to the Bitcoin circus! The big top is buzzing with excitement as we approach a once-in-four-years spectacle: the Bitcoin halving. 🎪🎩

    But wait, what’s that sound? It’s the implied volatility for Bitcoin options doing the jitterbug! Last weekend, it decided to kick up its heels, reversing a downward trend from the prior week. When implied volatility rises, it’s like the market whispering, “Hey, we’re not so sure about this direction—up or down.”

    And oh, the Bitcoin price! It’s doing the cha-cha, swinging in an 8% range. Meanwhile, global financial markets are spinning like tops due to geopolitical risks. Talk about a wild dance floor!

    Now, let’s focus on the near-term moves. Implied volatility on contracts expiring in the next two weeks has spiked from 59% to 71% in just 2 days. Translation: Expectations for volatility are rising faster than a salsa beat.

    But here’s the twist: Traders are paying extra for options, like buying fancy dance shoes for protection against price swings. It’s like they’re splurging on downward protection—high premiums and all.

    So, as the Bitcoin halving approaches, keep your eyes peeled. Will it be a bullish paso doble or a bearish foxtrot? Either way, the circus tent is packed, and the audience is on the edge of their seats. 🎶💃

  10. Insuring Deposits Over $250,000: A Financial Tango of Protection:

    Ladies and gentlemen, gather 'round the financial dance floor! We’re about to waltz through the intricacies of insuring your hard-earned cash. Imagine your money in a tuxedo, ready for a fancy soirée of safety.

    The Basics: FDIC and NCUA First, meet our star performers: the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA). They’re like the insurance maestros, ensuring that your deposits at banks and credit unions are protected. Each depositor gets up to $250,000 per insured institution, per account ownership category. So whether you’re solo, dancing with a partner, or saving for retirement, your money is covered in case the institution does a financial faceplant.

    But Wait, There’s More! What if you’ve got more than $250,000? Fear not, my financially savvy friends. Here are some elegant moves to keep your funds safe without opening accounts at multiple banks:

    1. Add a Joint Account Holder: Picture a graceful twirl. Each account holder gets their own $250,000 insurance coverage. Add a joint account holder (like a dance partner) to double the protection to $500,000. If you’re married and already doing the financial tango together, this move is a no-brainer.

    2. Different Ownership Categories: Now we’re doing the cha-cha. Joint accounts are just one category. You can also have individual accounts, retirement accounts, and trust accounts. Opening accounts in different categories adds another $250,000 of insurance coverage. It’s like having backup dancers—same bank, more protection.

    The Grand Finale By keeping all your accounts at one bank, you’re leading a harmonious ensemble. Some banks even let you see everything in a single dashboard—like a synchronized dance routine. And remember, this isn’t just about steps; it’s about peace of mind. So go forth, protect your wealth, and keep the financial rhythm alive! 💃🕺

And there you have it, folks! Remember, folks, the financial world is like a game of Monopoly—sometimes you’re the banker, sometimes you’re stuck in jail, and occasionally you land on Boardwalk and buy a hotel. Happy investing! 📈💰

 P.S. Did we miss anything major? Hit us up via an email with your hot takes and financial insights!

Part 9: Conclusion - Tax Triumph, Not Tax Trauma!

Congratulations! You've conquered the tax terrain, armed with knowledge and understanding. But remember, the tax landscape is an ever-evolving one. Here are some closing thoughts to keep you on top of your tax game:

Stay Sharp: News Flash - Tax Laws Change!

Taxes aren't static. New laws, regulations, and updates emerge regularly. So, stay informed! Subscribe to IRS updates, follow reliable tax sources online, and consult your tax professional to stay ahead of the curve. Think of it as keeping your tax knowledge base fresh and updated.

Plan Like a Pro: The Future is Now!

Taxes shouldn't just be a yearly scramble. By incorporating proactive tax planning into your financial strategy, you can make informed decisions throughout the year that benefit you in the long run. Consider retirement contributions, investment strategies, and potential deductions as you plan for your future goals. Think of it as building a solid tax foundation for your financial journey.

Remember, You're Not Alone:

This guide provides a general overview, but every tax situation is unique. Don't hesitate to seek personalized advice from a tax professional. They'll be your trusted guide, navigating the complexities of the tax code and ensuring you're maximizing your benefits while staying compliant. Think of them as your tax sherpa, leading you through the mountains of information.

Remember, conquering your taxes is about knowledge, planning, and seeking help when needed. By taking these steps, you can turn tax season into a manageable process and achieve financial peace of mind. Now go forth and conquer your financial goals, armed with your newfound tax expertise!

—

So, there you have it! With a little guidance and the right tools, you'll be a master in understanding (and hopefully master it) taxes in no time. Go forth, plant your seeds, and watch your wealth garden flourish!

This is the LAST part in this comprehensive series on All Things Tax Related ( we hope it helps you in getting ready for the tax season). You can checkout the previous part(s) of the series here. We will bring the next topic or series in the next edition - EXCITING!!!

If you liked this, checkout our 5 Part series on Investing and all our previous articles here.

So, whether you are crawling and sprinting, let's do this together!

Until next time, wishing you happy wealthiness (you see what we did there:)) to you!

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