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Wall Street Whispers: Your Weekly Financial Briefing & Part 2 of "Credit Alchemy" Series

Wall Street Whispers: Your Weekly Financial Briefing & Part 2 of "Credit Alchemy" Series

Chakkani Newsletter
April 27, 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: 5,099.96 +51.54 (+1.02%)
NASDAQ: 15,927.90 +316.14 (+2.03%)
Dow Jones: 38,239.66 +153.86 (+0.40%)
10-Year Treasury Yield: 4.663 (-0.043)
Bitcoin: $63,732.05 -901.93 (-1.4%)

Market Bites::

1. Tech Titans Tango: Alphabet and Microsoft Lead Wall Street Rally: In a financial dance that left investors humming, Alphabet and Microsoft took center stage on Wall Street. Alphabet’s debut dividend and a $70 billion stock buyback program had the crowd cheering, propelling its shares to an all-time high and pushing its market value past the $2 trillion mark. Meanwhile, Microsoft’s AI-powered cloud services wowed the audience, beating earnings estimates. As the curtain fell, the Commerce Department’s inflation data provided a sigh of relief, calming fears of stagflation. The S&P 500 and Nasdaq Composite joined the encore, gaining points, while Exxon Mobil stumbled and Intel faced a chipper challenge. Can earnings save the day? Stay tuned! 📈💡🎩

2. Inflation Dance: Fed’s Higher-for-Longer Stance Faces Hotter Moves: In the grand ballroom of economics, inflation twirls with the Federal Reserve, leaving investors guessing. The Fed’s “core” Personal Consumption Expenditures index, sans food and energy, waltzed in at 2.8% year over year for March—matching February but sashaying a tenth higher than expected. Month over month, inflation pirouetted a modest 0.3%, hitting the right note.

Yet, the Fed remains coy. It won’t cut rates hastily, preferring a slow tango with inflation. Markets, once jittery about a March or June cut, now sway toward September. But July? A bridge too far, unless inflation waltzes back to 2% alongside economic woes.

Fed Chair Jay Powell, our maestro, warns of elevated inflation on the three- and six-month charts. His symphony: patience. Achieving 2% confidence takes time, he says. A departure from prior notes, perhaps influenced by a housing crescendo.

Luke Tilley, our economist minstrel, predicts a July encore. Inflation’s 2.8% melody still hums within the Fed’s 2.6% forecast. But beware—the three-month rhythm crescendos to 4.4%. A seasonal high note? The Fed’s dance card is full, and rate hikes may rejoin the playlist. 🎶🕺💰

3. Inflation Dance: Fed’s Higher-for-Longer Stance Faces Hotter Moves: In the grand ballroom of economics, inflation twirls with the Federal Reserve, leaving investors guessing. The Fed’s “core” Personal Consumption Expenditures index, sans food and energy, waltzed in at 2.8% year over year for March—matching February but sashaying a tenth higher than expected. Month over month, inflation pirouetted a modest 0.3%, hitting the right note.

4. Inflation Dance: Fed’s Higher-for-Longer Stance Faces Hotter Moves: In the grand ballroom of economics, inflation twirls with the Federal Reserve, leaving investors guessing. The Fed’s “core” Personal Consumption Expenditures index, sans food and energy, waltzed in at 2.8% year over year for March—matching February but sashaying a tenth higher than expected. Month over month, inflation pirouetted a modest 0.3%, hitting the right note.

5. Alphabet’s Earnings Waltz: First Dividend and $70 Billion Buyback Spark Stock Surge: In a financial pas de deux, Alphabet pirouetted to applause. The tech giant’s first-quarter results dazzled, with revenue soaring to $80.54 billion—a 15% leap from last year. Earnings, at $1.89 per share, outshone Wall Street’s expectations. Alphabet’s debut dividend of 20 cents per share and a $70 billion stock buyback had investors twirling. The stock’s 10% leap marked its sharpest rally since 2015, valuing Alphabet at over $2.1 trillion. As the curtain falls, YouTube advertising and Google Cloud revenue take a bow. Encore, Alphabet! Encore! 🚀💡🎩

6. New Homebuyers Dance to a Different Beat: Focusing on New Construction: In the bustling real estate ballroom, new homebuyers twirl to a different tune. Despite low supply, soaring prices, and interest rate leaps, their eyes are on new construction. Why? Because new homes offer more incentives and availability than their pre-owned counterparts.

March’s Moves:
- About 693,000 new single-family houses pirouetted into buyers’ hearts, up 8.3% from last year.
- The median sales price waltzed to $430,700, according to the U.S. Census Bureau.
- Meanwhile, sales of previously owned homes stumbled by 3.7% from March 2023, according to the National Association of Realtors.
Golden Handcuffs:
- Existing homeowners, bound by the mortgage rate lock-in effect, hesitate to become sellers.
- With 30-year fixed-rate mortgages above 7%, they’re reluctant to trade their low rates for higher ones.
Builders Take the Floor:
- Builders, more flexible with pricing, offer enticing incentives:
  - Rate buy-downs
  - Price cuts
  - Even covering closing costs
- The dance card favors new home sales, where transaction volumes outshine margins.
Closing the Gap:
- New builds still cost slightly more than existing homes, but the gap has narrowed.
- Over the last six months, the median price for a new home is only about 4% higher than an existing house.
- A far cry from pre-pandemic days when new homes commanded over 40% higher prices.

So, whether you’re a budget-conscious buyer or a seasoned dancer, consider the rhythm of new home sales—it’s a fresh beat on the real estate floor. 🏠🎶💃

7. Crypto Tango: Bitcoin and Ether Take a Dip, ConsenSys Sues SEC: In the crypto ballroom, Bitcoin and Ether execute a graceful dip. CNBC Crypto World, our dance floor, showcases daily trading updates and high-profile interviews from the digital currency markets. Today’s spotlight: Lyn Alden, founder of Lyn Alden Investment Strategy and board director of Swan Bitcoin. She unravels Bitcoin’s performance amidst macroeconomic pressures. As the music plays on, ConsenSys waltzes into the spotlight, suing the SEC. The crypto industry’s rhythm keeps us guessing—will it be a tango or a twist? 💃📉🕺

8. Tesla Autopilot’s Dance with Danger: Critical Safety Gap Linked to Collisions: In the high-speed tango of autonomous driving, Tesla’s Autopilot system has tripped over its own shoelaces. Federal authorities reveal a “critical safety gap” that contributed to 467 collisions, including 13 fatalities. The National Highway Traffic Safety Administration (NHTSA) scrutinized 956 crashes involving Autopilot, concluding that Tesla’s design failed to ensure driver attention and proper use. A software update meant to fix defects fell short, leaving more crashes in its wake. As the NHTSA report takes center stage, lawmakers call for Autopilot to stick to its designated dance floor. 🚗💥🕺

9. CDs vs. IRAs: A Financial Dance-Off: In the financial ballroom, CDs and IRAs vie for your investment affection. Let’s break it down:

CDs (Certificate of Deposit):
- Pros:
  - Guaranteed return—like a dance partner who never misses a step.
  - Higher yield than most savings accounts—think of it as a fancy twirl.
- Cons:
  - No liquidity—your money’s committed to the waltz.
  - Early withdrawal penalty—like stepping on toes.
IRAs (Individual Retirement Accounts):
- Pros:
  - Potential for higher returns—like a daring tango with the stock market.
  - Long-term retirement savings—think of it as a marathon, not a quickstep.
- Cons:
  - Market volatility—sometimes it’s a cha-cha, sometimes a stumble.
  - Limited annual contributions—don’t overdo the spins.

So, which partner should you choose? If you’re after stability, CDs are your waltz. But if you’re ready for a riskier routine with potential rewards, IRAs lead the way. 🕺💰🎩

10. P2P Apps vs. High-Yield Savings: A Financial Tango: In the financial dance hall, P2P apps like Venmo, PayPal, and Cash App twirl alongside high-yield savings accounts (HYSAs). Let’s break it down:

P2P Apps:
- Pros:
  - Convenient—like a quick cha-cha with your phone.
  - Free payment options for friends and family—think of it as a friendly waltz.
- Cons:
  - Lack of federal deposit insurance—your money’s dancing without a safety net.
  - Unclear user agreements—like a tango with no choreography.
High-Yield Savings Accounts (HYSAs):
- Pros:
  - Safe and insured—like a steady foxtrot with FDIC or NCUA protection.
  - Flexibility to withdraw or deposit—dance at your own pace.
- Cons:
  - Limited monthly withdrawals—don’t overdo the spins.
  - No flashy moves—interest rates are steady, not showy.

So, choose your partner wisely: P2P apps for convenience or HYSAs for stability. Either way, keep the rhythm of your finances in step! 💃🏦🎩

Phew, that's a lot to unpack! Remember, this is just a snapshot of the complex and ever-evolving financial landscape. So, stay informed, diversify your investments, and don't forget to have a little fun along the way!

Bonus Tip: Want to dig deeper into any of these stories? Let me know in the comments below, and I'll be happy to share some additional resources!

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!

The Art of Building Credit: From Zero to Hero

Navigating the Credit Landscape

Introduction

Welcome to the second installment of our credit series! Today, we’ll embark on a journey from credit ground zero to credit hero status. Whether you’re starting fresh or rebuilding, this guide will equip you with the tools to build credit like a pro. 🌟

1. The Blank Slate: Establishing Credit

Secured Credit Cards

Imagine a credit card with training wheels. That’s a secured credit card.
How it Works: You deposit money (usually $200-$500) as collateral. Your credit limit equals the deposit.
Why It Matters: Secured cards help you prove your creditworthiness.

2. Credit-Builder Loans

These loans are like credit boot camps.
How it Works: You borrow a small amount (say, $1,000) and repay it over time.
Why It Matters: Timely payments boost your credit history.

3. Authorized User Status

Piggyback on someone else’s credit.
How it Works: Become an authorized user on a family member’s credit card.
Why It Matters: Their good credit habits benefit you.

4. The Heroic Move: Graduating to Unsecured Cards

Unsecured cards are the real deal.
How it Works: No collateral needed. Lenders trust you.
Why It Matters: Unsecured cards boost your credit profile.

5. The Golden Rule: Patience and Consistency

Building credit takes time. Rome wasn’t built in a day!
How it Works: Pay bills on time, keep balances low, and avoid credit binges.
Why It Matters: Consistency pays off—literally.

Conclusion

Congratulations! You’ve just leveled up in the credit game. Remember, credit building is a marathon, not a sprint. Stay tuned for our next episode: “Credit Card Chronicles: Friend or Foe?” 🌐

—

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 first part in this comprehensive series on “Credit Alchemy: Transforming Your Worth into Wealth” ( we want to get you ready for the next step in your life, whatever it may be)

If you liked this, check out other series including, a 9 part extensive series on “All Things Tax Related” and 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 wealthness (you see what we did there:)) to you!

📚 Bonus Resources:

Investopedia: Investopedia provides comprehensive information on creditworthiness, including factors that impact it, how to check your credit report, and steps to enhance your creditworthiness. Remember that your creditworthiness affects loan approvals, interest rates, and more.
The Balance: The Balance explains creditworthiness and emphasizes the importance of monitoring your credit score. You can access your credit score for free through services like Credit Karma, Credit Sesame, or WalletHub.
SuperMoney: SuperMoney offers practical steps for managing creditworthiness. You can obtain a free annual credit report from AnnualCreditReport.com or use free credit monitoring services like Credit Karma or Credit Sesame.

Remember to stay informed, check your credit score regularly, and make timely payments to maintain a strong credit profile. 🌟📊💳

Your Wealth Journey Awaits!

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