It Girl Identity: Issue 5

It Girl Identity Newsletter

Grab your lavender matcha latte and read what's moving markets this week, a detailed guide to opening an investment account, and enjoy our curated It Girl Identity recommendations!

What's Moving Markets

This week’s highlights include watching if Tesla's surge continues, corporate acquisitions, and upcoming earnings reports from major banks. Economic concerns and political shifts add to the dynamic landscape. Asian markets with newfound confidence and strong performance.

What’s Up

• Tesla (TSLA): Tesla surged 27% on positive market sentiment and anticipation ahead of its upcoming earnings report, significantly boosting the S&P 500. Despite delivering 443,956 cars in Q2—slightly less than last year—Tesla faces profitability challenges amidst fierce competition from Ford and GM. Elon Musk remains confident, focusing on future technologies like self-driving ride-hailing and humanoid robots to propel Tesla towards a potential valuation of $30 trillion. Analysts, however, highlight the imperative for Tesla to ramp up EV sales, with lower-cost models slated for early 2023.

• Paramount Global (PARA): Paramount Global saw a 15% increase, likely driven by strategic developments or market sentiment in the media sector.

• ON Semiconductor (ON): ON Semiconductor gained 8%, possibly benefiting from sector-specific news or company-specific catalysts.

• Top S&P 500 Gainers: Tesla (TSLA) +27%. Paramount Global (PARA) +15%. ON Semiconductor (ON) +8%. Advanced Micro Devices (AMD) +8%. Broadcom (AVGO) +7%.

What’s Down

• Anglo American (AAL): Shares fell after halting production at an Australian coal mine due to a fire.

• Eurofins Scientific (FR:ERF): shares fell by 4%, making it one of the slowest in the Stoxx Europe 600

• Top S&P 500 Losers: Nike (NKE) -20%. First Solar (FSLR) -11%. The Mosaic (MOS) -8%. Enphase Energy (ENPH) -8%. Walgreens Boots Alliance (WBA) -8%.

Other News

Markets and Economy:

• U.S. Market Performance Highlights: The S&P 500 (SP500) and Nasdaq Composite (COMP) saw their strongest weekly gains since late April, boosted by positive labor market data and dovish signals from Federal Reserve Chair Jerome Powell. Tesla's substantial rise also contributed, edging the S&P 500 closer to the critical 5,600 level.

• The U.S. job market cooled slightly in June: Hiring and wage growth slowed, pushing the unemployment rate up to 4.1%, its highest since 2021. Despite adding 206,000 jobs, slightly above expectations, it marked a decline from the previous month, compounded by a downward revision in May's figures. This nuanced slowdown is seen favorably by Federal Reserve observers, as it strengthens the argument for a potential interest rate cut later this year.

• Economic and Political Influences: Concerns over increasing U.S. national debt levels were underscored by Fed Chair Powell's remarks. In the UK, the Labour Party's election victory marked a shift in leadership amid economic uncertainties post-Brexit and global geopolitical tensions.

• Asian Markets Picking Up:

  • Taiwan’s stock market is the top-performing market in Asia-Pacific so far. Optimism and AI helped the Taiwan Weighted Index (WTX) surge to 28%.

  • Japan’s Nikkei 225 (N225) index is ranked second in the region with a six-month growth of 18%, reaching all-time highs. According to investment strategists at BlackRock, the Bank of Japan is more confident it will meet inflation targets, deeming Japanese macroeconomic conditions as favorable for risk assets.

  • Thailand, Indonesia, and the Philippines were the worst performers in the region. Thailand’s SET Index (SET) fell by 8%, while the Indonesian Jakarta Composite (^JKSE) and the Philippine Stock Exchange Index (PSE) fell by 3% and 0.6% respectively.

Mergers and Acquisitions:

• Saks Owner to Buy Neiman Marcus: Saks Fifth Avenue’s parent company is acquiring rival Neiman Marcus for $2.65 billion, with support from Amazon. This merger will strengthen luxury retailing and appeal to affluent clientele. The deal involves forming a new entity, Saks Global, encompassing both brands alongside Bergdorf Goodman, while Amazon and Salesforce will invest to enhance technological capabilities. This move aims to modernize customer data analytics and logistics for the upscale brands, crucial as traditional department stores face challenges like bankruptcies and store closures amidst shifting consumer habits. However, the consolidation in luxury retail may face scrutiny from antitrust regulators, similar to recent challenges in the sector.

• Boeing (BA) Acquires Spirit AeroSystems: Boeing is acquiring Spirit AeroSystems in an all-stock deal worth $4.7 billion, aiming to improve safety. Spirit AeroSystems shares jumped 5%.

• BlackRock Acquires UK Data Group Preqin: The world's largest asset manager enters the private markets data sector by acquiring Preqin for $3.2 billion, integrating research and data services for fund managers.

Earnings Calendar

This week is packed with high-profile corporate earnings reports! Keep an eye out for earnings updates from several major bulge bracket banks.

This Week's Major U.S. Economic Reports & Fed Speakers

Here is a quick breakdown of this week’s Fed Speaker events and economic indicators, what they mean, and their forecasted results!

Monday, July 8

• Survey of Consumer Expectations: Captures consumers’ outlook on inflation, earnings growth, job market, and more. (Previous: expected inflation at 3.2%, earnings growth at 2.7%, 40.5% chance U.S. stock prices will be higher).

• May Consumer Credit: Reports outstanding consumer credit, gauging economic growth. Forecast: $8.0 billion (Previous: $6.4 billion).

Tuesday, July 9

• Equitable Growth Indicators (EGIs): Measure disparities in macroeconomic outcomes for different economic, demographic, and geographic groups. Provide an understanding of equitable growth consideration in policymaking.

• June NFIB Optimism Index: Indicates the health of small U.S. businesses. Forecast: 90.3 (Previous: 90.5).

Wednesday, July 10

• May Wholesale Trade: Estimates national sales and inventories, aiding GDP calculation and evaluation of economic conditions. Forecast: 0.6% (Previous: 0.1% increase).

Thursday, July 11

Speakers: St. Louis Fed President Alberto Musalem

• June Consumer Price Index (CPI): Inflation measure based on the average change in prices of a basket of goods and services.

  • CPI (Monthly): Forecast: 0.1% (Previous: 0.0%).

  • CPI (YoY): Percent change from a year ago. Forecast: 3.1% (Previous: 3.3%).

  • Core CPI (Monthly): Excluding the volatile food and energy categories. Forecast: 0.2% (Previous: 0.2%).

  • Core CPI (YoY): Percent change from a year ago. Forecast: 3.4% (Previous: 3.4%).

• Initial Jobless Claims (June 6): Number of people filing for unemployment benefits for the first time. Forecast: 240,000 claims (Previous: 238,000).

• June U.S. Federal Budget: Describes the flow of money in and out of the U.S. Forecast: -$25 billion (Previous: -$228 billion).

Friday, July 12

• June Producer Price Index (PPI): Inflation measure based on the average change in selling prices by domestic producers.

  • PPI (Monthly): Forecast: 0.1% (Previous: -0.2%).

  • PPI (YoY): Percent change from a year ago. Forecast: 2.5% (Previous: 2.2%).

  • Core PPI (Monthly): Excluding the volatile food and energy categories. Forecast: 0.1% (Previous: 0.0%).

  • Core PPI (YoY): Percent change from a year ago. Forecast: 3.5% (Previous: 3.2%).

• July (Preliminary) Michigan Consumer Survey: Surveys how consumers feel about the economy, personal finances, and business and buying conditions. Forecast: 68.5 (Previous: 68.2).

Sources: Wall Street Journal, MarketWatch, New York Fed, Reuters, CNBC

How to Open an Investment Account

In last week’s newsletter, we covered what you should include in your portfolio. This week, we’re taking it a step further by guiding you through the process of setting up a beginner investment account.

Disclaimer: Information shared here is for educational purposes only. Consult a financial advisor for personalized advice.

When you are considering opening an investment account, you need to think about what you are investing for. Knowing your specific needs and financial goals can help you choose the correct account for you.

Types of Investment Accounts: Depending on your needs, you can open a brokerage account, 401(k), or an individual retirement account (IRA).

Brokerage Account: Typically, when investing in and trading stocks, that involves a brokerage account. Brokerage accounts can be characterized as:

• Flexible: Anyone over 18 can open an account and can put in and withdraw a desired amount of money at any time. With a brokerage account, you can invest in a full range of investment products.

• Taxed: Every year you need to pay taxes on your income (from selling shares or receiving dividends) and usually this account is the most expensive tax-wise of the three.

  Bonus Tip #1: Make sure to open an account with no account fees and no/low minimum to start investing.

401(k) Plan: This is an employer-sponsored retirement savings plan, commonly offered as part of a job benefits package. Contributions to the account are made automatically through payroll deductions. Some people may instead have access to 403(b) or 457(b) plans, which work similarly.

• Tax-deferred Investment Growth: You contribute to the amount pre-tax and don’t pay taxes while the money is sitting in the account. Income taxes are paid only when you withdraw money.

• Employer Matching: Many employers also offer to match your contributions, which is like free money to incentivize you to contribute.

  Example: Employer matches 50% of your contributions up to 6% of your salary. If you earn $100,000 and contribute $6,000 (6%), then the employer will also contribute with an additional $3,000.

• Limitations: You may be limited what investments to buy and how much you can withdraw.

IRA/Roth IRA: You can open an IRA account on your own through a brokerage firm, online investment account, or a bank. There are different types of IRA.

• Tax Benefits: Traditional IRAs offer similar benefits as the 401(k). But with this account you can invest whenever you like and even trade individual stocks, all more investment choices. Contributions are made with pre-tax dollars and may be eligible for tax deductions which will reduce your taxable income.

• Limitations: There are rules on how much you can contribute and withdraw, as well as eligibility standards.

  Bonus Tip #2: You can open an IRA if you don’t have a 401(k) at work. You might benefit from a traditional IRA if you expect to be in a lower tax bracket after you retire.

• Roth IRA: The difference is that contributions are made with after-tax dollars and all withdrawals are free and without penalty.

How to Open a Brokerage Account: Most brokerage accounts can easily be opened online through an application.

• Choose Type of Account:

  • Online Account: You can purchase and manage your investments.

  • Managed Account: You can let an investment advisor or a robo-advisor manage your investments. Robo-advisors are a low-cost option and use computer programs.

• Choose a Provider:

  • Great options for a beginner’s brokerage account include Fidelity, Robinhood, Charles Schwab, and E*Trade. These accounts are easy to use, have no account minimums, and have low to almost zero commissions.

• Open Account and Deposit Funds: After you set up the account, deposit or transfer funds to start investing. Some accounts might even ask you if you want to enable margin investing. With margin investing, you borrow money from the broker to make trades and pay interest. However, that is too risky for a beginner’s account.

Sources: Fidelity, Forbes, NerdWallet

It Girl Recommendations

Shop Our Other Recommendations Here: health, fashion, fitness, education, beauty, and skincare...

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Discover An Easier Way to Shop

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  Visit www.styl.digital to learn more.

Lavender Matcha Latte Recipe

Ingredients 

2 tsp matcha powder

1 tsp lavender syrup

3 tsp vanilla syrup

1 ½ milk of choice

Instructions

Mix the matcha powder in the milk with a whisk.

Add the lavender syrup and vanilla syrup and stir well.

Enjoy sipping your lavender matcha latte while reading It Girl Identity’s markets overview, tips, and recommendations!

Financial Fashion

To wrap up, here are some “corporate it girl” bag ideas under $150 (they are indeed laptop-friendly!). Shop these looks below:

• Top Left (Quince, $149.90)

• Top Right (Charles and Keith, $99)

• Bottom Left (Ten Tones, $76)

• Bottom Right (Béis, $148)

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See you next Monday, It Girls!

With Love,

It Girl Identity