It Girl Identity Newsletter

Grab your iced matcha and read what’s moving markets this week, a step-by-step guide to analyzing a stock, and check out our It Girl recommendations!

What's Moving Markets

What’s Up:

• Sarepta Therapeutics: Soared 30.14% with FDA approval for Elevidys, a new Duchenne muscular dystrophy treatment.

• Zealand Pharma: Rose 18.62% after promising Phase 1b trial results for a weight-loss drug that could rival Ozempic.

• Asana: Jumped 14.95% after its board approved a $150 million share buyback program.

• CarMax: Shares rose 0.37% on impressive first-quarter earnings, despite a 33% profit decline.

• Hertz Global: Popped 15.95% after raising its bond offering to $1 billion to update its rental car fleet.

• Lovesac Co. (LOVE): this furniture company recently beat earnings expectations and expected to rise 50% in the next year.  

What’s Down:

• Nvidia: Fell 3.22% as investors took profits after a strong run.

• Smith & Wesson Brands: Dropped 12.87% despite beating earnings forecasts, due to lower sales expectations for next quarter.

• LendingTree: Slid 2.48% after a report revealed hackers auctioning off stolen customer data.

• Palantir: Fell 6.78% following an analyst downgrade due to its high valuation.

• Bitcoin Mining Stocks: Marathon Digital Holdings dropped 7.02%, Riot Platforms fell 8.35%, and CleanSpark sank 9.81% after a sell-off following a bitcoin price rally.

Other News:

• S&P 500 and Nasdaq vs. Dow:The S&P 500 and Nasdaq have often outperformed the Dow due to their tech focus and market-cap weighting. However, last week, the recent tech stock sell-offs, led by Nvidia, have reversed this trend.

• Bond Market: Bonds remained flat as investors analyzed economic data, preparing for this week's PCE report.

• Gold Prices: Gold prices dropped as the dollar strengthened, making it more expensive to hold gold.

• Luxury Market May Be Shaky: Italian sneaker brand Golden Goose postponed its Milan IPO due to market volatility after European elections saw a rise in far-right anti-EU parties. French President Macron's snap elections also caused uncertainty. The Stoxx 600 index dipped 5% but has since recovered slightly. The political instability poses risks to Golden Goose's IPO and market conditions.

• Apple Plays Catch Up in AI: Apple is in talks with Meta to integrate its generative AI model into Apple Intelligence, aiming to enhance its new AI system for iPhones and other devices. As a latecomer to generative AI, Apple is seeking partnerships, including ChatGPT, for more complex tasks. This move highlights Apple's efforts to stay competitive in the AI space.

• A Very Birkin Birthday: The basic black leather Birkin 25 handbag costs $11,400 before tax at Hermès. Successful buyers can double their money by reselling it. The Birkin bag, now 40 years old, has become a phenomenon, shifting the power dynamics between shoppers and store workers due to its high resale value.

Earnings Calendar this Week:

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, June 24

• Fed Speakers: Christopher Waller, Austan Goolsbee, Mary Daly  

Tuesday, June 25

• Fed Speakers: Michelle Bowman, Lisa Cook  

• April S&P Case-Shiller Home Price Index: Important for understanding market trends, measuring changes in home prices across 20 cities.

• May Consumer Confidence: Gauges how optimistic consumers are about the economy.  

Wednesday, June 26

• May New Home Sales: Tracks sales of newly constructed homes, and is a good indicator for the health of the housing market. Forecast: 650,000 homes (Previous: 634,000).

Thursday, June 27

• Initial Jobless Claims (June 22): Number of people filing for unemployment benefits for the first time. Forecast: 240,000 claims (Previous: 238,000).

• GDP (2nd Revision for Q1): Measures total economic output of the country. Forecast: 1.3% growth (Previous: 1.3%).

Friday, June 28

• Fed Speakers: Tom Barkin, Michelle Bowman  

• May Personal Income: Measures income received by individuals, and helps predict consumer spending. Forecast: 0.4% increase (Previous: 0.3%).

• May Personal Spending: Measures how much consumers (aka the it girls) are spending. Forecast: 0.3% increase (Previous: 0.2%).

• May PCE Index: Personal Consumption Expenditures Price Index, the Fed’s fave inflation measure. Forecast: 0.0% (Previous: 0.3%).

  • PCE Year-Over-Year: Annual change in the PCE index. Important for understanding long-term inflation trends. Forecast: 2.6% (Previous: 2.7%).

  • May Core PCE Index: Excludes food and energy prices, providing a clearer picture of inflation. Forecast: 0.1% (Previous: 0.2%).

  • Core PCE Year-Over-Year: Annual change in the Core PCE index. Forecast: 2.6% (Previous: 2.8%).

• Consumer Sentiment: Gauges how optimistic consumers are about the economy. Forecast: 65.9 (Previous: 65.6).

How to Analyze Stocks:

1. Business Model: This is how a company makes money, and helps you see if the company has a clear path to profit.

2. CEO Behavior/Management Capability: Look how well the company is managed, such as signs of level-headedness and good decision-making. If the CEO behaves like Anxiety from Inside Out, it might not be a great investment choice. Remember that strong management can guide a company to success and rise in stock prices.

3. Sustainable Competitive Advantage: Identify what makes the company unique compared to its competitors, such as a unique product, strong brand loyalty, or cost advantage. For example, Nvidia (NVDA) has a competitive edge in AI due to its long-standing production of GPUs since the 90s, giving it a significant market share lead over competitors. This advantage is crucial for maintaining market position and staying ahead of rivals.

4. Attractiveness of Industry: Understand the industry's potential for growth. For instance, Artificial Intelligence (AI) is currently a rapidly growing industry.

5. Risks: Check if your potential investments face legal issues, regulatory risks, competition, or changes in the market.

6. Balance Sheet: This shows a company's financial position at a specific point in time, detailing its assets, liabilities, and equity. Look for the balance sheet in a company's annual report or on financial websites.

   • Here’s the link to Lululemon’s balance sheet in their 2023 Annual Report as an example: Lululemon (LULU) 2023 Annual Report.

   • How to Check: Use the "Find" function by pressing Control + F (or Command + F on Mac) once you are in the report to search for specific items quickly.

   • Check These Six Things: 

     • Assets: Check the composition—tangible (like buildings) or intangible (like patents). High-quality assets are essential for long-term value.

     • Liabilities: Note the types and amounts. High debt levels or significant short-term obligations can indicate financial stress.

     • Equity: Represents the net value of assets after liabilities. Positive equity indicates the company's overall value.

     • Debt-to-Equity Ratio: Compares total debt to total equity, showing the company's ability to cover debt. A lower ratio is better.

     • Current Ratio: Compares current assets to current liabilities, indicating short-term liquidity. A ratio above 1 means the company can cover short-term debts.

     • Working Capital: The difference between current assets and liabilities. Positive working capital means the company can cover short-term obligations.

7. Profitability: Shows how profitable the company is. You can find this info in the company's financial statements, particularly the income statement.

8. Historical Growth/Outlook: Check the company's past and projected growth rates. Look for this info in the company's financial reports or analyst reports.

9. Valuation: Determines the true value of a company's stock. You can find valuation metrics in financial websites such as Yahoo Finance or analyst reports.

It Girl Recommendations

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Financial Fashion

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4. 2nd Row Right Look

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See you next Monday It Girls!

With Love,

It Girl Identity