It Girl Identity: Issue 23

It Girl Identity Newsletter

Grab your oatmilk latte and dive into this week’s market movers, learn about dividend investing, and check out our curated recommendations from It Girl Identity!

What’s Moving Markets

Markets rallied after digesting both the election and another rate cut.

What’s Up

• Election Aftermath: The reelection of former President Trump sent stocks rallying, with the S&P rising 2.5%, the DOW by 3.6%, and the Nasdaq by 2.95%. Tesla specifically, with Musk’s alignment with the new administration, rose 25%. Crypto also rallied, with Bitcoin reaching an all-time high of $77,000 driven by Trump’s anticipated crypto-friendly deregulation.

• Top S&P 500 Gainers: Fortinet +9.99%, Tesla +8.19%, Motorola Solutions +7.37%, Expedia +3.81%.

What’s Down

• Bond Yields: Despite a rising USD and optimism for business, the 10-year treasury yield increased to 4.47% over concerns of rising debt and inflation. Fiscal policies, such as expansive tax cuts for businesses and high-income individuals, are seen as potentially increasing the US deficit, and the bond market overall is pricing in long-term inflation expectations.

• Top S&P 500 Losers: Akamai -14.40%, Airbnb -8.66%, Moderna -6.86%, Paramount Global -3.99%, Super Micro Computer -3.77%.

Markets & Economy

• Federal Reserve: For the second time this year, the Federal Reserve cut their benchmark interest rate to bring it to 4.50-4.75%. As PCE, the Fed’s preferred inflation gauge, came in at 2.1%, it seems that the fight against inflation is finally slowing. However, some economists are concerned with how the Trump administration’s trade policies are extremely likely to reignite inflationary pressures and warn there may be less rate cuts next year than originally priced in.

• AI Switchups: Salesforce is planning to hire over 1,000 workers to sell its new generative AI agent product, Agentforce. The hiring is aimed to capitalize on new momentum for AI, and coincides with plans to cut costs and fire employees, along with many other Big Tech companies. Many tech companies have been escalating their operations before reelect Trump takes office, and the Biden administration specifically is racing to complete deals with Intel, Samsung, and more to boost the US chip industry.

• BlackRock and Millennium Partnership: BlackRock is in early talks with Millennium Management about a strategic partnership. As the world’s largest asset manager takes an equity stake in one of the most profitable hedge funds, this allows BlackRock to enter the $4.5 trillion hedge fund industry, where it lacks a strong presence. Millennium has realized gains of about 14% a year since its start, and is considering launching its first fund in less liquid assets, including private credit, to sustain growth.

Earnings Calendar

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 forecasts!

Tuesday, November 12

Speakers: Fed Gov. Christopher Waller, Richmond Fed President Tom Barkin, Philadelphia Fed President Patrick Harker

• NFIB Optimism Index (Oct): Forecast: 92.0 (Previous: 91.5).

  • Definition: Measures small-businesses’ optimism about the economy.

Wednesday, November 13

Speakers: Dallas Fed President Lorie Logan, St. Louis Fed President Alberto Musalem, Kansas City President Jeff Schmid

• Consumer Price Index (Oct): Measures changes in the price level of a market basket of consumer goods and services. Forecast: 0.2% (Previous: 0.2%).

  • CPI Year Over Year: Measures the percentage change in consumer prices from the previous year. Forecast: 2.5% (Previous: 2.4%).

  • Core CPI (Sep): Excludes food and energy prices to measure underlying inflation. Forecast: 0.3% (Previous: 0.3%).

  • Core CPI Year Over Year: Measures the percentage change in core consumer prices from the previous year. Forecast: 3.3% (Previous: 3.3%).

• Monthly U.S. Federal Budget (Oct): Forecast: -$259B (Previous: -$67B).

Thursday, November 14

Speakers: Fed Gov. Adriana Kugler, Federal Reserve Chair Jerome Powell, New York Fed President John Williams

• Initial Jobless Claims (Oct 26): Forecast: 225,000 (Previous: 221,000).

  • Definition: Measures the number of new claims for unemployment benefits, indicating job market health.

• Producer Price Index (Oct): Measures the average change in prices received by domestic producers for their output. Forecast: 0.2% (Previous: 0.0%).

  • Core PPI (Oct): Excludes food and energy prices to measure inflation at the wholesale level. (Previous: 0.1%).

  • PPI Year Over Year: Measures the percentage change in producer prices from the previous year. (Previous: 1.8%).

  • Core PPI Year Over Year: Measures the percentage change in core producer prices from the previous year. (Previous: 3.2%).

Friday, November 15

• Import Price Index (Oct): Forecast: -0.1% (Previous: -0.4%).

• U.S. Retail Sales (Oct): Forecast: 0.3% (Previous: 0.4%).

  Sources: Nasdaq, Markets Insider, WSJ, Market Watch

Dividend Investing

Dividend investing is a strategy focused on buying stocks that regularly pay out a portion of the company’s earnings to shareholders. This approach can help you build a passive income stream, offering a way to reinvest earnings or supplement other income sources.

Why Dividends Matter: Dividends offer a way to earn money without selling stocks, ideal for those looking to accumulate wealth steadily. They can also help stabilize portfolios during volatile market periods, as dividends can provide a reliable return even if stock prices fluctuate.

Types of Dividend Stocks:

1. High-Yield Dividend Stocks: These stocks pay above-average dividends, providing a higher immediate income, but may carry more risk.

   • Example: AT&T, Altria

2. Dividend Aristocrats: Companies in the S&P 500 that have consistently raised dividends for 25+ years, known for stability and reliability.

   • Example: Coca-Cola, Procter & Gamble

3. Dividend Growth Stocks: These stocks pay dividends that are expected to grow over time, often in sectors with strong potential for expansion.

   • Example: Microsoft, Visa

Key Factors to Consider:

• Dividend Yield: The percentage return based on the current stock price (higher yields aren't always better; stability matters).

• Payout Ratio: Shows what percentage of earnings a company pays out in dividends (generally, a lower payout ratio indicates the dividend is sustainable).

• Dividend Growth History: Companies with a history of dividend increases can signal financial health.

Pros and Cons of Dividend Investing:

• Pros: Steady income, tax advantages, potential for long-term growth.

• Cons: Slower stock price appreciation, tax on dividends (in some cases), risk if dividends are cut.

Starting Tips for Dividend Investing:

1. Diversify across sectors to minimize risks.

2. Consider reinvesting dividends to compound growth.

3. Focus on quality companies with consistent dividend records.

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

It Girl Recommendations

Gearing up for finals season? Here are some study tips from us to you!

1. Use a "Pomodoro with a Twist": Try studying with a modified Pomodoro technique—study for 25 minutes, then take a break... but use your break to do something fun and random! It could be dancing to your favorite song, texting a friend something funny, or even doing a mini journaling session to reflect on the day. This keeps your brain engaged without feeling overwhelmed.

2. Try Scent-Association for Memory: Your sense of smell is strongly tied to memory. Light a particular candle or use a specific scent during your study sessions and then smell it again during the exam. The scent will trigger your memory, helping you recall the material you studied while it's fresh.

3. Reverse-Teach It: Take a random, unrelated subject (like a TV show you’re into) and try teaching it as if it’s part of your exam. Pretend you're explaining the concept to someone who knows nothing about it. The weird part? It makes the subject stick better because your brain has to simplify complex concepts in a way that’s clear and memorable.

Finance Books

Hey It Girls! Dive into these must-read finance books that will elevate your money game and empower your financial journey. Whether you're just starting out or looking to refine your strategy, these books offer insights and practical wisdom to guide you.

1. Rich Girl, Broke Girl by Kelley Keehn: Tailored for women, this book provides practical advice for various life stages, from handling debt to building wealth and achieving financial independence. Keehn breaks down the mindset shifts that can help you take control of your finances confidently.

2. Financial Feminist by Tori Dunlap: Created by the founder of Her First $100K, this book delves into empowering women financially by addressing taboo topics. Dunlap covers salary negotiation, investing, and breaking free from limiting financial narratives through a feminist lens.

3. Work Optional: Retire Early the Non-Penny-Pinching Way by Tanja Hester: For those dreaming of financial independence and early retirement without extreme frugality, this book is a practical guide. Hester provides tools for designing a sustainable lifestyle that balances financial freedom with personal fulfillment.

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See you next Monday, It Girls!

With Love,

It Girl Identity