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  • 🦢Black Swan Street Weekly Stock Market Summary (March. 25th - March. 29th 2024)

🦢Black Swan Street Weekly Stock Market Summary (March. 25th - March. 29th 2024)

Federal Reserve records record loss, Tesla falls off deep end, Robinhood's new credit card, social media ban, and ...

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Welcome to Black Swan Street!

Welcome back to another edition of Black Swan Street!!!

It was an action-packed week, so let’s get into it:

  • The Federal Reserve’s Record Loss🫢

  • The Swan’s Selections🦢

  • In Other News🗞️

  • Next Week In The Stock Market🔮

  • The Swan’s Story Of The Week🦢

Read time: 7 minutes

The Federal Reserve’s Record Loss🫢

This Is Fine GIF by Dash Digital Cash

Gif by Dashpay on Giphy

What happened? You know that central bank system that’s the backbone of the entire United States financial system? It’s called the Federal Reserve? Well it just reported the largest operating loss on record. In 2023, the Federal Reserve recorded an operating loss of -$114.3 billion (compared to 2022, when the central bank recorded a net income of $58.8 billion).

How is this possible? To battle inflation, the Fed’s been hiking the federal funds rate. This caused the Federal Reserve’s expenses to climb.

By the numbers:

  • Interest expense on depository institutions’ reserve balance increased $60.4 billion YoY

  • Interest expense on securities sold under agreements to repurchase increased $62.4 billion YoY

  • Interest income on securities acquired through open market operations decreased $6.2 billion YoY

Read the full annual audited financial statements here

What does all this do? Contribute to the largest operating loss on record.

What does this mean going forward? When there’s a reported loss, the Fed uses a deferred asset, which essentially works as an IOU by the Fed to itself. And when the Federal Reserve becomes profitable once again, they divert excess earnings to pay down the deferred asset.

A November report by the St. Louis Fed estimates the Federal Reserve will carry this deferred asset until mid-2007 (which means no profits to the government for a few years).

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The Swan’s Selections🦢

📈Institutional Stock Purchases Via Buybacks Soar. U.S. companies’ purchases of domestic equities through stock buybacks and corporate acquisitions will hit a 6-year high. This figure is expected to be ~$625 billion this year.

🛩️Talk About A Rough Year For Boeing. After countless plane troubles, lawsuits, and a nearly -25% decline in stock prices, Boeing is in the midsts once again. It was announced, Boeing CEO, Dave Calhoun, will be stepping down at the end of the year.

📱Get Off Your Phones Kids! Florida Governor, Ron DeSantis, has signed a bill that prohibits minors under the age of 14 from having social-media accounts.

🌉Major Bridge Collapse. A cargo ship has made contact with the Francis Scott Key Bridge, a central bridge located just off of the Port of Baltimore. The city is in big trouble as it looks to clean the fallen wreckage from the harbor before it causes significant hits to the local economy.

🚗Tesla Falls Off The Deep End. Tesla can’t seem to stop its fall, as it continues to tumble with no signs of stopping. Tesla stock has dropped more than 60% from its 2021 all-time high of $407.

💳Robinhood’s Game-Changing Credit Card. The fintech has released a new credit card that rivals the likes of Capital One, Discover, and Amex. This new card promises an industry-leading 3% cash back on most purchases with no annual fee.

In Other News🗞

  • U.S. investment funds pull $13.3 billion from BlackRock in anti ESG campaign - SN

  • Asia PE deals set for worst Q1 since 2015 - RT

  • U.S. median home prices hit a 2.5 year low, down 7.6% YoY - RT

  • Australia plans first stress test of financial system in 2025 - BBG

  • EV maker, Lucid Group, will receive a $1 billion investment in the form of a private placement for convertible preferred stock from Ayar Third Investment, an affiliate of Saudi Arabia’s PIF - BBG

  • Investors pour money into U.S. corporate bond funds at record rate - FT

  • China banned Intel and AMD chips in government computers - FT

  • Walmart-backed digital marketing firm ‘Ibotta’ filed for a U.S. IPO - RT

  • Fed posts record $114.3 billion loss in 2023 - RT

  • Visa, Mastercard agreed to $30 billion settlement over U.S. transaction fees - FT

  • Dell has now slashed ~6k jobs as part of broad cost cuts - RT

  • Johnson & Johnson is in talks to acquire medical device maker ‘Shockwave Medical’, which has an ~$11.9 billion market cap - WSJ

  • Draftkings shares fall on news NCAA wants to ban college prop bets - BBG

Next Week in the Stock Market🔮

Earnings Calendar Next Week:

What the Swan is watching:

Monday: PVH Corp

Tuesday: Paychex, Dave & Buster’s

Wednesday: Levi Strauss, BlackBerry

Thursday: Conagra Brands, Lamb Weston Holdings, RPM International

Economic Calendar Next Week:

The Swan’s Story Of The Week🦢

🚀This billionaire is building a hotel in space.

Elon Musk and Jeff Bezos have both invested billions into space startups, but these billionaires have made their money in other industries.

Kamal Gafarian is the only billionaire whose Fortune comes entirely from space startups. He started Intuitive Machines, a company that develops Lunar Landers who are in a tight race to be the first private space venture to land on the moon. -(BSS)

The Wrap-Up🔄

🎊🎉 That’s it for this week 🎉🎊

As you probably noticed we included some new sections this week (The Swan’s Story of the Week), so let us know what you think about it⬇️

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