Weekly Market Bites

end of week markets update

1) Nervous but not yet worried…

We might be at the beginning of the first market correction in more than a year. Stocks have been falling most of the week and US treasuries rising (with yields down) in the classic safety trade. While BTC has given up much of the election gains.

Here’s a summary of the market year-to-date:

2) It’s only been, what, two or three months since the Donald got elected, and the mood was euphoric.

But just like that, negative thoughts have started creeping into the market narrative.

One of the first to speak out? Hedge fund legend Steve Cohen.

Other known names have followed:

At the index level, the S&P 500 and Nasdaq are only about 5% of their highs. In market terms? That’s nothin. But things are moving in a negative vibe.

Some of last year’s hottest stocks have taken a much harder hit.

Many of these stocks like Tesla had gone up +100% in just a few months. When stocks go vertical, corrections aren’t going to be smooth and casual.

And, of course, it doesn’t help the narrative that insiders in many of these companies have been selling stock aggressively as prices soared. While retail traders bought 😆 

🫰 Can you blame them?

3) So what’s behind this negative juju?

Well, here’s what some market watchers and investors are pointing to as bad news:

• Massive federal layoffs: hundreds of thousands of jobs have been lost.

• Tariffs and trade tensions: against a growing list of countries.

• A softening labor market: cracks are starting to show.

But is that really why the market’s selling off? Who knows!

Are we just in a 5% dip? a 10% correction? or something bigger?

And really should you care? 

The legendary Peter Lynch had a thing or two to teach you regarding this. Check out this 1-minute golden oldie:

4) Over the weekend Warren Buffet dropped Berkshire Hathaway’s 2024 annual letter.

Yet before I get into any deep intellectual observations 🤣, lets stop and look at Berkshire’s stock performance:

Fantastique 👌

The old mans still got it at 94 💪

During 2024 operating earnings rose 27% compared to 2023. And the stock went up more than 20%.

But everybody’s been more obsessed about the increasing cash pile:

If that’s you, Warren has a message:

And if you want a little more taste of the oracle’s wisdom here are some good nuggets 🪙 

5) Over in crypto land things are a whole more choppy.

Bitcoin is down -25%, Solana has lost more than 40% and some meme coins forget it…

You gotta give it up for crypto people and their sense of humor even when sh… going south.

Is this the end of the bull market? Maybe, maybe not.

People will tell you after the fact that they predicted it. No matter what “it” turned out to be…

charts

“The top 10% of earners now account for half of all spending” 🤯 

And finally, some parting wisdom