TradeUP Thursday
Aug 10, 2023
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• Will Worries About Credit Card Borrowing and CPI Data Impact Market Sentiment?
• How significant is restricting U.S. tech investments in China's sensitive sectors for global economic relations?
• What's happening with the U.S. government's creditworthiness? 
Dow Jones S&P 500 Nasdaq
35,319.06 (+0.56%) 4491.38 (+0.53%) 13,818.25 (+0.70%)
Opening price as of 08/10/2023 compared to last close
Wall Street ends lower as investors await U.S. inflation data 
On August 9, U.S. stocks closed lower due to worries about credit card borrowing and upcoming CPI inflation data, with Dow down 0.54%, S&P 500 down 0.70%, and Nasdaq down 1.20%. The $1 trillion credit card debt and uncertainty about the Fed's interest rate decision led to an 86.5% chance of no September rate hike. Energy stocks rose 1.22%, Penn Entertainment surged 9.1% from a sports betting deal, but Lyft shares fell 10% due to competitive pricing plans. Around 78.6% of S&P 500 firms beat expectations, and both S&P 500 and Nasdaq hit new highs and lows. Read more

Biden orders ban on certain U.S. tech investments in China
President Joe Biden has signed an executive order limiting new U.S. investments in China's sensitive tech sectors, including computer chips and AI, aiming to prevent support for China's military development. China has expressed deep concerns about the move, which requires Treasury approval for certain transactions and is set to take effect next year after public comment. The order reflects efforts to curb China's tech advancement and adds to existing tensions in the U.S.-China economic relationship. Read more

Market gains momentum, eyes on 10-year auction, Lyft’s fall, Penn-ESPN deal, Disney's earnings – key points to understand
Stock futures are on the rise, with investors focusing on a 10-year Treasury auction and inflation data. However, concerns persist over China's post-Covid recovery. Lyft's shares have tumbled as the ride-sharing company acknowledges a price war with Uber that could impact near-term profits, despite delivering better-than-expected Q2 earnings. On the other hand, Penn Entertainment is experiencing a surge in its shares after striking a $2 billion sports betting deal with ESPN. Meanwhile, all eyes are on Disney's upcoming earnings report, where attention will be directed toward subscriber gains in its streaming services and trends in its Parks division. Read more

The federal government has been outspending its revenues and compensating for this by borrowing. The creditworthiness of the federal government is under evaluation. According to Fitch, the U.S. had always maintained a AAA highest rating, but it has now been lowered to AA+, suggesting slightly reduced confidence in the U.S.'s ability to consistently repay its debt. Fitch is one of the three major credit agencies, all of which provide credit ratings for the U.S. government. While S&P downgraded their rating in 2011, two out of three credit agencies have now lowered the rating due to federal debt concerns. This indicates a belief that the risk of default isn't high but has increased somewhat due to the substantial debt, ongoing borrowing, political challenges, and difficulties in reaching spending agreements.  

—Keith Hall, Former Director of the U.S. Congressional Budget Office


Financial Statements 


Balance Sheet: Details a company’s assets, liabilities, and shareholders’ equity at a specific point in time. Used in conjunction with the other financial statements, the balance sheet assists analysts and investors in gauging the overall health of the company. 

Income Statement: Details a company’s revenues and expenses over a period of time, typically a quarter or a fiscal year. Subtracting a company’s expenses from their total revenue reveals whether they had a profit or a loss during that period (net income). 

Cash Flow Statement: Unlike the income statement, the cash flow statement details a company’s cash inflows (cash going in) and outflows (cash going out). The three different sections on the statement are cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. 

Shareholder Equity Statement: Details the changes in a company’s equity accounts over a specific period of time, which might include purchasing shares back from investors (treasury stock) or issuing new common shares. Accounts typically found on the statement are preferred stock, common stock, treasury stock, additional paid-in capital, retained earnings, and noncontrolling (minority) interests.

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