Its Monday…

Dear Reader, 

Welcome back to the watering hole of finance. It's been a week since 23’ and I hope you are on track to make it The Year. I must say, you are off to a good start by being here. Just think of the Alpha you have (and will keep getting) over your boss, your gf’s dad, or your weird roommate, so good on ya. 

Take a minute to peruse this condensed capsule of unadulterated, Alpha. You are doing yourself a favor. See you soon winner. 

Market Indices & Commodities

News
This Week

• CPI - Thursday, January 11th (important inflation info for the Fed) 

• Bank of America, JPMorgan, Delta, Citi, and BlackRock earnings - Friday, January 12th

Why is this week important? Well, good question. On Thursday, we will see how prices for consumer goods (clothing, food, transportation, housing, etc.) have risen or fallen for December 23'. The next day, we will see two things - 1. the position of the major U.S. banks (which often shows how strong the economy is) and 2. how the U.S. travel scene is performing with Delta showing us behind the scenes. 

I would imagine with a CPI reading on Thursday that shows consumer prices declining (at least not rising) and strong bank earnings, we will see the market have a strong week. Let's watch.

Now You Know 
Real Estate and Extra Cash

As the Fed tries to make borrowing more expensive by keeping rates higher, the real estate scene has been getting spanked. The current 30-year mortgage rate is 7.52% (the highest since 2000), which has caused millennials to move back in with their parents, at a record rate. 

According to Bloomberg, 45% of people aged 19-29 are living with their families. This is the highest number since the 1940’s. A report from Fox Business suggests that with the savings from rent, millennials are spending more on luxury apparel/goods. 

Could this be why we have seen stocks like Abercrombie (+290% ytd), American Eagle (+33% ytd), and Ralph Lauren (+25% ytd) rally this past year? Not to mention the increased spending on travel and experiences. 

I don’t see this trend lasting much more than 2 years as millennials and parents will be ready for more independence, which means more money spent on essential goods (not Coach bags) and roommates until things are cheaper. This transition will likely tighten discretionary spending targeted towards millennials (e.g., sports betting, luxury apparel, streaming services, etc.). It will be meatloaf with mom until the luxury bags, concerts, and travel cease. 

Thank you  
That’s all Folks

Hey, thanks for reading and I hope you learned something new. Check your email tomorrow to learn something new and keep stacking on the alpha. Keep an eye on the market Thursday and Friday and I will catch ya back here soon. Cheers.