Plus, a Lunar New Year to remember | [Finimize]( Hi {NAME}. Hereâs a look at the big things that just happened and what you need to know for the week ahead. High And Mighty Goldman Sachs, adjusting its US stocks target higher once again, said this upward move isnât likely to get tipped off course. Itâs high, the bank says, and mighty. [xx] ð WHAT JUST HAPPENED? US - Goldman Sachs nudged up its 2024 forecast for the S&P 500 index yet again, with the index hitting record after record.
- Nvidiaâs quarterly results blew past expectations, driving home the notion that AI demand just keeps getting stronger. Europe - HSBC â Europeâs biggest bank by assets â saw its profit tumble by 80% last quarter. Asia - Foreign direct investment into China collapsed last year.
- Travel and spending during the Lunar New Year holiday boomed, surpassing pre-pandemic levels. âï¸ WHAT DOES ALL THIS MEAN? Goldman Sachs has already made two revisions to its full-year forecast â and itâs not even March. The investment bank now sees the S&P 500 hitting 5,200 by the end of 2024, one of the most optimistic calls on Wall Street. Now, thatâs a whopping increase over the 4,700 prediction it made back in November, but with the index already trading near 5,100, that new goal isnât too far off. The upgrade was triggered mainly by stronger economic growth and higher profit expectations for S&P 500 companies, particularly within the tech sector. See, the bank now expects the indexâs 2024 earnings-per-share to come in at $241, which would represent roughly 9% growth over last year â a big improvement from the stagnation seen in 2023. Nvidia just keeps dropping peopleâs jaws to the floor, like the AI technologies its computer chips power. Its sales more than tripled from a year ago, hitting $22.1 billion in the fourth quarter and trouncing consensus estimates. And the next round of results will be even more eye-popping, the company said, sending analysts back to their forecasts with pencils and erasers. The earnings and the outlook suggest thereâs no slowing down Nvidiaâs streak of overachievement, driven by firmsâ relentless demand for its AI chips. HSBC saw its fourth-quarter profit tumble to $1 billion â just a fifth of what it was a year ago. The plunge was mainly driven by several one-off accounting charges, including a huge loss on its stake in a Chinese bank, a hefty hit from selling its French lending business, and a whack of cash it set aside to cover potential losses from Chinaâs slumping real estate sector. That overshadowed what was otherwise a good year, with rising interest rates globally elevating HSBCâs full-year earnings to a record high. And despite a newly announced $2 billion in share buybacks, investors â fixated on the bankâs troubles in China â sent HSBCâs shares tumbling. Chinaâs troubles were on full display last week after a report showed foreign direct investment (FDI) in the country crumbled to a 30-year low. This isnât a case of shrinking speculative investments: FDI captures all the investments â initial and continuing â in China by multinational firms with ongoing operations in the country. Total FDI into the nation was just $33 billion last year â 82% less than the previous year and the lowest since 1993. Thereâs probably never a good time for this kind of dropoff in the economy, but this one comes at a particularly inconvenient moment for China, which is dealing with a property crisis, anemic domestic demand, and paltry investor confidence. But the country got some good news last week, with a new report showing travel and spending during the Lunar New Year holiday topped pre-pandemic levels. Tourist trips increased by 19% and spending by 8% this year, compared to 2019. Though, to be fair, this yearâs festival was eight days long, instead of seven. Still, the nationâs most important holiday is a key barometer of consumer spending, and the upbeat spending does suggest a potential rebound in domestic demand. [Archax]( SPONSORED BY ARCHAX Donât invest unless youâre prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. [Take 2 mins to learn more](. Check out the crypto platform that always keeps it moving [Crypto]( is always changing. Itâs essentially in the digital currenciesâ nature. So even if youâre on your game today, the next regulation, scandal, or approval could send you back to square one. Unless you use [Archax](. The investing platform has cutting-edge trading tools, sure, but thatâs just the start. [Take a tour](, and youâll find a ton of ways to sharpen your know-how and strategies. Plus, Archax is always adding [new coins](, meaning you can explore smaller, innovative options alongside the traditional big guys. [Discover a crypto investment platform that actually betters your strategy](. [Find Out More]( Donât invest unless youâre prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. [Take 2 mins to learn more](. ð This weekâs focus: A rosy outlook Thereâs no question that Goldman is optimistic about the prospects for US stocks, and that outlook extends beyond this year. Its economists estimate that AI could add a chunky 1.5 percentage point to US productivity growth every year over the next ten years. And based on the historical relationship between productivity growth and corporate profitability, this boost could lift S&P 500 profit margins by roughly four percentage points over the next decade, all else being equal. In other words, thatâd take S&P 500 profit margins from around 12% today to 16% in a decade. Thatâs massive: on an annualized basis, that would represent a 3% boost to earnings growth, which alone could push up stock market returns by a similar amount. And itâs all booming big for the US. Its market is, after all, home to many AI-focused software and hardware firms. That said, the buzz surrounding the technology has already driven US shares to record highs, leaving their valuations way above historical averages. And that suggests you might find more attractive, affordably priced investment opportunities in other places that are positioned to benefit from the latest tech revolution. The UK stands out here: itâs expected to get the [third-biggest]( uplift from AI, according to a Capital Economics report that ranked 33 different countries based on how much they stand to benefit from the technology. Whatâs more, the UKâs stock market valuation is sitting below its historical average. ð
THE WEEK AHEAD - Monday: US new home sales (January). Earnings: Zoom.
- Tuesday: Japan inflation (January), US consumer confidence (February), eurozone M3 money supply (January), US durable goods orders (January).
- Wednesday: Eurozone economic confidence (February). Earnings: Baidu, Salesforce, Snowflake.
- Thursday: Japan industrial production and retail sales (January).
- Friday: Japan unemployment rate (January), eurozone inflation (February), eurozone unemployment (January), China PMIs (February). Stay classy âï¸ Your Finimize Analyst team [American Association of Individual Investors (AAII)]( SPONSORED BY AMERICAN ASSOCIATION OF INDIVIDUAL INVESTORS (AAII) See the 50 top-rated funds and ETFs in the tech sector this year The world moves fast, and financial markets are dragged along with it. So the second you feel like youâve caught up on the news, a powerful handshake somewhere around the globe throws everything through a loop again, pushing you back to square one. Now, you can stay informed without the tedious groundwork. Each year, the [AAII Journal publishes its annual Mutual Fund and ETF Guides](. These guides assist fellow investors in discovering noteworthy investment opportunities in the technology sector. Youâll be guided through [top-rated mutual funds and exchange-traded funds]( (ETFs) for tech-minded investors, according to the AAII Team. Not just that, but youâll close the tab equipped with the [tools you need to navigate complex markets](, and the confidence to make smart decisions by picking out the right information. Forget your usual magazine of the month: if you want a solid grip of the tech sector, [the annual AAII Mutual Fund & ETF guides]( could be your new go-to read. [Find Out More]( ð Be in the right place at the right time. And by right place, we mean right here. [Promote Your Brand]( SPONSORED BY HEALTHWORDS.AI [HEALTHWORDS.AI]( ⸠Want to turn off the Weekly Review? [Hit pause]( To stop receiving all Finimize emails (including the daily newsletter) [Unsubscribe]( [View in browser](