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Markets dip, Bangladesh rises up, Venezuela opposes
Week ending August 4th
My name Jeff
August 05, 2024
Why are the markets being so rude right now? I’m trying to have a nice chill summer, but my portfolio looks like a bloodbath. How’s that fair?
Anyway, here’s a summary of the chaos happening these days.
Markets
PAST WEEK | YEAR-TO-DATE | |
|---|---|---|
Nasdaq | -3.5% | +11.5% |
S&P500 | -2.2% | +12.7% |
MSCI Emerging Markets | -1.6% | +4.7% |
Bitcoin* | -15.0% | +36.2% |
Ethereum* | -18.0% | +18.8% |
Stock of the week: | +73.5% | +62.4% |
Crypto of the week: | +0.4% | +0.1% |
Source: CoinGecko.com As of 11PM June 24th
World news
Top news stories of the past week
1) Markets are pissed: Global stock markets sold off in a big way. Japan’s stock market fell 12% and U.S. tech fell 4% as unemployment ticked up and people grew worried that the U.S. Federal Reserve may be too slow to cut rates. To all long-term investors: hold strong!
If the number is down, why green?
2) Turmoil in Bangladesh: Bangladeshi Prime Minister Sheikh Hasina has resigned and fled the country following weeks of intense protests and violent clashes, which have resulted in nearly 300 deaths and a nationwide curfew. The army has taken control and announced an interim government as protesters continue to demand significant political changes.
3) Venezuela election chaos: Thousands rallied in Venezuela, in support of opposition leader María Corina Machado, who claimed that the recent presidential election results declaring Nicolás Maduro the winner were rigged. Despite facing government repression and threats, Machado emphasized the strength of the opposition movement amidst ongoing tensions and calls for the release of accurate electoral data.
Top WEIRD stories of the past week
1) Des Moines, Iowa, is revising its proposed regulations on backyard chickens and roosters following a parade by chicken enthusiasts. “Chicken enthusiast” is something I want to see on a resume.
2) An Italian man set a record for pulling three planes while walking on his hands. These world records are far too specific.
3) In London, a Tortoise escaped its home, climbed onto train tracks, and delayed rush-hour traffic. This has the makings of the next Pixar hit.
Chart
You like charts? Graphs? Ya you do
Jobs data in the U.S. was released last week, with the unemployment rate up to levels not seen since October 2021.
Investment idea
What are we investing in?
Volatility
The idea that things generally tend towards chaos is a rule in physics, and the same is true for investing. Stock markets go through booms and busts - both are inevitable. However, because this happens on a cyclical basis, you can take advantage when things get crazy.
When the stock markets get nervous, volatility increases. We’re seeing this in a big way today. Volatility in the stock market is measured by something called the VIX. The higher it is, the more volatile the markets are. And as you can see, the VIX is really popping off today:
However, volatility rises and falls. Over the long term, you can clearly see that volatility peaks and falls down to a long-term average:
Because of this, when volatility spikes, you can profit from the assumed eventual decrease by investing in something called an “inverse volatility ETF”. This is basically a bet that the stock markets will calm down.
Two options you can invest in here are:
Fair warning: THESE CAN BE VOLATILE. But, volatility hasn’t been this high since March 2020 when everyone thought we were all going to die. So, it could be a good opportunity!
History
On this day…
…in 1926, Harry Houdini performed his final public stunt, staying in an airtight coffin underwater for 90 minutes. No thanks.
Music
Banger of the week
Most important thing
Meme? Nah. Art.
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