Co-Presidents Shaan Shuster ‘23 and Nick Tufano ‘23 introduced the club overview for the semester. Some important dates to highlight are February 10th when Jeff Raupp, former CIO of Brinker Capital will come speak to the club and February 24th for a potential Lafayette Board of Trustees alumni panel.
Elections will tentatively be held April 28th and the club asks potential candidates to have participated in at least 3 presentations/pitches over this academic year and to have regular attendance at all general body meetings.
Hank Skatoff ‘25 and Johnny Blazakis ‘25 delivered this week’s market update. The Federal Funds Rates increased by 25 basis points to around 4.5% and this was met with a generally positive reaction by the market. NASDAQ had the best start of the year since 2001, however David Rosenberg, former Chief Economist at MI, is not optimistic about this growth long term and believes we have not hit the bottom of the recession yet.
Three Megacap tech stocks, Meta, Apple, and Google, all reported earnings this week. META is down 77% from previous highs and has announced a $40B share buyback that could generate bullish price action. AAPL has had its first decline in revenue in about 3.5 years and a 5% drop YoY perhaps due to supply chain issues in China and macro headwinds. Net income for GOOGL fell 34% and it is the second time in company history that ad sales revenue growth has fallen, here by 5%.
The S&P 500 has been positive the last 4 months but could fall as the FOMC continues to battle inflation. Powell states that inflation has started to ease, and expectation is 3.5% by the end of 2023. The latest December CPI report came in at 6.5%.
TMT Analyst Lee Schulman ‘23 and Grant Sickles ‘25 presented a TMT sector update. Standing for technology, media, and telecommunications, the sector plummeted over the course of 2022 due to overvaluing during the pandemic followed by rising interest rates and an unsteady macro landscape highlighted by Russia’s invasion of Ukraine. Thousands of workers have been laid off in tech giants like Meta, Google, Microsoft and Amazon.
TMT is the 2nd most represented sector within the club’s portfolio. Within the portfolio’s 12 TMT holdings, the overall share price percent change since August 2022 is -10.7%. The biggest losers are Amazon (-21.95%), Paypal (-20.35%), and Adobe (-16.8%) and every stock had a negative share price percent change except for Kyndryl Holdings (9.04%). The club looks to sell a few positions to help mitigate risk in the portfolio as companies continue to navigate AI, Cloud Computing and the Metaverse.
Consumer Spending Analyst Nash Lovallo ‘23 and Jake Magnusson ‘26 presented a Consumer Spending Sector Update. Consumer Spending has had a slow run marked by retail purchases having fallen 3 of the past 4 months, the auto industry posting the worst sales year in more than a decade, and the sale of existing US homes falling to their lowest levels since 2014. The share of monthly income set aside for savings in December 2022 was 3.4% whereas this percentage was 7.5% in December 2021. Annual inflation is above 5% for the 19th straight month and this has been the longest streak since the early 1980’s.
However, the consumer staples sector has remained relatively stable due to the constant demand. In terms of the club’s portfolio, all 5 of the current positions in the consumer spending sector are significantly down. Most notably, Under Armour (UAA) is down 33.37% in earnings this past year. The average for the sector is -8.28%.
Lastly, Vice President Alexandra Borik ‘23 and Chairman of the Board Felicitas Hannes ‘23 presented the results of the 2022-2023 Interim MarketWatch Stock Market Game. Third place went to Shaan Shuster with 30 trades and $6.8k in total returns, second place went to Spencer Thomas with 8 trades and $12.7k in total returns, and finally first place went to Michael Malnati with 60 trades and $23k in total returns. The club congratulates the winners and thanks everyone who participated in this interim tradition.