Welcome back to our weekly newsletter! We have things all ready and summarized for you🔥

• Fed’s economic forecasts aren’t always forecasts for the Fed. 👮‍♀️

• Byju's Scandal: Money, Pancakes, and Lawsuits💼

• Goldman Sachs Suggests Two High-yield Investment Opportunities💲

What to know this Week? 📅

📊Market Performance

• S&P 500: 4,453.53 (+0.072%)

• DJI: 34624.30 (+0.018%)

• Nasdaq-100: 15,225.37 (+0.15%)

• Russell 2000: 1,834.30 (-0.69%)

• Bitcoin: 27,223.10 (+1.71%)

• Gold: $1,935.41 (+0.06%)

🏦Federal Reserve & Bank of England Policy Meetings

As we look ahead, the Federal Reserve and Bank of England are set to decide on interest rates in the coming week. The Federal Open Market Committee (FOMC) meeting led by Chair Jerome Powell will commence on Tuesday with an interest rate decision expected Wednesday. The market broadly maintains the expectation of the Fed holding interest rates steady.

Across the Atlantic, the Bank of England (BoE) will conduct its own policy meeting on Thursday. The BoE is anticipated to increase their benchmark rate by 25 basis points to 5.5%, which would be its highest rate since 2008.

🏠U.S. Housing Market - Key Updates

Our gaze also falls on the U.S. housing market this week with updates anticipated related to building permits, housing starts, existing home sales for August, and the NAHB's Housing Market Index for September.

Housing starts are expected to slightly decline to 1.44 million units, a subtle drop from July's 1.45 million. On the contrary, existing home sales are anticipated to slightly increase to 4.1 million, a slight rise from July's 4.07 million.

📜Corporate Earnings Reports

The business week will also see earnings reports from FedEx, AutoZone, and General Mills. These reports could potentially move the market and provide essential insights into these companies' financial health.

Fed’s economic forecasts aren’t always forecasts for the Fed. 👮‍♀️

This week, it's crucial to discuss economic updates unfolding in the U.S. with a particular focus on the Federal Reserve's (Fed) policy decision and its implications for the markets.

Federal Reserve Economic Forecasts This Week

The Fed's updated economic forecasts due on Wednesday will offer investors insights into the expected progression of economic growth, inflation, unemployment, and interest rates in the coming years. As the CME's FedWatch tool indicates a 99% probability that rates will remain unchanged, this announcement will likely hold most investor attention.

Interest Rate Outlook and Future Choices

The Fed's interest rate outlook in June, put forward in its "dot plot," indicated two more rate hikes by the end of 2023. To date, one hike has occurred. The question now is, will the Fed raise rates in November or December, or revise its forecast? The decision made on this issue will significantly determine the market's reaction.

Investor Challenges to Fed's Outlook

Investors often question the Fed's projections. These projections are frequently seen as definitive forecasts, even if they're more accurately 'most likely outcomes'. Criticisms of the Fed, especially from financial markets, often focus on the perceived tendency for the central bank to continue its strategies for longer than market participants anticipate.

Financial Markets and Critique

The relationship between the Fed and financial markets can sometimes seem contentious. Investors often bet against the Fed's projections. Over the years, the typical pattern sees the market predicting a sooner end to current Fed strategies than the Fed does.

Impact on Your Investments

It's vital for us as investors to understand and respond aptly to these changes. Remember, the goal isn't to outguess the Fed, but rather to adjust our strategies based on where the market is heading after crucial decisions are made.

Byju's Scandal: Money, Pancakes, and Lawsuits💼

To thoroughly understand the situation, we're mixing up Indian edtech, a $20 billion startup named Byju's, a hedge fund operating from a Florida IHOP, and a generous side of legal controversies.

The Indian edtech giant Byju's, once admired for its meteoric rise and billion-dollar investments, is now facing allegations of stashing away a whopping $533 million in a relatively obscure US hedge fund named Camshaft Capital Fund. The alleged hideaway? An IHOP pancake house in Miami, Florida.

This, in the words of prominent investor Chamath Palihapitiya, is an unfolding narrative beyond fiction.

As reported, Byju's is said to have deposited over $500 million last year into the aforementioned hedge fund, managed by a young William Morton. The fund, somewhat unconventionally, listed IHOP as their primary business address, a revelation made during tooth and nail investigations by lenders seeking to recoup their owed fortune.

This controversy, presently in the US legal spotlight, stems from the lenders claiming the $533 million to be collateral for a significant magnitude loan of around $1.2 billion.

The loan, they assert, is now in default. It is a serious allegation that Byju's promptly strikes back at, accusing the lenders of predatory practices.

As intriguing as it is, the trail dives deeper into absurdity. On inspecting an SEC filing, investigators found Camshaft's principal business location listed as a bustling IHOP, with the waitstaff seemingly oblivious to any such financial operations.

In a surprising twist, amid swirling accusations and legal tussles, Byju's has proposed repurchasing the loan within six months. They propose to do this possibly through liquidation of some of its international assets and courting potential private equity and strategic buyers.

Needless to say, the peculiar nature of this brew - an educational startup, the hedge fund, the pancake house, and the connected scandals - is making headlines worldwide.

Goldman Sachs Suggests Two High-yield Investment Opportunities💲

Let's delve into the two high-yield stock investment opportunities as suggested by Goldman Sachs. According to the firm, these two cash-rich companies are set to provide at least an 11% cash return to their shareholders.

Tapestry (TPR)

New York-based multinational holding company, Tapestry, known for luxury fashion brands Coach, Kate Spade, and Stuart Weitzman, is showing potential. Despite recently missing its quarterly expectations with a 4Q revenue of $1.62 billion and an EPS of 95 cents, Tapestry had a strong overall year.

For 2023, Tapestry report states considerable metrics - a net income of $936 million and a full-year diluted EPS of $3.88. Moreover, Tapestry returned approximately $1 billion to shareholders, supported by a solid $791 million free cash flow.

To add the cherry on top, TPR raised the quarterly dividend by 17% to $0.35 quarterly or $1.40 annually, bringing the total return yield to approximately 13%. Goldman's Brooke Roach provided a Buy rating, predicting a 50% potential gain within the next 12 months.

American International Group (AIG)

A well-known global insurance player, AIG, reported after-tax attributable income (AATI) of $1.3 billion in 2Q23, surpassing the previous year's quarter by $0.2 billion.

The company returned $822 million to shareholders through stock repurchases and common share dividends, thereby increasing the common stock dividend by 12.5%, marking the first increase since 2016.

Goldman's analyst empathizes with AIG for improving underwriting capabilities, reducing expenses, strategizing capital management, and increasing net investment income.

The analyst priced AIG shares at $81, suggesting a 32% share appreciation.

Forecasts🔍

XAU/USD

Based on last week's price of gold, it has closed above the support level of 2 previous weeks which was at 1920. Hence, we can expect that the price will continue to rise up to the weekly resistance level at 1940, which it will then either respect the resistance or a possibility to cause a breakout. Let's also take note that the specific resistance level (1940) has also been a support level for previous weeks/months which was broken out 6 weeks ago. Therefore, this will be the third time that it will be retested again.

Now lets look into the Daily Timeframe!

On the Daily Timeframe however, the weekly resistance level @ 1940 can be considered as a key level. Why? Because everytime the price touches the area (zone around 1940), the price either;

1. Goes UP

2. Goes DOWN

Hence, this is an important key level to watch out for this week. Besides, there is also a support level @ 1923, therefore if the price were to respect the weekly resistance (1940) or reject the zone around it, there is a high possibility that the price will be sideways around the two weekly resistance and support. It will be an interesting trade for short-term traders/scalpers who would like to trade in between the support and resistance, however, don’t forget to trade at your own risk and manage your finances well!

✨Bonus News✨

Disclaimer: This is not any kind of financial advise. This newsletter is solely informational; it does not constitute investment advice, a solicitation to buy or sell any securities, or a recommendation regarding how to manage your money. Be cautious and conduct your own study, please.