🎉 Lululemon Joins The S&P 500

Hope you all had a great weekend!

Earnings season is here. This week, companies like Johnson & Johnson $JNJ, Tesla $TSLA, Netflix $NFLX, and Procter & Gamble $PG will all be reporting earnings. I’ll be analyzing the most important earnings reports in Friday’s newsletter so definitely stay tuned!

In today’s newsletter:

• 💰 BlackRock’s Incredible Growth

• 🥇 Countries With The Most Gold

• 🎉 Lululemon Joins The S&P 500

Let’s dive right in!

💰 BlackRock’s Incredible Growth

Last week, BlackRock reported strong earnings of $10.91 a share, surpassing Wall Street's average estimate of $8.20. Despite this positive earnings report, clients withdrew a net $13B from BlackRock's long-term investment funds, marking the first outflows since the pandemic began in 2020.

Investors are likely favoring cash and bonds due to elevated interest rates. The company's total assets under management fell to $9.1T, partially due to $49B in withdrawals from lower-fee institutional index equity products. BlackRock is actively pursuing acquisition opportunities, aiming to spur growth during the current environment.

Nonetheless, since 2008, BlackRock has had an incredible AUM growth, increasing from $1.3T to $9.1T, or a 600% increase. This represents a compound annual growth rate of roughly 14%, making BlackRock the world’s largest asset manager. As a result of this growth, BlackRock has seen large ownership stakes in companies across nearly every industry, making some people concerned about the company’s growing influence.

🥇 Countries With The Most Gold

Gold prices surged more than 3% last Friday, marking their best week in seven months, as the escalating conflict in the Middle East drove investors towards safe-haven assets. The expectation that U.S. interest rates may have reached their peak also boosted zero-yield gold. If the geopolitical situation worsens, or it becomes more apparent that interest rates have peaked, we may see the start of a longer gold rally.

As mentioned in a recent newsletter, Costco recently started selling 1-ounce gold bars online. These bars come from reputable mints and are priced at just under $2,000 each. While Costco's gold bars offer accessibility and credibility, they sell out quickly, and buyers should be aware of premiums on physical gold.

Zooming out further, it isn’t a surprise to see the world’s largest economies holding the largest amounts of Gold. The USA takes the throne with 8,133 tonnes of Gold in it’s reserves, followed by Germany and Italy. In recent years, many emerging-market and developing countries, such as Ghana, have increased their central bank gold reserves, reversing a trend of gold demonetization that advanced economies started in the 1990s. It'll definitely be interesting to see if this trend continues moving forward.

🎉 Lululemon Joins The S&P 500

S&P Dow Jones Indices is making changes to the S&P 500 on October 18th. Lululemon Athletica will be replacing Activision Blizzard, since Activision Blizzard was acquired by Microsoft, and Hubbell will be replacing Organon & Co.

The S&P 500, the world's most popular stock market index, has changed a lot in the past nine years. In fact, about one-third of its 500 companies have been replaced since 2015. This frequent turnover shows how quickly companies fall in and out of favor, and just how quickly the index adapts to stay up to date.

Lululemon’s revenue has grown incredibly fast, with an average revenue growth of 34.6% over the last 18 years. The company saw a surge in sales during and after the pandemic, and it’s athleisure wear has become a staple for yoga and fitness lovers.

Notable Companies Reporting Earnings This Week:

• Monday:

  • Charles Schwab ($SCHW)

• Tuesday:

  • Johnson & Johnson ($JNJ), Bank of America ($BAC), Lockheed Martin ($LMT), Prologis ($PLD), Goldman Sachs ($GS)

• Wednesday:

  • Tesla ($TSLA), Procter & Gamble ($PG), Netflix ($NFLX), Abbott Laboratories ($ABT), Morgan Stanley ($MS)

• Thursday:

  • Taiwan Semi ($TSM), Philip Morris ($PM), AT&T ($T), Blackstone ($BX)

• Friday:

  • American Express ($AXP), Schlumberger ($SLB)

All of the companies that are reporting earnings this week can be viewed here.

Buys:

• Ro Khanna (D)

  • Company: Pfizer ($PFE)

    • Amount Purchased: $50K - $100K

  • Company: Microsoft ($MFST)

    • Amount Purchased: $17K - $80K

  • Company: Altria ($MO)

    • Amount Purchased: $15K - $50K

• Markwayne Mullin (R)

  • Company: Meta Platforms ($META)

    • Amount Purchased: $50K - $100K

  • Company: Apple ($AAPL)

    • Amount Purchased: $50K - $100K

  • Company: Amazon ($AMZN)

    • Amount Purchased: $50K - $100K

• Kevin Hern (R)

  • Company: Devon Energy ($DVN)

    • Amount Purchased: $15K - $50K

Sells:

• Virginia Foxx (R)

  • Company: Vector Group ($VGR)

    • Amount Sold: $50K - $100K

• Ro Khanna (D)

  • Company: Johnson & Johnson ($JNJ)

    • Amount Sold: $50K - $100K

• Scott Franklin (R)

  • Company: Cisco ($CSCO)

    • Amount Sold: $50K - $100K

  • Company: Alphabet ($GOOGL)

    • Amount Sold: $50K - $100K