This is the fourth issue of the LSMIF newsletter. Please share with your friends and family and message in the Discord to participate and share a story!
Current News and Affairs:
- Inflation hits UK government pledge to build 40 new hospitals: Although this sounds awful, it’s not really surprising considering the current climate with a £2bn shortfall!
- China sets 5% growth target to drive economic recovery: Sweeping changes are brought in to further centralise power and recover rapidly from the Zero COVID Policy. Although, this marks a decline in China’s overall GDP expected growth.
- Chinese companies choose Switzerland over US and UK to raise money overseas: Political tensions with Washington and tougher accountancy standards in London discourage listings in larger markets
- US-listed tech companies face cash crunch after burning through billions from IPOs: Only 17 of 91 listed groups have reported a profit this year!
- ChatBot Character.ai valued at $1bn in Andreessen-led funding round: Pioneering tech venture capital firm makes first big foray into generative artificial intelligence sector
- Surges in UK rate expectations prompts BofE pushback: Stubbornly high US inflation has sparked a global repricing in interest rate markets
- Deluge of inflation data pushes US borrowing costs to 2007 levels: Yield on two-year Treasury note hovers near 5% as investors brace for further Fed rate rises
- US stocks edge higher despite latest economic data and dollar strengthens: US jobless claims to drop 190k lower than 195k predicted
- US adds two dozen Chinese groups to trade blacklist: Targeted companies include chipmakers accused of assisting China’s military and surveillance tech exporters
- Jay Powell warns Fed is prepared to return to bigger interest rate rises: High-stakes testimony before Senate committee comes as central bank struggles to cool US economy!
- Data shows $1 trillion in 0DTE options traded per day! 0DTEs are 0 day expiration options which are very risky. For context, the entire Nasdaq sees $200 billion in daily volume. We are now seeing x5 this in Nasdaq daily 0DTE options. Is the stock market more of a casino than a free market?
- SouthEastern Hedge Fund: The team submitted their strategy called “Dollar Meltdown Galore”, focused on gold, emerging markets, India, and other sectors. They are now awaiting feedback and news on where they have placed
- SMIF Competition: The team looks set to get the win this Wednesday/Thursday in York, where we look to again win the competition having been put through to the finals, where they will present in hopes for the win! Massive well done to the team! They are down to 1 of 2 finalists!
Our Team, ready to present in the SMIF Competition in York
- Rebalancing Event: The fund has a mandatory meeting 15th March 1pm-3pm in DCB2104, where we will be going through the submitted ERRs and deciding what to do with current holdings and our cash holdings.
Testimonies/ Member News:
- Inflation Commentary: Following recent revisions, core services ex-housing CPI (sticky inflation) is still over 4% annualised levels in the US and the labour market keeps adding jobs at an underlying realistic pace of 150-200k new jobs per month. The Fed will be forced to keep risk-free rates at 5% for 9-12 months, meaning the housing market and real economy must handle 7-8% borrowing rates for a long time to come. Between 2010-2020, the US barely managed to produce an average 2% real GDP growth with an average Fed Fund rate of 0.62%. It is highly unlikely a medium-term recession is avoidable. And this has dire carry-over effects for the rest of the world, including the UK.
- Matteo (CEO): Please know that the fund is in active recruitment of future analysts. However, the way in which we recruit has now changed. There will be an application process to ensure quality members are brought on to the team. We are also starting to consider more senior and the future management team for next year.
- Two presentations were given in the last week, one in cooperation with the Business Society where 20 students participated and one to future LIBS students with an attendance of 150 students!
Matteo De Rossi (CEO) giving a presentation to 150 students.
Also, I’m still recruiting participants for my dissertation. If you’re interested in why losses are more “painful” than relative gains can be “pleasurable”, have an interest in game theory, or just generally have a spare second, please give my study a go!
As always, thank you for your participation and attention.