Investor's Playbook

📖Today’s Agenda

• Stock Market : Dollar Bulls Step Up Bets Ahead of December’s Jobs Report

• Entrepreneurship : TOP 3 AI TOOLS OF THE WEEK

• Personal Finance : Investing for income - Not just growth

📈Stock Market

Dollar Bulls Step Up Bets Ahead of December’s Jobs Report

Nonfarm payrolls for December are expected to land at a soft 170,000 new hires. Any major deviation could rattle the Federal Reserve’s rates projection.

The EUR/USD pair slipped modestly to the downside early Friday as forex speculators rotated into the US dollar ahead of today’s key data. It’s Jobs Day again and, as usual, markets are anticipating another promising number from the US economy.

This time, analysts have pinned 170,000 as the expected pace of hiring for December. A number too high above that will indicate that the American labor force is not cooling as intended. What’s more, it could sway the Federal Reserve into reconsidering its stance on the upcoming interest rate cuts this year.

In that light, the EUR/USD was trading near the $1.09 to $1.0920 neighborhood. The US dollar has started the year on an upbeat note denting the euro’s valuation by about 120 pips. Over the past year, the euro was able to chip away at the dollar’s value by about 3% after lots of strenuous effort.

TSLA: Tesla Loses Top Spot as World’s Biggest EV Seller

The race for electric vehicles just got more intense as Tesla’s Chinese rival bets on more affordable models.

Elon Musk’s Tesla has been dethroned from the top spot as the world’s biggest EV company by sales. China’s fast-rising BYD recorded over 526,000 deliveries for the December quarter, eclipsing Tesla’s 484,000 unit sales. Tesla has been holding the top spot since 2012 when it introduced the Model S.

For the year, however, Tesla retained its crown by delivering a total of 1.8 million electric vehicles. BYD, on the other end, shipped roughly 1.6 million all-battery cars and over 3 million passenger cars. The lofty figure was achieved without even tapping into the US market.

By another measure – market value – Tesla is far superior, boasting an $800 billion valuation. BYD, which is backed by Warren Buffett and has been dismissed by Elon Musk in the past, has swelled to an $80 billion threat with its US-listed shares rising just 8% in 2023 against Tesla’s 120% share-price increase.

🎯Entrepreneurship

TOP 3 AI TOOLS OF THE WEEK

1. Alison.Ai

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This powerful AI tool can be of great help to those involved in sales, SEO, and marketing/communication, aiding them in better targeting and optimizing their creative content for success. By freeing up time and resources, you can better focus on what matters and achieve your goals more efficiently with Alison.Ai.

2.Upword

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Upword is a great tool for productivity and helps you make data-driven decisions - it takes the hassle out of manual research and analysis. With Upword, you will be able to process information faster and gain a better understanding of your data. It can be used by businesses, organizations and individuals to streamline research and analysis and to gain valuable insights from your data.

3. Cliptutor

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Cliptutor is the perfect AI tool for transforming YouTube videos into personalized tutors. Combining the latest in AI technology, Cliptutor enables effective learning through real-time discussions, custom quizzes, and AI-backed study materials. It also provides multi-language support, media uploads, and integration with Quizlet and Kahoot. Furthermore, upcoming features, such as Timestamp-Based AI Quizzes and web content quiz creation, make it even better.

💸Personal Finance

Investing for income - Not just growth

During your early years as an investor, you typically invest mainly for growth — you want your assets to increase in value. But as you get closer to retirement, you'll most likely want your investments to generate income as well, either to provide part of your "retirement paycheck" or to supplement your earnings from part-time or consulting work.

"Investing for income is different from investing for growth and requires you to think differently about your assets, especially in volatile interest rate environments," says Matthew Diczok, head of fixed income strategy in the Chief Investment Office for Merrill and Bank of America Private Bank. "Interest rates are now above longer-term averages. While there may be further price declines, the yields available across high-quality fixed income assets are higher than they have been in over 10 years. This is unambiguously better for clients looking for additional sources of steady income, especially those with the ability and willingness to hold through additional market price volatility."

If your objective is to get an income stream from your investments, there are a number of approaches you can take — for many people, a combination of the strategies below may work best.

Dividend-paying stocks

Dividend-paying stocks are shares of companies that make regular payments to stockholders.Footnote 1 Both the dividends and share price are tied to the company's current health and outlook, which means the value of these assets may rise or fall over time. Many investors choose dividend-paying stocks in the hope that they'll provide both income and asset growth. During times when interest rates are rising, which generally means the economy is doing well, the likelihood is greater that a dividend-paying stock can do both. One note of caution, though: Some stocks with high-dividend yields can potentially drop in value when rates rise — if a company is highly leveraged, the cost of servicing their debt increases when rates go up, and that can have an impact on what their stock is worth.

Treasurys

Treasurys typically deliver a relatively low rate of return compared to other types of bonds but are considered among the safest of income-generating investments because they're backed by the U.S. government, Diczok says. Depending on the type of Treasury instrument you buy, maturities range from four weeks to 30 years. Typically, the longer the maturity, the more interest the bond pays. But also be aware that longer-maturity bonds, and especially Treasurys, are more sensitive to interest rate risk. As rates go up, the value of the bond goes down. That's of less relevance if you plan to hold it to maturity, but you might want to ask yourself: Am I sure I won't need the money before then?

Municipal bonds

Municipal bonds are offered by state and local governments, and the income they generate is usually exempt from federal income taxes and may be exempt from state and/or local taxes. "The trade-off for this federal tax-free status is a relatively modest rate of return," says Diczok. "This is why it's helpful to compare the after-tax return of other bonds with the interest you receive from municipals."

Investment-grade corporate bonds

Investment-grade corporate bonds are issued by private companies with high credit ratings. They are generally less volatile than the stock market and offer higher rates of interest than Treasurys or municipal bonds, according to Diczok, but because they're backed by companies rather than the government, they're considered somewhat riskier, particularly in terms of market value volatility.

High-yield bonds

High-yield bonds generally deliver higher returns than investment-grade corporate bonds, but are considered riskier. Diczok warns that their price might fluctuate in a manner closer to that of stocks than of bonds with a less risky profile as they have significant annual credit losses.