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Premium Income Investments is a free weekly newsletter that discusses interesting ways to generate alpha in the market. It ranges from value investing, quantitative analysis, technical analysis, and even dabbles in a bit of crypto. If you are looking for a fun and easy way to digest some of the trending financial concepts and investing strategies, give the Premium Income Investments newsletter a try!
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Southwest meltdown may cost the airline up to $825 million (3 min read)
The service meltdown during the end of year will cost Southwest nearly $1 billion and the company needs to report it as a loss in the Q4 financials. The costs did not include any possible fines or estimates of lost bookings in the future. The company did not give an estimate of how big the total loss would be in Q4. Shares of Southwest slid about 8% since the meltdown started and dipped 2% further on Friday after the news.
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Party City plans bankruptcy filing as sales hit by inflation (1 min read)
It was reported that Party City is preparing to file for bankruptcy in the coming weeks. The company is getting low on cash while struggling with weaker sales as persisting inflation has impacted the demand for its product. The market capitalization of the company has been steadily declining in the past year. The news of bankruptcy on Friday sent the company stocks another 50% lower to less than $0.2 per share.
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Stocks stage first big rally of 2023 (2 min read)
US stocks rose on Friday after the December jobs report showed signs that inflation may be cooling. All three major indexes were up and it was the best day for the Dow and S&P 500 since November 30th. Although the US added more jobs than expected in December, wages grew slower than anticipated, which suggest inflation is moving towards the Fed’s target. That’s all investors cared about from the recent data and the excitement sent stocks higher.
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U.S. labor market powers ahead, but wage growth loses steam (5 min read)
The US payroll growth decelerated in December but was still above the estimate from economists. The wage growth also began to slow with an increase 0.1% less than the previous month. However, household employment showed a huge rebound and pushed the unemployment rate back to a pre-pandemic low of 3.5%. The labor market overall remains resilient which raises the risk of the Fed lifting rates above the 5.1% peak it projected last month.
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Invest in Defensive ETFs as Recession Fear Grows in 2023 (6 min read)
As recession remains a growing concern this year, investors should consider allocating assets to some conventionally secure and recession-proof corners of the broad market. Zacks Research highlighted the following ETFs to take a closer look: Utilities Select Sector SPDR, iShares U.S. Healthcare Providers ETF, Invesco Dynamic Food & Beverage ETF, Vanguard Dividend Appreciation ETF and iShares Edge MSCI USA Quality Factor ETF. More on each ETF is available in the article.
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Steel ETF Surged as Market Tumbled (3 min read)
The VanEck Steel ETF (SLX) was one of the top performing ETFs last year with a return of 14%. It is the only ETF in the US that has exposure specifically to global steel producers. SLX also had impressive annualized returns over the last several years as steel prices have been sky high. However, despite performing well and having a relatively low fee, it has been losing assets over the years. SLX current assets are only a quarter of what it managed in 2008.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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