Hello Gauchos! Investment Connection wants to thank everyone who showed up to last week's meeting and took the initiative to subscribe to our newsletter! We are excited to have you as a part of our club and look forward to connecting with each one of you at our weekly meetings.

Below you'll find:

• MEETING THIS FRIDAY 10/21 from 5pm - 6pm at Mosher Alumni Hall, 2nd floor.

• MARKET CALL THIS SATURDAY 10/22 from 12pm - 1pm via Zoom (link here).

• Last weeks market performance

• Key economic data for the week ahead

• Opinion: A Case for 4,000 by Ishanjit Gondara

• Finding your next summer internship

News that moved markets

World Bank Cuts China Growth Forecast as Covid-19, Real-Estate Crunch Take Toll: Emerging economies in Asia are seen outpacing China for the first time since 1990

2-year Treasury yield rose above 4% for the first time since 2007, the 10-year yield hit an 11-year high.

Earnings

Goldman Sachs ($GS): Set to report earnings before the opening bell on Tuesday, The upcoming earnings date is derived from an algorithm based on a company's historical reporting dates. The consensus EPS forecast for the quarter is $7.47. The reported EPS for the same quarter last year was $14.93.

American Express ($AXP): Set to report earnings before the opening bell on Friday. The consensus EPS forecast for the quarter is $2.38. The reported EPS for the same quarter last year was $2.27.

Opinion:

Time will tell; A Case for 4,000

Markets on a broad scale, in terms of both commodities, countries, and currency, have taken investors for a wild ride – inflicting pain and uncertainty to all investors. Our current market condition is rare, and often hard to reference back to in the history book of market and economic conditions. Yet, these unique conditions provide fruitful learning experiences. As we seek to learn from both past and current market conditions I make the case for a possible short term market upswing, with a target of 4000.

Addressing the macro backdrop of high inflation, feds raising rates and war in Europe; I believe that markets are in position to rally off the oversold lows into the 4000s. The CPI number came in higher than expected sitting at 8.2%, and while it's not a pleasing set of data, I do believe that we have peaked in inflation and will start to see gradual decline in the coming months. As on the federal reserve front, the markets have priced in 75 basis points in November in the aftermath of hot CPI data. Interestingly, the bond market last year was only pricing a 50 basis points increase in ALL of 2022… Talking about bonds, with 6 month treasury offering a mouthwatering 4.5% and 10 year offering 4%, I feel that the treasury too are peaking

As exhausted investors look to add some duration on to their portfolios at these sweet rates, it can help boost a rally in the stocks. With the seasonality in the markets around midterms being one of the favorable ingredients to my expected rally, earnings can play a vital role as we kick off the earnings season.

On the technical side, holding off 3500 was pretty convincing. In particular, the price action after the CPI report which was a 5% turnaround was a good sign of exhaustion in selling and buyers stepping in. We also saw RSI touching the low of 29 making a sure case of being oversold. So why do I make the case for a rally to 4000? While 4000 does seem far off giving a room of about 9% upside, I feel the 200 moving average can be the magnet for the markets to retest which is around 4150.

Is this the bottom? Unlikely. While the fundamentals and technicals are aligning up pretty well for the short term, I believe the earnings slowdown is not completely priced into the markets just yet. Moreover, market rallies of 9% are just part of the bear markets. We might retest these lows as a result of 4th quarter guidance when markets factors in an earnings suppression but adding some stocks at these valuations can be fruitful irrespective of the holding period.

- Ishanjit Gondara, President

“You never can predict the economy. You can't predict the stock market.” - Peter Lynch

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