The markets faced a challenging week, with inflation rising 3.5% in March -- higher than expected. This has led to questions around the Federal Reserve's plans for interest rates this year. Historically, the Fed lowers rates to stimulate the economy and maintain their dual mandate of full employment and 2% inflation. However, with inflation elevated and unemployment low, the path forward is less clear.

Investors were optimistic in the first quarter, driving the S&P 500 up nearly 10%. However, my outlook for the remainder of 2024 is more cautious. I foresee the S&P 500 ending the year roughly flat, around 5,100. Several factors contribute to this view:

• Ongoing geopolitical tensions in the Middle East and Europe
• Growth pressures in China
• Persistent inflation in the U.S.
• Arguably frothy valuations in the AI sector
• The upcoming U.S. federal election

These uncertainties are likely to translate to significant market volatility through the year.

In other news, Tesla recently announced a 50% reduction in the monthly cost of its Full Self-Driving (FSD) feature, lowering it to $99 per month. This strategic move should help boost FSD adoption and provide more real-world data to train Tesla's AI systems, which should improve future FSD capabilities. I view this as a positive long-term development for the company.

Overall, the market environment appears challenging in the near-term, but Tesla's FSD update provides a potential bright spot. I will continue to monitor these developments closely.

Supervised full self-driving now $99/month https://t.co/UoZ0MvirxW

— Elon Musk (@elonmusk) April 12, 2024

Pretty tough week for Tesla after it missed Q1'24 delivery estimates coming in 8.5% below YoY.

Tesla quarterly deliveries decline for the first time in nearly four years (More at Reuters: Here)

Now, Elon is trying to redirect attention to the Robotaxi strategy by tweeting that more details will be announced on Aug 8:

Not holding my breath for this one. "Fool me once..."

Tesla Robotaxi unveil on 8/8

— Elon Musk (@elonmusk) April 5, 2024

Not much in worldwide economic news this week except for the Baltimore bridge collapse which is partly slowing down global trade. S&P500 and Nasdaq are effectively flat from last week changing +0.4% and -0.3%, respectively. 

Big mover this week was BTC -- up 11% WoW and 38% since purchase in late Feb 2024. Nice bounce which I attribute to news about the halving and investors leaning into a riskier trade (i.e., more greedy).

Let's see what next week brings! Have a great Easter weekend. Stock market is closed today (Good Friday). 

Edit:

Given this is the quarter end, I wanted to share some highlights from NYT for posterity. 

Even with the Fed contemplating cutting interest rates as many as three times this year, by as much as three-quarters of a percentage point in total, the returns on offer to investors remain well above those found elsewhere around the globe, helping keep money flowing into the United States.

What a week. The portfolio is down 1% while both the S&P500 and Nasdaq are up 2.3% and 2.9%, respectively. The biggest drop came from BTC, which I think lost some momentum given the ATH that was reached a couple weeks ago. 

I'm still optimistic that the halving will bring BTC back above $70k. 

Apologies for the delay this week. I passed out after work and completely slept in this morning. Dead tired after a long day and rough night. I slightly tweaked the output so now there's a week-over-week column to better capture the volatility. 

Tough week in the stock market. Inflation edges slightly higher than anticipated, likely putting pressure to delay the rate cuts. My guess is Powell won't cut rates in June. Bitcoin seems to hold its gains despite some profit taking this week. I think the upcoming halving is attracting net inflows to the Bitcoin ETFs.