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Good Morning!

Investors are feeling confident as the S&P hit all-time highs of 5000 yesterday. There have also been significant moves, including ARM, which is up over 50% after a strong earnings report, and Disney, which soared after its investment in Fortnite maker Epic Games.

Grab your coffee and let's get into it! ☕️👇️

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Markets

S&P 500 Breaks 5,000 For First Time In History (2 minute read)
The S&P 500 index experienced a modest increase of 0.1% reaching a peak of 5,000.40 shortly before the market closed at 4 p.m., surpassing its previous intraday high of 4,999 established on Wednesday. This benchmark index, reflecting the stock prices of the largest 500 American public companies, has shown a year-to-date increase of 5% and a substantial 43% surge from its lowest point in October 2022, when concerns over interest rate direction amid persistent inflation were at their peak.

George Ball, chairman of Sanders Morris Harris, highlighted the significance of this milestone, noting that surpassing 5,000 is not only a notable numerical achievement but also indicative of investors' confidence in the earnings potential of corporate America and the robustness of the economy.

Mexico takes China's crown as America's biggest bilateral trading partner (3 minute read)
In a significant shift, Mexico has surpassed China to become the United States' largest bilateral trading partner. Last year, the U.S. imported close to $476 billion from Mexico and exported around $323 billion to its southern neighbor.

This development comes amidst strained relations between the U.S. and China, marked by an ongoing trade war, which has contributed to a reduction in the US-China trade deficit. Despite challenges faced by Mexico, the trade data underscores the mutual economic benefits, emphasizing the importance of maintaining amicable relations between the two countries.

Arm’s stock explodes 50% higher (2 minute read)
Arm Holdings demonstrated a remarkable aspect of its business model in the latest quarter, prompting analysts to express growing optimism about the company's future trajectory. This sentiment was reflected in the stock's significant surge of around 50% during Thursday morning trading.

Guggenheim analyst John DiFucci emphasized the importance of the royalty revenue line, which saw an 11% growth to $470 million, exceeding expectations and serving as the primary driver of profit for the company. DiFucci also highlighted the significance of Arm's licensing business, noting its potential to fuel future royalty earnings, with license revenue increasing by 18% despite challenging comparisons.

DiFucci views Arm as a key player in the burgeoning field of artificial intelligence, distinguishing it from other companies that claim AI prowess but lack concrete financial evidence to support their assertions.

Investing

Disney to invest $1.5 billion in Fortnite maker Epic Games (2 minute read)
On Wednesday, The Walt Disney Co. revealed its intention to invest $1.5 billion in Epic Games, the renowned creator behind Fortnite and Gears of War, marking Disney's largest foray yet into the video game industry as part of CEO Bob Iger's broader strategy to bolster earnings.

This significant move signals a strategic partnership aimed at expanding the presence of Disney brands within Fortnite and pioneering a groundbreaking new games and entertainment realm, as outlined in a joint announcement. Following the news, Disney shares surged in after-hours trading, buoyed by the announcement and a stronger-than-anticipated earnings report.

OpenAI hits $2 billion revenue milestone (1 minute read)
OpenAI, supported by Microsoft, achieved a significant milestone by reaching $2 billion in revenue in December, as reported on Friday by sources familiar with the AI start-up's financials.

OpenAI is optimistic about its future prospects, aiming to surpass this milestone and more than double its revenue by 2025. This ambitious target is underpinned by robust demand from business clients eager to leverage its generative AI tools in various workplace applications.

1 of Warren Buffett's Biggest Mistakes (4 minute read)
Warren Buffett's transparency about his investment mistakes contributes significantly to his reputation as a valuable source of investment wisdom. Delving into Buffett's letters to Berkshire Hathaway shareholders reveals a candid discussion of numerous mistakes he's made over the years, along with insightful reflections on his decision-making process, errors, and their implications for the future.

This transparency makes his annual shareholder letter essential reading for anyone seeking to enhance their investing prowess or decision-making skills. Despite Buffett's acknowledgment of numerous mistakes, there's one particular blunder he highlights as exceptionally foolish—the "monumentally stupid" purchase, which ironically turned out remarkably well for Berkshire Hathaway shareholders.

Money

The Most Overrated Things in Personal Finance (5 minute read)
In the realm of personal finance, we're inundated with advice promising the "one thing" that can revolutionize our financial well-being, whether it's a specific investment strategy, a new mindset, or the latest money-saving hack. Despite the abundance of ideas aimed at helping us prosper, many fall short when put into practice, earning them the title of the most overrated concepts in personal finance. Take early retirement, for example—an enticing prospect of freedom from bosses, meetings, and perpetual work. However, beneath its surface allure lie often overlooked downsides.

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