📈 Microsoft drops $10bn on AI

Good Morning!

Tuesday saw US stocks rise despite the odds, thanks to a boost from healthcare and consumer cyclical stocks, who pushed the S&P 500 up. Goldman Sachs economists had a change of heart and are now saying Europe will avoid a recession in 2023.

But the big news of the week is Microsoft is investing a cool $10 billion into OpenAI, valuing the company at a whopping $29 billion. And if you're looking for a shopping trip, Cathie Woods just went on a buying frenzy, stocking up on some of the most hard-hit stocks. While you're here, follow us on twitter for investing threads!

Let's dive in, and remember, when in doubt, just throw a dart at a list of stocks (Just kidding, please do your own research).

Markets

U.S. stocks advance as investors await inflation data (5 minute read)Wall Street is optimistic despite the Fed's warning of high interest rates, as traders are betting that the upcoming consumer price data will show signs of softening. On Tuesday, US stocks still managed to rise, as healthcare and consumer cyclical stocks helped push the S&P 500 up by 0.7%. Even the tech-heavy Nasdaq Composite gained 1% as investors ignored the Fed's Monday warning that interest rates will keep climbing due to high inflation

Europe Might Just Sidestep A Recession (2 minute read)Goldman Sachs economists have made a u-turn, and now predict that Europe will avoid a recession in 2023. Thanks to the double blessing of falling gas prices and a reopened China, Europe's economy is now expected to grow by 0.6% this year! Though, it's not all sunshine and rainbows, the European Central Bank's rate-hikes may continue for a while, but at least Europe's list of problems just got shorter, so that's something.

U.S. House creates committee focused on competing with China (2 minute read)In one of their first move since gaining control, the new U.S. House of Representatives voted overwhelmingly to create a select committee to investigate and counter China's growing international economic influence. The vote was 365-65 in favor of the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, just in case the name alone wasn't intimidating enough.

Investing

Microsoft plans to invest $10 billion in OpenAI (3 minute read)Microsoft is investing a whopping $10 billion into OpenAI in a funding round that would value the company at $29 billion according to Semafor. The deal also includes Microsoft claiming 75% of OpenAI's profits until they get their money back and then taking a 49% stake in the company. Some analysts think that Microsoft is betting big on ChatGPT to give Bing a boost in taking on Google in the search engine game.

Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought (5 minute read)The money manager who's all about growth, Cathie Wood, is back in the game. Her ETFs are on the up in 2023, making up for some rough years before. Her top ETF is up a solid 5% just in the first few trading days of the year. Looks like Wood is finally beating the market instead of the other way around. On Monday, Ark Invest went on a shopping spree, picking up some extra shares in some of the hardest-hit stocks - Adobe, Tesla and Global-e Online - The Motley fool takes a closer look and to see if we should follow suit.

What Does "Sell Any Rips" Mean in Trading? (8 minute read)Trading terms can be confusing. Find out what "selling any rips" in the stock market is and learn the basics of the trading strategy. In this article, we look at why investors do it and the risks and rewards associated with selling rips.

Money

What the Fed Interest Rate Hikes Mean for Home Buyers, Owners and Sellers (5 minute read)The Fed's on a mission to calm sky-high inflation and in December of 2022, they raised interest rates for the 7th time. It's a big deal for anyone wanting to buy a house, since when the Fed raises rates, the cost of mortgages tend to go up too. And that's exactly what happened in 2022, with the average interest rate for a 30-year fixed rate mortgages soaring to 7%. So whether you're a home buyer, seller, or current homeowner, Dave Ramsey Solutions explains the impact of interest rate hikes.

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