GM Lark Traders. This is Lark Digest, the only trading newsletter that you look forward to more than your morning coffee.

We hope you had a great weekend and are no longer crying over Bitcoin’s recent drop (I’ve run out of tissues).

This week, the economic calendar is lighter so we’ll shift our focus from monetary policy to some more juicy catalysts that will be moving the markets.

And what’s more juicy than drama with Donald Trump?

Let’s run it:

1. The US Presidential election process begins today 🇺🇲 

2. Trump slams Vivek ❌ 

3. What does the market want to see? 🤔 

THINGS ARE ABOUT TO HEAT UP 🇺🇸 

For politics junkies like myself, today is an exciting day that will give us a glimpse into how the 2024 election might play out.

And if you’re not obsessed with politics, don’t worry.

Things are so juicy right now; by the end of this, you’ll be following closely, too.

1/ IOWA CAUCUSES ARE TODAY ✍️ 

Every election cycle starts off with the Iowa caucuses. Now you’re probably asking yourself the same thing I did: what the heck are the caucuses? How do they work? And why does it seem so complicated?

In short: 

• The caucuses determine which candidate will get to run for president in the November election.

• Only members of the Republican party get to vote.

• Voters will likely feel like they’re back in kindergarten playing musical chairs. That’s right, rather than voting on a piece of paper, participants physically move to different areas of the caucus location to cast their vote.

• Usually, a candidate needs at least 15% of the vote to be considered legit.

Why is it important?

• Iowa is the first state to hold these caucuses, which means it’s going to set the tone for the entire election. We’re going to see who’s gaining steam and who’s more boring than vanilla ice cream.

2/ THE DRAMA IS PICKING UP 😬

Now, here’s the deal: you might like Trump. You might like Biden. Or, you may like another candidate. Everyone has their opinion, their own style, their own flavour.

And that’s great.

But do you know what everyone likes?

Drama.

And let me tell you, this past weekend, I couldn’t get off Twitter.

What happened?

Vivek Ramaswamy has been gaining massive attention. At just 38 years old, a self-made billionaire and one of the most well-spoken candidates in a generation, it’s warranted.

But rather than trashing Trump like other candidates, Vivek has taken a different approach. He’s repeatedly said Trump was the best president of the 21st century.

A compliment like that and his level of charisma had many thinking Trump would ask Vivek to be his VP.

But not anymore.

Just when there was hope for some unity, this weekend, Trump began trashing Vivek on Truth Social.

Many are saying that Trump has only gone on the offensive because he’s beginning to see the support that Vivek is garnering. After all, Vivek has done more events in Iowa than Trump, DeSantis and Haley combined.

All of that to say, watching who will become the 2024 Republican candidate is going to be incredibly exciting.

And if none of that makes sense, at least Elon Musk is impressed.

HOW DO WE MAKE MONEY, THOUGH? 🤑 

I hear you, I hear you.

As exciting as this stuff can be, we’re traders. We want to make money.

So, how can we use this info to better position ourselves in 2024?

Here are 3 things to keep in mind, with the #1 being that this isn’t financial advice.

1/ RISK-ON OR OFF? 💣️ 

The fundamental thing to keep in mind during an election is the perceived level of risk that the new president will bring. This is determined based on their personality and their policies.

• Risky times = assets like stocks and crypto selloff 📉 

• Safe times = risk assets fly 📈 

If a president is elected for a second term, there’s typically less risk. You know what you’re getting with them.

If there’s a new president, depending on their policies, the risk is typically higher because they’re new.

2/ WHICH CURRENCIES ARE “RISKY”? 🥵 

Here’s your Sentiment Analysis 101 Course:

The following currencies typically strengthen during a risk-off (things are bad) move:

• USD

• JPY

• CHF

The following currencies typically strengthen during a risk-on (things are good) move:

• AUD

• NZD

• CAD

Note, this is because these are often considered “commodity currencies,” AKA their economies rely heavily on commodities.

For example, in Canada, we have a lot of oil and our economy massively relies on it.

So, depending on how things develop, always keep these correlations in mind so you can understand why the market is moving the way it is.

3/ WHAT DO THE NUMBERS SAY? 💻️ 

Let’s cut to the chase. Should you be concerned?

If history is any indicator, no.

During election years, on average, the stock market will return 11.28%.

That’s 15.3% for a Republican President and 7.6% for a Democrat.

Don’t trust us, trust Morgan Stanley.

That means the Lark Team will continue dollar-cost-averaging into a quality index fund and keep praying that Bitcoin goes to the moon.

But, of course, not financial advice.

We’ll see you Wednesday with an update,
Matt | Lark CEO

PS: Our insane 30% off promo on all 1-Stage and 2-Stage accounts ends today!

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