Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! We hope you had a great weekend and you’re prepared for another exciting week.

There’s a lot to cover in today’s newsletter but let’s start with a reminder:

• Stocks always go back up, but you may have to give it 20 years to get a real positive return. In other words, stocks have never been negative for a given 20 year period.

Today we cover:

• Ready for another rate hike?

• AI continues to attract investors but not everyone’s happy

• Earnings creating havoc

Here are the results of last week’s poll where I asked what you thought of Tesla:

The winning vote was for “Tesla is the company of the future” (40%). A close second was “Love Tesla, but hate Elon.”

📊 Economy 

Fed to Hike Rates AGAIN?

After a brief pause in June, the Fed is expected to hike interest rates this week.

Supportive inflation data and positive growth have increased the possibility of the Fed voting for a 0.25% hike in the next meeting, which would push the rate to a range of 5.25 and 5.5%, its highest in 22 years.

The Fed aims to bring inflation down to 2%, which has proven to be a challenge. However, there’s good news and the possibility of a recession has fallen to 20%, from 25%, according to Goldman Sachs.

A Few Other Things

• The strengthening US dollar is putting pressure on developing economies.

• The scorching heat is causing businesses to suffer productivity loss due to heat expected to total $100 billion per year.

• More states plan to allow ‘children’ to serve alcohol with Wisconsin seeking to lower the alcohol service age to 14.

📰 News

AI Investment is Booming But Workers Aren’t Happy

The success of ChatGPT and other such tools has made AI a hot market. VC funding in this niche is over 58% higher than in the first half of the last year. VCs invested almost five times as much into generative AI firms in the first half of 2023 as during the same period last year. 

The industry is attracting not only big-money private investors but also smaller investors. Flows into top AI-focused ETFs have ballooned by about 35% since the beginning of the year. However, the long-term impact of AI is still not clear.

Workers report that the intensity of their work has increased after the adoption of AI, which is making them unhappy.

Why so sad?

• Workers have to spend more time learning how to use AI tools

• There’s potential for errors, For example, CNET had to issue corrections after using AI to generate stories.

But this isn’t going to stop investors. AI is expected to continue to grow with big names such as Microsoft and Tesla making giant strides.

Earnings Season Continues

After mixed reports last week, this week is expected to bring more surprises.

Big names such as Microsoft, META, and Alphabet are expected to report this week. However, the real question isn’t the numbers, as investors seem more interested in how these companies plan to spend money.

• Big tech companies have spent billions on AI and investors now want to see results.

• META will have to surprise investors, after a great 2023, if it wishes to continue to attract buyers.

Quick Hits:

Twitter birds to fly away as the company plans to gradually change the logo. Musk announced plans to use the X as the new logo.

The hit movie ‘Barbie’ has boosted a ‘dying’ industry causing a 60% increase in demand for collector dolls. If you have a nice collection of dolls, it might be a good idea to check what it’s worth now with some $600 vintage Barbies currently selling for over $10,000.

Achieving carbon neutrality by 2050 isn’t going to be easy – It will require over $9.2 trillion per year to improve physical infrastructure and mine rare minerals to create the next generation of batteries.

📈 Stocks

S&P 500 4,536.34 (0.03%)
DJIA 35,227.69 (0.01%)
NASDAQ 14,032.70 (-0.22%)
VIX 13.60 (-2.78%)

The Market is Overbought, Warns an Expert

Gareth Soloway, a market strategist, believes the stock market is going to crash.

The year (2023) has proven to be a great year for the market. The Nasdaq had its best first half of the year in over 40 years. The index has jumped about 34% YTD, and the S&P jumping 18% YTD.

Buuut…Soloway, believes that weak industrial production, disappointing factory orders, stricter lending standards, and slowing retail sales all point to a worsening economy.

What next? He expects the Nasdaq to pull back 10% and the S&P to fall 6% in the second quarter. However, he’s one of the few analysts predicting such a scenario as the overall mood seems to be upbeat. Experts are waiting for a ‘soft landing’.

🔐 Crypto

Bitcoin $29,964.37 (0.57%)
Ethereum $1,884.37 (0.96%)
Total market cap $1.26 Trillion (-0.11%)
* Prices as of 23 Jul, 9:15pm UTC

SEC Questions the XRP Case, Signals Appeal

Ripple investors might have celebrated too early after a mixed win. The SEC has filed documents against Terraform Labs and its CEO Do Kwon, claiming the XRP decision was flawed. This means the body might be planning to reappeal the decision.

New documents show that the SEC believes the judge should dismiss its recent rulings, claiming the company “creates an artificial distinction between the expectations of sophisticated institutional and retail investors.”

💵 Personal Finance

Older, disabled Americans Have Access to Only 5% of the Country's Housing Supply

Accessible homes — which come with additional features — are designed to help older and disabled individuals live the way they wish to. These features include lower counters, wider doorways, and accessible bathrooms. However, despite a sizeable older population, there are just not enough accessible homes in the US.

Investment idea: This presents a great opportunity and challenge. Investors can invest in smart homes as they are going to be in demand. About 61 million people in the US have a disability and nearly 20 percent of Americans will be above 65 by 2030.

💰 Be a Better Investor

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.