Morning Download 

Personal finance + economics + markets

Together with VEED

Good morning investors! There’s a lot to talk about in today’s issue, so let’s jump right in.

Today we cover:

• Rate cut not coming anytime soon.

• Nvidia impresses in the third quarter.

• Binance in trouble, CEO steps down.

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📊 Economy and News 

No rate cuts for the economy

Federal Reserve officials at their most recent meeting expressed little appetite for cutting interest rates anytime soon, particularly as inflation remains well above their goal of 2% – at 3.7% in September.

This came as a surprise as the market was preparing for a cut. The news sent stocks tanking, ending Nasdaq and S&P’s 5-session winning streaks.

According to the officials, the policy will need to stay “restrictive” until data shows inflation on a convincing trek back to the central bank’s goal.

Furthermore, officials expect economic growth in the fourth quarter to “slow markedly” from the 4.9% increase in Q3 gross domestic product.

Global hits:

• Nordstrom sales come up short, echoing broader retail industry pressures. Other names like Best Buy and American Eagle are also facing similar issues. However, Abercrombie & Fitch is preparing for a good run.

• Ford to scale back plans for $3.5 billion Michigan battery plant as EV demand disappoints, labor costs rise.

• Asia markets fall after Fed minutes show no indication of rate cuts.

📈 Stocks

S&P 500 4,538.19 (-0.20%)
DJIA 35,088.29 (-0.18%)
NASDAQ 15,933.62 (-0.58%)
BRENT CRUDE 82.46 (-0.01%)
* Prices as of Nov 22nd, 12:20 AM UTC

Nvidia’s revenue triples

Nvidia’s results surpassed analysts’ projections for revenue and income in the fiscal fourth quarter.

• Earnings: $4.02 per share, adjusted, vs. $3.37 per share expected

• Revenue: $18.12 billion, vs. $16.18 billion expected

Nvidia’s revenue grew 206% year over year during the third quarter. Net income, at $9.24 billion, or $3.71 per share, was up from $680 million, or 27 cents per share, in the same quarter a year ago. 🎉 

Nvidia faces obstacles, including competition from AMD and lower revenue because of export restrictions that can limit sales of its GPUs in China. The company, however, said that GPU demand continues to outpace supply as Gen AI adoption broadens across industry verticals.

Nvidia stock has gone up 241% so far this year, vastly outperforming the S&P 500 index, which is up 18% over the same period. The stock, however, fell -1.89% after the bell.

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🔐 Crypto

Bitcoin $36,149 (-0.4%)
Ethereum $1,945 (-0.8%)
Total market cap $1.36T (-3.58%)
* Prices as of Nog 22nd, 12:20 AM UTC

Binance to exit the US

Crypto exchange Binance will leave the U.S., pay billions in fines and appoint a monitor for five years to settle charges with the Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Asset Control (OFAC).

Why? Binance's Changpeng Zhao stepped down and pleaded guilty to violating U.S. anti-money laundering requirements, despite the fact that Binance was never a U.S. exchange.

Binance compliance chief acknowledged Hamas funding in 2019. Furthermore, cybercriminals used Binance through direct transfers of $106 million into Binance wallets from Russian darknet marketplace Hydra before law enforcement shuttered the criminal underground site in April 2022. The company failed to stop this and other illegal activities.

What now? Binance will pay $4.3 billion in one of the largest corporate agreements in US history. Zhao will pay a $50 million fine under a deal that requires him to step down as CEO.

While no official word from Binance has come out yet detailing the future course of action at the exchange, it is most likely that the exchange will not collapse akin to FTX, given the settlement and resignation

The impact: The crypto industry suffered a major setback with almost all coins falling, led by Binance Coin that fell by nearly 10% following the news. At the time of writing, BNB’s long liquidations neared $3 million in the same hour of the Binance news coming out.

💵 Personal Finance

Health savings accounts and how they can help you save tax money

Today we’ll talk about Health Savings Accounts and how they can help save tax money. These types of accounts are offered in the U.S., China, Singapore and South Africa.

Health Savings Accounts (HSAs)

HSAs can be defined as “savings accounts used in conjunction with a high-deductible health insurance policy that allows users to save money tax-free against medical expenses." You must have a high-deductible health insurance plan to make contributions.

In simple words, these tax-deductible savings plans are used to put aside pre-tax money for future health-related expenses. The account is set up with a trustee with some terms and conditions.

There are presently no income limits but annual deductible limits are typically revised every few years. For 2023, the limit is $1,500 for self-only coverage and $3,000 for family coverage. For 2024, it will go to $1,600 for self-only coverage and $3,200 for a family plan.

Contribution limits

As mentioned earlier, contribution limits exist: $3,850 for self-only coverage and $7,750 for family coverage.

Employers can match contributions and the amount contributed by your employer is also included in these limits. However, individuals that are 55 or older can contribute an additional $1,000 with the option to make this contribution anytime during the year.

For 2024, the limits stand at $4,150 for self-only coverage and $8,300 for family coverage. Those 55 and older can contribute an additional $1,000 as a catch-up contribution.

How do these accounts impact taxes?

HSA contributions (by payroll or direct) are excluded from the employee’s taxable income, i.e.: are tax-deductible. You generally have until the tax filing deadline to contribute to an HSA. For tax year 2023, you can make contributions up until April 15, 2024.

These contributions appear on Form 1040 as an adjustment to income. On the plus side, you're not required to take these contributions as an itemized deduction, which proves to be beneficial as itemized medical deductions come with certain limitations or caps. Also, since only 13.7% of taxpayers itemize, this can prove to be quite advantageous.

In addition, all sorts of earnings related to your HSA, including dividends and interest, are tax exempt and hence not included in your return.

Note: Contributions made by your employer cannot be claimed as a tax deduction; however, can be excluded from your gross income.

Withdrawing from your HSA

Withdrawals are tax-free given that they meet eligibility requirements as defined in IRS Publication 502, Medical and Dental Expenses. Examples include surgery costs, medical procedure costs, guide dogs, and birth control pills. On the plus side, money can be withdrawn anytime.

In addition, fuel spent traveling to and from the clinic or hospital is also included but items that aren't necessary such as gym membership and nutrient capsules aren't included.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.