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Personal finance + economics + markets

Good morning, investors! The market appears to be stagnant and all eyes are on upcoming events the Fed Chair Powell press conference, jobless claims data, and home sales report – all expected this week.

Fun fact: The US is the world's largest economy in terms of nominal GDP, and the second-largest in terms of purchasing power parity, slightly behind China.

Today we cover:

• Yellen isn’t expecting a recession.

• China stockpiling oil.

• Binance versus SEC continues.

• Best states to buy a house in.

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📊 Economy and News 

Janet Yellen doesn't think the economy is in downturn

The economy isn’t going down, according to Yellen who spoke about the changing economy on CNBC's "Squawk on the Street."

But why? 

• Because the labor market is improving

• Because inflation is decreasing (according to her)

Warning: However, she warned that a government shutdown could kill the economy.

"There is no reason for it to occur, and we want Congress to stay focused. We've got a good, strong economy, as we just discussed, and creating a situation that could cause a loss of momentum is something we don't need as a risk at this point," she said.

Yellen isn’t the only one with such views. Most experts agree that recession isn’t a real danger anymore.

Market reaction: There wasn’t much of a reaction. The US Dollar Index was last seen losing 0.05% on the day at 105.25.

Our take: We don’t think the US is going to fall into a recession but we do expect a market correction. Also, inflation ticket up this month, not down.

China Stockpiling Oil

🇨🇳 Concerning: China is stockpiling oil. Either because they can get it cheap from Russia and Iran now or because they're preparing an invasion of Taiwan. Which is it? We don’t know but as investors we need to be prepared for anything.

What do to: Make sure you’re diversified and have a good financial plan. You may want to have some cash on hand in case markets tank if the worst happens. Remember what happened when Russia invaded Ukraine?

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Global hits:

• Elon Musk denies rumors of a Tesla factory in Saudi Arabia.

• “Germany will suffer,” predicts OECD.

• The Indian market is moving up.

📈 Stocks

S&P 500 4,443 (-0.22%)
DJIA 34,517 (-0.31%)
NASDAQ 13,678 (-0.23%)
VIX 14.11 (+0.79%)
Oil $90.77 (+.21%)
* Prices as of Sept 19th, 20:20 PM UTC

The world was red

Almost all major markets were red on Tuesday.

Dow fell 0.87% midday and other major indexes in the country were also lower.

Here are reports from other major markets:

• S&P/TSX Composite (Canada) fell 1.23%.

• S&P/TSX 60 (Canada) fell 1.24%.

• Shanghai Composite (China) closed 0.03% lower.

• Bombay Sensex (India) fell 0.01%.

• ASX 200 (Australia) fell 0.47%.

• FTSE 250 (The UK) fell 0.12% during trading hours.

• DAX (Germany) closed 0.40% lower.

This is one of the few days when international markets seemed to be in sync. However, some closed on a positive note, including CAC 40 (France) that went up 0.08%, and FTSE MIB (Italy) that closed 0.60% higher.

Instacart a $14 billion company

The grocery delivery company bucked the market and opened up 40%, added $4 billion to it’s valuation in 1 day.

So? It matters because it’s the first big venture-backed company to go public in the U.S. since 2021, and together with the successful ARM IPO last week, may signal a renewed appetite for IPOs and risk-on investments.

Oil Surges

We added to the daily price of oil to the market summary above today because it’s in the news - it keeps rising (up 45% the past 4 months), so we want to keep an eye on it.

How does it affect you? As an example, the inflation rate in Canada went up for the second month in a rate, to 4%, largely driven by oil prices.

🔐 Crypto

Bitcoin $27,171 (+1.4%)
Ethereum $1,641 (+0.2%)
Total market cap $1.12 T (+0.7%)
* Prices as of Sept 19th, 20:20 PM UTC

SEC fails to get access to Binance US software

In a major blow to the US Securities and Exchange Commission, the agency failed to convince a federal magistrate judge to immediately allow officials to delve into Binance.US’s software.

What’s happening: The SEC sued Binance US in June and has been struggling to get information from the company since.

What did the judge say?

Federal Magistrate Judge Zia Faruqui said he wasn’t “inclined to allow the inspection at this time.” (seems pretty vague, no?)

He suggested the SEC comes up with “more specific requests for discovery and get in touch with a broader range of witnesses.”

The legal struggle between Binance and the SEC has worsened in the last few days. The issue started when the SEC sued Binance CEO Changpeng ‘CZ’ Zhao and Binance US for running an unlicensed exchange.

💵 Personal Finance

5 best states to buy a house in

A home is a major investment. If you’re looking to buy one, whether to invest or live in, it is important that you pick a state where prices are good and increasing at a decent rate.

Here are some of our best picks:

#1 Pennsylvania

With the average home costing $254,722, Pennsylvania is a great choice to buy a house in. Pennsylvania House Price All-Transactions Index is at a current level of 622.77, up 2.88% from last quarter and 5.85% from one year ago.

#2 North Carolina

The average home in the state costs $323,487, which makes it a little costly but still worth it. Prices have been increasing at the rate of 4.4% per year. The median price has gone from $201,000 to $302,459 in 2023.

#3 Utah

Utah is expensive but in demand. The average home in the state costs $518,806. Still, we think it can be great due to its family-friendly environment and affordability in terms of cost of living. Prices have gone up insanely in the last few years with some areas having an appreciation rate of 16.8%

#4 Kentucky

Those looking for an affordable option can consider Kentucky where the average home value stands at $197.948. Also, prices have been declining in the state. In August 2023, 26.2% of homes in Kentucky sold below list price, down 0.4 points this year. This makes it a good time to invest in the state.

#5 New York

There are few states as interesting as New York where the average home costs $733,845. And while reports suggest that people are looking to move out of New York due to the price factor, we feel it’s still a good investment, especially for people looking to earn rental income. New York rentals average $3,495 for a studio rental to $7,495 for a 4-bedroom rental (main cities). The cumulative appreciation rate for homes over the past ten years stands at 80.72%, making it a great investment.

This doesn’t mean other states are bad. In fact, names like Mississippi, Ohio, and Nebraska often make it to lists that talk about the best states to own a home in.

The key lies in knowing where and when to buy. The video below can be of help:

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