🇺🇸 Changing economy

Good morning investors! The market has proven everyone wrong and is on a wild run.

Today we cover:

• A look at the economy

• Stocks hit a new high

• Getting rid of debt – part III

📊 Economy and News 

All that happened

🛢️ Oil: The EIA reported a larger-than-expected draw in crude oil inventory, with a drop of 3.443 million barrels versus an estimate of 1.333 million. Gasoline inventory also saw a significant draw, while distillates posted a larger-than-expected build. Crude production increased slightly to 13.3 million barrels per day.

On the other hand, OPEC maintained its world oil demand forecasts for 2024 and 2025, with growth expected at 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025. Meanwhile, Russian production and OPEC's own production both decreased in June.

🏡 Mortgage applications: Applications fell by 0.2% for the week ending July 5, with refinancing activity dragging down the numbers despite a slight rise in purchase activity. The 30-year mortgage rate edged down to 7.00%, keeping housing market sentiment subdued.

🙅‍♂️Wholesale sales: The figure in May rose by 0.4%, exceeding the expected 0.1% increase. Inventories also grew by 0.6%, matching expectations. This positive data could bolster Q2 GDP estimates and adds optimism for Q3.

🇺🇸 GDP: The Atlanta Fed GDPNow estimate for Q2 growth jumped to 2.0% from 1.5%, following recent data releases. This rise marks a positive shift after a series of declines, driven by stronger personal consumption and private domestic investment growth.

🪙 Crypto: During his testimony before the Senate Agriculture Committee, CFTC Chairman Rostin Behnam said 70-80% of cryptocurrencies are not securities. He also referenced an Illinois court ruling that identified Bitcoin and Ethereum as commodities, not securities.

Global hits:

• The 2024 Global Wealth Report from UBS forecasts a continued increase in the number of millionaires over the next five years, with the U.K. a notable outlier.

• Samsung launches latest foldable phones in the face of rising competition and Apple’s AI play.

• AMD announced the signing of a definitive agreement to acquire Silo AI, the largest private AI lab in Europe, in an all-cash transaction valued at approximately $665 million.

Interesting: Costco is hiking annual membership fees in the U.S. and Canada by $5, and raising the cost of its higher-tier membership by $10. It’s the first increase since 2017.

📈 Stocks

S&P 500 5,633.91 (+1.02%)
DJIA 39,721.36 (+1.09%)
NASDAQ 18,647.45 (+1.18%)
BRENT CRUDE 85.44 (+0.38%)
* Prices as of Jul 11th, 12:20 AM UTC

S&P 500 closes above 5,600 for the first time

The S&P 500 climbed Wednesday to a fresh record, breaking above 5,600 for the first time, as a sharp rise in semiconductor stocks led the market higher.

It was the 37th record close in 2024 for the S&P 500, and the 27th for the tech-heavy Nasdaq.

Chip stocks were among the largest winners of the session. Taiwan Semiconductor added 3.5% after revenue from April to June came in ahead of Wall Street estimates. Peer chip firm Qualcomm ticked higher by 0.8%, and Broadcom rose about 0.7%. Artificial intelligence darling Nvidia jumped 2.7%.

Those moves come as investors await fresh inflation figures on Thursday with the release of the June consumer price index report. The data follows comments from Federal Reserve Chair Jerome Powell on Tuesday and Wednesday that has fueled investor hopes for a rate cut in the second half of the year.

Economists polled by Dow Jones expect a 0.1% month-over-month advance and a 3.1% year-on-year gain. Core CPI, which excludes energy and food prices, is forecast to have expanded 0.2% from the prior month and 3.4% from a year earlier. The producer price index is set for release Friday.

Musk is a must: Elon Musk said during a livestream on Wednesday that his brain tech startup Neuralink is hoping to implant its second human patient within “the next week or so.”

Neuralink is building a BCI that could help patients with paralysis control technology like a phone or computer with their minds.

The company implanted its first human patient this winter, but executives said Wednesday that only around 15% of his implant’s channels are working.

💵 Personal Finance

Getting rid of debt step 3: plan a repayment strategy

Instead of just putting extra money toward any of your debt, think about which debt you want to pay down first.

If you’re paying more than the minimum payment, you can also try the debt snowball method for debt reduction. This debt repayment method asks you to make the minimum payment on all your debts except for the smallest one, which you’ll pay as much as you can. By “snowballing” payments toward your smallest debt, you’ll eliminate it quickly and move on to the next smallest debt while paying minimum payments on the rest.

Let’s say you have a $5,000 credit card balance, an $1,000 auto loan and $10,000 in student loans. With the debt snowball method, you would focus on paying off the auto loan first because it has the lowest total balance.

The debt snowball method can help motivate you to focus on one debt at a time instead of multiple, helping you build momentum and stay on track. You should only disregard the debt snowball method as an option if you have a payday loan or a title loan. These loans usually have much higher interest rates, between 300 percent to 400 percent APR on average, and should be paid off as soon as possible.

Why this works: You’ll see progress quickly when implementing the debt snowball method, motivating you to keep going.

How to start: List your outstanding debt balances and arrange them from the smallest to the highest balance. Continue to pay the minimum on all your debts, and allocate any extra funds to the debt with the lowest balance until it’s paid in full. Repeat this process with the next smallest debt on the list.

On the other hand, targeting high-interest debt first using the avalanche method will save you the most money in the long run.

With the debt avalanche, you focus on saving the most money in interest over time. After you pay the minimum balances on all your other debts, you put as much extra money as possible toward your debt with the highest interest rate.

Once you pay off the debt with the highest interest rate, you move on to the debt with the next highest rate. The debt avalanche is ideal if you want to save as much money on interest as possible.

💰 Be a Better Investor

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

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