Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! We’re in the second half of the year. The first half wasn’t so bad. What will the second hold? We’ll find out soon enough.

Today we cover:

1. Forecast for the second half

2. A.I. takes more jobs

3. Best places to live

4. China and the U.S. battle each other over A.I. hardware

5. The best financial advice of all time

📊 Economy 

Welcome to the Second Half

We’re officially in the second half of 2023. The first half saw 3 regional bank failures, aggressive rate hikes and the U.S. teetering on debt default. Despite all that, the stock market is in bull territory (up over 20% from the bottom) and has had the strongest 6 months since the 1980s.

Why?

1. The economy has been stronger than expected with low unemployment, despite many layoffs, mostly in the tech sector.

2. Artificial intelligence stocks have providing nearly all the gains as everyone is enthralled with that ChatGPT, Midjourney and others can do.

3. Consumers have continued to spend, even if they’re just adding it to their credit card bill.

However,

Thanks to the U.S. bank crisis, bank lending requirements are now tighter, which could lead to slower growth. Also, regional banks themselves are now weaker as deposits are moving to larger, stronger banks.

Stock gains have only been in a few sectors, like tech, so analysts are watching for signs of reversal (bad) or gains spreading to other industries (good).

(See “We may be in a rolling recession”)

📰 News

Media company fires employees for A.I.

It started.

A.I. is slowly starting to take jobs. G/O Media, which publishes Gizmodo and Jalopnik, laid off a dozen people from its newsroom and then announced a plan to publish A.I. content. (The Neuron, A.I. newsletter)

• CNET and Buzzfeed recently started using A.I. but got pushback from readers who said the quality wasn’t great.

• Meanwhile, Hollywood writers are demanding restrictions on the use of A.I. in script writing.

Quick hits:

💰Numbeo just released their mid-year reports on the Cost of Living by city worldwide and Quality of Life by city.

• Most expensive places to live: 6 of the top 10 cities are in Switzerland

• Quality of life: Europe is looking pretty good

🇨🇳 🇺🇸 China - U.S. restriction tighten

Last week the White House announced restrictions on A.I. chip exports to China. Now they plan to restrict Chinese access to U.S. cloud-computing services, like Amazon’s AWS and Microsoft’s Azure) that use advanced A.I. chips.

China has answered by restricting minerals used in the production of semiconductors, solar cells and missile systems.

🚙 Auto sales bounce back

Auto sales in the U.S. are defying gloomy forecasts, with sales up 13% in the first half of 2023.

• Despite rising interest rates and inflationary pressures, which have led to some consumers delaying car purchases.

• Dealers are reporting strong demand for SUVs and pickup trucks, while sales of sedans and small cars remain weak.

• General Motors reported a 18% sales increase in the first half of 2023, helped by strong demand for the Chevrolet Suburban and other big SUVs.

📈 Stocks

S&P 500 4,446.82 (-0.20%)
DJIA 34,288.64 (-0.38%)
NASDAQ 13,791.65 (-0.18%)
VIX 14.18 (+3.50%)

C3.ai [AI +7.04%] helps enterprises build AI-based applications more efficiently and it’s stock has benefitted from this year’s A.I. boom, but revenue only grew 6% in the last fiscal year, so the hype may be outpacing actual revenues. It’s up 19% over the past week and 253% YTD.

Rivian [RIVN +4.45%] was up yesterday after announcing a deal to deliver 300 electric vans to Amazon in Germany.

Coinbase [COIN -1.98%] lost ground after Piper Sandler downgraded them, stating that the recent surge in crypto prices didn’t result in more trading volume at Coinbase. In fact, Piper Sandler expect Coinbase to report their lowest trading volumes in the past 2 years for Q3.

Our take: It’s interesting to note this analysis doesn’t mention that Coinbase was listed as the “surveillance sharing” partner for nearly all the recent Bitcoin ETF filings. It’s unclear how much revenue this could lead to, but Coinbase is partnered with all the BTC ETFs and that’s surely worth something.

🧐 Meta [META +2.92%] launches it’s Twitter competitor today. Will you use it?

📚 What I’m watching

In the latest episode of the “My First Million” podcast, Shaan Puri gives “10 Years of Money Wisdom in Under 23 minutes” and it’s worth listening to. (Podcast version)

A few things I liked:

1. On work, he advised to “find what is play to you that is considered work by others” that you can get paid for.

2. Building wealth is a skill that can be learned, which is why someone who has that skill will always be able to grow their money. (That’s why we’re studying the markets, right? 😀)

3. Fat pitches. Don’t swing at everything, what for your best opportunity and go big on it.

🔐 Crypto

Bitcoin $30,458.48 (-1.1%)
Ethereum $1,911.85 (-1.5%)
Total market cap $1.23 T (-1.2%)
* Prices as of July 5th, 5:20 PM EST

The CEO of BlackRock (the largest asset manager in the world) likes Bitcoin

2nd week of inflows

Coinshares reports 2nd week of inflows totaling $125 million with most investors buying Bitcoin. Short investments saw the 10th week of outflows.

💵 Personal Finance

Best financial advice

While listening to Shaan Puri give his financial advice, I thought about my list of the best financial advice I’ve heard. After years of being a financial planner, the #1 tip I give people is:

1. Automate your investments and contribute 10-50% of your income to an index fund and forget about it for 10 years. Increase the amount you contribute by 2% every year.

💰 Be a Better Investor

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