Morning Download from Invincible Money 

Personal finance + economics + markets

5 minutes a day for better money decisions.

Good morning investors! New data shows the economy is improving, BlackRock won’t use the term “ESG” anymore and DOW 900,000?

📊 Economy 

Data Points to Strong Economy

New data suggest that the US economy is still growing, despite rising interest rates and concerns about a recession. It is possible that the economy could weaken in the coming months, but here are some of the indicators to consider:

• GDP grew faster than we thought in Q2: rate was revised to 2% from 1.3%.

• New home sales rose to the fastest annual rate in more than a year, reaching 763,000 in May. This was well above expectations of 720,000.

• Durable goods orders also topped expectations, rising 0.7% in May. This was the third consecutive monthly increase.

• Consumer confidence reached the highest level since the start of 2022. The Conference Board's index of consumer confidence rose to 109.7 in June, up from 102.5 in May.

• However, Housing prices declined for the first time since 2012 and the S&P CoreLogic Case-Shiller index of home prices fell 0.2% in April.

Where are we? Overall, the data is positive for the US economy. However, it is important to monitor the situation closely as the Federal Reserve continues to raise interest rates in an effort to combat inflation.

Reminder: Chairman Powell said on Tuesday 2 more consecutive hikes were not out of the question.

Update: Markets are pricing in a 72% chance the Fed will raise 0.25% in their July meeting.

📰 News

“ESG” too controversial for BlackRock

Larry Fink, the CEO of BlackRock, said that he will no longer use the term "ESG" (environmental, social, and governance) in his annual letters to shareholders. He said that the term has been "misused by the far left and the far right" and that it has become "totally weaponized."

Fink said that he still believes in the importance of ESG investing, but said he wants to find a way to talk about ESG investing that is "more inclusive and less polarizing."

Fink's decision to abandon the term "ESG" is a significant one. ESG investing has become increasingly popular and controversial in recent years.

Weak performance: Fink didn’t note that ESG-focused funds had the worst returns, underperforming by 9% last year and also over the past 5 years.

State backlash: 19 states issued a strongly worded letter last year to Fink attacking BlackRock’s reliance on ESG scores in their state pension funds.

Several states have banned ESG in managing state funds. Those states include Arizona, Florida, Idaho, Kentucky, North Dakota, Ohio, Oklahoma, Texas, Utah, West Virginia, and Wyoming.

Here’s a great episode about ESG from the Freakonomics podcast.

📈 Stocks

S&P 500 4,396.44 (+0.45%)
DJIA 34,122.42 (+0.80%)
NASDAQ 13,591.33 (0.00%)
VIX 13.54 (+0.82%)

Billionaire investor sees DOW 900,000 in 50 years

Billionaire investor Ron Baron said that he believes stocks will continue to rise in the next half-century, despite the current bear market and concerns about a recession.

Baron, the CEO of Baron Capital, said that he believes inflation will continue to be a problem, but that this will actually benefit stocks in the long run. He said that as inflation drives up prices, companies will be able to raise prices and their profits will increase. This will lead to higher stock prices.

He said that bear markets are a normal part of the market cycle and that they have always been followed by bull markets. He said that he is confident that the bull market will resume in the next few years.

He reminded us that inflation is the norm, not the exception, saying, "I expect inflation to be as it always has been, as it always has been in every single democracy that's ever existed, 4-5% year."

Can’t wait 50 years?

John Maynard Keynes famously said, “In the long-run we’re all dead.”

Market Movers

❌ Nike [NKE -3.34%] beat Q4 revenue estimate, but missed on profits. EPS was $0.66 vs $0.67 expected and revenue was $12.83 billion vs $12.59 billion expected.

☝🏽 Lucid and Aston Martin both up again on their EV partnership announcement, +7.17% and 2.12%, respectively.

🥳 Overstock.com [OSTK +19.69%] up again after announcing they’re changing their name to Bed Bath & Beyond, after buying their IP out of bankruptcy.

🚙 Volvo and Rivian [RIVN +9.36] are the latest EV companies to sign on to use the Tesla charging network (NACS). Fisker is also likely to use it as they contracted with ChargePoint, who also adopted the NACS plug for its charging stations.

🔐 Crypto

Bitcoin $30,390.89 (+1.1%)
Ethereum $1,848.06 (+1.0%)
Total market cap $1.21 T (+1.4%)

Brazil’s planned digital real (CDBC) is to be compatible with start contracts and DeFi.

The European Commission published a bill that would create a digital euro or CBDC (Central Bank Digital Currency), which includes privacy controls and an offline guarantee, meaning that users would be able to use the digital euro offline.

When CDBC? The bill is still in its early stages, and it is not yet clear when the digital euro would be launched.

Ledger has introduced an institutional-grade trading network called Ledger Enterprise Tradelink, which is designed to meet the risk management and regulatory requirements of institutional investors.

What is it? The network offers real-time tracking of collateral balances and operational status for all participants, with zero transaction fees.

Who can use it? It’s a permissioned network, meaning that only authorized participants can access it. It is designed to be scalable, so it can accommodate the growing demand for institutional-grade crypto trading.

💰 Be a Better Investor

🧠 Get Smarter

Facts on inflation

What is it? Inflation is a general increase in prices and a decrease in the purchasing power of money.

What causes it? It can be caused by a number of factors, including increased demand, rising production costs, and government policies.

What happens? Usually a decrease in real wages, an increase in the cost of living, and a decrease in the value of savings.

How to fix it: There are a number of ways to combat inflation, including raising interest rates, reducing government spending, and increasing the supply of goods and services.

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