☀️ Feb ends shining

Good morning investors! February has been great, let’s now see what March holds for us.

Today we cover:

• Inflation comes as expected.

• February ends on a positive note.

• Gemini is paying back.

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📊 Economy and News 

Inflation comes as expected

The personal consumption expenditures price index excluding food and energy costs increased 0.4% for the month and 2.8% from a year ago, as expected.

Headline PCE, including the volatile food and energy categories, increased 0.3% monthly and 2.4% on a 12-month basis, also in-line. Prices, however, are still higher than the Fed’s target of 2% but are declining at the right pace.

Some say that these figures amounted to a blow for Fed officials who had been hoping to begin cutting interest rates with inflation steadily fading from its four-decade high in 2022 of 9.1%. But, the market did not react negatively to the report.

Personal income rose 1%, well above the forecast of 0.3%. Spending decreased by 0.1% versus the estimate for a 0.2% gain. Consumers, however, are still turning to savings to make ends meet.

The personal savings rate was 3.8% on the month, slightly higher than December but off a full percentage point from where it was as recently as June 2023.

Initial jobless claims totaled 215,000 for the week ended Feb. 24, up 13,000 from the previous period and more than the 210,000 estimate.

Global hits:

• Humanoid robot startup Figure AI valued at $2.6 billion as Bezos, OpenAI, Nvidia join funding.

• Trump Media sued by co-founders ahead of DWAC merger.

• India’s economy ended 2023 ‘with a bang’ as growth surged to 8.4%.

📈 Stocks

S&P 500 5,096.27 (+0.52%)
DJIA 38,996.39 (+0.12%)
NASDAQ 18,043.85 (+0.95%)
BRENT CRUDE 82.31 (-0.01%)
* Prices as of Mar 1st, 12:20 AM UTC

A look at stocks

Good news: Ray Dalio says the U.S. stock market ‘doesn’t look very bubbly’.

Earnings also came out strong. Energy drink maker Celsius reported positive earnings and soared to new all-time highs.

Monster Beverage also jumped on strong January sales and gross margin expansion, ending the day just below all-time highs. It is among the best-performing stocks of the last 30 years.

Hormel Foods had a great day after reporting positive earnings, driven by growth in its food service and international segments.

Bad news: US Justice Department is investigating Boeing over its door plug blowout. On the other hand, Meta has been accused of ‘massive, illegal’ data processing by European consumer groups. Plus, layoffs are still happening and the latest to join is Electronic Arts, maker of Madden NFL, with plans to cut 5% of staff as gaming industry layoffs widen. Another company with similar plans is Best Buy that recently warned of potential layoffs.

Lastly, Stellantis is recalling 338,000 Jeeps for suspension problems.

Overall, February proved to be a great month for the market. The S&P 500 Index jumped 3.87% in the month with some major stocks hitting new highs.

🔐 Crypto

Bitcoin $62,101. (-1.01%)
Ethereum $3,421 (-0.03%)
Total market cap $1.28T (-1.1%)
* Prices as of Mar 1st, 12:20 AM UTC

Gemini to pay $1.1 billion back to customers

Gemini Trust, a cryptocurrency exchange founded by Cameron and Tyler Winklevoss, has reached a settlement with a New York regulator under which it will return at least $1.1 billion to customers of its now shuttered lending program, Gemini Earn.

In addition, it will pay a fine of $37 million to the regulator “for significant failures that threatened the safety and soundness of the company.”

Further action can be taken against the company if it fails to meet its obligations.

But, all is still not well for Gemini, which is facing several other legal issues as well, most notably a separate lawsuit filed in October by New York’s attorney general accusing three companies — Gemini, GCC and Digital Currency Group, the parent firm of GCC — of lying to investors and covering up more than $1 billion in losses.

💵 Personal Finance

Why people can’t afford homes

Homes are expensive, not only because of the base price going up but also because the interest rate is very high.

This is making people rent and put their dream of owning a home to rest.

But, why are so many aspiring homebuyers unable to afford a down payment? It’s due to a lack of savings and high living costs.

Down payments are usually in the range of 20 to 30 percent. This prevents people from applying for a loan. But, do you know that there are some ‘better’ options as well?

Most homeowners don't put 20 percent down. In 2022, the median down payment among homebuyers was 13 percent. This is because there are some loans with lower requirements.

FHA loans require as little as 3.5 percent, and VA loans and USDA loans have no down payment requirement at all.

But we don’t always recommend buying homes without a down payment because that’ll cause you to pay more interest over the life of the loan because you're borrowing more money.

Out of reach: A recent survey showed that about 20% of aspiring homeowners feel they will never be able to afford a home as prices continue to rise. Home prices are in fact up 16% since the pandemic.

With the median price standing at $417,700, you’ll have to spend $62,655 if the down payment requirement is 15 percent. Unfortunately, most people cannot afford this as the median U.S. household income is only $74,580.

What do do? Your best option is to look for affordable houses. West Virginia, for example, is an affordable state with an average price of just $98 per square foot and listings selling for an average of $140,000. Other affordable options include Arkansas, Iowa, Alabama, and Mississippi.

💰 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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