Morning Download from Invincible Money

Personal finance + economics + markets

Finance in 5 minutes a day to help you make better money decisions.

Good morning investors! Consumer spending picks up, as do wages. Generative AI is changing games, TV and movies forever, but the AI stocks are not yet in a bubble.

📊 Economy 

🤝🏼 Debt ceiling: After reaching a debt deal over the weekend, the respective parties now have to get support from the lawmakers to get Congressional approval tomorrow.

💵 Consumer spending hasn’t slowed and shows a growing U.S. economy

Personal spending in April jumped 0.8%, more than double market expectations. This was the largest increase since January and followed a 0.1% rise in March. Adjusted for inflation, real spending rose 0.5%, also beating expectations.

The strong increase in spending was supported by a 0.4% rise in personal income, the largest increase in three months. This was driven by higher wages and salaries, which rose 0.4%.

Here are some additional details from the report from the U.S. Bureau of Economic Analysis:

• Spending on goods rose 0.8%, while spending on services rose 0.3%.

• The increase in spending was broad-based, with all major categories showing gains.

• The rise in income was also broad-based, with all major sources of income showing gains.

• The personal saving rate fell to 4.1% in April, from 4.2% in March.

Our take: The strong increase in personal spending is a positive sign for the US economy. It suggests that consumers are still confident and willing to spend, which is essential for economic growth. The increase in income is also a positive sign, as it means that consumers have more money to spend. The decline in the personal saving rate is not necessarily a bad thing, as it could indicate that consumers are spending more of their income and stimulating the economy.

Overall, the report on personal spending in April is positive for the US economy. It suggests that the economy is still growing at a healthy pace and that consumers are still confident.

📰 News

AI storytelling is here

Generative AI is a type of AI that creates new content, such as text, images, or music. It does this by learning from existing data and then using that knowledge to generate new outputs.

It’s going to be huge.

💾 Nvidia launched its generative AI service called “Nvidia ACE” for game developers last weekend. Their new product allows game developers to bring NPC (Non-playable characters) to life.

• How? The in-game characters respond to verbal cues from the player and they can respond like a real person. This is the beginning of the end of “dumb” characters wandering aimlessly in the background.

• Nvidia’s stock hit $1 trillion!

• Watch the 2 minute demo here.

TV & Movies will never be the same

🎬 Screenwriter Justine Bateman (sister of Justin Bateman) posted a thread about where she sees TV going with generative AI.

Future TV may include:

• Actors licensing their likeness so actors can “act” in movies forever. (Already happening - Bruce Willis recently signed a deal)

• Viewers could custom order a movie with the characters and story they want and a movie is created just for that person.

• Put yourself in the movie.

• Create the next season of a cancelled movie.

Watch this clip from Answers with Joe for more. Pretty thought provoking.

For investors: It’s important to keep track of these technological developments because, as we’ve seen with Nvidia’s stock shooting up 35%, these developments can eventually drive profits for the right companies.

📈 Stocks

Microsoft’s deal to buy Activision Blizzard hinges on Call of Duty. Regulators worry that the game is so influential it could lead to a cloud gaming monopoly.

Tesla [TSLA +2.99%] up again yesterday as Elon meets with China’s foreign minister to discuss Telsa’s expansion in China.

AI stocks driving the market. Investors are piling into the AI trade and 7 stocks Bank of America analyst calls the “Magnificent Seven” are getting all the gains.

Apple, Alphabet, Microsoft, Amazon, Meta, Tesla and Nvidia.

Apple and Microsoft have each gained more in value that the entire bottom 93 stocks of the Nasdaq 100. (Source)

As crazy as that is, economist Jeremy Siegel says all the interest in AI has not yet created a bubble!

🔐 Crypto

Bitcoin: transaction fee revenue for miners hit its highest level in 2 years.

No tax: The proposed 30% tax on crypto miners was cut out of the US debt ceiling deal leading to BTC to hit a 2 week high over the weekend.

💵 Personal Finance

How to Avoid Burn Out

Dr. Jordan Peter, clinical psychologist, talked with Dave Ramsey about the importance of having a vision and goals related to money. When working toward a goal, like saving money, if you know why you have that goal, it’s much easier to achieve it without quitting.

Know specifically what you’re saving for, why you want it and you may get tired, but not burned out.

This short video is worth a watch.

💰 Be a Better Investor

🧠 Get Smarter

A study by Baylor University found that early risers are more likely to be religious, satisfied with their lives, and productive. The researchers believe that this may be because early risers are more likely to experience positive emotions, have a sense of purpose, and have more time in the day to get things done.

They are also more likely to be healthy because they get enough sleep and exercise. And they are more likely to have strong social relationships because they more involved in their communities and have friends who are also early risers.

If you are not an early riser, there are a number of things you can do to change your sleep habits and become more of a morning person. These include going to bed and waking up at the same time each day, creating a relaxing bedtime routine, and avoiding caffeine and alcohol before bed.

The study didn’t mention those who read morning newsletters are smarter, but we know this is true 😉

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

🦾