Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! Inflation is finally showing signs of slowing down and the market was up, but not big, which means…let’s see what happens next. 👀 Fed.

Today we cover:

1. The latest inflation data

2. Why I’m mentioning smaller companies

3. A ChatGPT competitor that passed all the exams

4. Singapore not into crypto right now

5. ETF vs Mutual funds - Part 2

📊 Economy 

Inflation Slows

Inflation in the United States rose by 0.2% in June, below expectations of 0.3%. The Consumer Price Index (CPI) increased 3% from a year ago - the lowest inflation rate since March 2021.

Core inflation (not including food and energy) rose 4.8% from a year ago - the lowest since October 2021.

The Fed may like these numbers, which shows inflation showing, but economic growth remains steady, although with challenges. For now, we seem to have escaped “stagflation” (inflation + stagnation), which was a worry of many economists.

• The slowdown in inflation is being attributed to a number of factors, including easing supply chain disruptions and declining energy prices, lower used vehicle and airline prices.

🤞🏾 While the slowdown is welcome news for consumers, it remains to be seen whether it will be sustained.

Reader feedback

A reader wrote this 👆🏿in response to yesterday’s article, which I really appreciate because I’m trying to spotlight companies and trends besides just the big tech companies.

Small and medium sized businesses make up the bulk of any economy and even though inflation is coming down, banking regulations have tightened and most government funding is going to big companies. In the U.S., the CHIPS and Science Act went to the semiconductor industry and the Inflation Reduction Act went largely to Energy and Healthcare.

Small companies are feeling the increased costs without much help. It’s something to look at when trying to get a big picture of the economy.

Watch Investor Kevin O’Leary’s take on it.

📰 News

Anthropic competes with ChatGPT

A.I. company Anthropic launched Claude V2 and has quickly become a competitor to ChatGPT. One advantage is that Claude has data from 2023 and you can give it a lot more data to evaluate. (read The Deep View for more)

How good is it? I can pass the GRE, Medical exam and Bar Exam. What next?

Quick hits:

Elon launches XAI, which stands for "extended artificial intelligence." The company's goal is to develop artificial intelligence that is more powerful and capable than anything that exists today (isn’t everyone already doing that?).

• Musk has said that XAI could be used to solve some of the world's most pressing problems, such as climate change and disease.

📈 Stocks

S&P 500 4,472.16 (+0.74%)
DJIA 34,347.43 (+0.25%)
NASDAQ 13,918.96 (+1.15%)
VIX 13.54 (-8.76%)

Most Actives

💊 Recursion Pharmaceuticals, Inc. [RXRX +78.17%] shot up after announcing a $50 million investment from chipmaker Nvidia.

Why? The pharma company uses machine learning to develop new medicines.

My take: Nvidia recently invested in other companies in exchange for the companies using Nvidia’s chips. In short, it’s an investment that benefits both parties, in this case, Recursion secures access to hard to get chips and Nvidia locks down a long-term customer. Win-win!

🥗 CAVA Group [CAVA +14.43%] owns a chain of Mediterranean restaurants and sells products through grocery stores. Some analysts say it could be the next Chipotle, while others warn it’s overvalued.

🤝🏼 GoodRX Holdings, Inc [GDRX +21.48%] jumped after announcing a partnership with CVS.

📚 What I’m reading

Random: People are putting rubber ducks on Jeeps for no reason.

My take: I don’t understand people sometimes.

Here’s the story from the Wall Street Journal (slow news day at WSJ?)

🔐 Crypto

Bitcoin $30,362.84 (-0.7%)
Ethereum $1,870.14 (-0.4%)
Total market cap $1.22 (-0.3%)
* Prices as of July 12th, 6:30 PM EST

Singapore not investing in crypto

The country’s sovereign wealth fund, called Temasek, said there’s currently too much regulatory uncertainly, stating:

“There’s a lot of regulatory uncertainty in this environment. And I do think that it will be very difficult for us to make another investment in the middle of all this regulatory uncertainty,” the country’s Chief Investment Officer said.

Side note: They invested $275 million in FTX that they just wrote off.

Bitcoin Price target

Here are the results of a poll I put up yesterday on Twitter. Thanks for all who voted.

💵 Personal Finance

Index funds - Part 2 of 3

Here are some additional benefits of investing in index funds:

• Tax efficiency. Index funds tend to be more tax-efficient than actively managed funds. This is because they do not make as many trades, which can lead to capital gains distributions.

• Ease of use. Index funds are easy to buy and sell, and they can be purchased through most brokerage firms.

• Transparency. Index funds are transparent, which means that you can easily see what assets they hold and how they are performing.

If you are considering investing in index funds, there are a few things you should keep in mind. First, you need to decide which index fund is right for you. There are index funds that track a variety of markets, so you need to choose one that aligns with your investment goals. Second, you need to decide how much you want to invest. Index funds can be bought in small or large amounts, so you can start investing with whatever amount you are comfortable with. Finally, you need to decide how often you want to invest. You can invest in index funds on a regular basis, or you can invest lump sums when you have the money.

Investing in index funds is a great way to build wealth over the long term. They are low-cost, diversified, and passively managed, which makes them a good choice for investors of all levels. If you are considering investing, I encourage you to learn more about index funds and consider adding them to your portfolio.

Stay tuned for Part 3 tomorrow. Read Part 1 here.

💰 Be a Better Investor

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