šŸ„¶ Inflation's Cooling; Market's Hot

and Cybertruck finally ready

Morning Download from Invincible Money 

Personal finance + economics + markets


Good morning investors! We hope you had a great weekend and youā€™re prepared for another exciting week.

Letā€™s start with a fun fact about July:

  • July ranks as the best month for the S&P 500 over the past decade, with a 3.3% average gain, according to the Carson Group.

Today we cover:

  • The changing economy

  • What experts say about mortgage rates

  • Upcoming earning season

šŸ“Š Economy 

Yellen to Visit India AGAIN

AP Photo/Ajit Solanki

U.S. Treasury Secretary Janet Yellen is again in India, for the third time in the last nine months.

She is expected to meet finance ministers from G20 countries and talk about economic and financial challenges, including the increased risk of default some low-level income countries have been facing.

The visit comes a few weeks after the Indian PMā€™s high profile US visit. It shows the US considers India a key player and regional power.

A Few Other Things

  • Federal Reserve officials will meet this month to discuss monetary policy.

  • Consumers are happy and no more afraid of a recession. Theyā€™re feeling the most optimistic since September 2021.

šŸ“° News

Get Ready for a New Nasdaq-100

Nasdaq-100 is highly concentrated in just a handful of stocks such as Amazon, Nvidia, Apple, Alphabet, Tesla, Meta Platforms, and Microsoft, also known as the Magnificent Seven, which have skyrocketed this year with Nvidia hitting the $1 trillion mark this year after jumping over 200 percent.

The index is now expected to undergo some changes for a more balanced presentation. The Index is rebalanced quarterly, however, a special rebalance is expected to ā€œaddress over-concentration in the index by redistributing the weights,ā€ read an official press release.

  • No new names will be added to the Index

  • No existing names will be removed during the rebalance.

The purpose is to ensure that issuers with individual weightings that exceed 4.5% don't surpass a combined 48% of the entire index.

This isn't the first time that such a change is expected, the index has been rebalanced twice, once in 1998 and again in 2011.

First Cybertruck is Finally Out

Tesla's first Cybertruck is ready, four years after announcement.

The "bulletproof truck", however, did not pass all tests. Its "armor glass" windows failed ā€“ unable to handle the metal ball thrown at it.

Musk wants to produce a quarter-million Cybertrucks annually, but heā€™ll face supplier issues.

  • The truck is not yet available for purchase.

  • Is it going to boost Teslaā€™s stock? Probably.

Quick hits:

A 10-day UPS strike could cost the US economy more than $7.1 billion, making it the costliest work stoppage in the countryā€™s history. The union is expected to go on strike next month.

The US Virgin Islands blames JPMorgan Chase for allegedly benefitting from Jeffrey Epsteinā€™s sex trafficking operation and failing to report suspicious financial activity. Itā€™s seeking $190m in penalties and disgorgement from the bank.

With fewer people going to the office post-pandemic, remote work could wipe about $800b from the value of office buildings by 2030.

šŸ“ˆ Stocks

S&P 500 4,505.42 (-0.10%)
DJIA 34,509.03 (0.33%)
NASDAQ 14,113.70 (-0.18%)
VIX 13.34 (-1.98%)

Stocks had a good week

The stock market rally continued last week. Both bonds and stocks saw major jumps as investors welcomed lower inflation numbers with open arms.

The S&P 500 is up almost 17 percent halfway through the year, and thereā€™s still room for more growth. Big players like Nvidia and Facebook had a great time with the former hitting a new high and the latter continuing to climb.

This week will be exciting as more big names are expected to announce results, including Bank of America (18-Jul), Tesla (19-Jul), Netflix (19-Jul), and Abbott Laboratories (20-Jul).

The S&P 500 has rallied, however, this rally has been greatly driven by valuation expansion. This means all eyes will now be on earnings to drive gains for the remainder of the year.

If estimates turn out to be true, we may see the worst quarterly earnings decline this season. Experts expect S&P 500 earnings to fall 7.7% before making a U-turn in the third quarter and rebounding in 2024. 

Numbers so far, however, have been encouraging with big banks and airlines reporting impressive earnings. Investors appear more interested in forecasts than earnings.

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šŸ” Crypto

Bitcoin $30,298.70 (-0.01%)
Ethereum $1,929.73 (-0.09%)
Total market cap $1.26 Trillion (-0.24%)
* Prices as of 16 Jul, 9:15pm UTC

Telegramā€™s Wallet Bot Welcomes USDT and BTC

Get ready to use Telegram to make payments directly within chats.

Wallet, a Telegram bot built on the TON blockchain, has launched a crypto payment solution.

It will now allow merchants to accept payments in digital currencies and use crypto to make purchases.

šŸ’µ Personal Finance

Homeowners Beware: Mortgage Rate Not Expected to Change

Mortgage rates are high but not that high, according to Dave Liniger, a real estate expert and RE-MAX co-founder who remembers mortgage rates hitting 18 percent in the early 1980s.

Buyers got relief in 2021 when the rate went as low as 2.65% due to the pandemic. However, those days are gone.

Mortgage rates hit 6.96% last week and Liniger believes that "homebuyers may be stuck with these interest rates for the foreseeable future."

He expects mortgage rates to fall at the end of 2024.

šŸ’° Be a Better Investor

ā€œWaiting helps you as an investor and a lot of people just canā€™t stand to wait. If you didnā€™t get the deferred-gratification gene, youā€™ve got to work very hard to overcome that.ā€

Charlie Munger

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.