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- 😣 Inflation returns?
😣 Inflation returns?
and the messed up South Asian market
Good morning investors! This will be a very important week because big names like Netflix and Tesla are expected to announce earnings. Moreover, major economic reports, including the GDP report and the personal consumption expenditures prices reading are expected this week. Both these can impact the Fed decision on rates.
Today we cover:
A look at the South Asian market
Inflation to make a comeback?
Investing in collectibles.
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📊 Economy and News
The situation in South Asia
Moody’s Investors Service has a negative outlook for sovereign creditworthiness in Asia-Pacific this year, mainly due to China-related issues.
China, a major player in the region, is dealing with a lot of problems, including a shrinking working age population. Reports showed only 9.02 million births in 2023, down 50% from 2017.
Set alongside 11.1 million deaths in the year, the country’s population shrank by 2.08 million in 2023 after falling 850,000 in 2022.
This is the first time the country has reported two consecutive declines since the great famine of 1959-1961. This is one of the reasons why companies like Apple are moving to other countries.
Countries with large manufacturing bases and improving infrastructure such as India, Malaysia, Thailand and Vietnam, could benefit from the situation.
Moody’s said that the slowdown in China’s growth can impact APAC economies and even lead to supply chain issues. In addition, the current political situation could worsen due to the changing dynamics between Russia, the US, China, and Taiwan.
Maybank, on the other hand, sees Southeast Asia markets making a comeback with valuations as demand for chips and EVs increases. Southeast Asian markets have taken a beaten in recent months but investors are once again interested in the region.
Global hits:
Terraform Labs has filed for bankruptcy protection in the US.
Indians are getting richer – around 100 million people in the country will earn more than $10,000 a year by 2027.
Saudi Arabia goes big in Davos as it looks to become a top AI tech hub for the Middle East.
Reminder: The S&P 500 closed at a record high for the first time in two years.
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📈 Stocks
S&P 500 4,839.81 (+1.23%)
DJIA 37,863.80 (+1.05%)
NASDAQ 17,314.01 (+1.95%)
BRENT CRUDE 78.78 (-0.01%)
* Prices as of Jan 22nd, 12:20 AM UTC
Inflation to make a comeback?
Americans are happy due to slowing inflation but it might be time for a rude surprise.
Inflation eased markedly throughout 2023 without a sharp rise in unemployment. Moreover, reports show that people expect inflation to continue to fall in 2024, but the changing geopolitical situation could impact things – not only in the US but around the globe.
The world is about to collapse, said one expert while talking about attacks by Iran-backed Houthi militants in the Red Sea. These attacks have impacted shipping and could result in major delays.
Freight rates are already up and some think oil will suffer a blow as well, which could make everything more expensive.
The situation has forced experts to ask governments to rethink price cuts as it might be too early to make a move. In fact, some experts see another small hike in the US.
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💵 Personal Finance
Investing in collectibles
Collectibles do not always offer good returns, but if you play it well, you can make millions investing in collectibles like:
Wine and spirits, including whiskey, limited-edition bottles, and fine wines.
Fine art, including antique furniture, paintings, and sculptures.
Wearables, including designer bags, limited-edition watches, and branded dresses.
Vehicles, including vintage cars and limited-edition motorbikes.
Coins and currency, including banknotes, precious metal coins, and rare coins.
Pop culture collectibles such as movie memorabilia, action figures, and comic books.
Stamps, including rare stamps, first-day covers, and thematic collections.
Memorabilia such as trading cards, game-used equipment, and autographs.
Collectibles are items that hold real value, are in physical form, and can be traded. They’re popular among fans or people who enjoy collecting specific items.
These investments are not easy as these items are typically rare, hence hard to find and very expensive. However, in some rare cases, you might be able to get your hands on such an item at a very low price. Also, some items may not be in demand today but they might eventually increase in value in the future.
Also, they can be a little hard to store. You need to ensure they are in mind condition. Moreover, capital gains tax can be as high as 40% based on your location. Still, check here for some of the most expensive collectibles to get some ideas.
Our take: Since the value of collectibles can be illiquid, it may be hard to know exactly what it’s worth, so you really need to know your stuff so you don’t overpay or get taken to the cleaners.
💰 Be a Better Investor
“A lone amateur built the ark; a large group of professionals built the Titanic.”
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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.