Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! The stock market didn’t do much yesterday but the economy sprung some unwanted surprises.

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Today we cover:

• Moody’s downgrades US banks

• Bitcoin is back up

• All about mortgages

📊 Economy 

US Banks in trouble again

Moody’s cut the ratings of a number of U.S. banks while placing some big names on a watch.

Here are some of the names that are now under review and may receive a downgrade in the future:

• Bank of New York Mellon

• Truist Financial

• U.S. Bancorp

• State Street

• Cullen/Frost Bankers

• Northern Trust

Furthermore, Moody's changed the rating for 11 banks, including some popular names such as Capital One, Fifth Third Bankcorp, and Citizens Financials. Some smaller lenders to have received downgrades were BOK Financial, Pinnacle Financial, and M&T Bank.

“We continue to expect a mild recession in early 2024, and given the funding strains on the U.S. banking sector, there will likely be a tightening of credit conditions and rising loan losses for U.S. banks,” said the agency.

📰 News

Credit card debt hits a new high

Credit card debt levels have hit a new high, surpassing $1 trillion for the first time after going up by $45 billion to hit the $1.03 trillion mark.

This is the fifth consecutive quarter that credit card balances have risen. Inflation and high interest rates are some of the main driving factors.

Quick hits:

• X wants advertisers back, to try a new safety deal.

• Food and oil prices continue to rise.

• Elon Musk may need surgery.

📈 Stocks

S&P 500 4,493.5 (-0.42%)
DJIA 35,314.34 (-0.45%)
NASDAQ 15,273.03 (-0.87%)
VIX 15.99 (1.40%)
* Prices as of Aug 9th, 12:20 AM UTC

The stock market remains dull

All major indexes fell on Tuesday, however, there were no big changes and the market showed signs of recovery by the end of the day.

At session lows, both the S&P 500 and the Nasdaq were down over 1%, however, they closed at -0.42% and -0.79% respectively.

The banking sector suffered the largest blow due to the downgrade. There were no major earnings yesterday. Lyft went up 5.39% during the day only to fall -6.5% after the bell despite earnings topping estimates. It will be exciting to see how it opens today.

Major Movers:

• Broadridge Financial Solution (6.44%) jumped after the earnings and the company’s decision to raise dividends.

• West Pharmaceutical Service (5.59%) jumped due to the potential benefit of the company's new obesity drug.

• International Flavors & Fragrances Inc (-19.36%) was the S&P 500’s worst-performing stock after it cut the outlook due to reduced customer spending.

• Dexcom Inc (-8.9%) fell after competitors, Novo Nordisk and Eli Lilly, reported excellent growth.

🔐 Crypto

Bitcoin $29,798.43 (2.12%)
Ethereum $1,858.22 (1.65%)
Total market cap $1.19T (2.08%)
* Prices as of Aug 9th, 12:20 AM UTC

Bitcoin shows positive signs

Bitcoin turned green on Tuesday after Moody's downgrade. The largest cryptocurrency reached $29,785, jumping 2.89%, after failing to go above 1% for the last two weeks.

“Bitcoin is holding strong. The correlation between the stock market and bitcoin is decoupling as bitcoin has proven to be a beneficiary of banking turmoil,” said Greg Magadini, director of derivatives at Amberdata.

Crypto-related equities moved in a positive direction despite the overall market turning red. Coinbase gained 2.42% and some mining stocks grew as much as 4%. Furthermore, other major currencies, including Ether and Solana also gained.

💵 Personal Finance

It’s getting harder and harder to buy a house, here’s how to improve your chances

The US homeownership rate is only 65.8%. There is a housing crisis and most people are not able to afford a house thanks to rising prices and high mortgage rates.

Available credit for mortgages tightened even more in the previous month, falling to its lowest level in over ten years. This indicates tightening lending standards and the difficulty in getting approved for a loan.

Still, there are ways to get approved:

• Improve your credit score, you’re more likely to get approved if you have a score of 620 or higher.

• Work on your debt-to-income (DTI) ratio and try to keep it under 40%.

• Lenders pay attention to income history. You're more likely to be approved if you have been employed for at least two years or if you have a solid and guaranteed income. Also, all income must be provable.

• Show your assets as accessible funds prove liquidity. Also, consider going for a large deposit as it helps bring the LTV ratio down and makes you eligible for more deals.

• This might come as a surprise but the property type can impact your chances of approval. Applicants looking for a primary residence find it easier to get approved than applicants looking for an investment property. However, in some cases, buying a rental property first may make more sense.

• Consider paying off existing debt and avoid applying for new debt.

Always compare lenders and choose the right mortgage option. Government-backed loans such as FHA, VA, and USDA loans are more affordable and easier to apply. On the other hand, conventional loans are stricter to qualify for.

Ready to buy a house? Check out the video below for more on choosing a lender:

💰 Be a Better Investor

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