Morning Download from Invincible Money

Personal finance + economics + markets

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

Good morning investors! Elon Musk worries the Fed is looking in the rear view mirror, Taco Bell wants to say “Taco Tuesdays” without getting sued and fund managers pull back on stocks.

📊 Economy

Elon Musk, CEO of Tesla and Twitter, warned that the economy is facing headwinds and the Federal Reserve will be slow to lower interest rates. Musk said that economic conditions will be challenging "for everyone, not just Tesla" this year.

• Musk explained, "You can think of raising the Fed rate as somewhat of a brake pedal on the economy, frankly. It makes a lot of things more expensive – certainly things that are bought with credit. But then it has downstream effects even on things that aren’t bought with credit."

• Regarding the Fed’s actions he said, "My concern with the way the Federal Reserve is making decisions is they’re just operating with too much latency. Basically, the data is somewhat stale. The Federal Reserve was slow to raise interest rates, and now I think they’re going be slow to lower them."

📰 News

🏡 Stay put for work. People used to move a lot more for work, but that’s over. From 2008-2017, 11% of people moved, but that’s down to 1.6% now largely thanks to the availability of remote jobs, plus high interest rates makes it less likely people want to buy a new house.

🌮 Free the Taco! Taco Bell is petitioning the U.S. Patent and Trademark office to make the phrase “Taco Tuesday” available “to all who make, sell, eat and celebrate tacos.” The trademark has been owned by a small restaurant chain, called Taco John’s, for decades.

🏛️ U.S. Debt Ceiling talks inch forward with Speaker McCarthy saying “It is possible to get a deal by the end of the week.” Biden said he’s “confident” they can reach a deal and large bank CEOs are meeting Sen. Schumer to discuss.

• June 1st looms. That’s the date Sec. Yellen said the U.S. will begin defaulting on its obligations if a deal isn’t reached.

💰U.S. debt service rises. The largest spending category for the U.S. government in 2022 was payment on the debt at $399 B, second overall only to defense spending at $766 B and Entitlement spending at $2.1 T.

• According to the Congressional Budget Office (CBO), the cost of servicing the U.S. debt is expected to reach 50% of the budget by 2030.

• The CBO's projection is a significant warning sign for the U.S. economy. If the cost of debt service reaches 50% of the budget, it will be very difficult for the government to fund other important programs, such as education, healthcare, and infrastructure. This could lead to a decline in the quality of life for Americans and could make the economy less competitive.

🤖 A new study from Harvard and McKinsey found that AI could save the US healthcare industry $360 billion annually. However, there are challenges to scaling up AI use in healthcare, such as lack of trust and time constraints. If AI is successfully implemented, it could revolutionize healthcare by improving patient care and reducing costs. (Read more on AI at The Deep View)

📈 Stocks

🚙 Tesla [TSLA +3.84%] annual shareholder meeting summary: Tesla shareholders elected JB Straubel to the board of directors, rejected proposals to prepare a key-person risk report and a report on child labor in its cobalt supply chain, and heard from CEO Elon Musk that the Cyber truck will start deliveries later this year.

🥸 Google [GOOG 0.55%] Alphabet has launched two new AI-powered tools to help biotech and pharma companies accelerate drug discovery.

• The Target and Lead Identification Suite helps companies predict and understand protein structures, a fundamental part of drug development.

• The Multiomics Suite helps researchers ingest, store, analyze and share mass amounts of genomic data.

🏚️ Home Depot [HD +4.05%] beat earnings expectations with $3.82 EPS vs $3.80 expected, but on lower sales with $37.26 B vs $38.28 B expected.

It was their largest revenue miss in 20 years, causing the stock to initially drop 2.15%. Lower sales were due to sinking lumber prices and extreme weather. They expect sales to fall 2-5% for 2023, which would be the first decline in 14 years.

💵 Capital One [COF +2.87%] regulatory filings showed that Warren Buffett bought $950 million of stock.

🏢 Bank of America’s Global Fund Manager Survey revealed:

• Most are underweight US equities.

• Overweight bonds and cash.

• 65% expect a weaker economy going forward.

• Most crowded trades: long big tech, short US banks.

🔐 Crypto

🏀 Shaq is AWOL. A group of investors who lost money in the recent cryptocurrency crash have sued Shaquille O'Neal and cryptocurrency exchange FTX. The lawsuit alleges that O'Neal and FTX made false and misleading statements about the safety and security of cryptocurrency investments. The lawsuit seeks damages for the investors who lost money in the crash.

• Despite being super famous and also 7’1” tall, process servers still haven’t been able to find him to serve him papers.

🇫🇷 France welcomes crypto firms who are leaving the U.S.

🪙 Coinbase is expanding in Singapore as the U.S. tightens regulations.

💰 Be a Better Investor

This quote is a reminder that we are in control of our own financial future. We can make choices that will help us reach our financial goals, such as saving money, investing wisely, and living within our means. By taking control of our finances, we can create a better future for ourselves and our families.

💵 Personal Finance

Term: Emergency fund

Definition: An emergency fund is a savings account that you can use to cover unexpected expenses, such as a car repair, medical bill, or job loss.

How to apply it: The amount of money you should have in your emergency fund depends on your individual circumstances, but a good rule of thumb is to have three to six months of living expenses saved. You can start saving for your emergency fund by setting aside a small amount of money each month, such as $50 or $100. Once you have a few months of expenses saved, you can increase the amount you save each month.

Having an emergency fund can help you avoid going into debt when unexpected expenses arise. It can also give you peace of mind knowing that you have a financial cushion to fall back on if something happens.

Here are some tips for building an emergency fund:

• Set a goal for how much money you want to save.

• Create a budget and track your spending so you can see where you can cut back.

• Set up an automatic transfer from your checking account to your savings account each month.

• Make saving for your emergency fund a priority.

Building an emergency fund takes time and discipline, but it is one of the best things you can do for your financial future.

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