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! Nobody likes the Fed or anyone else in the government, AI is super hot and SBF doesn’t want to go to jail.

📊 Economy

Jerome Powell has the lowest level of confidence in a Fed chair on record, according to a new Gallop poll showing only 36% of US adults have a “great deal” or “fair amount” of confidence he would do the right thing for the economy.

• For reference, former chair Janet Yellen was at 37%. Bernanke was at 39% in 2012.

• Powell’s approval dropped concurrently with the rise in interest rates.

That low level of confidence extends to nearly all U.S. governmental leaders.

Gallup finds between 34% and 38% of U.S. adults expressing a "great deal" or "fair amount" of confidence in President Joe Biden, Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen and congressional leaders in both major parties to do or recommend the right thing for the economy.

$7 trillion of the U.S. nation debt is owed to foreigners - $1.1 trillion to Japan and $860 billion to China. The rest is owed to U.S. companies or citizens.

💰 Venture Capitalists are clamoring to invest AI startups.

🤖 Sam Altman, CEO of OpenAI, the company behind ChatGPT, said that the company is working on a version that respects copyrights and pays creators if their data is used.

📰 News

🛌 Tempur Sealy will buy Mattress Firm, the leading mattress company, for $4B as they try to make up for slowing sales. Yesterday, Tempur Sealy reported a 2.5% decline in Q1 revenue to $1.21.

🛢️Occidental Petroleum [OXY] was down 2.85% after Buffett said he wouldn’t take control of the oil giant.

Bill Gross advises to buy short-term T-bills if you think the debt ceiling standoff will be resolved.

📈 Stocks

🚗 The EV maker Lucid said it has enough cash to last 2024 despite reporting $779.5 million in net losses, compared to $81.3 million in losses in Q1 2022. Sounds bleak. However, revenue was up 100%+ to $149.4 million.

• Never heard of Lucid? They made 10,000 vehicles this year. Tesla made 1.3 million cars last year.

🏁 Six Flags [SIX +18.71%] was up after beating earnings expectations.

🍗 Tyson Foods [TSN -16.34%] was down after posting a loss for Q1 as well as cutting its outlook for the rest of the year.

🔐 Crypto

🦹🏻‍♂️ Infamous FTX founder Sam Bankman-Fried has asked the court to dismiss 10 of the 13 countes, including those for fraud, conspiracy and foreign bribery. They argue some charges are too vague or violate terms of extradition from the Bahamas.

U.S. exchange Bittrex files for bankruptcy.

BTC price is down slightly as chain congestion persists thanks to BRC-20 meme coins.

Canada is the lately country looking at a digital dollar, despite reports worldwide that nobody wants a CBDC. The Bank of Canada said they don’t see a need for one now, but may in the future.

💵 Personal Finance

According to a survey from the New York Federal Reserve people expect the inflation rate to be about 4.4% for the next year. Household spending is expected to decrease as a result.

• Consumers also expect food prices to increase by 5.8% and gas to increase by 5.1%.

Given that inflation is not going anywhere and prices are expected to go high, consumers can either cut expenses or increase income.

If you have cash in a bank paying you nothing percent, remember you can get around 5% on a money market fund at a brokerage or through apps like Apple’s Savings Account.

💰 Be a Better Investor

🧠 Get Smarter

Compound interest is an important financial principle that everyone should know. You either pay it (see: credit card) or earn it (see: investments).

It is the concept of interest calculated not only on the initial principal amount but also on the accumulated interest from previous periods. This means that over time, the amount of interest earned can grow substantially, making it a powerful tool for savings and investments. However, compound interest can also work against you if you have high-interest debt, as interest charges can accumulate quickly. Understanding compound interest can help individuals make smarter decisions about their finances, by starting early and consistently contributing to savings or investments, they can take advantage of the compounding effect and achieve long-term financial goals.

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