🎈 Powell talks rate cuts

and Boeing sales

Good morning investors! Yesterday was the sixth consecutive day of setting new records. Even Tesla is on a ten-day winning streak.

Today we cover:

  • Fed Chair Powell’s testimony summary

  • Boeing sales data

  • Getting rid of debt - part II

📊 Economy and News 

What to know from Fed Chair Powell’s testimony on Capitol Hill

Inflation has significantly decreased since hitting a four-decade peak two years ago, Federal Reserve Chair Jerome Powell stated on Tuesday. However, central bank officials want to see more progress before reducing interest rates. They are also closely monitoring the job market.

The Fed's key interest rate, which affects borrowing costs throughout the economy, has remained at a 23-year high for about a year, following aggressive rate hikes to curb inflation.

Although the rate of price increases slowed considerably in 2023, a setback earlier this year delayed the anticipated timing for the first rate cut. According to their latest economic projections in June, Fed officials now expect to cut interest rates only once this year, down from the three cuts they had forecast in March.

Inflation resumed a downward trend in the spring, but officials appear to be in lockstep saying they need more evidence that inflation is truly headed toward their 2% goal.

In June, consumer prices didn’t rise on a monthly basis for the first time since November, according to the Fed’s favorite inflation gauge, the Personal Consumption Expenditures price index. The annual PCE inflation rate registered at 2.6% in June, down slightly from 2.7% in May.

Additionally, the Fed is closely monitoring the job market which has shown signs of cooling. This comes as U.S. consumers appear to be pulling back after years of elevated inflation and a sharp rise in interest rates, according to recent spending data and comments from retailers.

Fed Chair Jerome Powell told senators that the job market now resembles its pre-Covid-19 state: “strong, but not overheated.” The job market rebounded significantly after the brief pandemic-induced recession in 2020 and has continued to expand since. However, it has recently shown signs of loosening.

Last month, the unemployment rate rose to its highest level in over two years, and new applications for unemployment benefits have been trending upward in recent weeks. America’s economic engine, consumer spending, has started to show some cracks.

Sales at US retailers have consistently come in weaker than expected for the past few months and retailers have sounded the alarm on shoppers across the income spectrum trading down for cheaper alternatives.

Recent surveys of service-providing businesses in the United States have shown that consumer demand so far this summer has been tepid, a stark contrast to last year when Americans splurged.

Global hits:

US vs China: Chinese companies are at the forefront of experimenting with generative AI, yet they lag behind the U.S. in full-scale implementation, according to a survey.

The survey revealed that 64% of Chinese companies are conducting initial experiments with generative AI but have not fully integrated the technology into their business systems.

Chinese respondents expressed the highest confidence in their readiness to comply with AI regulations, with nearly 20% stating they are fully prepared, compared to 14% of respondents in the U.S.

International prices: China’s inflation numbers missed expectations, rising 0.2% in June. On the other hand, Japan stocks scaled new peaks after inflation data met expectations

📈 Stocks

S&P 500 5,576.98 (+0.074%)
DJIA 39,291.97 (-0.13%)
NASDAQ 18,429.29 (+0.14%)
BRENT CRUDE 84.44 (-0.01%)
* Prices as of Jul 10th, 12:20 AM UTC

Boeing sales numbers are here

Boeing announced that it sold just 14 new jets last month, with the majority being freighter sales. Notably, one of these sales was to replace a plane that experienced a door plug blowout mid-flight just over six months ago.

The company sold only three 737 Max jets—two to an unidentified customer and one to Alaska Airlines to replace the aircraft that suffered the door plug incident on January 5 at around 16,000 feet. The remaining 11 jets were 777 freighters.

Although this was one of Boeing’s best sales months of the year, it still ended the first half of 2024 with gross sales down 70% compared to the previous year. The 14 sales in June were an increase from the four sold in May and seven in April but a significant drop from the 304 gross orders received in June 2023.

March was the only strong sales month for Boeing, with 113 planes sold, primarily due to an order of 85 jets from American Airlines. However, this order was for a longer version of the 737 Max, which has yet to receive certification from the Federal Aviation Administration to carry passengers. This certification, initially expected this year, has been delayed to at least 2025 due to issues highlighted by the Alaska Airlines incident.

Note: don’t forget to check our LinkedIn and take part in our Boeing poll. Your opinion is valued!

Sad: Dyson to axe around 1,000 jobs in Britain.

Surprise: Microsoft and Apple drop observer seats on OpenAI board amid regulatory scrutiny.

💵 Personal Finance

Managing debt step 2: Look for opportunities to consolidate

If you have multiple high-interest loans, can you consolidate them into one loan with a lower interest rate.

Look to see if you have access to a low-interest personal loan that you could take out to pay off high-interest credit card balances.

However, remember that before consolidating or refinancing any student loans, you should carefully review your eligibility for federal loan forgiveness programs which may be impacted by loan consolidation or refinancing.

Furthermore, you may consider a balance transfer offer of 0% interest from one of your credit cards. This way, you can get a grace period that could last anywhere from six to 18 months, depending on the offer.

Be aware that if you don't pay the balance off in full before the offer term ends, you will pay the credit card's interest rate on the balance.

💰 Be a Better Investor

"If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed."

“Edmund Burke”

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