Morning Download from Invincible Money 

Personal finance + economics + markets

Good morning investors! Let’s start your day with a reminder:

• The stock market is down 45.14% of the days and up 54.85% of the days.

  And yesterday was the former…pretty red.

Today we cover:

• Fitch downgrades the US

• A bad day for the market

• Retirement account balances

📊 Economy 

Fitch downgrades the US

Fitch Ratings has downgraded America’s Long-Term Foreign-Currency Issuer Default Rating to 'AA+', down from 'AAA'. Moreover, it has removed the Rating Watch Negative and assigned a Stable Outlook status.

Treasury did not agree with the move and called it 'arbitrary and based on outdated data." The White House also disagreed with the decision.

Experts believe that this downgrade reflects negatively on the economy and is the result of the government's spending.

This is the first major downgrade for the country since 2011 when Standard & Poor’s cut the rating to AA+ from AAA.

Economist Peter Schiff had a different take:

A few other things:

• The global market declines due to the US downgrade.

• Trump indicted – charged with bid to overturn 2020 election.

📰 News

Time to bid adieu to incandescent light bulbs

The Biden administration has finally executed Trump’s incandescent light bulb plan, a decision that will have an impact on the US economy and end users.

After years of struggle, the Department of Energy (DOE) has finalized a new rule to phase out incandescent light bulbs. According to the rule passed last year, only bulbs that emit a minimum of 45 lumens per watt can be used. The rule came fully into effect in July 2023 and now the DOE is working with manufacturers to help them get rid of existing inventory.

This decision will help consumers save about $3 billion per year, according to the DOE, while also cutting carbon emissions by up to 222 million metric tons over the next 30 years.

Quick hits:

• Foxconn, a prominent electronics manufacturer associated with Apple, is set to inject a $600 million investment into the Indian state of Karnataka.

• Nile, a networking company co-founded by former Cisco Systems executives, is set to challenge Cisco after raising $175 million in a new round.

📈 Stocks

S&P 500 4,513 (-1.38%)
DJIA 35,282 (-0.98%)
NASDAQ 13,973.45 (-2.17%)
VIX 16.09 (15.51%)
* Prices as of Aug 3nd, 12:20 AM EST

Stock market falls, recording its worst day since February

Stocks were in selloff mode on Wednesday after Fitch downgraded the US credit rating.

The Nasdaq Composite registered its worst day since February, shedding 2.17% to close at 13,973.45. Other indexes, including the DJIA and the S&P 500 also closed in red.

Technology was the worst hit, as the 10-year treasury yield hit its highest level in over six months. Moreover, big Chinese names, including Alibaba, Baidu, and JD.com took a beating after the country proposed limits on phones for minors.

However, analysts are not worried. Some believe such a move was necessary as most big names have grown tremendously in the last few months and a correction was due.

Major Movers:

• Trxade Health Inc. (59.31%) saw a massive jump after the company completed the acquisition of Superlatus, Inc.

• Assurant Inc. (5.72%) gained without any major news.

• PayPal (-9.94%) suffered a big blow, falling 3.08% during the day and 6.86% after hours despite positive earnings.

• Shopify (-7.73%) fell during the day as investors exited the company before earnings were posted.

🔐 Crypto

Bitcoin $29,172.50 (-1.76%)
Ethereum $1,842 (-1.59%)
Total market cap $1.22 trillion (-0.22%)
* Prices as of Aug 3rd, 12:20 AM EST

Twitter and Elon Musk helped push the price of FTX-listed altcoins

A new study from the Network Contagion Research Institute highlighted the role of Twitter, now called X, in pumping up the price of digital coins, including currencies traded by insiders at FTX.

The research consisted of more than 3 million tweets posted from Jan. 1, 2019, to Jan. 27, 2023, covering 18 digital coins. The study found that Elon Musk’s tweets helped push a variety of coins, helping some go as high as 50% in one day.

The study highlights the power of social media and how some big names can manipulate the market. The report mentioned X’s attempts to prevent manipulation and control the presence of bots yet they argue that new restrictions may also impact third-party audits.

💵 Personal Finance

Retirement account balances are increasing and so are the disparities

According to a new report, there is a huge difference in retirement account balances for middle-income and high-income households – $64,300 against $605,000. In simple words, rich households have 9x more money for retirement than middle-income households.

The gap has widened in the last few years. Back in 2007, high-income households possessed a median retirement account balance that was four times greater than that of middle-income households.

On the plus side, retirement account balances are increasing despite economic challenges. As per a recently released report, the average IRA balance reached $109,000 in Q1 2023, jumping 5% compared to the previous quarter.

Similarly, the average 401(k) balance jumped by 4%, and the average 403(b) account balance rose by 6%.

My take: The phrase “the rich get richer, while the poor get poorer” isn’t really true. It’s more like “the rich are getting richer faster than everyone else.”

How to save more money

If you don’t meet the numbers discussed above and you’re struggling to save due to debt and high expenses, then consider these tips:

• Automate your savings by establishing a direct deposit system.

• Avoid loans and come up with a debt-repayment strategy that works for you.

• Look for advantageous balance transfer offers on credit cards.

• Create and stick to a budget.

• Look for ways to increase your income.

Those who want more can check this detailed video for some great money saving hacks:

💰 Be a Better Investor

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