🇺🇸 Trump and elections

Good morning investors! A lot happened last week and we’re expecting another bumper week with big names such as Netflix set to announce earnings.

Today we cover:

• Shots fired at Trump rally

• Big tech takes a back seat

• Ripple goes up again

📊 Economy and News 

Trump gains more support after assassination attempt

Former President Donald Trump was rushed off stage by the Secret Service at a Pennsylvania rally on Saturday after shots were fired.

Trump could be seen on video contracting his body to the right, clutching his ear and dropping to the ground. What appeared to be blood could be seen on the former president’s right ear.

“He is fine and is being checked out at a local medical facility,” Trump’s campaign spokesman said in a statement.

One spectator from the rally is dead, and a second is in serious condition, according to the Butler County district attorney. The shooter is dead, NBC News confirmed.

This will have an impact on several things, including the market. In fact, investors think that the shooting at U.S. former President Donald Trump’s election rally raises his odds of winning back the White House, and trades betting on his victory will increase this coming week.

The man seems to be winning major support recently. Elon Musk publicly endorsed Donald Trump for the first time in the U.S. presidential race, calling the Republican former president "tough." Billionaire Bill Ackman and others publicly announced their support also.

🚀 Some believe that Elon Musk may be appointed as a policy advisor by Donald Trump. This could be a big win for Musk, who some think is hungry for power and others feels he’s been unfairly targeted by several U.S. government lawsuits. However, strategists are a bit worried.

BCA Research economists have challenged the prevailing market expectations regarding the impact of a potential second term for President Trump, suggesting a shift from anticipated tax cuts to increased taxes through higher tariffs.

Global hits:

• Nearly all AT&T cell customers’ call and text records exposed in a massive breach.

• Millionaires are leaving Hong Kong.

• Yen hits four-week high, intervention questions circulate.

📈 Stocks

S&P 500 5,615.35 (+0.55%)
DJIA 40,000.90 (+0.62%)
NASDAQ 18,398.44 (+0.63%)
BRENT CRUDE 85.03 (-0.43%)
* Prices as of Jul 14th, 12:20 AM UTC

Small companies are in demand

Looming U.S. interest rate cuts are presenting investors with a tough choice: continue investing in the Big Tech stocks that have driven returns for more than a year or shift to less-favored market sectors that could benefit from easing monetary policy.

This decision-making process may shift following Thursday's unexpectedly low inflation report, which reinforced expectations for a near-term rate cut by the Federal Reserve. Lower rates are anticipated to benefit various underperforming sectors this year, including small-cap stocks, real estate, and economically sensitive industries such as industrials.

Recent market actions suggest this shift may already be starting. On Thursday, the tech-heavy Nasdaq 100 experienced its biggest drop of the year, while the small-cap Russell 2000 had its best day of 2024.

The Nasdaq 100 has gained about 21% this year, compared to a 6% rise for the Russell 2000. Additionally, the equal-weight S&P 500, which represents the average stock in the benchmark index, had its biggest relative gain since 2020 over the standard S&P 500, which is dominated by the largest tech and growth stocks. This narrowed the gap between the two indices, with the S&P 500 up about 18% in 2024 versus a 6.7% gain for the equal-weight index.

Small-cap stocks and the equal-weight S&P 500 continued their gains on Friday, even as tech stocks rebounded.

Investors warned that these moves might be a temporary correction after the performance disparity between tech and other sectors reached extreme levels. Historically, periods of market broadening have been short-lived. For instance, small caps surged at the end of 2023 when investors anticipated imminent rate cuts, only to lag in the subsequent months.

Smaller companies, including biotech firms heavily dependent on credit, stand to benefit significantly from lower rates, said Matthew McAleer, president and director of private wealth at Cumberland Advisors. Industrial companies, which often rely on debt for capital-intensive projects, could also emerge as winners, according to McAleer.

🔐 Crypto

Bitcoin $59,992 (-0.02%)
Ethereum $3.109 (-0.04%)
Total market cap $1.55T (-0.01%)
* Prices as of Jul 14th, 12:20 AM UTC

Ripple surges

On July 13, 2023, a landmark ruling was issued in the United States Securities and Exchange Commission's (SEC) case against Ripple Labs. The court determined that the XRP token is not a security when sold on public exchanges, a decision with significant implications for the cryptocurrency market and the regulatory landscape in the US.

This ruling marked a notable victory for Ripple Labs, a blockchain-based digital payment network, and set a precedent for how cryptocurrencies are classified. The SEC had initially filed a lawsuit against Ripple in December 2020, alleging that the company conducted an unregistered securities offering by selling XRP tokens.

Ripple, however, argued that XRP should be considered a currency rather than a security. After a prolonged legal battle, the court partially sided with Ripple. However, the decision was not entirely favorable to Ripple, as the court found that the company violated securities laws when it offered XRP to hedge funds and other institutional buyers.

A year later, XRP's value is on the rise again. Following a Bitcoin price dump and a broader cryptocurrency market crash, XRP's price fell to as low as $0.3984 at the beginning of the month, its lowest point in over a year. This decline worried holders, as the token had been struggling for years. However, the situation has improved significantly, with XRP gaining an impressive 11% in the last 24 hours and 18% over the week, reaching a current price of $0.5122.

What triggered this surge? On Saturday, Federal Judge Analisa Torres declared that XRP is not a security and did not violate any securities laws in that context. This news was highly anticipated by XRP holders, signaling that the Ripple vs. SEC legal battle is nearing its end.

The SEC has scheduled a closed meeting on July 18, which could lead to a settlement of the case, potentially freeing Ripple from years of legal challenges.

💵 Personal Finance

Use debt settlement to get rid of debt

We heard you loved the ‘getting rid of debt’ series, so why not add one more point to it?

Did you know you may have the option to call creditors and negotiate a settlement of your debts, usually for a lot less than you owe. While it’s possible to take care of this yourself, an array of third-party companies also offer debt settlement services for a fee.

Paying less than you owe and escaping old debts may seem smart, but the Federal Trade Commission does mention some risks. For starters, some debt settlement companies ask you to stop making payments on your debts while you’re negotiating better terms, which can negatively impact your credit score.

Why this works: You’ll only pay a portion of what you owe and can move on knowing you no longer owe those creditors.

How to start: Contact your creditors to offer settlements and if they agree, get the terms in writing. Or you can hire a reputable debt settlement company to do the legwork for you.

💰 Be a Better Investor

Resources:

• Make Money in Retirement

• Side Hustle Ideas

• Stock Deep Dives

• Investing 101 videos

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

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