📉 Rate cuts?

Good morning, investors! The market is preparing for another busy earnings season.

Today we cover:

• Rate cuts coming?

• Goldman Sachs reports earnings.

• Time to invest in silver?

📊 Economy and News 

Fed ready to cut rates?

Federal Reserve Chair Jerome Powell stated on Monday that the central bank will not wait until inflation reaches 2% before cutting interest rates.

During his speech at the Economic Club of Washington D.C., Powell explained that central bank policy operates with “long and variable lags,” which is why the Fed won’t wait for its target to be met.

“The implication of that is if you wait until inflation gets all the way down to 2%, you’ve probably waited too long, because the tightening that you’re doing, or the level of tightness that you have, is still having effects which will probably drive inflation below 2%,” Powell said.

Instead, the Fed seeks “greater confidence” that inflation will return to the 2% level, Powell added.

“What increases that confidence is more good inflation data, and lately, we have been getting some of that,” he noted.

Powell also expressed that he doesn’t believe a “hard landing” for the U.S. economy is a “likely scenario.”

Global hits:

• Foreign automakers are struggling to compete in China’s rapidly growing EV market, dominated by domestic brands, due to higher production costs and insufficient differentiation of their products.

• Europe heads for mixed open as markets digest Powell’s comments on cutting rates.

• British luxury brand Burberry is replacing its chief executive following another disappointing quarter in which sales plunged more than 20%.

Rising up: Macy’s management has ended talks with private investors attempting to take over the company and will pursue its own turnaround strategy to remake the chain.

📈 Stocks

S&P 500 5,631.22 (+0.28%)
DJIA 40,211.72 (+0.53%)
NASDAQ 18,472.57 (+0.40%)
BRENT CRUDE 84.18 (-0.79%)
* Prices as of Jul 16th, 12:20 AM UTC

Dow rises 200 points to close at a record

The Dow Jones Industrial Average rose on Monday as investors speculated that the unsuccessful assassination attempt on former President Donald Trump would boost his prospects as the Republican presidential candidate and benefit the GOP in the upcoming November elections.

Expectations of more favorable fiscal policies contributed to the expansion of the bull market that began last week. On Monday, small-cap stocks and banks saw gains.

The Republican National Convention kicked off Monday in Milwaukee, Wisconsin, with Trump leading President Joe Biden in national polls.

Humana and UnitedHealth Group shares increased during the session, as these insurers could face fewer cost pressures under a Republican administration.

The Russell 2000 climbed 1.8%, reaching its highest level since 2022 and marking its fourth consecutive positive day. Goldman Sachs noted that a second Trump term could boost small caps, referencing their strong performance following his 2016 victory.

Worrisome: GM’s target of being capable of producing 1 million all-electric vehicles in North America by the end of 2025 is heavily in doubt.

💵 Personal Finance

Time for silver to shine

Forget everything, silver seems to be the new king and is already doing pretty well.

It's trading at 12-year highs, is up 36.20% year-to-date and 42.42% year-over-year.

A significant 77% of major investors, along with a similar percentage of retail traders, are long on silver. The number of long contracts held by professionals is at 2 and 3-year highs, and net positions (longs and shorts) are at three-year highs.

Research from the Silver Institute reveals a silver shortage, with a shortfall of 663 million ounces from 2021 to 2023—nearly 80% of the annual global silver mining output. An additional deficit of 215 million ounces is forecasted for 2024.

India's Reliance Industries ($RELIANCE.NSE) is struggling to secure enough physical silver for solar panels and other products, prompting them to obtain at least 25 million ounces from COMEX futures for physical delivery.

Meanwhile, in China, private sector demand for gold is skyrocketing. Investment demand surged 26.9% in Q1 2024 compared to Q1 2023. Gold imports can't keep up, so they are increasingly buying gold contracts on the Shanghai Futures Exchange, where trading volume now surpasses COMEX.

To alleviate the gold shortage, the Chinese government has encouraged the public to invest in silver. As a result, physical silver prices in China have jumped $4 to $7 above the global spot price, while gold deliveries to China have decreased. Consequently, China has skipped gold purchases for the past two months.

With the insatiable demand from both India and China, silver prices are on a rapid ascent.

💰 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.

Advertise with Us