Morning Download from Invincible Money 

Personal finance + economics + markets

Together with Brilliant

Good morning investors! I hope everyone had a great weekend. Welcome to the 1,254 of you who joined over the weekend!

Today we’ll cover:

1. Wall St. analysts have no clue

2. Janet Yellen’s faux pas in Beijing

3. Is this emoji legally binding: 👍🏿

4. Bitcoin’s amazing year

5. The best way to grow your wealth

📊 Economy 

Wall St. Analysts bewildered

Wall Street is struggling to make sense of the current economic environment.

Analysts were caught off guard by how the first half of 2023 unfolded in financial markets. Many had predicted a global recession, but the economy has so far avoided one.

Bonds have outperformed many stocks, and central banks have been slower to raise interest rates than expected. As a result, analysts are now uncertain about what the second half of the year will bring.

Analysts are divided on what the future holds and they are hesitant to make any bold predictions. As a result, investors should be prepared for continued volatility in the markets in the months to come (the VIX is up, meaning move volatility expected).

What to expect:

• Analysts had expected the Federal Reserve to raise interest rates by 50 basis points at each of its meetings in the first half of 2023. However, the Fed has only raised rates by 25 basis points at each meeting so far.

• As a result of the uncertainty in the markets, many analysts have revised their forecasts for the rest of the year. Some now believe that the economy will enter a recession in the second half of 2023. Others believe that the economy will continue to grow, but at a slower pace.

• As an example of divergent opinions, the most bullish outlook is from Fundstrat, which forecasts a 9+% rise in the market. The most bearish is Piper Sandler, forecasting a drop of 27%. That’s a different we haven’t seen in 2 decades.

📰 News

Yellen in Beijing

U.S. Treasury Secretary Janet Yellen said her meeting with Chinese officials in Beijing were “direct, substantive and productive” and helped put the two countries on a “surer footing” to improving economic relations.

Yellen said the U.S. and China have “significant disagreements” and need to communicate “clearly and directly.”

They discussed trade, climate change and the war in Ukraine, among other things, but announced no agreements.

Recent turmoil: Relations have been shaky recently after the White House first announced restrictions on A.I. chip exports to China. Then restricting Chinese access to U.S. cloud-computing services, like Amazon’s AWS and Microsoft’s Azure) that use advanced A.I. chips.

China answered by restricting minerals used in the production of semiconductors, solar cells and missile systems.

Criticism: Yellen faced criticism by bowing multiple times to the Vice Premier, which is something U.S. officials aren’t suppose to do.

Quick hits:

👍🏽 Canadian judge says Thumbs Up emoji is a valid signature. In a recent case, a farmer replied to an email with a 👍🏼 and then didn’t delver the goods. The judge ordered him to pay $62,000 and ruled the emoji a valid signature.

Keep that in mind next time you text someone 😅 

📈 Stocks

S&P 500 4,398.95 (-0.29%)
DJIA 33,734.88 (-0.55%)
NASDAQ 13,660.72 (-0.13%)
VIX 14.83 (-3.95%)

Threads vs. Twitter

Threads added 70 million users in the first 2 days, while Twitter is accusing Meta of stealing trade secrets.

Four hedge fund billionaires on the All-In podcast discuss what it means for Facebook. Chamath, who worked at Facebook, thinks Threads will add $20 billion in market cap. Others think it may be a big failure after the hype dies down.

Different directions

Two stocks seem to be going in different directions: Alphabet and Microsoft.

👎🏽 Alphabet has been downgraded by UBS, Bernstein and Loop Capital and now has the lowest number of buy ratings in 3 years.

��🏿 Microsoft has been upgraded by Morgan Stanley, who named the company its top large-cap software pick with a $415 price target. That would make it the next $3 trillion company.

Watching this week

Wednesday: the CPI (Consumer Price Index) being released and expected to be +0.3%.

Thursday: Initial jobless claims with 250,000 expected. PPI (Producer Price Index), +0.2% expected.

Friday: Consumer sentiment report

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🔐 Crypto

Bitcoin $30, (%)
Ethereum $1, (%)
Total market cap $1. (-%)
* Prices as of July 5th, 12:20 AM EST

ETF filing effects on Bitcoin

So far this year Bitcoin has been the best performing asset.
Here’s the breakdown YTD:

Bitcoin +85%
Gold +5%
S&P 500 +16%
NASDAQ +40%

So what’s driving it? Two major factors: The Silicon Valley Bank-induced banking crisis in the U.S. and most recently the ETF filings from BlackRock, Fidelity and others.

Who’s buying? Looking at the time people trade, we can see most of the interest is during U.S. trading hours, especially just after the BlackRock filing.

How many? In recent months the number of Bitcoin addresses with over 1 Bitcoin surpassed 1 million for the first time ever.

However, liquidity is still low and according to Will Clemente’s Q2 report, we’re early in this cycle and could still see lows like March of 2020.

💵 Personal Finance

Best way to grow wealth?

Self-made millionaire Ramit Sethi believes that the number one way to grow your wealth is to start investing early and gradually increase the amount you invest each year.

Sethi recommends investing in a low-cost index fund, like the S&P 500, which will allow your money to grow just as well as "secret investments" accessed by the rich.

• Sethi also advises people to track their expenses and identify areas where they can cut back in order to free up more money to invest.

• He emphasizes that building wealth is not as difficult as it may seem, and that the top ways to grow your money are actually quite simple.

His Netflix show is fun to watch as he helps people with their finances.

💰 Be a Better Investor

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