📉 🏛️ Economists Make the Case For Rate CUTS In July
Happy Wednesday all,
I just shot a great video with a friend of mine I hadn’t seen since Middle School! He owns a Supercar, a McLaren Artura, and upcoming on the channel is a video where we go over the costs to own a Cheap vs Luxury vs Supercar. Look out for that video in the next week or two - here’s a sneak preview picture of our interview:
One fun fact is that registration for the car alone costs $2,000 🤯 . And you won’t believe the cost of maintenance… but I’ll leave that for the video.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
👮♂️ Secret Service ramped up security after intel of Iran plot to assassinate Trump (CNN)
🚀 Musk Says He Will Move X and SpaceX Headquarters Out of California (WSJ)
📉 Riskiest Stocks Begin an Epic Rotation With Rate Cuts in Sight (BBG)
❓ Powell Signals Rate Cut Coming Into View but Declines to Say When (WSJ)
🇨🇳 US Floats Tougher Trade Curbs in Chip Crackdown on China (BBG)
The Weekly Brief
Wall Street Economists See Compelling Case for Fed to Cut Now
According to a Bloomberg report, a growing number of prominent Wall Street economists are arguing that the Federal Reserve should consider cutting interest rates as early as its July 30-31 meeting, rather than waiting until September as currently expected.
They cite recent tame inflation data, slowing U.S. economic growth, and a rising unemployment rate as compelling reasons for the Fed to act sooner.
These economists warn that the risks of waiting too long to reverse course are increasing, given that monetary policy changes take time to impact the economy.
However, Fed Chair Jerome Powell and most FOMC members still seem unconvinced of the need for urgency, with Powell recently avoiding any guidance on rate cut timing.
US Retail Sales Excluding Autos Rise by Most in Three Months
U.S. retail sales showed resilience in June 2024, with sales excluding auto dealers rising 0.4% from the previous month, surpassing expectations and marking the strongest increase in three months.
Total retail sales remained unchanged at $704.3 billion, primarily due to a 2% decline in auto dealer receipts caused by a cyberattack. Excluding gasoline and auto sales, retail purchases jumped 0.8%, the highest since early 2023.
The data suggests that consumer spending remains robust despite high interest rates and a cooling labor market, with non-store retailers and health and personal care stores showing significant growth.
S&P 500 On the Verge of Breaking the Record for Longest Streak
At the time of writing this, the S&P 500 is on the verge of reaching a significant milestone, potentially marking 352 sessions without a 2% decline by Wednesday's close.
This would be the longest such streak since the period leading up to the 2007 global financial crisis, when the index went approximately 950 sessions without a significant drop between May 2003 and February 2007.
The current streak of stability in the equity market is attributed to optimism about the economy's resilience in the face of Federal Reserve tightening.
Investors appear to prefer a scenario where the Fed cuts rates due to falling inflation rather than in response to a weakening economy, highlighting the market's current confidence in economic stability.
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