🔥❄️ Inflation Gradually Cooling

Apr 08, 2024

Happy Sunday,

Rickie checking in with you. Hope you’re doing well!

This week, I thought a lot about how much money can add up whenever you make a big purchase. I got a Nintendo Switch not too long ago (I love Super Mega Baseball) and I was just thinking about all the games and accessories that were out there to buy. You don’t just buy a Switch and call it a day - it’s nice to have like 2-3 games you can rotate through, a case is a necessity if you’re going to be moving it around, screen protectors, etc.

That’s when I realized that pretty much everything you buy is like this.

Bought a new car?

Maybe you need winter tires or tinted windows

Want to go camping?

You’ll need a tent, sleeping bags, a cooler, etc.

Thinking about buying a boat?

You’ll probably need a truck with enough towing capacity to haul it around, insurance, gas, and more!

You’re going to find yourself spending money. Just make sure it’s worth your time and be aware of all the little things that add up along the way! That’s my spiel! Hope you enjoyed.

Of course, enjoy this week’s Sunday Primer!

- Humphrey, Tim, & Rickie

Market Report

In March, the U.S. labor market saw significant growth, with nonfarm payrolls increasing by 303,000, surpassing economists' expectations and marking the largest rise in nearly a year.
The unemployment rate fell to 3.8% as more individuals entered the workforce and found employment. Job growth was particularly strong in sectors such as health care, construction, and leisure and hospitality.
Average hourly earnings increased by 0.3% from the previous month and 4.1% year-over-year, the slowest annual wage growth since mid-2021.

Oil prices recently surged above $90 a barrel, sparked by escalating military tensions between Israel and Iran.
- Various factors have also contributed to this tight supply situation, including Mexico's decision to significantly reduce its crude exports, American sanctions impacting Russian oil cargoes, potential threats to Venezuelan supply, and Houthi rebel attacks on tankers in the Red Sea.
Despite these challenges, OPEC and its allies have maintained their production cuts, adding to the supply constraints.

The world's largest tech companies, including Apple, Amazon, Microsoft, and the parent companies of Google and Facebook, are currently sitting on a cash reserve of over $570 billion, which is more than double that of the next five richest nonfinancial companies in the S&P 500.
- Apple, Microsoft, and Alphabet each generated over $100 billion in cash from operations last year alone.
The challenge now for these companies is finding effective ways to utilize this vast amount of capital, especially as global regulators intensify their scrutiny on Big Tech, thwarting efforts to expand through acquisitions.
- Google, with nearly $98 billion in net cash, is reportedly considering a bid for HubSpot, which could be valued at over $40 billion. This potential deal is significant as it would be more than three times the size of Google's largest acquisition to date.
- Apple is investing in share buybacks and dividends, with Apple spending $77 billion on buybacks last year.

Forecast Ahead

The upcoming CPI report for March (will be released on Wednesday) is anticipated to reveal a modest deceleration in core inflation. The core CPI, which omits volatile food and energy prices, is expected to rise by 0.3% month-over-month, following a 0.4% increase in February.
A report on Thursday will reveal new data on prices paid to producers, which is expected to show a more moderate advance in prices.
The Fed's next meeting is scheduled for April 30-May 1 and the release of the March meeting minutes is expected to come Wednesday.