📲👀 Reducing Screen Time & Market Report

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Jun 18, 2023

Happy Sunday, Father’s Day, and Juneteenth Weekend,

Today I wanted to talk about the subject of Screen Time. As someone who makes content for a living, I’m on my phone a LOT. I’ve been embarrassed to say that my screen time in the past few weeks on my phone alone has been 4-5 hours, and on busier days sometime even 6+ hours. This had led me feeling very unproductive and just not that happy.

I hate that I have this habit of compulsively opening up my phone and hitting all my usual apps: Instagram, Discord, Checking Stocks, Slack, Messages, etc. It happens any time I get a spare moment: standing in line at a coffee shop, walking anywhere, even checking it while I’m sitting down enjoying the outdoors.

Not all screen time is productive, so I’ve been working on some ways to bring my screen time down and I have a few tips for you - especially if you’re feeling the same way.

I leave my phone in a different room from the one I sleep in - this allows me to not doom-scroll before bed or right when I wake up.
Tik Tok was too addicting, so I deleted the app from my phone. On one of my older phones that I wasn’t using - I simply installed Tik Tok and I leave it at home whenever I go out.
ClearSpace: a free app that helps you reduce screen time by adding in a little more friction to an app of your choice. For example, when I open Instagram I need to wait 15 seconds before I’m allowed to actually “open” it. It also lets you set a target amount of time you want to spend in the app, and kicks you out when that time is over.
Turning off all Notifications except for Text Messages. That way I don’t see a random DM on an app and get sucked into my usual patterns of app-checking.
Pair screen time with exercise: this at least makes me feel less guilty! I get on the treadmill and watch Tik Tok, YouTube, or a Netflix show.

Do you have some tips to reduce screen time? Let me know! Enjoy this Sunday edition of Hump Days and I hope you’re having a great weekend. Let’s get into it!

— Humphrey, Tim & Rickie

Market Report

Rate Hike Pause!

The Federal Reserve announced a pause in interest rate hikes on Wednesday following 15 months of continual increases aimed at stopping inflation. The decision leaves the fed funds rate at 5% to 5.25%. Despite the pause, the Fed and Jerome Powell made it clear that rate hikes could resume later to further manage inflation, with new Fed projections suggesting rates could rise to 5.6% by the end of the year. Despite these estimates, the market doesn’t seem to agree with this, as it’s currently pricing no more hikes this year and rate cuts starting in 2024.

The idea of no more rate hikes from here doesn’t make much sense. While the inflation scare following Covid appears to be in its last stages, it’s uncertain how long it’ll stick around for. Examining May inflation data shows that there has been a shift in inflation drivers from food, energy, and goods to core services. Although the headline rate of inflation dropped from 4.9% to 4.0% due to falling oil prices, core inflation remained almost unchanged. Current inflation is primarily driven by "shelter" costs.

Shelter inflation, comprising approximately a third of the index, has continued to maintain a high level, despite the downturn in goods inflation. However, the latest data from Zillow suggests a decrease in rental inflation. Their June 2023 forecast highlighted an upward revision of home value expectations, largely driven by the ongoing low inventory of available homes which continues to push home prices higher.

Zillow's latest forecast calls for a 5% growth in home values in 2023, and expects the typical home values to rise by 5.8% from May 2023 through May 2024. However, the tight inventory conditions, which caused the fastest month-over-month home value appreciation in nearly a year, also present significant challenges. Buyers, despite the limited options and elevated mortgage rates, remain eager to purchase homes, a factor that contributes to the current inflation rates in the housing market.

Regardless, Zillow revised its forecast for existing home sales in 2023 downwards, expecting a 17% decline from 2022, with an anticipated 4.2 million home sales. Despite expectations for a modest decline in mortgage rates possibly stimulating home buyer demand, the persistent low inventory, and high prices could offset these impacts, limiting potential sales.

Fearless Market Continues

Stock Indexes Recover Rate Campaign Losses | US equties have powered back to levels last seen in April 2022

The markets keep seemingly brushing off the Federal Reserve's aggressive rate hike campaign that dominated the news for 15 months. The S&P 500 has now reached a level higher than that on March 16, 2022, when the Fed began the sharpest rate hikes in four decades. Other key market metrics, including the dollar, bond volatility, and stock market positioning, are now near levels seen before the rate hikes began.

This has led to an uptick in investor participation and strategy reversals by some of Wall Street's biggest bears. For instance, aggregate equity positioning by Deutsche Bank has turned overweight for the first time in over 16 months. In addition, volatility in both bonds and equities has decreased, returning to their pre-tightening lows.

The focus of the markets has now shifted towards the health of corporate balance sheets and the potential for a capital expenditure surge as companies prepare for an AI boom. Consequently, the contribution of macroeconomic themes to the markets has dropped from 83% to 71% since March, marking the largest three-month decline since 2009, according to a Citigroup report.

The Federal Reserve's influence over the markets is expected to diminish over the next six to twelve months, with other global and fundamental drivers playing a more significant role. This shift comes as the Fed signals that it's nearing the end of its rate hikes, leading to expectations of decreased volatility in Treasury markets, which have recently experienced some of the largest daily swings in years.

Despite the bullish market, there's still a 65% chance of a US recession within a year, according to economists. This prediction is backed by the collapse of four regional banks and inversions across the US Treasury curve. However, the economy has, so far, embraced rate hikes, with resilient labor markets and mostly healthy corporate and household balance sheets.

Hours Worked Decline as Hiring Continues

Despite a hiring boom, private-sector employees in the U.S. are working fewer hours per week, sparking concerns of a possible recession. A decline in weekly work hours has often preceded layoffs and economic downturns in the past. However, this time the trend might not indicate a recession as employers are still hiring and avoiding layoffs, even while cutting hours. The drop in working hours could be due to businesses finally filling long-vacant positions, allowing overworked staff to return to regular hours.

The trend of reduced work hours extends across sectors, with businesses such as hotels, restaurants, and shops seeing a 5% drop in work hours from pandemic peaks. This drop has been enabled by businesses being able to hire more staff, eliminating the need for overtime and skipped breaks. For instance, El Pollo Loco, a restaurant chain, states that it has enough employees to allow for regular breaks and no overtime.

A study suggests another reason for reduced working hours: individuals choosing to work less. During the pandemic, U.S. workers started spending fewer hours at their jobs, a trend that has continued even as the impact of the pandemic has lessened. This is thought to reflect a shift in priorities sparked by the pandemic, with remote work making it easier for people to log off early. The shared experience of the pandemic may have also eased concerns about working less than peers, contributing to the stability of this trend.

Forecast Ahead

Markets will be closed on Monday for the Juneteenth holiday. Happy Juneteenth to all!

Jerome Powell will be on Capitol Hill a week after the Fed paused its most aggressive rate hike campaign in decades, with investors watching for clues on whether JPowl is leaning towards more interest-rate hikes in the future.

The Fed chair will deliver the central bank’s semi-annual monetary policy report to the House on Wednesday and the Senate the following day.

Big Number: Food By the Numbers

The number of meals cooked at home per week jumped in the US from 6.2 in 2019 to 6.8 in 2020 and rose in most other countries as well, according to the Gallup World Poll, but it fell worldwide because of declines in China.
“Food away from home” accounted for 53.2% of US household food spending in 2022, the USDA estimates, up from 48.3% in 2020 and 43% in 1997.
From February 2020 to February 2021, real consumer spending on food for off-premises consumption rose 6.9%, while spending on alcoholic beverages rose 13.4%.