🔥❤️🔥 Stock Market Rips on Fed Rate Optimism
Happy Wednesday all,
The stock market as well as Magnificent Seven had a huge bounce back today after selling off the past week or two. Nvidia was up 12.8%+ alone today, Tesla was up 4.25%, Meta Stock had a 2.75% gain and Apple a modest 1.50% gain.
All of this is because the chair of the Federal Reserve, Jerome Powell, made the following remarks:
“If we were to see, for example, inflation moving down quickly — or more or less in line with expectations — growth remains reasonably strong, and the labor market remains consistent with its current condition, then I would think that a rate cut could be on the table at the September meeting,” Powell told reporters.
We’ll be sure to keep you updated on what happens with interest rate as it gets closer to a potential cut. In personal news, I’m sitting at the San Francisco airport waiting for my flight to London! Pictures and updates to come.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
How the US Power Grid Became a Mess—Just When We Need It Most (BBG)
The Haves and Have-Nots at the Center of America’s Inflation Fight (WSJ)
Southwest Airlines Is Ditching Open Seating on Flights (WSJ)
Amazon Pushes Fast Delivery Into Rural Areas in Challenge to Post Office (WSJ)
Home Prices in US Increase With Tight Supply Driving Up Costs (BBG)
History Favors Stock and Bond Bulls Alike When the FOMC Meets (BBG)
The Weekly Brief
The Hottest Job Market in a Generation Is Showing Signs of Slowing
The once-booming U.S. job market is showing signs of cooling, transitioning from the crazy conditions seen during the pandemic recovery to a more balanced state.
While still healthy by historical standards, the labor market is experiencing a gradual slowdown, with the unemployment rate rising to 4.1%, job openings decreasing, and wage growth moderating.
Hiring has fallen below pre-Covid levels, and certain sectors are seeing increased competition for positions. However, the risk of layoffs remains low, and some industries still struggle to find skilled workers.
Older Workers at Risk of Working Longer for Retirement, Report Says
New research from Morningstar found that older workers, particularly baby boomers and Gen Xers, are at a greater risk of not having enough money for retirement compared to millennials.
52% of baby boomers and 47% of Gen Xers may face retirement shortfalls, while 44% of millennials are at risk.
Younger workers benefit from improved 401(k) plans and have more time to save, whereas older generations missed crucial saving years.
The study highlights that workers without a defined contribution plan, like a 401(k), are significantly more likely to face financial shortfalls in retirement. Additionally, working longer can mitigate these risks, with the likelihood of running out of money decreasing substantially if retirement is delayed from age 65 to 70.
Microsoft Stock Drops After Disappointing Cloud Growth
Microsoft reported mixed results in its latest earnings release, with overall revenue and profit growth beating expectations, but growth in its crucial Azure cloud business falling short of analyst estimates.
Azure revenue grew 29%, below the expected 30% and down from 31% in the previous quarter. This slight miss in Azure growth, which is central to Microsoft's AI strategy, caused the company's stock to drop.
Despite strong overall performance, with total revenue up 15% to $64.7 billion and net income up 10% to $22 billion, the market reaction reflects concerns about the sustainability of the AI boom and its impact on Microsoft's future growth.
The company continues to invest heavily in AI infrastructure, with capital expenditures rising significantly, but faces constraints in AI capacity and has partnered with third parties to meet demand.
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