💪🇺🇸 U.S. Still an Economic Powerhouse
Happy Wednesday all,
This week on the YouTube channel, I posted a video titled “10 Purchases Under $200 That Save Time & Money”. In an effort to expand the offerings of the channel, I wanted to see if you guys responded well to a video on products as opposed to the usual personal finance topics. When you get a chance, give the video a watch and tell me what you think in the comments! If you came from the newsletter, too, definitely comment that as well!
It’s been a tough week in the markets, especially if you’re invested in tech, with Alphabet (GOOG 0.00%↑) falling by almost 10% today after a rough earnings report. We got a packed edition for you this week!
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
☁️ Google’s cloud sales disappoint as advertising rebounds (WSJ)
🇸🇦 Israel-Hamas war casts shadow over Saudi investment summit (Bloomberg)
🎓 Elite universities face donor revolt over Mideast conflict (WSJ)
🇨🇳 Why China’s 1T yuan debt plan isn’t necessarily such a big deal (CNBC)
🛰️ SpaceX signs deal to launch key European satellites (WSJ)
👨💻 Biden aims to boost investment in clean energy, biotech, semiconductors with tech hubs (CNBC)
🚙 Saudi Wealth Fund, Hyundai Motor agree to build auto plant (Bloomberg)
🗣️ House elects Republican Mike Johnson as speaker (WSJ)
🚗 Car owners fall behind on payments at highest rate on record (Bloomberg)
The Weekly Brief
Fresh Growth Numbers Are Set to Show U.S. Remains Economic Powerhouse (Bloomberg)
The U.S. economy is expected to have expanded at the quickest pace in nearly two years in Q3 on the back of increased consumer spending.
GDP grew at a 4.3% annualized pace in Q3, according to the median projection in a Bloomberg survey of economists.
The U.S. remains in particular strength as Europe stagnates and Asia deals with a struggling Chinese economy.
The resilient consumer is complicating policy decisions from the Fed as they try to tackle inflation without spiraling the economy into recession.
“Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Fed Chair Jerome Powell said Thursday.
Many countries have central bank decisions this week, with Canada and the ECB expected to keep rates on hold. Russia and Turkey are likely to deliver large hikes.
Jamie Dimon Rips Central Banks for Being ‘100% Dead Wrong’ on Forecasts (CNBC)
CEO of JPMorgan Chase, Jamie Dimon, warned about the dangers of locking in an outlook about the economy, given the poor recent track record of central banks like the Fed, referring to when central banks insisted that the inflation surge would be ‘transitory’.
“I want to point out the central banks 18 months ago were 100% dead wrong, Dimon said in a panel discussion in Saudi Arabia. “I would be quite cautious about what might happen next year.”
Fed officials in March 2022 collectively saw their key interest rate rising to just 2.8% by the end of 2023, while it has climbed north of 5.25% since. They also predicted core inflation to be 2.8% compared to the 3.9% we see today, as measured by the central bank’s preferred gauge.
Intel Stock Drops on Report Nvidia is Working on Arm-based PC Chip (CNBC)
Intel stock fell 3% after a report that Nvidia and AMD were working on Arm-based PC chips.
Intel currently holds the majority of the PC chip market, followed by AMD—sales of PC chips made up over half of Intel’s revenue in Q2.
Nvidia could release a PC chip based on Arm as soon as 2025.
Chips that use the Arm-based instruction set often use significantly less power, which is critical for battery-powered devices.
You’ll Find This Interesting
There’s Never Been a Worse Time to Buy Instead of Rent (WSJ)
According to CBRE analysis, the cost of buying a home versus renting one is at its most extreme since 1996.
The average monthly new mortgage payment is 52% higher than the average apartment rent.
Between 1996 to mid-2003, the cost to buy/rent was more or less equal. After 2008, plummeting interest rates and a flood of housing supply meant that it was 12% cheaper to buy a home than to rent during the 2010s.
The current ownership premium is a blend of surging mortgage rates that hit 8% and high house prices since the pandemic, raising domestic space's value.