Hey Chakkani Fam! Welcome to Your Weekly Financial Briefing! We've got bite sized market moves, big tech bets, and whispers of change from all over the world. Grab a cup of joe (or your preferred drink) and let's dive:

Bears & Bulls: Markets Notes & Numbers

• S&P 500: 5,459.10 +59.88 (+1.11%)

• NASDAQ: 17,357.88 +176.16 (+1.03%)

• Dow Jones: 50,589.34 +654.27 (+1.64%)

• 10-Year Treasury Yield: 4.193 (-0.062)

• Bitcoin: $67,614 +2,859.41 (+4.42%)

  All data as of last trading day's market close time read more…

Market Bites::

1. US Inflation Data Boosts Global Stocks, Lowers Treasury Yields: 📈 Market Surge: Global stocks experienced a robust rally, marking their best daily performance in six weeks as U.S. inflation data suggested economic improvement. The Commerce Department reported that the personal consumption expenditures (PCE) price index rose 0.1% in June, aligning with economists' expectations, hinting at a potential rate cut by the Federal Reserve in September.

🔍 Inflation Insights: The PCE price index's annual rise of 2.5% indicated stable inflation, reinforcing the notion that the economy is on solid ground. Despite this, a rate cut in the upcoming Fed meeting remains unlikely, with markets predicting a September adjustment instead.

📊 Wall Street's Response: U.S. stocks surged, particularly small-cap stocks, with the Nasdaq climbing over 1% after a series of declines. The Dow Jones, S&P 500, and Nasdaq Composite all posted significant gains, though the S&P 500 still faced a weekly drop.

🌍 Global Impact: European markets also closed higher, bolstered by corporate earnings, despite weekly losses. MSCI's global stock index rose nearly 1%, marking its largest daily gain since June 12.

📉 Treasury Yields: Following the inflation data, U.S. Treasury yields fell, with the 10-year note yield dropping to 4.202% and the 2-year note yield declining to 4.3894%. This trend reflected market expectations for future Fed rate cuts.

💲 Currency Movements: The dollar weakened slightly against a basket of currencies, with notable drops against the yen and euro. The yen's strength was supported by expected Fed rate cuts and potential Bank of Japan policy tightening.

🛢️ Oil Prices: U.S. crude and Brent oil prices fell due to reduced Chinese demand and optimistic expectations for a Gaza ceasefire.

2. Oil Falls 1.5%, Ends Week Lower on China Demand Fears: 🛢️ Price Decline: Oil futures dropped about 1.5% on Friday, capping a week marked by worries over declining Chinese demand and optimism around a potential Gaza ceasefire, which might ease Middle East tensions and related supply issues. Brent crude fell to $81.13 a barrel, and West Texas Intermediate (WTI) settled at $77.16 a barrel. Brent experienced a weekly decline of over 1%, while WTI dropped more than 3%.

📉 Demand Concerns: Initial support from better-than-expected U.S. GDP growth figures was overshadowed by fears of reduced Chinese oil demand. China's total fuel oil imports fell 11% in the first half of 2024, sparking concerns about the broader demand outlook in the world's largest crude importer. Analysts warned of a potential deflationary cycle in China, which would exacerbate the demand issue.

🔧 Production Adjustments: In the U.S., refiners, including Valero Energy, plan to cut production as the summer driving season ends. Valero's refineries are expected to run at 92% capacity in the third quarter, down from 94% in the second quarter.

🌍 Middle East Developments: Progress towards a Gaza ceasefire has raised hopes of reduced regional tensions. Negotiations for a six-week ceasefire, potentially leading to the release of hostages by Hamas, are reportedly closer to fruition.

🔩 Rig Count: Baker Hughes reported an increase in U.S. oil drilling rigs, with five added this week, bringing the total to 482. This marks the first monthly rise in rig numbers since March, suggesting potential future output increases.

3. Keep Global Tax Negotiations at OECD, Not UN, Yellen Says: 🌐 OECD vs. UN: U.S. Treasury Secretary Janet Yellen expressed strong opposition to shifting global tax deal negotiations from the Organisation for Economic Cooperation and Development (OECD) to the United Nations. Speaking at a G20 event in Rio de Janeiro, Yellen emphasized that the OECD, a consensus-based organization with technical expertise, is better suited for such complex negotiations. She argued that the UN's majority vote structure is not conducive to reaching agreements that need unanimous support from all countries involved.

💼 Progress and Challenges: Yellen highlighted the substantial progress made under the OECD's guidance, particularly regarding the two-part corporate tax deal. However, she acknowledged ongoing challenges with holdouts like India, China, and Australia on the 'Pillar 1' tax agreement, which involves reallocating taxing rights on large multinational corporations. The U.S. insists on the inclusion of "Amount B," a method for calculating transfer pricing for smaller firms to reduce tax disputes.

🌏 Brazil and G20's Role: Brazil, holding the G20 presidency, initially proposed adding a third pillar to the global tax deal targeting ultra-wealthy individuals. This proposal evolved into a broader G20 declaration to enhance cooperation on taxing the ultra-rich while respecting national sovereignty. Brazil sought to advance this debate within both the OECD and the UN, reflecting a desire for more inclusive discussions.

📣 Non-Profit Push: Non-profit organizations like Oxfam advocate for aligning OECD tax talks with the UN to ensure a more democratic process. Oxfam criticized the OECD as being dominated by wealthy nations, arguing that the UN would provide a more equitable platform for setting global tax standards.

🔧 Technical and Political Nuances: Yellen noted that while some tax topics might be suitable for UN discussion, the intricate nature of the current global tax deal negotiations requires the OECD's specialized approach. She remained optimistic about bringing key countries like China into agreement, despite India's resistance.

4. India's Foreign Exchange Reserves Rise for Third Week, Hit Record High: 🇮🇳 Historic High: India's foreign exchange reserves surged for the third consecutive week, reaching an unprecedented $670.86 billion as of July 19, according to the Reserve Bank of India (RBI). This increase includes a $4 billion rise in the latest week, building on a $14.9 billion rise over the previous two weeks.

💰 Composition and Influences: The reserves, comprising foreign currency assets, gold, Special Drawing Rights (SDRs), and India's reserve tranche position in the International Monetary Fund (IMF), saw significant contributions from changes in foreign currency assets and the valuation of foreign assets. The RBI's interventions in the forex market to stabilize the rupee also played a crucial role.

📉 Rupee Volatility: Despite the rise in reserves, the Indian rupee hit a record low, closing at 83.7275 against the dollar, marking its fourth consecutive week of decline. The RBI's efforts to defend the currency during volatile periods underscore the challenges faced in maintaining currency stability amid fluctuating market conditions.

🔎 Detailed Breakdown:

• Foreign Currency Assets: Increased to $588.05 billion from $585.47 billion.

• Gold Reserves: Rose to $59.99 billion from $58.66 billion.

• SDRs: Slight increase to $18.21 billion from $18.11 billion.

• Reserve Tranche Position: Marginal rise to $4.61 billion from $4.61 billion.

5. A Parade on the Seine, Lady Gaga, and Rain Mark Start of Games: 🎤 Spectacular Opening: The Paris Olympics kicked off with a dazzling opening ceremony along the Seine, featuring a unique barge procession. Lady Gaga serenaded the crowd with a French cabaret song near Notre-Dame, while French-Malian singer Aya Nakamura electrified with her hits.

💧 Weather and Crowd Reaction: Despite the rain, thousands cheered athletes and performers along the 6 km stretch of the river. The innovative ceremony, the first outside a stadium, showcased Paris' landmarks and French culture, though some spectators left early due to the weather.

🚤 Security Concerns: The grand event required a massive security operation, especially after a rail sabotage incident earlier in the day. With snipers on rooftops, armed police in inflatable boats, and the Seine swept for bombs, safety was paramount for the 300,000 spectators and numerous world leaders present.

🎨 Cultural Highlights: The show included a cancan line by Moulin Rouge dancers, a depiction of Zinedine Zidane running with the Olympic flame, and tributes to notable French women like Simone Veil. The ceremony also featured the unveiling of the Olympic medals by legends Michael Phelps and Martin Fourcade.

🌍 Global Unity: The Greek and refugees' teams received warm applause, while the Israeli delegation faced mixed reactions. The parade highlighted the geopolitical tensions, with chants of "Palestine!" rising from parts of the crowd.

🏅 Games Begin: With over 10,500 athletes competing, the first gold medals will be awarded on Saturday. The event, 100 years since Paris last hosted the Olympics, aims to celebrate global sportsmanship and French heritage.

Phew, that's a lot to unpack! Remember, this is just a snapshot of the complex and ever-evolving financial landscape. So, stay informed, diversify your investments, and don't forget to have a little fun along the way!

Bonus Tip: Want to dig deeper into any of these stories? Let me know in the comments below, and I'll be happy to share some additional resources!

And there you have it, folks! Remember, folks, the financial world is like a game of Monopoly—sometimes you’re the banker, sometimes you’re stuck in jail, and occasionally you land on Boardwalk and buy a hotel. Happy investing! 📈💰

 P.S. Did we miss anything major? Hit us up via an email with your hot takes and financial insights!

Part 6: "Investment Insights: Rebalancing Your Portfolio for Success"

• Overview: Offers insights into rebalancing investment portfolios to stay aligned with financial goals.

• Key Points: Evaluating asset performance, risk assessment, and portfolio diversification strategies.

Investment Insights: Rebalancing Your Portfolio for Success

🔍 Overview

Investing is a dynamic process that requires regular adjustments to ensure your portfolio remains aligned with your financial goals and risk tolerance. Rebalancing your portfolio is a crucial step in maintaining a diversified and effective investment strategy. In this article, we’ll explore the importance of rebalancing, provide practical steps to do so, and offer insights to enhance your financial literacy and investment success.

📊 The Importance of Rebalancing Your Portfolio

1. Maintain Desired Asset Allocation:

   • Over time, market fluctuations can shift your asset allocation, leading to an imbalance that might not align with your risk tolerance or investment goals.

   • Tip: Regularly monitor your portfolio to ensure it adheres to your target allocation.

2. Manage Investment Risk:

   • Rebalancing helps manage risk by preventing overexposure to any single asset class, maintaining a balanced risk profile.

   • Tip: Diversify your investments across various asset classes to spread risk.

3. Optimize Investment Returns:

   • By periodically selling high-performing assets and buying underperforming ones, you can capitalize on market opportunities and potentially enhance returns.

   • Tip: Use rebalancing as an opportunity to buy low and sell high, adhering to the principles of disciplined investing.

🔧 Practical Steps to Rebalance Your Portfolio

1. Assess Current Portfolio Allocation:

   • Evaluate Current Holdings:

     • Review your current investments to determine their current value and allocation. Use a pie chart to visualize your portfolio’s distribution.

     • Tip: Use investment tracking tools or apps to simplify the assessment process.

   • Compare with Target Allocation:

     • Compare your current allocation with your target asset allocation. Identify any significant deviations that need adjustment.

     • Tip: Regularly revisit your target allocation to ensure it aligns with your evolving financial goals and risk tolerance.

2. Determine Rebalancing Strategy:

   • Set Rebalancing Thresholds:

     • Establish specific thresholds (e.g., +/- 5%) that trigger the need for rebalancing. This helps maintain discipline and avoid emotional decision-making.

     • Tip: Consider using calendar-based rebalancing (e.g., quarterly or annually) as an alternative approach.

   • Choose Rebalancing Method:

     • Decide whether to rebalance by selling overperforming assets and buying underperforming ones or by directing new contributions towards underweighted asset classes.

     • Tip: Rebalancing through new contributions can be a tax-efficient strategy, minimizing capital gains taxes.

3. Execute the Rebalancing Process:

   • Sell Overweighted Assets:

     • Identify and sell assets that have exceeded their target allocation. Use this opportunity to lock in gains and reduce exposure to overvalued assets.

     • Tip: Be mindful of transaction fees and tax implications when selling assets.

   • Buy Underweighted Assets:

     • Use the proceeds from the sale of overweighted assets to purchase assets that are below their target allocation. This helps restore balance to your portfolio.

     • Tip: Consider dollar-cost averaging to spread out purchases and reduce the impact of market volatility.

4. Monitor and Adjust Regularly:

   • Track Portfolio Performance:

     • Continuously monitor the performance of your investments and their impact on your overall portfolio. Regular tracking helps you stay informed and make timely adjustments.

     • Tip: Use financial news and market analysis tools to stay updated on market trends and investment opportunities.

   • Revisit Financial Goals:

     • Periodically review your financial goals to ensure they remain relevant. Adjust your target allocation and rebalancing strategy as needed to reflect any changes in your goals or risk tolerance.

     • Tip: Schedule annual reviews with a financial advisor to get professional insights and recommendations.

📈 Moving Forward

Rebalancing your portfolio is a critical practice for maintaining a disciplined and effective investment strategy. By regularly assessing your asset allocation, setting rebalancing thresholds, and making necessary adjustments, you can manage risk, optimize returns, and stay on track towards your financial goals.

💡 Conclusion

Investment success requires ongoing attention and proactive management. Rebalancing your portfolio is an essential part of this process, helping you maintain a balanced risk profile and capitalize on market opportunities. Embrace these insights and strategies to enhance your financial literacy and achieve long-term investment success.

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So, there you have it! With a little guidance and the right tools, you'll be a master in understanding (and hopefully master it) financial concepts in no time. Go forth, plant your seeds, and watch your wealth garden flourish!

This is the SIXTH part in this comprehensive 9 part series on “Mid-Year Money Mastery: Your Guide to Financial Checkups and Strategic Adjustments” (we want to get you ready for the next step in your life, whatever it may be).

If you liked this, check out other series including, a 9 part extensive series on “Credit Alchemy: Transforming Your Worth into Wealth” and all our previous articles here.

So, whether you are crawling and sprinting, let's do this together!

We will bring the next series to you in the next week episode.

Until next time, wishing a very happy wealthness (you see what we did there 😃) to you!

📚 Bonus Resources:

1. Investopedia: Investopedia provides comprehensive information on creditworthiness, including factors that impact it, how to check your credit report, and steps to enhance your creditworthiness. Remember that your creditworthiness affects loan approvals, interest rates, and more.

2. The Balance: The Balance explains creditworthiness and emphasizes the importance of monitoring your credit score. You can access your credit score for free through services like Credit Karma, Credit Sesame, or WalletHub.

3. SuperMoney: SuperMoney offers practical steps for managing creditworthiness. You can obtain a free annual credit report from AnnualCreditReport.com or use free credit monitoring services like Credit Karma or Credit Sesame.

Remember to stay informed, check your credit score regularly, and make timely payments to maintain a strong credit profile. 🌟📊💳

Your Wealth Journey Awaits!

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