Hey Chakkani Fam! Welcome to Your Weekly Financial Briefing! We're back with 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: 5,615.35 +30.81 (+0.55%)

• NASDAQ: 18,398.44 +115.04 (+0.63%)

• Dow Jones: 40,000.90 +247.15 (+0.62%)

• 10-Year Treasury Yield: 4.186 (-0.006)

• Bitcoin: $57,910.14 +403.8 (+0.7%)

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

Market Bites::

1. Wall Street Closes Higher on Rate Cut Bets, Mixed Bank Results: On July 12, Wall Street saw a mixed day of trading. Here are the key points:

1. Rate Cut Bets and Record Highs:

   • The S&P 500 and Dow Jones Industrial Average hit intraday record highs. Investors are betting that the U.S. Federal Reserve will cut interest rates in September.

   • Notably, some major companies rebounded after a recent dip. Apple and Nvidia each climbed over 1%.

2. Bank Performance:

   • JPMorgan Chase reported a second-quarter profit boosted by rising investment banking fees. However, its shares dipped 1.2%.

   • Wells Fargo tumbled 6% due to missing estimates for quarterly interest income.

   • Citigroup, despite reporting a surge in investment banking revenue, fell 1.8%.

3. Small-Cap Rally:

   • The small-cap Russell 2000 index rallied for a third straight day, reaching its highest level since 2022.

   • The S&P 400 Mid Cap index also rose.

   • Ryan Detrick, chief market strategist at Carson Group, sees this rotation into small- and mid-caps as a positive sign overall.

4. Tesla Dominates Trading:

   • Tesla was the most traded stock in the S&P 500, with $38 billion worth of shares exchanged during the session. The electric car maker jumped 3%.

5. Market Indices:

   • The S&P 500 closed up 0.55% at 5,615.35 points.

   • The Nasdaq gained 0.63%.

   • The Dow Jones Industrial Average rose 0.62% to 40,000.90 points.

   • Weekly performance: S&P 500 up 0.9%, Nasdaq up 0.2%, Dow up 1.6%.

6. Earnings Outlook:

   • Investors are optimistic about profit growth beyond tech heavyweights like Nvidia.

   • Analysts expect S&P 500 firms’ second-quarter earnings to jump 9.6%, driven by technology companies. However, real estate, industrials, and materials sectors may see declining earnings.

2. U.S. Producer Prices Show Modest Increase Amid Favorable Components: Producer Price Index (PPI) Overview:

• In June, the U.S. producer prices increased slightly more than expected.

• The rise was driven by a 0.6% increase in the price of services.

• Notably, the PPI for final demand rose 0.2% after being unchanged in May.

• Over the 12 months through June, the PPI increased by 2.6%, the largest year-on-year gain since March 2023.

• Components Impacting PPI:

  • Healthcare services and other factors that contribute to inflation measures were mostly favorable last month.

  • Services, including margins for trade services, played a significant role in the PPI increase.

  • However, transportation and warehousing services costs fell, and portfolio management fees partially rebounded.

  • Airline fares increased, but the overall decline from May remained substantial.

  • Medical services PCE (personal consumption expenditures) showed even tamer readings.

• PCE Inflation and Core Inflation:

  • PCE inflation was forecast to edge up 0.1% in June (after being unchanged in May).

  • Core inflation ticked up 0.1% in May, with both PCE and core inflation expected to increase 2.5% year-on-year in June (following a 2.6% rise in May).

• Market Implications:

  • Despite the rise in producer prices, there doesn’t seem to be significant inflation pressure affecting consumer prices.

  • Wall Street stocks traded higher, and the dollar slipped against other currencies.

  • The Federal Reserve’s potential interest rate cut in September remains on the radar.

In summary, while producer prices showed a modest increase, the overall inflation picture appears relatively benign. The Fed’s focus on inflation and economic indicators will guide their decisions moving forward. 📈💹

3. Disinflation, Rotation, and a Bruised Dollar: Rotation and Inflation Impact:

• A violent rotation occurred from Big Tech stocks into small-cap stocks following the surprisingly benign June U.S. inflation report.

• The Nasdaq turned away from record highs, plunging almost 2%, while small caps in the Russell 2000 surged more than 3% to three-month highs.

• The S&P 500 also lost ground, albeit less dramatically.

• Notably, Tesla faced an 8.4% drop—the largest since January—due to reports of a delay in the robotaxi launch.

• The positive inflation news showed headline prices falling for the first time in four years, with annual inflation dipping below 3% for the first time in 12 months.

• Core Inflation and Market Reactions:

  • Core inflation was below forecast at 3.3%, its lowest in three years.

  • Services and shelter components also moderated.

  • Despite stock market volatility, a drop in weekly jobless claims provided some relief.

  • Producer price updates are awaited for further clarity.

• Federal Reserve and Interest Rates:

  • Fed officials responded positively to the inflation report.

  • The International Monetary Fund believes the Fed can start cutting interest rates later this year.

  • Rate futures fully price in a Fed cut for September, with potential for further cuts throughout the year.

  • Ten-year Treasury yields hit a four-month low but rebounded slightly.

• Currency Moves:

  • The dollar suffered losses, while the dollar/yen pair plunged almost 2%.

  • Reports suggest Japanese authorities may have intervened to buy yen.

  • The Nikkei skidded 2.5% in Japan, impacted by tech-related concerns.

In summary, the market landscape is influenced by disinflation, sector rotations, and currency fluctuations. Buckle up—it’s a wild ride out there! 🎢💸

4. Wall Street Revival Boosts Big Banks Amid Main Street Challenges: In the intricate dance of finance, Wall Street and Main Street often move to different rhythms. Recently, a Wall Street revival has provided a much-needed boost to big banks, even as challenges persist on Main Street.

Here are the key points:

1. Investment Banking Resurgence:

   • JPMorgan Chase (JPM), Citigroup ©, and Wells Fargo (WFC) experienced a surge in investment banking fees during the second quarter.

   • Deal-making activity showed signs of life after a two-year slump.

   • Trading revenue also improved for all three institutions.

2. Mixed Performance:

   • Despite the positive trends, stocks of these banks declined.

   • Higher interest rates and elevated deposit costs squeezed traditional consumer banking margins.

   • The banks also set aside more funds for potential loan losses, signaling cautiousness about credit conditions.

3. Net Interest Income Concerns:

   • Investors closely watched net interest income—a critical measure of lending revenue.

   • Sequentially, net interest income fell at JPMorgan, Wells Fargo, and Citigroup.

   • Customers continued to shift toward higher-yielding deposit products like CDs, impacting this metric.

4. JPMorgan’s Accounting Gain:

   • JPMorgan’s net interest income declined 1% from the prior quarter.

   • However, an $8 billion one-time accounting gain related to an exchange of shares in Visa (V) partially offset this decline.

   • Without the accounting gain, JPMorgan’s overall net profit would have dropped 9% year-on-year.

5. Wells Fargo’s Deeper Decline and Investment Banking Surge:

   • Wells Fargo’s net interest income decline was deeper than expected, leading to a 6% drop in its stock.

   • Despite this, Wells Fargo benefited from increased Wall Street activity, with investment banking revenues surging 38%.

   • JPMorgan’s investment banking rose 50% year-on-year, reaching $2.35 billion.

   • Citigroup’s investment banking fees jumped 63% in the second quarter, totaling $935 million.

6. Wall Street’s Long-Awaited Moment:

   • Wall Street has endured false starts over the past two years.

   • Last year’s optimism about IPOs and mergers fizzled, resulting in the worst dealmaking year in a decade.

   • However, 2024 shows promise, despite lingering concerns about inflation, geopolitical tensions, and the upcoming presidential election.

7. Positive Signs for Investment Banking Heavyweights:

   • JPMorgan and Citigroup’s performances bode well for other investment banking giants like Goldman Sachs, Morgan Stanley, and Bank of America, which are set to report earnings soon.

8. Cautious Optimism:

   • JPMorgan CFO Jeremy Barnum acknowledged progress but remained cautious.

   • Antitrust scrutiny in Washington could impact new deals, tempering the enthusiasm for mergers and acquisitions.

In this financial tango, Wall Street’s rhythm is picking up, but the dance floor remains complex and unpredictable. 💃🏼📈

5. Election Chaos Impacts, Market Breadth Explodes: Asking For A Trend: In this segment, we delve into the intersection of election chaos, market dynamics, and investor sentiment. Former President Donald Trump’s repeated suggestions that he would contest the 2024 election results if he didn’t win have added uncertainty to an already complex landscape. Let’s break down the key points:

1. Election Uncertainty and Geopolitical Consequences:

   • Former President Trump’s potential challenge to the 2024 election results introduces uncertainty. The New York Times reports his inclination to contest the outcome.

   • The ongoing uncertainty surrounding the November ballot and who will occupy the White House in January could have significant geopolitical ramifications.

2. Market Breadth Expansion:

   • Despite the political noise, the stock market shows signs of strength. Notably, 300 stocks on the New York Stock Exchange recently hit new highs—the most since March 2024. This surge suggests that market breadth is expanding.

   • Investors are closely watching these developments as they navigate earnings season.

3. Interest Rate Expectations and Retail Investor Activity:

   • Bank of America’s analysis indicates that the US benchmark Federal Funds rate suggests a soft landing scenario, with expectations for interest rate cuts.

   • Interestingly, a recent Goldman Sachs report highlights a slowdown in retail investor activity. This slowdown could potentially pave the way for increased short selling.

4. Box Office Stocks and Recovery:

   • Box office stocks are showing signs of recovery, even without a plethora of new content. Chad Beynon, a senior analyst at Macquarie, shares his outlook on this sector.

In summary, the intersection of election uncertainty, market breadth, interest rate expectations, and retail investor behavior creates a dynamic landscape for investors. Buckle up—it’s going to be an interesting ride! 📈🎢

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 4: "The Art of Adjustments: Realigning Your Financial Strategies"

• Overview: Focuses on how to make necessary adjustments to strategies based on the analysis.

• Key Points: Identifying what's working and what's not, making strategic pivots, and setting new targets.

The Art of Adjustments: Realigning Your Financial Strategies

🔍 Overview

Midway through the year, it's essential to revisit and realign your financial strategies to ensure you stay on track towards your goals. Whether it's tweaking your budget, adjusting your investment portfolio, or refining your savings plan, making strategic adjustments can significantly impact your financial success. In this article, we’ll explore practical steps to realign your financial strategies, enhancing your financial literacy and empowering you to make informed decisions.

📊 The Importance of Realigning Financial Strategies

1. Adapt to Changing Circumstances:

   • Life events, market conditions, and personal goals can change, requiring adjustments to your financial strategies to stay relevant and effective.

2. Maximize Financial Opportunities:

   • Regularly reviewing and adjusting your strategies allows you to take advantage of new opportunities, optimize returns, and enhance your financial position.

3. Mitigate Risks:

   • Proactive adjustments help you identify and manage risks, protecting your financial health from potential downturns or unexpected events.

🔧 Practical Steps to Realign Your Financial Strategies

1. Revisit Your Financial Goals:

   • Assess Goal Progress:

     • Review the progress you’ve made towards your financial goals. Are you on track? Identify any goals that need more attention.

     • Tip: Use a financial tracker or spreadsheet to monitor your progress and identify gaps.

   • Adjust Goal Priorities:

     • Life changes can shift your priorities. Reassess the importance of each goal and adjust your focus accordingly.

     • Tip: Rank your goals in order of importance and allocate resources to the top priorities.

2. Revise Your Budget:

   • Analyze Spending Habits:

     • Review your spending patterns over the past six months. Are there areas where you consistently overspend or underspend?

     • Tip: Use budgeting apps to categorize and track your expenses, making it easier to spot trends.

   • Allocate Funds Efficiently:

     • Adjust your budget allocations based on your analysis. Increase savings for high-priority goals and reduce spending in less critical areas.

     • Tip: Implement the 50/30/20 rule: 50% for needs, 30% for wants, and 20% for savings and debt repayment.

3. Review and Rebalance Your Investment Portfolio:

   • Evaluate Performance:

     • Assess the performance of your investments. Are they meeting your expectations? Identify underperforming assets.

     • Tip: Compare your investment returns against benchmarks to gauge performance.

   • Rebalance for Diversification:

     • Ensure your portfolio is well-diversified to spread risk. Rebalance your assets to align with your risk tolerance and goals.

     • Tip: Consider rebalancing your portfolio at least once a year to maintain the desired asset allocation.

4. Optimize Debt Management:

   • Review Debt Repayment Plans:

     • Examine your current debt repayment strategies. Are you making progress in reducing your debt?

     • Tip: Focus on paying off high-interest debt first to minimize overall interest payments.

   • Explore Refinancing Options:

     • Look into refinancing high-interest loans or consolidating debts to lower your interest rates and monthly payments.

     • Tip: Use online calculators to compare refinancing options and potential savings.

5. Enhance Savings Strategies:

   • Boost Emergency Fund:

     • Ensure your emergency fund is sufficient to cover 3-6 months of living expenses. If it’s lacking, prioritize increasing your contributions.

     • Tip: Set up automatic transfers to your emergency fund to build it consistently.

   • Maximize Retirement Contributions:

     • Review your retirement accounts and increase contributions if possible, especially if you’re not yet maxing out employer matches.

     • Tip: Take advantage of tax-advantaged accounts like 401(k)s or IRAs for retirement savings.

📈 Moving Forward

Realigning your financial strategies is an ongoing process that adapts to your evolving financial landscape. By regularly revisiting your goals, budget, investments, debt, and savings plans, you can make informed adjustments that enhance your financial resilience and success.

💡 Conclusion

The art of adjustments is crucial for maintaining a healthy financial path. By strategically realigning your financial strategies, you stay responsive to changes, optimize opportunities, and mitigate risks. Embrace this proactive approach, and let it guide you towards a secure and prosperous financial future.

—

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 FOURTH 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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