📈 Inflation falls, what's next?

Advertise with us | Our Newsletters | Your Rewards

Good Morning!

CPI data came in cooler than expected yesterday, leading to a variety of price movements. The US dollar dropped, while stocks diverged, with big tech taking a hit and smaller companies seeing gains.

Grab your flat white and let's get into it! ☕️👇️

Markets

⛏️  Gold Jumps 2% After Soft US Inflation Raises Rate Cut Prospects
Gold prices surged by 2% in afternoon trading Thursday and stayed high Friday morning after the US inflation report came in lower than expected. Precious metals tend to become more appealing during periods of low interest rates, and the recent CPI data might accelerate the timeline for rate cuts.

🔻 S&P 500 retreats from record as investors sell high-flying Big Tech stocks
The S&P 500 pulled back from a record high as investors shifted away from top tech stocks like Nvidia and Meta. This move was triggered by the lowest CPI reading in over three years, pushing rates down and driving investment into small caps and housing-related shares.

🏦 JPMorgan Chase is set to report second-quarter earnings
JPMorgan Chase is set to report second-quarter earnings before the opening bell on Friday. Will the results reveal economic cracks? Despite passing multiple stress tests, there's a chance the bank's consumers could start feeling the strain from higher interest rates.

👴 How Much Money You Need For Retirement
Plans change, returns vary, and inflation is unpredictable. Spending patterns evolve with age, and unexpected expenses arise. Despite these uncertainties, planning for retirement, setting expectations, and making decisions about an unknowable future are essential.

Inflation Falls, What’s next?
Federal Reserve officials now have more good data to work with after the latest CPI came in comfortably below estimates. US inflation fell more than analysts predicted for June.

The consumer price index measured a 3% year-on-year growth, sliding below the 3.1% estimation. This could solidify the case for an earlier interest rate cut by the Federal Reserve.

Policymakers have been debating when to lower borrowing costs. Fed chief Jay Powell noted this week that more good data is needed before easing borrowing conditions, with rates currently at a 23-year high.

June’s optimistic report, which was also below May’s 3.3% increase, could speed up the timeline.

The CPI had a pronounced effect on markets. The US dollar eased against other currencies, with the euro-dollar moving toward $1.09. The dollar-yen fell near ¥160.50. Futures tied to major stock averages initially responded positively, showing modest increases and extending a record-setting run before tumbling lower.

Steal our best value stock ideas.

PayPal, Disney, and Nike all dropped 50-80% recently from all-time highs.

Are they undervalued? Can they turn around? What’s next? You don’t have time to track every stock, but should you be forced to miss all the best opportunities?

That’s why we scour hundreds of value stock ideas for you. Whenever we find something interesting, we send it straight to your inbox.

Subscribe free to Value Investor Daily with one click so you never miss out on our research again.

From our partners

BUSINESS

Tesla Shares Drop 8%

Tesla shares closed down about 8% on Thursday after Bloomberg reported a delay in unveiling its Robotaxi by two months.

Previously set for August 8, Tesla has now pushed the launch to October to allow more time for prototype development.

Tesla’s stock slump followed an 11-day rally sparked by a better-than-expected second-quarter deliveries report, which had erased the stock’s losses for the year. However, shares are now back in negative territory for 2024.

UBS downgraded Tesla’s rating to sell, citing an overvaluation of its growth initiatives. They forecast Tesla will reach 3.9 million vehicles by 2030, falling short of the 5 million target, with medium-term outlook from 2025 to 2027 being 11% below consensus.

"Our view is informed by tepid demand for EVs in the U.S. and competitive markets in Europe and China," UBS analysts noted. Despite this, they acknowledged Tesla’s significant growth opportunities beyond just vehicle sales.

Thanks for reading, if you enjoyed, tell your friends!