⛏️ Sweden discovers rare earths

Good Morning!

Thursday saw Wall Street stocks rise once again, with investors feeling relieved by the cooling of inflation in the US. But while some companies are striking gold (literally - Swedish mining company LKAB just announced a whopping discovery of rare earth oxides), others are facing challenges, particularly in light of China's uncertain economic growth.

Markets

US Stocks End Higher On Latest Sign Of Cooling Inflation (2 minute read)Wall Street stocks rose again on Thursday following the release of US data showing a moderation in inflation. The markets are looking ahead to earnings reports from large banks, which are expected to be strong. The Consumer Price Index (CPI) last month rose by 6.5 percent from a year ago, according to data released on Thursday. This is the smallest increase since October 2021 and marks the sixth straight month of easing inflation.

A Soft Landing Won't Mean the Economy Is Safe (4 minute read)It looks like the Federal Reserve's prediction of a "soft landing" for inflation might just come true. Inflation is on the decline and the job market is still strong with low unemployment and decent wage growth. This is great news, but let's not break out the champagne just yet. While a "soft landing" is definitely better than a "hard landing", it's important to keep in mind that not everyone is feeling the benefits equally. Some households, especially those with lower incomes, are still struggling to make ends meet despite the positive economic numbers. 

Why the stock market isn’t impressed with the first monthly decline in consumer prices in more than 2 years (5 minute read)It seems that inflation data may not be having the impact on stocks that it once did. Despite receiving positive inflation news, stocks only had a modest increase on Thursday. This is surprising, as inflation has been a major concern for markets in recent months. The reason for this lack of reaction may be that investors were hoping for even more significant drops in inflation, and were disappointed when this didn't happen. Additionally, some investors were hoping that the decrease in inflation would lead the Federal Reserve to reconsider their plans for interest rate hikes.

Sweden's LKAB finds Europe's biggest deposit of rare earth metals (3 minute read)Swedish mining company LKAB announced on Thursday that it had discovered over 1 million tons of rare earth oxides in Kiruna, northern Sweden. This is the largest known deposit of rare earth minerals in Europe. These minerals are crucial in the production of electric vehicles, wind turbines, portable electronics, microphones and speakers. Europe currently does not have any rare earth mining industries, making it dependent on imports, but with the increasing demand for electric vehicles and renewable energy, this discovery is a great news for the region.

Investing

China is looking less desirable to investors (2 minute read)Wall Street investors are becoming increasingly cautious about China's economic growth due to the rising number of challenges. Investment firms such as Goldman Sachs and JPMorgan have already started to question the long-term future of Chinese returns. The reason for this shift in sentiment is due to the fast deterioration of demographics and the shift of manufacturing away from China to other countries. Additionally, China's competitiveness in technology may be affected by the U.S. export controls on semiconductors.

Lower Stock Prices are the Fed’s Goal (5 minute read)The Federal Reserve (Fed) wants to lower stock prices to control inflation. While they may not state it directly, the Fed believes that stock prices have a direct impact on the economy and inflation. Therefore, as a way to control inflation, the Fed may use stock market lever, specifically lower stock prices, to improve the effectiveness of monetary policy. The minutes of the December 15, 2022 FOMC meeting give us some useful pointers.

Can Stocks Picked by Artificial Intelligence Beat the Market? 3 Stocks to Watch (6 minute read)Navigating the stock market can be a tricky task, especially during tough times like we're experiencing now. Artificial intelligence and big data might just be the secret weapon small investors need to come out on top. While these technologies are not new to the stock market, they have traditionally been reserved for large financial institutions. But one company, Danelfin, is looking to change that. They have created an AI-driven analytics platform that will give everyday investors access to the same tools that big institutions use. 

Money

Have you fallen prey to these common misunderstandings in personal finance? (15 minute read)As a financial advisor, you start to see smart people have the same confusion and misunderstandings about personal finances as the rest of us. Some of these misunderstandings are kinda benign. Some can really damage your finances. Trust me when I say that you are far from alone if you have misunderstood these things yourself. They’re important to understand.

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