Hot Stock Summer - Market Update June 17-22, 2024
Kendrick Lamar and the Stock Market are the winners of summer
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Welcome back to the Rambling Mind Newsletter. This is your Market Update.
Summary of Topics:
Company News
Nvidia Take The Crown (for a bit)
Stats of the Week
$160 Billion in uncollected taxes
$155 Million made by Inside Out 2
260 Million Americans melted last week
$419,300 reasons you cannot buy a house
4.8 Hours spent on social media
Looking Ahead
PCE Inflation Report
End of June - Halfway through the year
Sports I Love
Am I Old or What?
Extras
0.15% per transaction
Markets
Stock Marker is on 🔥🔥. The weather is scorching my bones. However, we the consumers are putting our cards on ice. Retail spending in May showed spending continues to slow down as consumers begin to push back on higher prices. Consumer spending is a massive part of the economy, when we choose not to spend that sends a ripple effect into every part of the economy. It is something to keep an eye on as we move through this year.
As a frugal non-spender myself, I AM HERE FOR IT!! Thank you all for choosing not to spend so when I HAVE TO spend it doesn't cost me so much and I have some negotiation power. I do not care if it causes a recession (okay maybe I care if I lost my job or something).
Tale of the Tape
Companies
Nvidia Takes The Crown
There is literally no stopping this company (for now). Apple muscled its way back to the top last week but only sat there for all of about a day. Then Microsoft took the reins back. All the while Nvidia was plotting in the background.
🔎Details: On Tuesday, Nvidia added more than $100 billion to its market cap (about the size of a Dell, or a McDonald's) to become the most valuable company in the world.
This is crazy! You have to realize it was just last year that Nvidia became a trillion-dollar company. It has taken much less time for it to become worth almost $3.5 trillion.
The amazingness of compounding is on display.
👀What to Watch: Can Nvidia use its dominant position to switch from a hardware manufacturer to a software provider? There are rumors that Nvidia is pressuring Amazon to allow the company to host its cloud service called DGX Cloud within Amazon Web Services. DGX would be a direct competitor to AWS. This shows Nvidia's desire to move out of the hardware category which can be very cyclical to a more consistent software category that can grow consistently.
It will be interesting to see how long Nvidia to use its lead in advanced chip design before Microsoft, Google, Amazon, Apple, and Facebook catch up and render their chips useless. It was not long ago that Intel was the kind of the chip world but slowly every company created their own versions and moved on from the company.
My Takeaway: Congratulations to all those who have held Nvidia for years or those who have been a part of the run up. I am jealous of you and also have no wish to be you right now. Torn between riding the wave or taking your winnings and sailing into the sunset.
But there is a third option. Take a bit out and move it into other safer-ish bets like an index fund and let your original investment continue to ride. Regardless, whatever you decide you'll always have a regret of some kind. So do whatever gives you the least amount of regret.
Please CrowdStrike become my Nvidia in the future!!
Stats of the Week
This is the annual difference between the taxes collected by the IRS and the taxes owed. The IRS announced a plan to crack down on the use of shell companies to avoid taxes through something called basis shifting. Where people move assets between different partnerships or shell companies to establish a new cost basis which significantly reduces their taxes.
According to Deputy Treasury Secretary Wally Adeyemo, cracking down on this type of tax evasion will bring in over $50 Billion for the government over the next decade. However, the question remains will the IRS be able to implement this plan? It will depend on who your next president is. Trump and Republicans are all about defunding the IRS. Biden wants to provide additional funding.
Inside Out 2 reminds everyone what it is to feel again and made bank doing it. The movie made over $155 million in domestic box office sales. This is the second highest animation opening in the history of movies. Incredibles 2 made $295 million on its opening weekend.
This is the biggest movie opening weekend this year and the biggest since Barbie last year. This is also important to prove to the world that Pixar and Disney still have their touch in creating magic. However, it kinda sucks for the future of movie watching because it also proves that original movies are kinda dead. We are fully in the age of sequels, prequels, and whatever else kind of quel there is.
The number of people who felt the blaze of the sun last week. Almost 90% of the US experienced temperatures above 90 degrees at some point last week. Do not expect the week ahead to be any better. This is our lives now.
According to National Association of Realtors, the median house costs $419,300. This is a new record high. The main driver of continued pressure on house prices is supply. The US currently has about 2 million less houses than needed.
Unfortunately things don't look to be getting any better. Building permits continue to decline which means, less homes are being planned to be built.
My Take: I wouldn't advice anyone to buy a house right now unless you live on Austin where they are building houses by the boatload. If you are going to buy a house, test run what it would be like meaning.
Open a savings account, and every month transfer the difference between what you pay today for your utilities and rent and the amount you would be paying for mortgage, taxes, insurance, maintenance, and higher utilities cost.
Teenagers spend an average of almost 5 hours per day scrolling, watching, posting, liking, DMing, Snapping, and all the other action verbs to describe the time spent on social media apps.
The US Surgeon General wants to require every social media company to put a warning label that would pop up every time children and teenagers open the app. Warning about the dangers and effects social media has on their mental health.
Looking Ahead
Gonna be a pretty quiet week.
Biggest news will be the release of the Personal Consumption Expenditure (PCE) inflation report. This is the Fed's preferred inflation report. The PCE was 0.3% month over Month in April and 2.7% year over year. If the trend continues it will be great news.
In other news, JUNE IS ENDING!!
How are we already in JULY?! Good news is that July is the best month in the year because yours truly slid of his mother’s womb in July.
Sports I Love
Copa America and Euro 2024
Both are in full swing and for some reason I just cannot find it in myself to care. If there is a game on in front of me, I will watch but otherwise I do not seek out ways to watch the games.
Is this an age thing or just a specific thing to these two tournaments?
NBA Finals
Boston won the NBA Finals as predicted and absolutely no one cares. I couldn’t even be bothered to add a picture.
Extras
I was today years old when I learned that Apple is the most popular form of Mobile Wallet payment. Apple charges credit card and banks 0.15% for each transaction. Which might seem insignificant, until you realize that US citizens spend over $700 Billion every month.
Apple makes up about 6% of those transactions which is about $43 Billion.
Apple makes $63 Million a month by doing absolutely nothing!