For this reason a man shall leave his father and mother and be joined to his wife, and the two shall become one flesh
-Matthew 19:5-6
Saw the beauty of a man leaving his family and joining to his wife. My sister got married (hence why no newsletter or money mentality last week), It was such a beautiful day. I am so excited for my sister and a little sad just because I cannot bug her in the exact same way. But I am so happy her husband has proven to be the kind of man who will protect her heart at all costs. I pray the Lord will continually anoint their union and be at the center of it. I pray that He will strengthen and keep them through the ups and the downs in Jesus’ name.
I LOVE YOU, SIS!! 💖
The wedding was so beautiful that it almost convinced me that spending an excessive (which my sister did not do, she too practical for that lol) amount of money on a wedding could be worth it. But then I read this article and this article and I came right back to reality. Weddings are too expensive today or maybe I am just too broke.
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
📈Markets
We love these markets. Everything flying higher is exactly what we wanted. The scary thing is it feels very bubblicious. But we might as well, enjoy the bubble as it keeps growing.
Fun Fact: Only 5 companies have driven the returns for the Markets. You can guess those companies: Apple (+36%), Microsoft (+37%), Google (+39%), Amazon (+44%), and Nvidia (+159%). You could also add Tesla (+66%), Meta (+120%), and Netflix (+109%).
This is actually very normal for a few companies to drive all returns
In the 70s, it was the Nifty Fifty Stocks
In the 90s, the Four Horsemen - Microsoft, Oracle, Cisco, and Intel
So Ignore everyone who says, this is abnormal. They either know nothing about history or are actively trying to sell you something and are evil
Either way, they should be ignored.
This newsletter is 1605 words, an 8 min read
Tale of the Tape
Economy
In an unexpected but positive turn of events. The Labor Market had a major hiring surge in May.
🔢By The Numbers: Economists expected the economy to add only 190,000 jobs.
According to the Labor Department, the economy added 339,000 jobs in May.
Unemployment rose to 3.7% from 3.4%
But this shows that more people are joining the labor market and the labor participation rate rose 62% from 60%.
About 369,000 people gave up on self-employment and are seeking traditional employment
The quits rate dropped from 3% to 2.4% as more people feel the pressures of life
Layoffs continue to increase from 1.4 million to 1.6 million and have been on a steady increase since January.
🧐What Does It All Mean?: To every question, you may have about the economy. The answer is YES.
Is a recession coming? YES
Are we finally seeing the economy expand again? YES
Is the Labor Market slowing? YES
Is the Labor Market contracting? YES
Are consumers spending? YES
Are consumers pulling back on expenses? YES
Takeaway: The economy right now can be whatever you want it to be. This is why paying attention to the monthly data and economic trends is generally useless for most of us. It is entertaining but useless. Your personal finances are much more important than these data points. As the old saying goes, everything might be fine in the economy but if you lose your job you are in a Depression.
Nope, it is not you. Life has gotten more expensive than ever before. Rent has heavily outpaced the growth of income. Putting a major squeeze on all our finances. So if you cannot afford to live by yourself, that is not a flaw of the US capitalistic system. It is by design.
🔍Details: According to Moody's Analytics, the median renter in the US has to spend at least 30% of their monthly income on rent in the first quarter of 2023.
Various cities cost much more than the 30%
New York: 54%, Average rent: $4334/month
Miami - 43%, Average rent: $2141/month (low-income area)
Boston - 33%, Average rent: $2948/month (high-income area)
Los Angeles - 35%, Average rent: $2456/month
Atlanta - 24%, Average rent: $1586/month (Median Salary is $54k)
San Francisco - 30%, Average rent: $3224/month
The typical advice is you want all your necessary expenses to cost no more than 50% of your take-home pay.
With rent being so high, it is incredibly difficult to do this.
😭It Gets Worse: Even with that being said. It is currently still cheaper to rent than to buy in all metro areas in the US. This is according to a report from Redfin.
Takeaway: It just SUCKS for everyone right now. Partly because we all want to be closer to the cities because that is where the best opportunities are. Wages are not increasing as fast as we would like but companies still love their profit. Eventually, something has to break because if no one has discretionary income to spend on company products, their profits disappear. So eventually someone gotta start paying out some dollars to the people. In the meantime, Imma keep telling y'all to have roommates and SAVE THAT BREAD!!
Check out the Moody's Map to see how your city compares.
Target announced last week that consumer demand has slowed rapidly. Due to this, they expect lower sales and profits for the rest of the year. They also plan to take on losses as they put a lot of merchandise on sale to get rid of inventory.
Not Alone: Costco, Macy's and Dollar General also stated similar trends on earnings reports. Stating Americans are pulling back on spending on everything. Choosing to go with only the necessities.
Important?: The increase in unemployment shows that people have finally run out of their excess savings. They are returning to work but also they are cutting back on expenses. This is not a great sign for the economy. This points to a big potential for economic growth to reverse. Remember consumer spending makes up 2/3 of GDP.
One man's expense is another man's income. If that breaks down, everything breaks down.
Stats of the Week
The parent company to my mom's favorite means of sending spam messages (if you are an immigrant, you know what I'm talking about), Facebook was fined $1.3 billion by EU regulators.
Why?: The same reason we all hate Facebook. Its use and storage of the personal data of European Union citizens on US servers. It is the highest fine ever levied since GDPR rules were put in place.
With the cost of everything going higher and higher, more people are choosing to tough it out rather than take the medical treatment they need. This is according to a survey by the Federal Reserve’s Economic of Well-Being. The US is notoriously an expensive place to get ill. That is not changing anytime soon.
Looking Ahead
Apple might reveal a new VR headset today at its Worldwide Developer’s Conference. I am more skeptical than most people.
On Wednesday, we get details on consumer credit for April. This can clarify the picture of consumer spending. In March, credit card balances increased by 17%. Consumer borrowings increased by $26 Billion. It is expected that borrowings will decline by $20 Billion in April as interest rate increases have hit consumers’ bottom line. Take everything from this report with a grain of salt as this is a lagging indicator.
Sports I Love
FA Cup Final
As expected and unfortunately for Man U, Man City continued its march to world domination on Saturday. They won 2-1, with Man U not really having a chance to win the game. All that is left is Champions League Final for Pep to claim the elusive treble with Man City.
For the first time in over 40 years, the NBA will crown five different champions over a five-season span. NBA unlike every other sports league has the fewest number of champions because the game is heavily single-player driven. A superstar player can take a trash team to a championship.
Larry Bird, Magic Johnson, and Kareem Abdul-Jabbar combined for eight titles in the 1980s.
Michael Jordan won six in the 1990s.
Kobe Bryant, Shaquille O'Neal, and Tim Duncan combined for eight in the 2000s.
LeBron James, Dwyane Wade, Steph Curry, and Kevin Durant combined for six in the 2010s.
Here's a quick walk down memory lane of all the teams that have won championships in the last 40 years. Warning it is very repetitive.
1954-58: Lakers, Syracuse Nationals (now Philadelphia 76ers), Philadelphia Warriors, Boston Celtics, St. Louis Hawks
1971-75: Milwaukee Bucks, Los Angeles Lakers, New York Knicks, Celtics, Golden State Warriors
1975-79: Warriors, Celtics, Portland Trail Blazers, Washington Bullets (Wizards), Seattle SuperSonics (Oklahoma City Thunder)
1976-80: Celtics, Trail Blazers, Bullets, SuperSonics, Lakers
1977-81: Trail Blazers, Bullets, SuperSonics, Lakers, Celtics
2019-23: Toronto Raptors, Lakers, Bucks, Warriors, Nuggets/Heat
WHO YOU GOT?!
I believe the Nuggets walk away with their first-ever Championship.
Extras
Amazon might begin offering cell phone plans with Prime. It could cost anywhere from $10 to Free. It is another way for Amazon to be your one-stop shop for all things. Right now it is all rumors. The likelihood of anything actually happening is very low
Orcas are working together to sink boats in the Iberian coast after a female Orcas had a "moment of agony". Whales like human are very social creatures. So one got hurt and now they are out for revenge!
No matter how much we try to run from it or hide from it. Just like smoking, social media is simply harmful. Especially for kids. Read the article in the link above and I think you will reach the same conclusion as I have. My kids ain't using this thing until they can make that decision on their own. The supposed connection benefit are far outweighed by the mental and emotional costs