“You cannot be happier than happy.”
-Richard Curtis
Welcome back to the Rambling Mind Newsletter. This is your Market Update.
📈Markets📉
February looked like 2022
However, March has started off rather well.
Hopefully, March continues marching in the right direction ⬆👆🏾.
This newsletter is 911 words and a 5 min read. Enjoy!
Tale of the Tape
Economy
It is not looking good for Biden's plan to cancel $40+ Billion in Student Loans. With a 6-3 conservative Supreme Court, the Biden Administration faces a tough challenge to get this approved.
💬What they said?: Chief Justice John Roberts and other conservative justices invoked the "major questions doctrine," which holds that the executive branch needs explicit congressional approval to act on the biggest issues.
According to Axios, the court has used this to shoot down other executive orders such as environmental regulations and COVID vaccine mandates.
🔢By the Numbers: 26 million people have applied for loan forgiveness.
16 million were fully approved.
Takeaway: Make the assumption that your loans are not getting forgiven. Although, I would not advise you to immediately start paying the loans off. Instead, I would advise you to start setting aside money every paycheck in a separate account, so you know what life will be like when the loan payment is kicked back into action.
My takeaway: From an economic perspective, when these loans kick back in, it will be a major drag on the economy. Billions of dollars that would have been spent on goods and services in the economy will now go toward debt repayment. This will help the Fed fight inflation. However, this is not great if we are trying to avoid a recession.
Stats of the Week
The number of people in the US that live with diabetes and need insulin regularly to survive.
On Wednesday Eli Lilly, one of the largest producers and sellers of insulin, announced they are cutting monthly costs of insulin by 70%.
Eli Lilly said it will cost no more than $35/month out of pocket for those who need the drug.
Before you start clapping for Eli Lilly, they didn't do this from the kindness of their heart. They have raised the price of insulin by over 1000% in the last 30 years.
Also, they faced major pressure from the government. One of the parts of the Inflation Reduction Act was to put a cap on the cost of insulin for those on Medicare at $35.
Biden had also threatened to expand the cap to everyone else.
After two months of decline, mortgage rates have begun rising once again.
After hitting a low of 6% in January, rates have been rising rapidly.
As of the writing of this post, the average interest rate hit 7.08%.
Inflation is not declining, which is causing the bond market yields (what mortgage rates are based on) to rise as investors expect the Fed to continue raising rates and keep rates higher for longer.
However, there is a bit of good news, home prices are falling as fewer people are bidding on houses.
According to Axios, a typical home sold for $350,246 during the four weeks ending Feb. 26, or 0.6% lower than in February 2022.
It isn't much but it is something
Looking Ahead
The last few weeks have not been very interesting from a business and economic news perspective. However, that will change this week. Econ and Finance Nerds can celebrate once again because we get various job reports for the month of February.
On Wednesday, we get the Job Openings and Labor Turnover Survey. This will give us an idea of how tight the job market remains.
Also on Wednesday, ADP releases its Nation Employment Report. Giving us an insight into how employment looks for private companies.
Friday closes the week with the Nonfarm Payroll report. The most comprehensive labor market report from the Department of Labor.
If the labor market remains tight, expect the markets to react negatively. A tight labor market gives the Fed ammunition to continue raising interest rates, which is not necessarily the best thing for the Stock Market. The expectation is for the unemployment rate to remain unchanged at 3.4% and for only 200,000 jobs to be added to the economy.
Sports I Love
😲What is this!!
Just when my hope in Man U was restored. They go and do this!! I couldn't even bring myself to watch this atrocity.
Extras
On Wednesday TikTok announced it would be placing a 60 min daily limit timer for users under 18. TikTok says this is to help with child safety on the platform.
How it works?: Every 60 min of continuous scrolling, a pop-up prompt will appear for the user to input a code to continue watching.
Why?: TikTok faces much scrutiny over being a Chinese-owned social platform and many government officials want to ban it. TikTok does not want to be labeled a teen mental health crisis app like Instagram. So, it's getting ahead of those concerns.
Takeaway: This is like me using my phone as my alarm. Then playing on my phone all night but hitting snooze 10 times when the alarm goes off. But like me and oversleeping, the problem is not hitting snooze. The problem is taking my phone to bed and not going to sleep on time. Social media is the problem and will not be the solution to the problem.