Bet UK! Somebody needs to repair the Conservative Party moral compass – the Party have completely lost direction.
UK Election – “Place your bets here!”
“The sun is the most important thing in everybody’s life, whether you’re a plant, an animal, or a fish, and we take it for granted”.
Danny Boyle
Daniel Francis Boyle (born 20th October 1956) is an English director and producer. He is known for his work on films including Shallow Grave, Trainspotting and its sequel T2 Trainspotting, The Beach, 28 Days Later, Sunshine, Slumdog Millionaire, 127 Hours, Steve Jobs, and Yesterday.
Nvidia slips by 13% in three days after momentarily becoming most valuable company
The Dow Jones Industrial Average gained as investors rotated out of ‘hot’ chip stocks, including Nvidia.
Nvidia shares fell a little under 7% on Monday 24th June 2024, the chipmaker’s third down day in a row. The stock is down 13% from its peak last week.
Other stocks that also experienced drops on Monday were some of the biggest gainers of late due to their exposure to the artificial intelligence (AI) feeding frenzy.
Investors may be taking profits and locking in gains in Nvidia and similar momentum stocks after a number of extremely busy trading months.
Bitcoin tumbles back to $60,000
The price of the cryptocurrency Bitcoin was down more than 6% at close to $60,000 on Monday 24th June 2024 – its lowest level in more than a month and about 17% from its March 2024 record.
In the past week, it’s fallen more than 10%.
Crypto investment products reportedly notched a second consecutive week of outflows, according to analysts. Last week, they saw their lowest trading volumes globally since the U.S. Bitcoin ETFs launched in January 2024.
Bitcoin one day chart 24th June 2024 at around $60,000 (CoinMarketCap)
“The secret of getting ahead is getting started” – Mark Twain
Mark Twain 1835 – 1910
Samuel Langhorne Clemens (1835 – 1910) known by the pen name Mark Twain, was an American writer, humourist, and essayist.
Many self-made successful businesspeople echo the same advice for success – Just get started!
Have you heard of the ‘Sahm Rule’ recession indicator?
The ‘Sahm Rule’ serves as a heuristic indicator employed by the Federal Reserve to ascertain the onset of a recession in the economy.
The Sahm Rule is a real-time evaluation tool based on monthly unemployment data from the Bureau of Labor Statistics (BLS). Named after economist Claudia Sahm, it forecasts the onset of a recession when the three-month moving average of the national unemployment rate (U3) increases by 0.50% or more compared to its lowest point in the preceding 12 months.
This simple yet effective indicator helps policymakers monitor economic cycles and respond accordingly
Time to cut according to the ‘Sahm Rule’
Sahm has reportedly stated that the Fed is taking a significant risk by not implementing gradual rate cuts now. Last week, Federal Reserve officials significantly reduced their forecasts for rate cuts this year, shifting from three anticipated reductions noted in the March 2024 meeting to just one.
According to the creator of a well-established rule for predicting recessions, the Federal Reserve is risking an economic contraction by not lowering interest rates immediately.
Nvidia briefly surpassed the individual stock market values of Germany, France and the UK
The little-known company, Nvidia, now stands alongside Apple and Microsoft in market cap valuation thanks to AI.
In just a little over a year it has all but tripled its market valuation and become a go to investment on Wall Street and around the world.
Nvidia’s market capitalization has recently individually surpassed the total value of the German, French, and U.K. stock markets.
With a market cap exceeding $3.4 trillion, Nvidia now stands above these significant European stock markets in valuation.
“The best way to predict the future is to create it.” Abraham Lincoln
Abraham Lincoln, 1809 – 1865 was an American lawyer, politician, and statesman who served as the 16th president of the United States from 1861 until his assassination in 1865.
S&P 500 breaches 5500 but closes slightly lower as Nvidia pulls back from its meteoric rise
The S&P 500 retreated on Thursday 20th June 2024, having momentarily surpassed the 5500 for the first time ever, as Nvidia, a favourite stock with Wall Street investors, relinquished its earlier gains.
The S&P 500 index fell 0.25% to end at 5473. Earlier in the session, the S&P 500 gained around 0.34% to hit a new all-time high.
S&P 500 one day chart 20th June 2024
The Nasdaq Composite dropped 0.79% to finish at 17721. The Dow Jones Industrial Average (Dow) jumped around 299 points, to close at 39134.
Nvidia lost ground and handed the Market Cap crown back to Microsoft after briefly enjoying the accolade for just 2 days. At one point, Nvidia trimmed around $240 billion off its Market Cap as investors took profits.
Will Nvidia regain the crown in the coming weeks? Probably.
Nvidia one day chart 20th June 2024
Anthropic releases its most powerful AI Chatbot
Anthropic, a rival to OpenAI, unveiled Claude 3.5 Sonnet on Thursday, touting it as their most advanced AI model to date.
Claude has joined the ranks of widely used chatbots such as OpenAI’s ChatGPT and Google’s Gemini. Founded by former OpenAI research leaders, Anthropic has secured backing from major tech entities like Google, Salesforce, and Amazon. Over the past year, the company has completed numerous funding rounds, reportedly amassing approximately $7.3 billion.
The announcement comes after Anthropic introduced its Claude 3 series of models in March, followed by OpenAI’s GPT-4o in May 2024. Anthropic has stated that Claude 3.5 Sonnet, the initial model from the new Claude 3.5 series, surpasses the speed of its predecessor, Claude 3 Opus.
“It shows marked improvement in grasping nuance, humour, and complex instructions, and is exceptional at writing high-quality content with a natural, relatable tone,” the company said in a blog post.
It can also write, edit and execute code in a real time workspace open for the user to engage.
“I’ve been saving this for a rainy day, Mr. Sunak – but I think you might need it now.”
Bank of England offers no election help to Rishi Sunak as the UK interest rate is held at 5.25%. Not that they should.
But the UK inflation is on target now at 2% so that’s some consolation. The PM claimed credit as the inflation target was met – happily informing us that his plan was working. But isn’t it the job of the Bank of England to maintain inflation at 2%?
Not that they have done a very good job of that either.
No change as Bank of England holds interest rate at 5.25%
UK interest rates have been left unchanged at 5.25% by the Bank of England (BoE)
The Bank has maintained the interest rates at 5.25% for the seventh consecutive time to combat inflation, resulting in increased mortgage repayments and higher savings rates.
The interest rates, at their peak for the past 16 years, have been sustained at 5.25%. Currently, there are indications of a shift in stance, with a growing consensus for a potential reduction in August 2024.
UK interest rate and inflation chart June 2021 – June 2024
The unloved stock market rally: exploring why many investors are hesitant to embrace this record-breaking run
The unloved rally: A paradox
The S&P 500 and Nasdaq have been reaching all-time highs with remarkable frequency, notching nearly thirty record days in 2024, including four in the past week. Despite this stellar performance, a considerable number of investors remain hesitant. Let’s explore the reasons behind this paradox.
Lingering recession fears
The recollection of the 2022 bear market continues to trouble investors. The swift escalation of monetary policy by the Federal Reserve at that time generated widespread uncertainty and apprehension. This has led many investors to maintain a cautious stance, concerned that the past may repeat, even amidst a surging market. Maybe less of us expected the AI driven stock buying frenzy to scale such highs so quickly?
Scepticism
Investors are inherently sceptical. Amidst a relentless market rally, uncertainty emerges. Can this be sustained? Is a correction looming? This scepticism may hinder investors from wholeheartedly participating in a bull market, despite what the statistics indicate.
Emotional baggage
Investment isn’t solely a game of numbers; it’s equally a matter of emotions (although it shouldn’t be). Investors bearing the scars of past losses may find their emotional baggage weighing heavily on their decisions. The fear of experiencing another market crash can cloud rational judgement, leading them to forgo opportunities for potential gains.
The ‘easy money’
The stock market’s significant rise from the lows of 2022 has convinced some that the phase of ‘easy money’ is over. Investors who did not capitalize on the early stages of the rally might think they have missed out, causing hesitation to engage fully. That’s where I am right now – but waiting for a ‘pullback’.
Navigating the dilemma
For individuals caught between caution and the fear of missing out (FOMO), the following strategies could be considered.
Diversification
Distribute your investments among various asset classes. Diversification serves to reduce risk and acts as a safeguard against the unpredictability of the market.
Long-term perspective
Keep in mind that investing is akin to a marathon, not a sprint. It’s important to concentrate on long-term objectives instead of short-term market movements.
Education
Inform yourself about market cycles, historical patterns, and the effects of monetary policy. This should empower more informed decision-making.
Professional advice
Consult a financial advisor who can guide you based on your individual circumstances and risk tolerance.
Conclusion
The current stock market rally, though not widely embraced, offers both opportunities and challenges. Investors are tasked with finding the right balance between exercising caution and capitalizing on potential growth. As the market climbs, it’s essential to be aware of our biases and emotions. Only then can we approach the rally with a more informed viewpoint.
Disclaimer: This article provides general insights and should not be considered personalised financial advice. Always consult a professional before making investment decisions.
Remember: Always do your own diligent and careful research.
RESEARCH! RESEARCH! RESEARCH!
UK hits 2% Bank of England’s inflation target for the first time since 2021
Inflation has reached the Bank of England’s target for the first time in nearly three years, having soared to 11.1% in October 2022, the highest in over four decades – driven by a spike in energy and food prices following the pandemic and Russia’s invasion of Ukraine.
In the year leading up to May 2024, prices increased by 2%, a decrease from the 2.3% rise in the previous month, according to official statistics.
The economy remains a central issue in the lead-up to the general election on July 4th, with all major parties discussing strategies to manage the cost of living.
This discussion precedes the Bank of England’s upcoming decision on UK interest rates this due on 20th June 2024.
The bank is anticipated to maintain the rate at 5.25% – a peak not seen in 16 years – for the seventh consecutive meeting, with the market not expecting a reduction until August 2024.
The decline in May’s inflation rate was attributed to slower price increases for food and soft drinks, recreation and culture, and furniture and household items.
Fuel pump prices remain high.
The inflation target has been achieved – it must be time for a reduction in interest rates.
Nvidia passes Microsoft in market cap – should investors be concerned about the meteoric rise?
Nvidia, traditionally recognised within the gaming community for its graphics chips, has become the world’s most valuable publicly traded company.
On Tuesday 18th June 2024, Nvidia’s shares rose by 3.6%, increasing its market cap to $3.34 trillion and overtaking Microsoft, now valued at $3.32 trillion. Earlier in the month, Nvidia’s valuation reached $3 trillion for the first time, surpassing Apple.
Nvidia $3.34 trillion market cap
So far this year, Nvidia’s shares have surged over 170% and saw further gains after announcing first-quarter earnings in May 2024. Since the close of 2022, the stock has increased more than ninefold, paralleling the rise of generative artificial intelligence.
Apple’s shares dropped by 1.1% on Tuesday, resulting in a market value of $3.29 trillion for the tech giant.
Nvidia commands roughly 80% of the market share for AI chips in data centres, a sector that has expanded rapidly as companies like OpenAI, Microsoft, Alphabet, Amazon, and Meta have competed to acquire the necessary processors for constructing AI models and managing growing workloads.
In the latest quarter, Nvidia’s data centre business saw a 427% increase in revenue from the previous year, reaching $22.6 billion and comprising approximately 86% of the company’s total sales.
Established in 1991, Nvidia initially focused on hardware, selling gaming chips for running 3D games. The company has also ventured into cryptocurrency mining chips and cloud gaming services.
However, in the last two years, Nvidia’s stock has soared as investors recognised its pivotal role in the AI boom, a trend that continues to accelerate. This surge has increased the net worth of co-founder and CEO Jensen Huang to an estimated $117 billion, ranking him as the 11th richest individual globally, according to Forbes.
But is the rise too fast and is it time for a share price valuation adjustment in its meteoric rise, to bring it back down to Earth?
Nvidia share price one year chart 18th June 2024
Financial advisors are reportedly cautious about Bitcoin ETFs and are adopting them slowly, according to BlackRock
Bitcoin exchange-traded funds (ETFs) debuted in January 2024, yet their adoption by financial advisors has reportedly been sluggish.
Advisors’ hesitations stem from Bitcoin’s price volatility and its relatively brief history. Bitcoin ETFs serve as a conduit between cryptocurrency and conventional finance. According to a BlackRock spokesperson – financial advisors are cautiously, but progressively, embracing the long-anticipated Bitcoin ETFs since their launch.
Currently, it is estimated that approximately 80% of Bitcoin ETF purchases are being made by self-directed investors who decide their own allocation, frequently via an online brokerage account.
Bitcoin one year chart snapshot 18th June 2024 (am)
“Vote Now! Pay Later. Our Deal. Labour”
UK Election – The Labour Party slogan is ‘CHANGE’ – but ‘CHANGE‘ to what?
I do not support any party. I have no idea what the Labour party stands for anymore. And as for the Conservatives – not a clue either – too many deceits and for far too long!
We have choice – but no choice!
Nvidia to get 20%+ weighting as ETF fund reportedly plans to acquire $10 billion of shares
Nvidia’s swift ascent is poised to prompt a major technology exchange-traded fund to acquire more than $10 billion in shares of the semiconductor maker, consequently reducing its shareholding in Apple.
The Technology Select Sector SPDR Fund (XLK), which will rebalance soon, is guided by an index that will adjust based on the market cap value at Friday’s close. According SPDR Americas Research, the recalibration will reportedly position Microsoft as the leading stock, followed by Nvidia, and then Apple.
Without caps, each of the three stocks would exceed a 20% weight in the index. However, the index’s diversification rules restrict the total weight that stocks constituting at least a 5% share of the fund can hold.
Consequently, it is anticipated that Microsoft and Nvidia will each approach a 21% weight, while Apple’s share is projected to drop to approximately 4.5%.
This news moved markets on 17th June 2024 and pushed the S&P 500 to a new all-time high. The Nasdaq100 index also relished the news reaching: 19902.75
Nvidia share price 17th June 2024 – one year chart
New all-time highs for S&P 500 & Nasdaq
The S&P 500 climbed on Monday 17th June 2024, closing at a new record high aided by the substantial weighted rebalancing of an ETF.
The index concluded at 5473, while the Nasdaq Composite soared to 17857. The Dow Jones Industrial Average gained 188.94 points, finishing at 38778.
These gains occurred after XLK announced it was rebalancing its fund in favour of Nvidia. The major technology exchange-traded fund will get 20% weighting and billions in investor demand it was announced.
S&P 500 500 reaches another all-time high of 5473 on 17th June 2024
Mastercard reportedly to remove manual card number entry for online payments and replace it with a token system in Europe by 2030
Beginning in 2030, Mastercard will eliminate the need for Europeans to manually enter their card numbers during online checkout, regardless of the platform or device used.
The familiar 16-digit card number will be substituted with a randomly generated ‘token.’ This change will enable consumers to complete payments with a single click at the checkout page, authenticated by a thumbprint.
Mastercard reported that 100% tokenization across e-commerce sites will reduce fraud rates dramatically.
The way we pay for products and services online will feel very different in the coming years.
Bitcoin slips to around $66,000 level but holds at key support
Bitcoin’s price has experienced a dip, struggling to maintain above the $66,000 mark.
It started the week on a decline after a not-so-good weekend, with its volatility making it challenging to hold its price level. Despite this, Bitcoin recorded a minor gain on Monday 17th June 2024, in early trade, with its price on international exchanges standing at roughly $66,000.
The $66K level is now seen as ‘critical’ for Bitcoin’s future price movements
Bitcoin chart CoinMarketCap
“Time is a created thing. To say, ‘I don’t have time,’ is like saying, ‘I don’t want to.’” – Lao Tzu
Lao Tzu
Lao Tzu’s philosophy is foundational to Taoism and focuses on living in harmony. His teachings emphasize naturalness, simplicity, and spontaneity. He also introduced the concept of the Three Treasures: compassion, frugality, and humility, as virtues to cultivate for a harmonious life.
The birth date of Lao Tzu is not precisely known and is often debated among scholars. Traditional accounts commonly place his life around the 6th century BCE, making him a contemporary of Confucius.
It is noteworthy that the historical existence of Lao Tzu is debated by some contemporary scholars, who propose that he might be a mythical figure, or a designation applied to several contributors of the Tao Te Ching.
China’s latest May 2024 retail sales data came in above expectations
In May 2024, China’s retail sales exceeded forecasts, increasing by 3.7% from the previous year and surpassing the anticipated 3% rise.
Conversely, industrial output experienced a 5.6% growth on an annual basis, falling short of the projected 6% increment. Meanwhile, fixed asset investment saw a 4% increase from the previous May, narrowly missing the predicted 4.2% growth.
Microsoft will postpone the release of the AI Recall tool amid security worries
Microsoft will not include Recall, the artificial intelligence tool designed to track user activity, in the upcoming release of the Copilot+ PC.
Concerns have been raised by industry experts about the possibility of hackers creating tools to extract user information.
Microsoft has reportedly announced that Recall will transition from a widely accessible tool to a preview feature exclusive to the Windows Insiders Program.
Chinese auto sales overtake U.S. for the first time
For the first time, automotive companies in China surpassed their U.S. counterparts in car sales last year, driven by BYD and expansion in emerging markets, according to a data released Thursday 13th July 2024.
Chinese brands such as BYD now at the forefront, reportedly sold 13.4 million new vehicles last year. In comparison, American brands sold approximately 11.9 million units. Japanese brands remained at the top with 23.59 million sales.
China’s sales growth rate surpassed that of the U.S., with a 23% rise from the previous year compared to the U.S.’s 9% increase.
The consistent high pricing by legacy automakers has inadvertently steered consumers towards more affordable Chinese alternatives.
No surprise here then as manufacturers milked profits from legacy lineups!
Tariffs have now been introduced on China to curb their automakers runaway success.
“Haven’t you forgotten something?”
A soggy start to the UK election will likely have a ‘stormy’ ending for the Conservative Party.