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06-22-2024
Gold Peaks, AI Soars, and Market Moves to Watch! Key Economic Shifts and Investment Opportunities
U.S. Job Market Slows, Housing Struggles: Unemployment claims dipped slightly last week, but the number of people on benefits reached the highest since January, signaling a cooling job market. The Federal Reserve's high-interest rates are also impacting the housing market, with new home starts and permits hitting their lowest levels in nearly four years. Despite a slight drop in mortgage rates, homebuilding remains weak. These signs suggest the Fed might rethink its rate cut plans as the economy slows. For Cascade Shares, this shift present new investment opportunities as market conditions evolve.(CNBC)
Gold Peaks on Fed Bets: Gold prices surged over 1% to a two-week high of $2,351.55 per ounce on Thursday, as investors anticipate potential interest rate cuts from the Federal Reserve. Recent U.S. economic data, including a slowdown in single-family housing starts and stable jobless claims, supports expectations of a Fed easing program. This has increased long positions in the gold market. Safe-haven demand and central bank buying continue to bolster gold. At Cascade Shares we leverage this rise in gold prices to enhance its portfolio value. Check the current gold price.
S&P 500 Dips After Record High: The S&P 500 briefly hit 5,500 for the first time but ended Thursday down 0.35%. The Nasdaq Composite dropped 0.8%, while the Dow Jones rose 100 points. Nvidia fell 2%, despite its strong year-to-date performance driven by AI hype. These fluctuations in the market offer Cascade Shares strategic entry points for diversified investments.(CNBC)
Switzerland Leads in Rate Cuts: Switzerland has cut interest rates again, leading the pack among major developed economies. The Swiss National Bank reduced its rate to 1.25%, despite recent economic growth and a slight inflation rise. Sweden's Riksbank lowered rates to 3.75% and is expected to maintain them in June. Canada cut rates to 4.75%, the first G7 country to do so this year. The European Central Bank and Bank of England have also adjusted rates, but the U.S. Federal Reserve has yet to start cutting, as the U.S. economy remains robust. Cascade Shares will benefit from these international rate cuts by exploring global investment opportunities. (Reuters)
UK Inflation Hits Target: UK inflation dropped to 2% in May, hitting the Bank of England's target for the first time since 2021. Despite this, strong underlying price pressures mean a pre-election interest rate cut is unlikely. Services inflation remains high at 5.7%, above economists' predictions. The decrease in inflation, driven by lower food prices and energy bills, comes too late to benefit Prime Minister Rishi Sunak ahead of the July elections. Economists expect the BoE to start cutting rates around August, depending on domestic price pressures. For Cascade Shares, this indicate a stabilizing global market, ripe for strategic investments. (Reuters)
Nvidia's AI-Powered Ascent: Nvidia has soared to the top as the world's most valuable company, with a market value of $3.34 trillion. Driven by high demand for its AI-optimized chips, the company's shares have increased over 170% this year. Nvidia's rapid rise took just 96 days to go from $2 trillion to $3 trillion. This surge has pushed it past tech giants Microsoft and Apple. And we capitalize on the tech boom by incorporating high-growth stocks like Nvidia into its investment strategy. (CNBC)
Quote of the week
The gold price surged on Thursday as weakening US GDP data prompted expectations of a Federal Reserve interest rate cut in the coming year. Spot gold climbed 0.7% to $2,042.79 per ounce, while US gold futures dipped 0.3% to $2,054.50. The retreat in US Treasury yields, driven by a softer-than-expected GDP growth revision and a slight uptick in weekly jobless claims, fueled a demand for the precious metal.
Let’s take a break. U.S. Federal Reserve officials have announced a pause in interest rate hikes but Fed Chair Jerome Powell said more rate increases are likely ahead as the inflation fight "has a long way to go." (CNBC)
Price pressures still strong. European Central Bank raised interest rates by 25 basis points to 3.5%, with ECB Chief Christine Lagarde signaling more rate hikes ahead: "There is no clear evidence that underlying inflation has peaked." (AP)
Stubborn inflation. U.K. inflation came in hotter than expected in May, as consumer prices increased by an annual 8.7%, unchanged from the previous month. (Reuters)
Persistent U.K inflation triggers mortgage crisis for millions. Rising mortgage payments are putting financial pressure on millions of borrowers in Britain, posing a threat to household spending and the overall economy. (Bloomberg)
Germany loses momentum. Germany's economic activity experienced a notable loss of momentum in June, primarily attributed to a slowdown in the services sector and prolonged weakness in the country's factories. (Bloomberg)
Recession is likely? The French economy is expected to have experienced a significant slump in the three months through June, with purchasing manager indexes (an index of the prevailing direction of economic trends in the manufacturing and service sectors) suggesting a contraction of 0.5% compared to the previous quarter. (Bloomberg)
Euro area's economic momentum stalls. The economic momentum in the euro area nearly ground to a halt in June, ending the revival the bloc had shown since its winter downturn. (Bloomberg)
Image of the week
Greedflation. "It’s firmly in the economic lexicon now. And like Bidenflation, another portmanteau word, it’s a loaded term." (Bloomberg Opinion)
A catastrophic implosion. Titan, a deep-sea submersible, carrying five individuals on a mission to the century-old wreck of the Titanic, has been discovered in fragments following a devastating implosion. This tragic event resulted in the loss of all lives aboard the vessel, bringing an end to a multinational five-day search effort. (Reuters)
Russia has restarted its oil deliveries to North Korea, marking the first such shipment since 2020. This move further strengthens the cooperation between the two nations, which the U.S. alleges includes the transfer of arms from Pyongyang to support Kremlin’s war in Ukraine. (Bloomberg)
Prepare for a cosmic spectacle! Astronomers have captured an awe-inspiring event — a tremendously energetic explosion emerging from an ancient galaxy. This explosion, called a gamma-ray burst, appears to be the long-awaited evidence of a star destruction phenomenon, theorized for decades but never witnessed until now. (Reuters)
