Monday's Scoop: Momentum☀️

Hey friends - hope you had a fantastic weekend. I don’t mean to scare you, but tomorrow is October. Get your affairs in order. Fall is here.

Here’s what you need to know today to inform your work, spending, and investments:

1. The ports are about to shut down as workers demand fair pay.

2. Insurance isn’t protecting from more frequent extreme weather events.

3. People keep spending as prices stop rising so much.

Unemployment Rate: 4.2%
^{Relatively normal, low}

The ports are about to shut down as workers demand fair pay. A major port strike is set to hit the US East Coast and Gulf of Mexico, threatening to disrupt supply chains and cost the economy billions of dollars each day. The International Longshoremen’s Association plans to walk off the job Tuesday after accusing the United States Maritime Alliance of decades-long wage suppression. Ports from Maine to Texas, which handle half of the country’s ocean shipping, will be impacted. Despite the looming deadline, no negotiations are scheduled, and President Biden has stated he will not intervene, citing his belief in collective bargaining. The strike could delay essential goods like food and cars, raising inflation concerns.

Global Energy Emissions: 37.4 billion tonnes of CO₂
^{An all-time high, up 1.1% from 2022. (IEA)}

Insurance isn’t protecting from more frequent extreme weather events. Hurricane Helene has caused devastating flooding across the Southeast and Appalachia, highlighting a growing problem: millions of Americans lack flood insurance. According to Bloomberg, Helene is expected to have caused $25-30 billion in damage, and most of that won’t be covered by insurance. Warmer temperatures are fueling more frequent and intense storms, yet only about 4% of US homeowners have flood coverage, and many policies don’t account for inland floods caused by heavy rainfall. The cost of insurance has also surged, with many insurers pulling out of storm-prone areas like Florida, leaving homeowners without options. As storms worsen, insurance companies are either not covering floods or leaving areas altogether, making it harder for homeowners to recover from damages. Make sure to check whether you’re in a flood zone and whether your home insurance covers flood damage.

Inflation Rate: +2.5% (YoY), +0.2% (MoM)
^{Policymakers aim for 2% YoY inflation (August CPI)}

People keep spending as prices stop rising so much. The Commerce Department reported that consumer spending continued climbing in August, ticking up 0.2%. People are still spending more on services like housing, dining out, and recreation, even as they pull back on buying things like cars. Inflation seems to be under control. Policymakers’ preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose only 0.1% in August, even when excluding volatile food and energy prices. Living costs are just 2.2% higher than a year ago, the slowest annual pace since 2021, which is a nice break. Despite slower hiring, rising wages and increased savings rates are helping keep the economy going.

The Market: ⬆️ +0.4%
S&P 500: 5,762.48
1Mo: +4% | 1Yr: +34% | 5Yr: +95%

The market cruised to another new all-time high on Monday as investors celebrated more positive economic trends. Inflation seems under control, borrowing should keep getting cheaper, spending is holding up, and China is stimulating growth.