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- Monday's Scoop: Cruising🌤️
Monday's Scoop: Cruising🌤️
Lockheed Martin expands in space & Rivian hits delays
Scoops Team
August 19, 2024
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Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Americans gained a little optimism this month.
Home construction keeps slowing, perpetuating the housing shortage.
Global temperatures are shattering records at an alarming rate.
How are you feeling about the economy? |
🌊 Climate trends
Global Energy Emissions: 37.4 billion tonnes of CO2
An all-time high, up 1.1% from 2022. (IEA)
Global temperatures are shattering records at an alarming rate, highlighting the accelerating impact of climate change. July 2024 was the second hottest July on record, breaking a 13-month streak of record monthly temperatures, according to the European Union’s Copernicus Climate Change Service. However, July’s average temperature was so close to a record that it sparked debate between major scientific agencies. July also had the two hottest days on record. This extreme heat has been driven mainly by fossil fuel pollution trapping heat inside the atmosphere and exacerbated by the El Niño weather pattern, pushing temperatures to unprecedented levels worldwide. Companies and governments will face greater challenges protecting their people from these deadly heat waves.
👜 Cost of living trends
Inflation Rate: +2.9% (YoY), +0.2% (MoM)
Policymakers aim for 2% YoY inflation (July CPI)
American consumers grew slightly more optimistic in August. The University of Michigan’s consumer sentiment index increased 2.1% in August but remained 2.3% lower than last year. Americans’ sentiment on inflation didn’t change, expecting the cost of living to continue rising about 3% per year over the next five years. The general increased optimism was partly driven by an improved outlook among Democrats following President Biden’s decision to exit the race, with Vice President Kamala Harris becoming the party’s nominee. Meanwhile, Republicans’ sentiment dipped to its lowest level since last November. Despite these political shifts, the economic outlook for personal finances and the next five years reached its highest point in four months, up 10% over last year.
🏠 Housing trends
30yr Mortgage Rate: 6.5%
That’s down from 7.1% a year ago. (MBA)
Median Existing Home Price: $426,900
That’s up from $410K a year ago. (NAR)
New home construction keeps slowing, extending the housing shortage. The Commerce Department reported that single-family housing construction starts plummeted 14.1% in July to a 16-month low, marking the fifth consecutive monthly decline. This sharp downturn, exacerbated by Hurricane Beryl's impact in the South, reflects builders' growing hesitancy to build in a market where high prices and expensive mortgage rates have deterred homebuyers. The National Association of Home Builders sentiment index fell to an eight-month low in August. While lower mortgage rates might offer some relief, the combination of uneven housing supply across regions and broader economic uncertainties suggests the housing market may face a bumpy road ahead.
📈 Investment trends
The Market: ⬆️+1.0%
S&P 500: 5,608.25
1Mo: +2% | 1Yr: +27% | 5Yr: +97%
The market drifted higher again on Monday without any major shift in the narrative. Last week was full of news about spending, corporate profits, cost of living, and layoffs that pointed to a slower but stable economy that doesn't seem to be on the verge of a dramatic downturn. The market has fully recovered from the recession scare of the week prior and is approaching a new all-time high.
🤓 Inside Scoop: Why is there more market volatility during the Summer?
Summer can often bring more market volatility because of a substantial decline in trading volume. As much as it seems like the stock market is a big machine, it's still run by people. As portfolio managers and analysts head to the Hamptons and more people take a moment to unplug, trading volumes can decline.
There can be wider swings in prices in a market with fewer participants. If you had a thousand people guess what they think a toaster costs, you would likely see many similar guesses clustered around a consensus price. But, the more people you take away, the fewer overlapping opinions and wider the gaps in price estimates. That's what happens in the stock market. Fewer traders can lead to wider jumps in prices.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Act like a boardmember and judge how companies behave. Engaging helps build your financial confidence and hold corporations accountable. (+2pts)
 Estée Lauder | Sales Slump Estée Lauder expects slower sales growth due to declining demand in its once-strongest market, China, citing persistent weak sentiment among Chinese consumers. The cosmetic giant’s CEO, retiring next year, plans to cut costs and leverage social media platforms to recapture lost market share and boost sales.
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 Rivian | Supply Setback Rivian has paused production of delivery vans for its biggest shareholder and customer, Amazon, due to a parts shortage, adding to ongoing challenges in its electric vehicle manufacturing efforts. The electric truck startup still hopes to meet its production targets this year after retooling its factory in April.
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 Gilead | Counterfeit Crisis Gilead Sciences exposed a counterfeit operation that allegedly tampered with and resold altered HIV medications at two New York pharmacies, endangering patients’ health. The pharmaceutical company launched anti-counterfeit efforts to fight these illegal networks and protect the integrity of essential medicines.
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 Kroger | Price Cut Pledge After pausing its planned merger with Albertsons due to regulatory issues regarding their combined market dominance, Kroger is offering to cut grocery prices by $1B, less than 1% of its annual sales. A failed merger between the grocery giants could mean hundreds of millions in breakup fees for Kroger, on top of the $800M in merger-related costs so far.
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💭 Broader perspectives… (+2pts)
Should there be price caps on groceries? |
 Lockheed Martin | Space Acquisition Lockheed Martin is buying struggling spacecraft maker Terran Orbital for $450M, bolstering its space and missile tracking capabilities with Terran's satellite transports. The defense giant plans to pay off Terran's debts and provide additional financial support, strengthening its foothold in satellite technology.
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🛠️ Recommended resources (+2 pts)
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