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- Monday's Scoop: Stalled🌤️
Hey friend - the Olympics are unfortunately over. As your final update, USA tied China with 40 gold medals but exceeded everyone by dozens of silver and bronze medals. What did you think of the closing ceremonies?
Insiders, catch up with the Weekly Scoop.
Don’t forget to sign up for our sustainability competition with Future to win $500!
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Renewable energy has overtaken fossil fuels in Europe.
Americans aren’t as worried about inflation.
Big tech companies aren’t the only ones making big profits this year.
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)
Renewable energy has overtaken fossil fuels in Europe as the EU leads the charge in clean energy. In the first half of 2024, wind and solar power outpaced fossil fuels for the first time, with almost half of the EU's electricity coming from these renewable sources, according to a report by Ember. This shift is part of a broader trend as the EU moves away from coal and gas, even though energy demand is rebounding. It's a big step forward in reducing fossil fuel pollution and promoting sustainable energy, showing that a greener future is within reach with the right policies and investments.
👜 Cost of living trends
Inflation Rate: +3.0% (YoY), -0.1% (MoM)
Policymakers aim for 2% YoY inflation (June CPI)
Americans aren’t as worried about inflation. The New York Federal Reserve’s latest consumer survey shows that people expect the cost of living to rise only 2.3% annually over the next three years, the lowest inflation expectations since the survey began in 2013. Expectations are important because if consumers and businesses believe things will keep getting more expensive, they’re more likely to raise prices or demand higher wages, fueling inflation further. Even with these lower expectations, it doesn’t mean the cost of living pain is behind us. Americans are more concerned about missing debt payments and managing rising rent and education expenses.
📈 Investment trends
The Market: ⬆️+0.004%
S&P 500: 5,344.39
1Mo: -5% | 1Yr: +19% | 5Yr: +85%
The market didn't move much on Monday without any major economic events. Last week's data stymied fears of an imminent recession with a low number of layoffs and perfectly mediocre corporate financial updates. Investors will look for more signs that the cost of living is under control in this week's inflation report.
Big tech companies aren’t the only ones making big profits this year. Most companies have now provided their second-quarter financial reports. While the high-performing tech companies still saw substantial profits, the rest of the companies in the S&P 500 are on track for their first quarter of profit growth since late 2022, with earnings expected to rise by 7.4% in the second quarter. Including Big Tech, S&P 500 companies are reporting nearly 11% more profit than last year, according to Factset. This broadening profitability is a positive sign for the economy and the stock market. However, while companies have boosted profits through cost-cutting, sales haven’t been as strong. The second-quarter revenue for S&P 500 companies was only 0.5% higher than the previous year. These trends paint an encouraging picture of the operational efficiency of America’s biggest companies, but success will now depend on whether spending and business activity start to pick up.
🤓 Inside Scoop: What do investors look for in earnings reports?
One of the most critical components of corporate financial reports is the guidance. Public companies must report on their financial health each quarter, releasing standardized metrics on their sales, expenses, debt, profit, etc. All of that information, though, is backward-looking. Investors are buying a company for its future earnings (aka profit).
Companies often issue guidance or provide projections for future sales and earnings. This gives investors a sense of optimism or pessimism from those who know the company the best. Forecasted metrics are not required, so many companies have often avoided making projections over the past few years, given the unprecedented economic events. If they do report, you'll hear that they may have raised or lowered guidance, meaning they expect higher or lower profit/sales/whatever than they projected last time. You might also hear guidance compared to Wall Street Analysts' projections or estimates.
🏭 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)
 Hasbro | Digital Direction Hasbro, famous for traditional toys like GI Joe, is investing heavily in digital gaming and entertainment as sales for physical toys slow. The toy manufacturer's mobile app Monopoly GO! has earned billions in revenue since launching last year.
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 Cisco | Shift in Focus Cisco plans to cut thousands of jobs in a second round of layoffs this year, shifting its focus toward growing areas like cybersecurity and AI. Earlier this year, the networking giant cut about 4,000 jobs amid slowing tech spending.
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 Stellantis | Work Abandoned Stellantis will lay off up to 2,450 workers at its Warren, Michigan plant as it unexpectedly ends production of an older, budget-friendly Ram 1500 pickup truck popular among entry-level buyers. The Dodge automaker hasn't announced a new model replacement, raising concerns for workers and the local community.
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 Palantir | Defense Deal Palantir will partner with Microsoft to offer AI and cloud services to US defense and intelligence agencies, bolstering its growing influence in government technology. The secretive data company's government contracts, responsible for more than half its revenue, reached $1 billion annually for the first time this year.
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💭 Broader perspectives… (+2pts)
Should AI be as heavily regulated as banking or healthcare? |
 Warner Bros Discovery | Digital Strategy Warner Bros aims to use TikTok as a key discovery tool for movies and shows amid struggles across its media business, using new features to drive traffic to its content. The entertainment giant has already taken billions in losses on its legacy TV business, lost its NBA licensing, and laid off thousands this summer.
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🛠️ Recommended resources (+2 pts)
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