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- Tuesday's Scoop: Slow 🌤️
Tuesday's Scoop: Slow 🌤️
Disney's wrongful death & Live Nation's ticket monopoly
Scoops Team
August 20, 2024
Hey friend - welcome back to your daily scoops on the economy and companies impacting your life.
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Layoff fears are rising among workers.
The clean energy economy is growing rapidly.
Gold’s breaking records.
How are you feeling about the economy? |
💼Work trends
Unemployment Rate: 4.3%
Relatively low, but up from record lows
Layoff fears are rising. According to a new survey from the Federal Reserve Bank of New York, Americans are increasingly concerned about job security, with the expected likelihood of unemployment rising to its highest level since 2014. Additionally, more workers are job hunting, and salary expectations have dipped. This comes amid slower hiring and an increasing unemployment rate over the past few months, raising concerns that employers’ willingness to hire and retain staff may be weakening faster than anticipated.
The clean energy economy is growing rapidly. The Inflation Reduction Act (IRA) has driven a significant boom in US manufacturing, particularly in clean energy and electric vehicles, with over $133 billion in new investments since its passage two years ago. Total manufacturing investment over the past two years is nearly four times what it was in the two years prior. According to Rhodium data, investments in solar energy have increased by 56%, and battery storage investments have more than doubled in the last two years. The 271 projects announced since the bill’s passing are on track to create 100,000 jobs. This surge has been especially beneficial for rural areas and red states, with 85% of investment so far going to Republican congressional districts, according to E2 data. However, the upcoming presidential election has introduced uncertainty, with concerns that a Republican victory could weaken or even repeal the IRA. Despite these political risks, the investment in clean energy is transforming US manufacturing, creating thousands of jobs and accelerating the transition to renewable energy.
📈Investment trends
The Market: ⬇️ -0.2%
S&P 500: 5,597.12
1Mo: +1% | 1Yr: +27% | 5Yr: +97%
The market drifted lower on Tuesday without any significant updates. The story right now centers around an economy that's not as strong as last year but still doing pretty well.
Gold just hit a major milestone, with a single gold bar now worth over $1 million for the first time. This record was set as gold's spot price soared past $2,500 per troy ounce, driven by lower interest rates and growing uncertainty, particularly surrounding China’s economy. Other nations aren’t doing as well as the US. Central banks, especially China’s, have also been buying gold, further fueling the metal’s rally. This surge in gold prices highlights broader concerns in the global economy, and with gold reaching new heights, it’s a sign that investors are seeking safety amidst economic volatility.
🤓 Inside Scoop: How do market cycles impact different asset classes, such as stocks, bonds, and commodities?
Different kinds of assets each have their own market cycles that respond to the economic cycle differently. Stocks work in anticipation of the economic cycle, typically crashing in advance of a downturn and rallying again as the economy shows signs of recovery. The real estate market has its own unique cycles driven by generational trends, interest rates, and environmental conditions. While the stock market acts as more of a predictor of the economic cycle, the real estate market has more power to influence the state of the economy, given how many more consumers own homes than stocks. Some assets, like bonds or gold, are considered lower risk and may appreciate in an economic downturn as investors seek safety. Different commodities, from metals to raw foods, operate on their own cycles and fluctuate with supply and demand, making them more complex to predict.
While every asset has understood performance patterns in different parts of the economic cycle, that’s no guarantee of future results. Every downturn has unique characteristics and government policy responses, affecting every asset market differently.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
How are these companies doing? Judge their decisions. Investing starts with an opinion. (+2 pts)
 Disney | Court Bound Disney has agreed to resolve in court a wrongful death lawsuit filed by a Florida widower whose wife died from an allergic reaction after dining at a Disney Springs restaurant. The entertainment giant initially tried to block the husband's ability to sue based on terms and conditions in his Disney+ trial subscription.
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💭Broader perspectives… (+2pts)
Do you read the terms and conditions? |
 Texas Instruments | Chip Boost Texas Instruments will receive $1.6B in grants and up to $8B in tax credits from the US government to support building three new semiconductor factories as part of a national effort to boost domestic chip production. The chipmaker aims to reduce reliance on foreign suppliers, creating 2,000 manufacturing jobs by 2029.
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 Eli Lilly | More Potential Eli Lilly's blockbuster weight loss drug behind Zepbound and Mounjaro demonstrated an ability to cut the risk of developing Type 2 diabetes by 94% in a long-term study. Beyond sustained weight loss, the drugs have also shown potential in preventing heart failure, sleep apnea, and fatty liver disease, adding to their growing list of benefits driving demand.
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 Lowe’s | Demand Drop Lowe's continues to face challenges as warmer weather and reduced DIY activity impacted its sales despite efforts to engage professional contractors. The home improvement retailer expects annual profit and sales to decline, citing a slowdown in home improvement projects amid high borrowing costs.
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 Live Nation | Monopoly Battle Live Nation is under heightened legal pressure as nearly 40 US states seek damages in a lawsuit alleging the company monopolized the concert industry and inflated ticket prices. The Ticketmaster owner controls around 60% of major concert promotions and over 80% of ticketing at large venues, making it a dominant force in live music.
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🛠️ Recommended resources (+2pts)
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