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  • Tuesday's Scoop: Snooze ☀️

Tuesday's Scoop: Snooze ☀️

Eli Lilly ramps up weightloss & Shell cuts wind

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

 

🌎 Big picture

  1. Memorial Day Weekend travel broke records.

  2. People don’t feel great about the state of the economy and the cost of living.

  3. Business investment rebounded in April.

How are you feeling about the economy?

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 💼 Work trends

Unemployment Rate: 3.9%
Still near the lowest rate in 50+ years

Memorial Day Weekend travel broke records this holiday. The US Transportation Security Administration reported screening the most passengers on a single day on Friday. That’s positive news for the economy, as travel can often be the first thing people cut back on when feeling financially strained. The economy runs on consumer spending.

Business investment picked up more than expected in April despite facing hurdles with high borrowing costs. The Commerce Department reported orders for durable goods, which includes anything from computers to trucks that last more than three years, rose by 0.7% in April. Orders for non-defense business investments, excluding transportation, so-called core capital goods, rose 0.3%. Shipments also increased after declining in March, signaling a pickup in business spending on self-improvement.

 

 👜 Cost of living trends

Inflation Rate: +3.4% (YoY), +0.3% (MoM)
Policymakers aim for 2% YoY inflation (April CPI)

Most Americans are still pretty unhappy about the state of the economy, and the rising cost of living is a critical factor. The University of Michigan Consumer Sentiment Index fell to a six-month low in May as Americans reported rising inflation expectations. Consumers expect the cost of living to rise by 3.5% over the next year, a faster increase than last month’s 3.0%. In a slightly conflicting survey, the Conference Board's Consumer Confidence Index improved in May after three consecutive months of declines. Inflation fears increased across both surveys, but people are less worried about finding a job. Recession concerns keep rising. Consumers power two-thirds of the economy, so economists monitor sentiment closely.

 

 📈 Investment trends

The Market: ⬆️ +0.03%
S&P 500: 5,306.04
1Mo: +4% | 1Yr: +26% | 5Yr: +93%

The market drifted sideways on Tuesday as investors returned from the three-day weekend. This month's data has started to suggest a slight economic rebound, worrying investors about more inflation and delays to policymakers' potential interest rate cuts.

 

 🤓 Inside Scoop: How much should I be saving for retirement?

When planning for something decades in advance, there’s no perfect formula. The best thing we can do is build a daily decision-making framework as our income, expenses, goals, and needs evolve.

Saving more is almost always better, but where we save matters. Retirement accounts provide tax benefits that help our money grow more quickly. However, we can’t access funds from our retirement account until we’re almost 60 years old. So, we must consider balancing our long-term savings between retirement accounts and those we can access before then for significant expenses, like a home, children, vacations, or education.

How much we need to have in retirement depends on our expenses and how long we might live. That’s hard to forecast accurately, given the inflating cost of living, potential tax changes, and the unpredictable longevity of life.

So, the best thing we can do is focus day-to-day on reducing our expenses, increasing our income, and saving as much as possible. Once we have established our short-term and emergency savings, we can split our long-term savings into pre and post-retirement funds that can hopefully grow over time.

🏭 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)

Eli Lilly

Pumping Pills

Eli Lilly plans to invest $5B to expand production capacity for its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro.

The drugmaker's largest-ever manufacturing investment should help address shortages from surging demand for its treatments.

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Shell

Cutting Wind

Shell plans to trim its offshore wind division staff in Europe as part of the CEO's shifting focus towards short-term profitability from expensive clean energy investments.

The oil giant started cutting staff across divisions focused on lowering pollution earlier this year.

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 💭 Broader perspectives… (+2pts)

Should oil companies invest more in wind power or focus on their core business?

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T-Mobile

Carrier Consolidation

T-Mobile will acquire US Cellular's wireless operations for $4.4B, strengthening its market position and expanding its 5G network reach.

The wireless giant also recently merged with Mint Mobile parent Kaena and Sprint.

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Alphabet

Waymo Problems

Regulators have raised traffic safety concerns about Alphabet's Waymo self-driving vehicles after discovering nine more incidents during an investigation.

Alphabet says its autonomous vehicles have driven tens of millions of miles with excellent safety.

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CVS Health

Pharmacy Union Momentum

CVS faces a growing unionization movement as pharmacy workers at two more Rhode Island locations join a new national union to address alleged unsafe working conditions.

The health chain has suffered mass walkouts protesting understaffing and increased workloads.

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