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- Wednesday's Scoop: Anticipation ☀️
Wednesday's Scoop: Anticipation ☀️
Amazon goes full renewable & Meta cracks down on hate
Scoops Team
July 10, 2024
Hey friend - it’s the heat of summer. Make sure you’re watering your interns.
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
High mortgage costs have sidelined buyers and refinancers.
AI startups are thriving while others struggle.
A surge in immigration is helping solve the labor shortage and boost the economy.
How are you feeling about the economy? |
💼 Work trends
Unemployment Rate: 4.1%
Not far from 50-year lows
An unprecedented surge in US immigration is making waves in the job market and economy. The Congressional Budget Office (CBO) highlighted this influx of potentially 2.5 million immigrants in 2023. This influx of foreign-born individuals has helped solve the labor shortage and boosted consumption. The CBO’s latest report reveals that by 2033, the labor force will grow by 5.2 million due to higher net immigration. This boost is expected to raise economic production by $8.9 trillion and federal tax revenues by $1.2 trillion from 2024 to 2034 while reducing deficits by $900 billion. The surge should be a significant driver of economic growth and job creation.
🏠 Housing trends
30yr Mortgage Rate: 7.0%
That’s down from 7.1% a year ago. (MBA)
Median Home Price: $419,300
That’s up from $397K a year ago. (Existing homes - NAR)
High mortgage costs kept home buyers and refinancers on the sidelines. The Mortgage Bankers Association reported a 2% drop in refinance applications last week, marking the fourth straight week of decline. Many homeowners find current interest rates, which hover around 7%, too high to justify refinancing, given that they’re nearly double the cost of a mortgage a few years ago. Although home prices have surged over 40% since pre-pandemic levels, the high refinancing costs keep most borrowers from cashing in. Meanwhile, mortgage applications for purchasing a home ticked up slightly but are still down 13% compared to last year.
📈 Investment trends
The Market: ⬆️ +1.0%
S&P 500: 5,633.91
1Mo: +5% | 1Yr: +24% | 5Yr: +87%
The market climbed to its 37th record high of the year on Wednesday, carried by AI hype and optimism for tomorrow's inflation report. Updates from the tech sector continue to fuel enthusiasm for the opportunities in AI, and AI stocks keep pushing the market higher. Tomorrow's inflation report will be critical. Another indication of slowing inflation will fuel confidence that policymakers will cut borrowing costs in September.
Investors are pouring money into AI start-ups despite a general downturn in the tech sector. From April to June, AI companies attracted $27.1 billion in funding, making up nearly half of all US start-up investments, according to PitchBook. The AI boom, ignited by the release of OpenAI’s ChatGPT in late 2022, has driven substantial growth and high-value funding rounds. This surge reflects the massive potential seen in AI, even as other sectors struggle.
🤓 Inside Scoop: When do bull markets become a problem?
Bull markets tend to turn into bear markets due to some economic imbalances. We cycle from fear to greed, and when investors get greedy, that can mean too much money chasing things that don’t deserve it. Investors start taking on too much risk, assuming assets will continue to grow. Exuberance overrides sound investment principles, inflating asset values beyond reason, like digital files of cartoon images getting sold for millions of dollars. The so-called bubble can burst once something changes in the economy to signal an end to the value momentum. Investors grow more conservative, unwilling to pay high asset prices, leading to substantial losses and a market crash.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Vote and practice your board member voice. It accelerates your comprehension and comfort with these topics. (+2 pts)
 Meta Platforms | Hate Speech Crackdown Meta is expanding its hate speech policy to remove posts targeting "Zionists" when used to refer to Jewish people or Israelis rather than political supporters amid heightened Middle East tensions. The social media giant, which owns Facebook and Instagram, updated its policy after consulting 145 stakeholders.
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 Microsoft | Pollution Vacuum Microsoft has signed its largest-ever Direct Air Capture (DAC) to carbon credit purchase agreement to remove carbon emissions directly from the air. The tech giant aims to remove more carbon from the atmosphere than it emits by 2030, but its emissions have increased by 30% since 2020.
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 Taiwan Semiconductors | AI Boost Taiwan Semiconductors reported a massive 40% increase in second-quarter sales, reaching $20.67 billion, as the AI boom continues to fuel data center investments globally. The world's largest contract chipmaker is the sole supplier of Apple and Nvidia's most advanced AI chips.
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💭 Broader perspectives… (+ 2pts)
Has your company started integrating AI yet? |
 Advanced Micro Devices | AI Expansion AMD will purchase Silo AI, Europe’s largest private AI lab, for $665M to expand its artificial intelligence software capabilities alongside its hardware and compete with market leader Nvidia. The chipmaker has invested $125M this past year in building out its suite of AI capabilities.
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 Amazon | Clean Machine Amazon achieved its goal of matching its global electricity use with renewable energy purchases seven years ahead of schedule. The e-commerce giant is the world's largest corporate purchaser of renewable energy, having invested billions across hundreds of global solar, wind, and battery projects.
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🛠️ Recommended resources (+2 pts)
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