Jay Powell says Fed will ‘keep at it’ in hawkish inflation speech (4 min read)
The S&P 500 index and NASDAQ Composite dropped 2.5% and 3.1% respectively after Jerome Powell declared the Fed “must keep at it until the job is done” in regards to their determination to bring down inflation. Learning from the lessons in the 1970s where inflation could’ve been under control a lot sooner to avoid economic turmoil, Powell is committed to bring price stability even if it means lower economic growth for a sustainable period. Fed officials are still debating whether the next rate hike will be 0.5% or 0.75%. After the speech, the futures markets implied the Fed’s rate can be as high as 3.82% by next March.
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US and China reach deal on audits of listed companies (2 min read)
The Public Company Accounting Oversight Board (PCAOB) signed a deal on Friday with the Chinese authorities to give the US regulators complete access to Chinese accounting firms auditing US listed Chinese companies. This is a step forward from the long stand off between the two nations over a compliance audit. PCAOB are skeptical about how much access will actually translate from the deal in practice. The SEC chair said the agreement can potentially prevent 200 Chinese companies from being delisted on the US stock exchange.
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Britain to see 80% spike in energy bills as crisis deepens (3 min read)
The UK energy regulator announced that consumer energy bills will increase by 80%, bringing the average cost from 1,971 pounds to 3,549 pounds a year. Inflation is already at a 40 year peak and is expected to go even higher with this surging energy price. Low income earners have reported taking on new debts to cover essential bills. The government will be giving out grants to help but many say that it won't be enough to get through this winter. No other support measures will be announced until after the leadership election on Sept 5.
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BlackRock's New Megatrends ETF Bets on Neurology Breakthroughs (1 min read)
Blackrock launched a new fund called the iShares Neuroscience and healthcare ETF. It is the first of its kind and tracks healthcare companies globally that operate in the area of neurology pharmaceutical and neurological devices. Companies included in this ETF need to have at least half of its revenue derived from one of these two categories. Half of the portfolio are currently US companies with Japan and Western Europe companies next. The ticker symbol is IBRN and has a management fee of 0.47%.
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Why ETF Use Is Still Growing Among Investors, Advisors (2 min read)
The U.S. ETF industry just hit the second highest record with an inflow of $343 billion year to date. There are several reasons for the rapid growth in this industry. Many online brokerage platforms started zero commission on trading ETFs which helped drive retail investors into using ETFs. Fund companies that traditionally offer only mutual funds are increasingly converting into ETFs because of client’s growing demand in the structure due to lower fees and tax efficiencies. The current total asset in the U.S. ETF industry is $6.61 trillion.
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3 money rules from an ex-stock trader (2 min read)
Lauren Simmons earned only just $12,000 a year as a trader on NYSE back in 2017. Now, at the age of 28, she is a self made entrepreneur and is on track to make a million dollars this year. She shared 3 money rules that helped her get to where she is today. The first rule is to avoid making impulsive purchases and try to wait three to six months before buying anything that is over $100. The second rule is to not fear checking bank accounts and be honest about what you are spending on because that is how you will know your spending habits. The last rule is to periodically review your investments or even subscriptions to see if they are aligned with your financial goal or budget.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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