IMF says U.S. should tighten fiscal policy to help cut persistent inflation (2 min read)
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The International Monetary Fund (IMF) stated that the US should keep interest rates higher for longer to control inflation. Despite the Fed’s rate hiking efforts, inflation has remained more persistent than expected. The IMF forecasts the US to grow 1.7% in 2023, slightly higher than the previous estimate, with a peak fed rate of 5.4% this year, above the current range of 5% to 5.25%. The IMF emphasized that inflation will likely be above the Fed's 2% target throughout 2023 and 2024.

Elon Musk warns house prices are set to plunge - and says commercial real estate is in meltdown (2 min read)
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Elon Musk warns of a fast decline in US commercial real estate, predicting it will affect home values next. He highlights the maturity of commercial real estate debt and the potential for defaults as higher rates, tighter credit, and remote work trends pose challenges for the industry. Wall Street banks are also estimating $450 billion in commercial real estate debt could default this year and about a 40% drop in prices. The US housing market faces similar problems, with experts foreseeing a 15% to 20% price plunge.

Nvidia is now a $1 trillion company thanks to the AI boom (2 min read)
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Nvidia has reached a significant milestone by becoming a $1 trillion company, a feat previously achieved by only a few large companies like Apple and Microsoft. The valuation surge is driven by the growing demand of companies looking to incorporate generative AI into their offerings and Nvidia’s chips play a significant role in bridging that gap. As a result, Nvidia reported a record profit in Q1 and estimated sales in Q2 to be 50% higher than analysts’ expectations. Its stock surged 25% last week and jumped another 4% on Tuesday to trade around $409.

‘It’s not a bubble yet’: Wharton’s Jeremy Siegel predicts Big Tech boom fueled by A.I. (3 min read)
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Despite growing concern of AI being in a bubble, Wharton professor and renowned economist Jeremy Siegel remains bullish on the booming trend. Investors have been piling assets into AI stocks with most surging past record highs and experts noted that the phenomenon resembles the dot-com bubble in the late 90s. However, Jeremy believes it’s not a bubble yet. He acknowledged that these stocks may be slightly overvalued in the long-term, but short-term momentum can push them even higher and no one can predict how high they will go.

An Investing Expert Explains How He Screens For the Best Dividend ETFs (4 min read)
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This article explains that chasing high yields can be risky as it may indicate financial instability or unsustainable dividends. Instead, investors should focus on quality metrics like sustained profitability, earnings growth, and strong balance sheets. ETFs like Vanguard Dividend Appreciation ETF (VIG) and iShares Core Dividend Growth ETF (DGRO) are highlighted as they meet these criteria and have historically outperformed the market with less volatility.

Cathie Wood calls Nvidia stock 'overpriced' after missing 2023 rally (3 min read)
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Cathie Wood believes Nvidia is overpriced despite its leadership in AI chipmaking. Most of her funds, including the ARK Innovation ETF (ARKK), sold its Nvidia holdings just before the stock surged over 180% this year. She tweeted that Nvidia's current valuation of 25 times expected revenue is ahead of the curve and argues that there will be other AI winners with visionary leaders and proprietary data. Particularly, she sees Tesla as a beneficiary of AI breakthroughs and highlights its lower valuation compared to Nvidia.

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Thanks,
Thomas

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