U.S. consumers' inflation expectations fall again, NY Fed says (3 min read)
The recent New York Fed’s consumer expectation survey showed inflation expectation slid further in August as gas prices continue to drop. The inflation expectation was at 5.75% over the next 12 months, a decrease from 6.3% in July. In addition, the survey also shows that price increases at 2% over the next five years which is inline with the Fed’s inflation target. This might bring some relief to the Fed’s rate hike decision later this month. However, futures markets are still pricing in strong for a 0.75% rate increase even after the survey was released.
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Stocks close higher for fourth straight session ahead of key inflation report, Dow rises 200 points (1 min read)
The US stock markets continue to rally as the dollar weakens and growing confidence that the inflation has peaked. This extended the rebound from last Friday where the three major indexes snapped their three-week losing streak. The market has been volatile as the Fed reiterated their dedication to continue rising rates to bring inflations down even if it hurts economic growth. However, there was favorable news that hinted at a slowdown in inflation which led to investors being optimistic about the key inflation report scheduled to release on Tuesday.
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US to ramp up restrictions on semiconductor exports to China: report (2 min read)
The US government will add new restrictions on shipping highly advanced chips and equipment to China starting next month. US companies must obtain a Commerce Department license prior to the export. KLA Corp., Lam Research Corp., and Applied Materials Inc., have already been operating under these restrictions since early this year. Nvidia said they also require licensing to export A.I. chips to China. The US will be spending $28 billion of funding to boost domestic production of key computer chips to increase competitiveness with China in this industry.
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European stocks close higher as global markets await more U.S. inflation data; Stoxx 600 up 1.8% (1 min read)
The Stoxx 600 Index closed 1.8% higher on Monday with retail stocks performing the best across all sectors by jumping 4.5%. This rally continued from market closing higher on Friday as investors reacted to the record rate hike by the ECB last week. Global markets are preparing for the release of the August consumer price index report on Tuesday. This will be one of the last pieces of inflation data the Fed will see prior to their meeting at the end of September to determine the size of the next rate hike.
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Zero-Covid at what price? Chinese researchers are treading on sensitive ground (2 min read)
A Chinese real estate research firm recently published a report that claims 34% of shops were closed across Shanghai’s major malls due to Zero-Covid lockdown. However, Shanghai authorities have denied the claim. Shanghai along with other cities were under strict Covid lockdowns in the past few months. Analysts said the restrictions will unlikely ease before the Communist Party congress beginning on October 16. The lockdown has been hurting the economy as the forecasting growth is only at 3% this year. Social media users and researchers have reported the negative impact of the country’s Covid policy but were shortly deleted.
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Emerge Debuts With 3 Women-Run ETFs (3 min read)
Emerge launched three new ESG focused ETFs that are actively managed by woman-run subadvisors. They were launched on the Cboe Global markets and each has a Canadian equivalent launched on the NEO Exchange in Canada. The name and ticker of the ETFs are Emerge EMPWR Sustainable Dividend Equity ETF (EMCA), Emerge EMPWR Sustainable Global Core Equity ETF (EMZA), and Emerge EMPWR Sustainable Emerging Markets Equity ETF (EMCH). More details about the ETFs are available in this article.
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The Best Investment, According to Warren Buffett, and How You Can Own It (2 min read)
Warren Buffett has always recommended holding a low cost S&P 500 index fund for long term investing. S&P 500 index has proven to outperform most active strategies in the long run and achieve growth over time. There are many funds that tracks the S&P 500 but in terms of the lowest cost, VOO is a great choice with only 0.03% annual management fee. In addition to low cost, Warren Buffet also said to invest consistently. By adding consistently every month, you don’t need to worry about market timing because the cost will average out over time.
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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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