 | | |  Good morning. The rate of inflation has slowed by two-thirds over the past year. But getting back down to a pre-Covid level may prove more painful than the bear market of 2022. One reason? The strong labor market.
Some sections of the market have considerable buying power. For instance, airline pilots for FedEx (FDX) just rejected a proposal that would have seen their wages jump 30 percent. While a big boost, other airline pilots have seen more increases over the past year. If big wage jumps continue, we could see a return to the 1970's, where increased wages led to more demand, higher prices, and then a demand for further wage increases.
This type of inflation, known as wage push inflation, could keep prices higher for longer. It may not kill off the current stock market rally, but it could weigh on corporate profits, and thus future market returns. Traders should expect the market to slow down following its strong rise so far this year.
Now here's the rest of the news: | | | | | |
| | |  | DOW 35,438.07 | +0.08% | | | | | S&P 4,567.46 | +0.28% | | | | | NASDAQ 14,144.56 | +0.61% | | | | | *As of market close | | | • | Markets closed higher on Tuesday, adding to Monday's gains. | | | • | Oil rose 1.1 percent, closing at $79.63 per barrel. | | | • | Gold rose 0.2 percent, last going for $1,967 per ounce. | | | • | Cryptocurrencies traded mixed, with bitcoin at $29,220 at the stock market close. | | | | | | | |
| | | There's Always a Value Play in a Growth Trend | | | | This year's market returns have been heavily driven by companies working on artificial intelligence (AI). That includes big tech companies in the hardware and software space, as well as smaller companies with a hyperfocus on the new technology.
While that trend is playing out, the market has picked the top players in the space, even with dozens of companies working on the trend. Investors who buy into these lesser-liked stocks can benefit from the long-term trend of AI, while also getting a value play today.
» FULL STORY | | | | |
| | Insider Activity Report: Safety Insurance Group (SAFT) | | | | Srb Corp, a major holder of Safety Insurance Group (SAFT), recently added 32,384 shares. The buy came to a total of $2.17 million, and increased the fund's position by 2 percent.
Srb has been a regular and consistent buyer of shares since May, with eight buys in the past three months. Going back further, last year saw company insiders, including both directors and officers, sell small parts of their holdings.
» FULL STORY | | | | |
| | Unusual Options Activity: Meta Platforms (META) | | | | Social media provider Meta Platforms (META) has more than tripled off of last year's lows. One trader sees the rally continuing into 2025.
That's based on the January 2025 $550 calls. With 541 days until expiration, 5,032 contracts traded compared to a prior open interest of 167, for a 30-fold rise in volume on the trade. The buyer of the calls paid $9.95 to make the bullish bet.
» FULL STORY | | | | |
| | • | Home Prices Could Continue Rising
While home prices have been declining for several months now, amid rising interest rates, the lack of new supply on market could lead to home prices continuing to trend higher. The data could start showing up on the year-over-year data in the coming months amid a potential shortage in key markets. | | | | • | Extreme Heat Shifting Tourists Away from Europe
Vacations to the Mediterranean are down about 10 percent compare to a year ago, with industry experts citing the heat wave in Europe as the culprit. The continent has had some high temperatures so far this year, and the region is not as equipped with air conditioning as the United States. | | | | • | FDIC Calls Out Banks Who Overstated Deposits
Following the bank failures in the spring, the FDIC has called out a number of banks who were found to have overstated their deposit data. All told, banks have lowered their uninsured deposits by $200 billion. The bank failures largely occurred due to the high level of uninsured deposits at those smaller banks. | | | | • | 23 Million Americans Are In the Gig Economy
An estimated 23 million Americans have earned at least some money from the gig economy over the past year, based on industry data. The Bureau of Labor Statistics last tracked gig data in 2017 and found the number closer to 5 million, well before the pandemic-era disruptions that upended traditional work for millions. | | | | • | Microsoft Brings Bing Chat to Chrome and Safari
Bing Chat, the AI chatbot designed by Microsoft (MSFT) for its Bing browser, is coming to Safari, owned by Apple (AAPL), and Chrome, owned by Google (GOOG). The chatbot is still in testing on those browsers right now. Bing Chat operates on OpenAI's GPT-4 model, and still has more functionality on Microsoft's Edge browser for now. | | |
| | | | TOP | | | PKG | 10.5% | | | | MSCI | 9.076% | | | | GE | 6.386% | | | | FFIV | 6.318% | | | | PHM | 5.909% | | | | BOTTOM | | | SIRI | 14.083% | | | | RTX | 11.144% | | | | ALK | 9.549% | | | | LBTYA | 8.006% | | | | IVZ | 7.962% | | | | |
| | |  | | So far, there's no evidence of a recession. So as long as there's no evidence of recession, and I think the market will probably continue to melt up; people are chasing. | | - Steve Eisman, senior portfolio manager at Neuberger Berman, on the market's rally, and why it will continue as signs continue to point to the lack of a recession in the immediate future. | |
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