Morning Market Preview for September 13th, 2024

Good morning, Heroes!

Here’s your Morning Market Preview for September 12th, 2024
Read, or listen relaxingly for a few minutes – whichever you prefer!

Key Economic Reports

• Initial Jobless Claims: The market consensus forecasts Initial Jobless Claims at 229,000. This is slightly up from the previous week's actual figure of 227,000, suggesting a modest increase in new unemployment claims.
  
  
• Producer Price Index (PPI): This indicator measures wholesale inflation and is closely watched by investors and economists for signs of upstream price pressures on the companies that produce for consumers further down the line.
  
  
• Core PPI: Analysts and market observers expect a monthly increase of 0.2% for the Core PPI, which excludes volatile items such as food and energy. This expectation reflects a continuation of moderate inflation pressures from the production side. 

Key Events & Earnings Reports Today

Adobe

• Expectations: The consensus expects Adobe to report revenue around $5.37 billion, showcasing a 10% year-over-year growth, driven by strong performance across its product lines, particularly in Creative Cloud and Document Cloud due to AI integration.
  
  

• Importance: The report will be crucial for investor sentiment, especially in the context of Adobe's strategic moves towards AI. Positive results could reinforce confidence in Adobe's strategic direction, potentially leading to stock price increases.
  
  

The Fed

• The Fed's next meeting is scheduled for the 17th and 18th and expectations are that the Fed will cut rates. The market expects a quarter percent cut, but some think a half percent cut and even no cut are possible. Ultimately, the Fed decides and the market reacts, so don’t guess with any significant amount of money. 

Stocks

Year-to-Date Performance:

• Up Most: Utilities & Information Technology continue to have the best 2024 at 20.85% and 20.74%, respectively.
  
  
• Down Most: Materials has now just barely replaced Consumer Discretionary as the second worst sector in 2024, and Energy continues its last place position, up 5.75% and 1.40%, respectively. Of note, the worst sector is still up this year.

5 Day Moving Average: This is the percent of Large Cap stocks above their 5 day average

• Up Most: Real Estate is at 90% the last 5 days, and Tech is at 84%.
  
  

• Down Most: Energy is down to 5% the last 5 days with Consumer Staples now at just 11%, marking a significant downward shift the last 5 days.

Crypto

• Bitcoin: Up to about $57,969 at the open, and is up a whopping 36.85% this year.
  
  
• Ethereum: Also up, at about $2,381 at the open, and is up a modest 1.67% this year.
  
  
• Top Gainers Recently: Bitcoin Cash and Cardano had a good 24 hours, up 3.7% and 2.52% respectively.

Bonds

• 2-Year Treasury Yield: Open at 3.65%, continuing its yield decline this year.
  
  
• 10-Year Treasury Yield: Open at 3.658%, also continuing its yield decline this year.

Gold

• Open Price: $2,516 per ounce, up again, now up a whopping 21.8% this year, driven by safe-haven buying amid economic uncertainties.

Real Estate

• 30-Year Fixed Mortgage Rate: Down again, now to 6.11%, the rate has dropped about 8.4% this year.
  
  
• Trends: Real estate is local, and each market is seeing different specific conditions. Some report high-end home sales staying strong while others report a weakening there and an improvement in affordable housing sales.

Geopolitical Aspects

• The sentiment around US leadership, including how it handles international relations, trade wars, and domestic policies like inflation control, impacts investor confidence. Discussions around strategic petroleum reserves, border issues, and political stability can lead to market reactions.

Worldwide Market News

• Global markets are reacting to concerns about China’s slowing economic growth and energy price fluctuations, while ongoing conflicts and trade disputes add further uncertainty.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

P.S. 

Some Simple Explanations of Key Concepts to Level Up Your Financial Education

PPI: Measures the average change in selling prices received by producers, helping gauge future consumer price changes.

Fed Meeting: The Federal Reserve adjusts interest rates to control inflation and stimulate or cool down the economy.

Treasury Yields: Higher yields indicate that the government is paying more to borrow money, often a sign that inflation or interest rates are rising.

Equities: Stocks represent ownership in a company. Sectors like tech can be volatile but often offer high growth potential, while sectors like utilities are more stable but less growth-oriented.

Cryptocurrencies: Digital currencies like Bitcoin are highly speculative but have delivered strong gains this year.

Gold: Seen as a safe-haven asset, it tends to rise during times of economic uncertainty.

Real Estate: Changing mortgage rates make buying homes more or less expensive, which can cool off or heat up the housing market.

Understanding these elements helps in navigating the financial markets, where each piece of information can be a puzzle piece in predicting market movements or making informed investment decisions.

You’re the Hero.
    We’re the Guide.

In today’s rapidly changing financial landscape, keeping a close eye on your finances is more important than ever. Managing your financial health starts by knowing your financial health. A doctor takes a patient’s vital signs, no? It’s time people had an affordable way to know their financial vital signs.

This is where Financial Health Monitoring & Alerts come into play, and Arena Investor, in partnership with the innovative Elements app, is here to provide a comprehensive solution, so you can learn, understand, and improve your financial health – along a journey you can actually enjoy!

‍What is Financial Health Monitoring & Alerts?

Financial Health Monitoring & Alerts is a service provided by Arena Investor that tracks various aspects of your financial life, from spending and savings to investment and debt levels. It gives you accurate insights into the most important financial ratios and key factors that make up one’s financial health. 

With the integration of the Elements app into Arena Investor’s platform, we’re taking this service to the next level. The Elements app is designed to give you a structured, visual approach to understanding your financial picture. It breaks down your financial data into key components—such as income, assets, liabilities, and cash flow—providing you with a clear and comprehensive view of your financial health.

‍So what is Alerts?

With Alerts you get notifications each month when one or more of your financial health vital signs become excellent or concerning. No more guessing how you’re doing. No more wishing you had a teammate monitoring your progress and alerting you to something that needs your attention. Now, you have a vigilant teammate ensuring you stay the course on a healthy financial journey.

Why Financial Health Monitoring is Essential

In the modern financial environment, it’s easy to lose track of where your money is going. Financial Health Monitoring & Alerts is crucial because it allows you to stay on top of your finances in a proactive manner. Instead of reacting to financial issues after they arise, you can address them before they become significant problems.

‍The Role of Alerts in Financial Health Management

Alerts are the cornerstone of effective Financial Health Monitoring. They act as a financial guardian, constantly scanning your accounts and transactions to identify any issues that may require your attention. 

The Elements app enhances this by categorizing your financial life into easily understandable “elements” and providing alerts when certain thresholds are crossed. Whether it’s a budget overspend, a savings shortfall, under-investing in tax-advantaged accounts (and therefore not reducing your tax bill or optimizing your retirement) an Arena Investor representative  will notify you, so you aren't the last one to know your financial health is off-track.

Elements helps you stay on top of your financial game.

Some common types of alerts include:

- Budget Alerts: Notifications when your spending exceeds set limits.
- Savings Alerts: Reminders when you’re behind on savings rates or celebrations when you hit a milestone.
- Investment Alerts: Warnings when your equity rate is too low.
- Debt Alerts: Notifications when debt rate becomes too high or you pay-off debt and can celebrate the accomplishment.
- Insurance Alerts: Get alerted if your insurance rate is too low and you may be vulnerable, or if it is too high and you’re overspending for the coverage.
- Liquidity Alerts: Notifications if you have too little cash, or cash-equivalent assets
- Total Term Alerts: Know how many years you can live in retirement based on your current financial situation!

Benefits of Integrating with the Elements App

1. Proactive Financial Management: By continuously monitoring your finances and alerting you to potential issues, Arena Investor allows you to manage your money proactively. You’re empowered to make adjustments before small issues become major setbacks.

2. Visual Financial Planning: Elements breaks down complex financial information into visually engaging and easy-to-understand components, making it simpler to see where you stand financially and what steps you need to take to improve your situation.

3. Personalized Insights: With the combined power of Arena Investor’s Financial Health Monitoring & Alerts and the Elements app, you receive insights tailored to your specific financial situation. Whether you’re saving for a home, planning for retirement, or managing a complex investment portfolio, the platform provides guidance that aligns with your goals.

4. Stress Reduction: Finances can be a major source of stress, especially when surprises arise. With Financial Health Monitoring & Alerts, supported by Elements, you gain peace of mind knowing you’re always informed and prepared.

5. Improved Financial Discipline: Alerts from Arena Investor help you stay disciplined in your financial habits, whether it’s sticking to a budget, contributing to savings, or managing debt.

Who Should Use Financial Health Monitoring & Alerts?

Financial Health Monitoring & Alerts, especially when enhanced by the Elements app, is beneficial for anyone looking to take control of their financial future. It’s particularly valuable for those busy individuals who know they should be doing better with their money but don’t have the time, or simply want better work-life balance. 

Finding Better Balance

In today’s dynamic financial environment, staying informed and proactive about your finances is crucial. Arena Investor’s integration with the Elements app for Financial Health Monitoring & Alerts offers a powerful way to stay on top of your financial health. By providing insights and alerts, this service helps you manage your money more effectively, avoid potential pitfalls, and achieve your financial goals with confidence.

At Arena Investor, we are committed to providing our clients with the best tools and resources to secure their financial futures. With the integration of the Elements app into our tech stack, we’re offering a modern, comprehensive approach to Financial Health Monitoring & Alerts. Whether you’re looking to save for a major life event, optimize your investment strategy, or simply gain a clearer understanding of your financial situation, Arena Investor, with Elements, is here to help you every step of the way.

Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.

‍But first, an obvious choice

Meta may be interested in purchasing technology and know-how. While they may feel no need to own X as a social media platform, there can be compelling reasons to buy the technology and know-how X develops under its new direction. Simply put, buying X would be a two-for-one special: Eliminate X as a social media nuisance and more importantly integrate their newly-purchased X-tech across all their products. What’s $100-billion or so to a $1.35-trillion behemoth, especially if there’s considerable measurable upside?

But Meta buying X is hardly a stretch of the imagination. Let’s dig deeper.

‍Overview

As the tech landscape continues to evolve, Microsoft has shown a strong ability to adapt and expand into new markets. However, despite its dominance in software, cloud computing, and productivity tools, the company has notably missed several key opportunities. Two of the most significant are social media and content creation tools for creatives—areas where competitors like Google and Meta have thrived. By acquiring X (formerly Twitter), Microsoft could bridge these gaps and position itself as a leader in the next wave of digital transformation. Here's why Microsoft would be a great candidate to buy X and how it could integrate this asset into its broader strategy.

‍Filling the Social Media and Content Creation Gaps

Microsoft has made various attempts to enter social media, most notably with its acquisition of LinkedIn in 2016. However, LinkedIn primarily serves a professional audience and doesn’t capture the broader, more dynamic conversations happening on platforms like X. Additionally, Microsoft has largely stayed out of the content creation space, an area where other tech giants have built strong ecosystems around tools like YouTube, Instagram, and TikTok. By acquiring X, Microsoft could immediately gain access to a massive user base and a platform that is becoming increasingly integrated with content creation and distribution tools.

Under its new leadership, X is not just focusing on real-time communication but is also expanding its offerings to include content creation tools for Creatives. These tools are designed to allow users to produce, share, and monetize their content directly on the platform. This aligns perfectly with Microsoft’s ongoing strategy to enhance its creator-focused products, such as its Surface devices and creative software like Clipchamp. Integrating X’s content creation tools with Microsoft’s existing suite would create a more comprehensive offering for Creatives, helping Microsoft to compete more effectively with platforms that already serve this audience.

‍X’s Ambitious Plans: Payments, AI Integration, and Being The World’s Town Square

X is evolving into more than just a social media platform; it’s positioning itself as a multi-functional hub that includes social interaction, financial transactions, and real-time content creation. Its plans to integrate payments into the platform could turn it into a key player in the digital payments space—a market where Microsoft has shown interest, especially with its cloud services for financial institutions. By acquiring X, Microsoft could enhance its fintech capabilities and offer a seamless experience that combines social media, payments, and content monetization.

Let’s not overlook the upcoming opportunity to integrate blockchain/crypto into transactions either – something X’s leadership is keenly aware of and interested in. If blockchain is a public ledger, then X with blockchain is the public ledger in the middle town square.

Moreover, X’s recent advancements in artificial intelligence, particularly with the introduction of Grok, present another compelling reason for Microsoft to consider an acquisition. Grok, an AI tool designed for real-time and recent data analysis, could significantly enhance Microsoft’s existing AI suite, which includes Azure AI and collaborations with OpenAI. By combining Grok’s capabilities with its own, Microsoft could offer even more sophisticated tools for real-time data processing, benefiting both individual users and businesses.

Additionally, Microsoft has had a minimal role in the news industry, an area where X has traditionally been strong. X is the go-to platform for breaking news and real-time updates, something that Microsoft has struggled to capture. Integrating X into its ecosystem could give Microsoft a foothold in the news industry, allowing it to better compete with companies like Google and Apple, which have established news platforms.

‍Synergies with Microsoft’s Existing Ecosystem

The acquisition of X would not only fill a gap in Microsoft’s portfolio but also create synergies with its existing products and services. X’s social media platform could be integrated with Microsoft Teams, adding a new dimension to enterprise communication by bringing in real-time public discourse and creative content sharing. This could make Teams even more versatile, appealing not only to businesses but also to a broader audience, including content creators.

Furthermore, X’s ad tech could significantly boost Microsoft’s advertising business, which currently lags behind competitors like Google and Facebook. X’s ability to deliver targeted ads based on real-time trends and conversations, coupled with Microsoft’s existing data analytics capabilities, could create a powerful advertising platform that reaches a wide audience.

‍A Strategic Move in the Competitive Landscape

Finally, acquiring X would be a strategic move for Microsoft in its ongoing competition with other tech giants. While companies like Meta and Google have established themselves as dominant players in social media, content creation, and news, Microsoft has remained largely on the sidelines. Buying X would not only give Microsoft a seat at the table but also position it as a major competitor in these spaces. It would signal that Microsoft is serious about expanding its influence across all aspects of digital life—from productivity and gaming to social media, content creation, and beyond.

‍Like their OpenAI play, Microsoft can be bold and strategic 

In conclusion, Microsoft’s acquisition of X would be a bold and strategic move that fills critical gaps in its portfolio. With X’s ambitious plans for payments, AI, content creation, and news, combined with Microsoft’s strengths in cloud computing, enterprise software, and artificial intelligence, this acquisition could create a powerful new platform that redefines the intersection of social media, finance, and technology. By integrating X into its ecosystem, Microsoft could not only catch up to its competitors but potentially leapfrog them in the race to dominate the digital future.

‍Personalities and human nature

Let’s be frank: Elon Musk is a major personality. And he speaks of and works for high-order, human-redefining accomplishments. He has warned against Google, and he has warned against an unethical direction for AI. What’s good for Microsoft is often bad for Google. So Elon would like that check to be in place. The last step would be for him to see that Grok is indeed a check against any OpenAI concerns he has. That may be a large hurdle to clear. But Microsoft may have learned from some wobbly OpenAI days, and be able to present a compelling case – and overpay.

And the institution that Microsoft is would immediately provide the top-cover to “formal and establishment” voices and therefore major advertisers. And the unaware crowd that doesn’t understand the role X plays as town square would adopt. Top-cover, integrations, mass adoption, and an overall huge value-add for Microsoft.

‍Built for The One in the Arena

Arena Investor is on a mission not only to help with financial planning, and investment management, but also with education. Keep reading, watching, following, and sharing great Arena Investor content. And as always if you want professional advice, we are glad to be your teammate – along a financial journey you can actually enjoy.

You’re the Hero.
    We’re the Guide.