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Investopedia
2 mths
14
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Just as it’s heating up outside, the economy seems to be cooling off.
Inflation, spending, and income all downshifted in April, a report from the Bureau of Economic Analysis showed Friday. If Friday’s report is the beginning of a trend, the economy could be entering a new phase, one in which less money changes hands.
Households—whose budgets have been pressured by elevated inflation, high interest rates for all kinds of loans and a job market where raises are becoming harder to get—may be forced to cut back their spending. In turn, merchants could face pressure to keep prices in check.
In other words, the economy may be meaningfully slowing down, just as officials at the Federal Reserve hope to accomplish with their campaign of anti-inflation interest rate hikes.
“Rapidly rising prices in recent months have depleted personal savings, and a slowing labor market may finally be taking a toll on some consumers’ willingness and ability to spend,” Scott Anderson, chief U.S. economist at BMO Capital Markets, wrote in a commentary.
The details of the report supported the idea that consumer spending, the most important part of the economy, could be running out of steam after a long period of rapid growth. Spending only increased 0.2% in April after jumping 0.7% in March and actually fell 0.1% after adjusting for inflation. Inflation-adjusted after-tax income also fell 0.1%, the fourth decline in the last 12 months.
“Consumer spending in the first month of the new quarter slowed as real disposable incomes fell,” Jeffrey Roach, Chief Economist for LPL Financial, wrote in a commentary. “Businesses need to prepare for an environment where consumers are not splurging like they were last year.”
It wasn't just Friday's report that hinted at a downshift in consumer spending. The measure of first-quarter gross domestic product (GDP) was revised Thursday, showing consumer spending decelerated.
"On the one hand, the slowing GDP and slowing personal consumption are a sign that the economic expansion is cooling, which could be a concern for companies and stock market investors," wrote Chris Zaccarelli, chief investment officer for Independent Advisor Alliance Thursday. "But on the other hand, slowing consumption and economic growth could be just the news we need to see in order for the rate of inflation to keep coming down and allow the Fed to reduce interest rates after all."
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Instablog9ja
2 mths
11
Claudia Sheinbaum has been elected as Mexico’s first female president in a resounding win, achieving a historic victory.
According to Mexico’s official electoral authority, preliminary results indicate that the 61-year-old former mayor of Mexico City secured between 58% and 60% of the vote in Sunday’s election. This gives her an almost 30-point lead over her closest competitor, businesswoman Xóchitl Gálvez.
She is set to succeed her mentor, outgoing President, Andrés Manuel López Obrador, on 1 October. Sheinbaum, a former energy scientist, has pledged to maintain continuity, promising to further the “advances” made by López Obrador. “I won’t fail you,” she said assuring the people in her victory speech. Her supporters are celebrating in the Zócalo, Mexico City’s main square, waving banners that read “Claudia Sheinbaum, president.”
Before her presidential bid, Sheinbaum served as the mayor of Mexico City, one of the country’s most powerful political roles, often seen as a stepping stone to the presidency.
However, the just concluded elections has become its bloodiest in modern history after the number of a§§assinated candidates reached 37 before today’s vote. The number of candidates a§§assinated in the 2024 election reached 37 – one more than during the 2021 midterm election – after a candidate running for local office in Puebla state was m¥rdered at a political rally on Friday, according to data from security consultancy firm Integralia. The consultancy has also recorded 828 non-lethal att+cks on candidates during the election season, up from 749 since Monday.
In a nation where politics, crime and corruption are closely entangled, dr*g cartels went to extreme lengths to ensure that their preferred candidates win. Hours before polls opened, a local candidate was m*rdered in a v+olent western state, authorities said, joining at least 25 other political hopefuls k+lled this election season, according to official figures.
In the central Mexican state of Puebla, two people diEd after unknown persons att+cked polling stations to steal papers, a local government security source told AFP. Voting was suspended in two municipalities in the southern state of Chiapas because of vtolence. Sheinbaum has pledged to continue the outgoing president’s controversial “hugs not b¥llets” strategy of tackling crime at its roots.
More than 450,000 people have been mYrdered and tens of thousands have gone missing since the government deployed the army to fight dr*g trafficking in 2006.
Investopedia
2 mths
11
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Artificial intelligence (AI) developments captured investors' attention in the first six months of 2024, with AI-related momentum leading several tech stocks to outpace the S&P 500 and the Nasdaq Composite indexes in the first half of the year.
Some of the biggest beneficiaries have been chipmakers like Nvidia (NVDA) and its partners such as Super Micro Computer (SMCI) and Micron Technology (MU). Tech giants, including Meta Platforms (META) and Google parent Alphabet (GOOGL), and legacy computer companies such as Dell Technologies (DELL) and HP (HPQ) have also gained on enthusiasm for AI.
While past performance isn't necessarily a predictor of future returns, investors might consider the stock gains in the first half of the year as an indicator of the companies' positioning amid the AI boom, though experts say the AI era could just be getting started.
Semiconductor industry stocks have been some of the biggest beneficiaries of the AI boom as the emerging tech requires advanced computing hardware produced by chipmakers.
Nvidia shares have more than doubled since the start of the year, after more than tripling in 2023. The chipmaker has become an AI heavyweight as the demand for Nvidia's graphics processing units (GPUs) has surged as companies build and train AI systems.
Nvidia founder and CEO Jensen Huang earlier this year unveiled the Blackwell platform, the company's most capable and efficient system, which analysts called "the most "most ambitious project in Silicon Valley." Rosenblatt analysts said Blackwell products, B100, B200, and GB200, are likely "already sold out well into 2025."
"The semiconductor giant ranks first among peers in terms of growth, gross margins and return on invested capital," Melius Research analysts wrote, commenting on the stock's room to grow.
Shares of AI hardware maker and Nvidia partner Super Micro Computer have also more than doubled in price since the start of 2024 after tripling in 2023. Rosenblatt analysts called Super Micro Computer the "Switzerland of AI" since its liquid cooling tech is essential in deploying advanced AI systems, and JPMorgan analysts suggested its rise has signaled the "investment cycle relative to AI has just started." Super Micro Computer joined the S&P 500 index in March.
Shares of Micron Technology, another Nvidia partner, gained over 46% in the first half of 2024. Bank of America analysts named Micron as a "junior samurAI" saying there could be "volatile but fruitful opportunities among the #2 vendors" like Micron as leaders like Nvidia expand the market.
Citi analysts noted that despite headwinds like increased capital expenditures for the year and the impacts of an earthquake in Taiwan in April, they expect Micron stock to grow "above its historical average but below AI peers."
Tech giants like Meta and Google parent Alphabet have also seen their stocks surge in the first half of the year as the companies leveraged their positions in the industry and their ability to meet the capital-intensive needs of AI advancement to lead developments in the space.
Meta Platforms shares gained over 31% in the first half of 2024. Jefferies analysts have said the company could be well-positioned to outpace peers in the digital ad space as it leverages AI tools. The company unveiled its own AI assistant, MetaAI, integrated into Facebook, Instagram, and WhatsApp, in April.
When Meta announced it would be significantly increasing spending to invest in AI, it sent the stock tumbling, but analysts said increased spending could be key to securing AI leadership.
William Blair analysts said "the scale and timing of the generative AI investment will be larger and longer than previous platform investments," but they "believe it is still exercising prudence in spending and ultimately will be one of the leaders in the AI race," though they noted it "may take some time and further proof points to investors."
Google parent Alphabet shares gained 23% in the first half of the year, with its market capitalization passing $2 trillion after hosting its AI-focused Google I/O conference in April. Bank of America analysts said the conference highlighted "expectations for double-digit revenue growth, Cloud margin expansion, and opportunity to capitalize on strong AI assets."
Both Alphabet and Meta announced they were making custom silicon chips to run AI workloads in the first half of 2024. Microsoft (MSFT) and Amazon (AMZN) also make their own AI-capable custom chips. The big tech companies' in-house chips could reduce their reliance on Nvidia and help manage costs, though they might not keep up with the advanced capabilities of Nvidia's chips.
While legacy computer makers may not be the first companies to come to investors' minds when thinking about AI, companies like Dell Technologies and HP have also benefited from AI enthusiasm.
Dell's stock price soared 82% in the first half of the year, with the stock seeing double-digit single-day moves on AI momentum. Dell could see gains as a service provider as it ramps engagement with Nvidia, JPMorgan analysts wrote in a report titled "Forgotten AI Warriors in Hardware."
After Dell's first-quarter earnings failed to impress investors and sent the stock tumbling this week, the company said it expects to tackle its AI server backlog as Nvidia GPU supply improves as it works to improve its margins.
Despite this week's decline, Bank of America analysts reiterated a "buy" rating for Dell, saying "we are still in the early stages of AI adoption with continued strong pipeline and momentum around AI servers," adding that Dell could be able to "capture higher AI margins over time."
HP shares have added about 21% in the first half of 2024, as the legacy tech company signals to investors that it is a beneficiary of the AI boom. Shares jumped this week after the company reported strong earnings and expected gains amid an AI PC accelerated upgrade cycle for consumers and enterprise customers.
Microsoft recently unveiled a new category of Windows PCs designed for AI workloads, with Dell and HP among the original equipment manufacturer (OEM) partners.
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Instablog9ja
2 mths
9
The federal government has made a heartfelt appeal to Organized Labour as they revealed that labour’s current minimum wage proposal of N494,000 is an increase of 1,547 percent of the existing wage. This wage bill will cripple the economy by leading to massive job losses in the private sector.
This is heartfelt and deeply considered appeal to the Labour Unions to continue along the path of negotiations with the Federal and State Governments, under the auspices of the Tripartite Committee that has been established to fashion out a new, realistic minimum wage for the Nigerian people.
As Government, we are desirous of a peaceful outcome, and we will do everything to make this happen. Yesterday, the leadership of the National Assembly met with the Unions. Today, we have offered another invitation to the Unions, to meet with us and continue our discussions.
We will continue to engage, and continue to make ourselves very available in the context of these negotiations on behalf of the Nigerian people
Let me make it clear that we are not opponents on this negotiation table. We are United by the fact that we want the best for the federal Republic of Nigeria and for all 200 million citizens of the country.
We have a responsibility to strike a measured and realistic balance, in this effort to arrive at a new minimum wage for Nigerians Let us remind ourselves of the fundamental facts: The minimum wage is not only for public sector workers. It will be binding on the private sector as well. This reality must be factored into the negotiations.
As I have explained earlier, Labour’s current proposal of N494,000 is an increase of 1,547 percent on the existing wage, and translates into an annual wage bill of 9.5 Trillion Naira for the Federal Government of Nigeria alone.
This is apart from its costimplications for sub-national governments and private sector employees. Such a wage bill would cripple the Nigerian economy, by leading to massive job losses especially in the private sector.
The National Consumer Credit Scheme and the Nigerian Education Loan Fund (NELFUND) are additional significant demonstrations of a determination to bring reliefto the people of Nigeria.
We want the Labour Unions to understand that the relief that Nigerians are expecting, and that they fully deserve, will not come only in the form of increased wages. It will also come as efforts to reduce the cost of living, and to ensure that more money stays in the pockets of Nigerians.
President Bola Ahmed Tinubu (GCFR) is firmly committed to doing what is right, reasonable and sustainable regarding these minimum wage negotiations. We call on the Labour Unions to reciprocate this gesture in the interest of the nation. thank you for listening.
Investopedia
2 mths
14
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Major U.S. equities indexes were mixed to close out the trading week and the month of May.
Investors had the chance to digest the latest Personal Consumption Expenditure (PCE) data, which rose 0.3% in April, matching the results from the previous month. "Core" inflation, which strips out more volatile food and energy prices, recorded a slight downtick in April, which could help alleviate concerns about a potential reacceleration of price increases.
After trading in negative territory for much of Friday's session, the S&P 500 rallied in the final hour of trading to end the day 0.8% higher. Underperformance in the technology sector kept a lid on the Nasdaq, which finished minimally below the flatline. The Dow soared 575 points, or 1.5%, to notch its best day so far this year, lifted by a recovery in shares of Salesforce (CRM) and UnitedHealth (UNH) after they posted heavy losses earlier in the week.
Shares of Caesars Entertainment (CZR) jumped 11.7%, notching the S&P 500's top daily performance. Reports said billionaire and activist investor Carl Icahn has amassed a large stake in the casino operator. In an interview, Icahn said he is comfortable with the current Caesars management team and has no intentions to push for significant transformations.
Salesforce shares advanced 7.5% on Friday, clawing back a portion of the steep declines posted Thursday after customer relationship management (CRM) provided an underwhelming sales growth forecast. Despite the lackluster outlook, the company remains confident in its capacity to emerge as a winner from a potential artificial intelligence (AI) boom.
Shares of Dollar General (DG) added 7.0%. Although the discount retailer topped sales and profit estimates when it reported quarterly results Thursday morning, its shares sank that day amid concerns about headwinds including losses from shoplifting. According to a Friday report by SeekingAlpha, the initial reaction to the results may have overlooked Dollar General's operating improvements and progress on its turnaround plan.
Paycom Software (PAYC) shares suffered the day's heaviest losses in the S&P 500, plunging 8.6% after co-CEO Christopher Thomas stepped down after less than four months in the role, citing personal reasons. Chad Richison will remain at the helm of the payroll software provider as the sole CEO as well as president and chair. The company also announced an additional shakeup in its executive team, with three new leaders joining the c-suite.
Moderna (MRNA) shares dropped 5.9%, despite the biotech firm receiving approval from the Food and Drug Administration (FDA) for its vaccine to protect against respiratory syncytial virus (RSV). The company's first non-COVID product to be greenlit by regulators could provide a key source of revenue as pandemic-related sales recede, but Moderna's shot faces competition from RSV vaccines released in 2023 by GSK (GSK) and Pfizer (PFE). Friday's share price declines also came amid reports that the U.S. government is nearing a deal to fund a trial of Moderna's vaccine against avian flu.
Although Dell Technologies (DELL) reported better-than-expected quarterly sales and profits, analysts raised concerns that increasing demand for AI servers could negatively affect the company's margins. Dell shares plunged 17.9% on Friday, and the losses extended to other companies with exposure to servers. Super Micro Computer (SMCI) shares were down 5.3%. Shares of HP (HPQ) fell 4.9%, giving back a portion of Thursday's solid post-earnings gains.
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Instablog9ja
2 mths
13
Reno Omokri has weigh in on the nationwide strike, as he revealed that N494,000 is more than sixteen times the current minimum wage of N30,000.
He added that Nigerians will bear the brunt if government gives in to the outrageous demands of the labour unions. NLC President, Joe Ajaero, is working to please his master, Peter Obi. They’re fighting a proxy w+r for Peter Obi
If producers of goods and services, like Dangote, Indomie, Nestle, Flour Mills of Nigeria, Glo, petrol stations, etc, have to pay their staff a minimum of N494,000, what do you think they will charge for their products? You, as a worker, will be jumping from frying pan to fire!
Joel Ajaero and his gang are not economists, and worse still, they are supporters of Peter Obi. They endorsed him during the election. They campaigned for him. They defended him. Please assume I am a liar and fact-check me. They are fighting a proxy war for Peter Obi. Obviously, the 2027 election is affecting their direction. They do not have an economic agenda. They have a political objective.
If the Federal Government should give in to their outrageous demands, it is you who will si ffer. Ajaeeo is not poor. He has money. He travels abroad in style. He can relocate his family. It is you and your family that will bear the brunt of this politician in labour union clothes.
Joe Ajaero’s national strike will only cause national strife. This is the eighth strike Ajaero is calling this year. He has called more strikes than the last three NLC Presidents combined! If he wants to be a striker, let him go and become a footballer. He can then compete with Messi and Ronaldo on who is the GOAT striker.
Even the Organised Private Sector, the manufacturing base of Nigeria, have publicly said they cannot pay #494,000, and patriotically suggested N60,000, which is a reasonable amount. I even think the government should go as high as N80,000. But #494,000 is just outrageous and an attempt by Joe Ajaero toplease his master, Peter Obi, who himself pays his own workers at Next supermarket peanut.
How can any reasonable person demand that the minimum wage should increase by 1600%? Has Nigeria’s revenue, production capacity, or tax base expanded by 1600%? Is Joe Ajaero an economic saboteur who wants to crash our economy to make it easy for his boss in the 2027 election?
Ajaero is a politician. He should leave labour unionism and join Peter Obi’s political movement.
