Alchanati Campbell & Associates
We are a very particular and stubborn species. We hate and we love. We’re high-maintenance, needy, different, and approval-seeking. We want recognition and external-acknowledgment. But... we all still miss the small moments in life that create the memories we carry. The short-lived relationships are still worthy enough where they become a sketch within our life story. We complain and expect others to listen. We struggle and assume others understand our pain. But... we all believe we’re one of a kind; unique in experience and expression. Why is that? Education teaches us to “try our best”. Our parents tell us to “follow our hearts”. Religion tells us to “believe we’re the chosen people”. Society tells us to “follow trends and other influences; playing us to be the consumers that we are”. We learn from books and mentors. Our principles come from history and legacy. And all we can do is be as “individual” as we can... dreaming in fantasy land.
The Market. The top 25 metro areas accounted for more than half of the US $19.5 trillion GDP in 2017. (New York, Los Angeles, Dallas, Washington, and San Francisco are the top 5). The new and best-paying jobs are clustered in cities like San Francisco, New York, and Seattle. Economic opportunity for most Americans increasingly hinges on one factor: where you live. There is a rate cut expected in late July. The Feds have made this decision due to the inflation increasing. Lowering rates is supposed to increase spending and investing. The US budget deficit widened by 23% to $747 billion in the last 9 months.
How mobile devices are affecting families. Half of teens felt “addicted” to their mobile devices. 89% of teens had their own smartphones. US teenagers who spend three hours a day or more on electronic devices are 35% likely to have a risk factor for suicide than those who spend less than one hour. Poor sleep has been linked to a number of mental and physical health problems, as well as diminished academic and cognitive performance. Mobile device use affects sleep by encroaching on sleeping hours through the effects of bright lights (blue light) disturbing sleep rhythms. Parents and teens keep their mobile devices close by at night, including a third of teens who keep their mobile devices in bed with them. Many teens and parents are having their sleep interrupted by notifications. Doctors and researchers say not to use screens in the hour before bed.
What makes a good trader. The two main drivers of trader performance are cognitive reflection and theory of mind. Cognitive reflection helps traders use market signals to update their beliefs. Theory of mind offers traders crucial hints on the quality of those signals. Most traders tend to rely on simple heuristics instead of performing the requisite calculations. Trades of high-IQ males outperformed those of low-IQ males. Financial literacy, personality traits, and risk attitudes play a lesser role in understanding trader performance.
Fixed Income, Gold, and Equities are all near their local highs, and the USD is showing strength against its highest volume pair, the Euro. In the past, we have seen fixed income, gold, and equities all compete for capital inflows, shown by their reputable indices increasing/decreasing in value. In the last 3 months, we have seen all three of these asset classes increasing in value, while the USD at first depreciated, then appreciated in value. Usually when we see Gold increase, we see equity and the majority of the fixed income market decreasing, which represents fear in the markets, as people hedge with gold. The fact that we see all three nearing their local high’s, with a correlation between these 3 asset classes increasing, shows something weird is happening in our market. This could explain partially why the fed is seriously contemplating cutting the fed funds rate by 25-75 bp’s, while the market is already experiencing irrational exuberance.
The Economics of Healthcare. About one out of every six dollars spent in the US economy goes to some form of healthcare. The healthcare market has consumers like patients, and producers, like doctors and nurses. There are also third parties like insurers and governments. Patients often don’t know what they need and cannot evaluate the treatment they are getting. Healthcare providers are often paid not by the patients but by private or government health insurance. People are living longer. Healthcare spending is a growing share of the economy.
Monetary and Fiscal Policy. Fiscal policies are decisions to change spending and taxation levels by the federal government. Increasing federal spending and/or reducing taxes can promote more employment and output, but these policies also put upward pressure on the price level and interest rates. Decreased federal spending and/or increased taxes tend to lower prices and interest rates, but they reduce employment and output levels in the short run. Monetary policies are decisions by the federal reserve system that lead to changes in the supply of money, short term interest rates, and the availability of credit. Open market purchases or sales of government securities affect the money supply and short-term interest rates. The federal reserve tends to increase interest rate targets when it feels the economy is growing too rapidly and/or the inflation rate is accelerating. It tends to lower rate targets when it wants to stimulate the short-term growth of the economy.
The Alchanati Campbell and Associates Team
WHAT'S UP FRIDAY? is a weekly newsletter that will give you a summary of "What's up?" on Wall Street, in the US and around the World written by The Alchanati Campbell and Associates Team. What makes us unique is we focus on long-term knowledge; knowledge that will still be useful to you 10 years from now.