Major Indices
| Index | Performance |
|---|---|
| S&P 500 | -0.31% |
| DOW Jones | +1.72% |
| NASDAQ | -1.62% |
| FTSE 100 | -0.53% |
| DAX | -0.75% |
| Nikkei 225 | +0.87% |
| Shangai Composite | -3.01% |
Sector Performance
US Inflation: July
Due to a pullback in falling gas prices, inflation increased from 3% in June to 3.2% in July
Is AI a bubble waiting to burst?
AI is certainly a buzzword right now as companies are doing anything to use it. A Morgan Stanley Report however claimed AI stocks have already exceeded the typical gain of an industry that becomes the 'next best thing'. The US Large-cap tech sector has boomed over 200% this year alone. The action of investors trying to escape the bubble before its too late, could cause the burst. In fact, Stability AI CEO Emad Mostaque said: “I think this will be the biggest bubble of all time." There is a very interesting report from Goldman Sachs questioning if it is all just a 'hype', which can be found here. Investment Forecast in AI is expected to reach $200bn globally by 2025.
US Banks downgraded by Moodys
10 Banks had their credit ratings lowered, and others were warned that their investment grade ratings are to be reviewed including Bank of New York Mellon. This is believed to be due to less confidence for customers and higher interest rates which impact smaller banks as deposits have fled to larger banks. Not good for small/medium sized businesses!
The Swiftieconomy
The Eras tour is expected to break (and smash) records for the most ever sales at $1.6bn. There was even 2.3 magnitude earthquake due to the atmosphere at her Seattle concert. The tour is expected to promote $5bn in consumer spending, and the Federal Reserve of Philadelphia has attributed the tour as the driver of their toursim industry, boosting the economy. Lets not get too carried away though, the 'swiftieconomy' makes up only 0.04% of the U.S. economy's $13 trillion six-month GDP
German Economy Update
Germany is showing signs of an economic crisis after being in a recession over Winter and experiencing stagnated GDP growth in the recent quarter. Due to war in Ukraine and banned exports, they are no longer able to buy cheap energy from Russia. Meanwhile, trade with China has stagnated.
GDP Growth in Germany since July 2020
Other Headlines
- Transportation company Yellow has gone bankrupt, providing negative forecasts for the wider market
- US housing market is struggling due to increased borrowing costs, slowing rent growth, and increasing expenses
- Berkshire Hathaway reported a $35.9bn profit in Q2