Podcast Summary
Fidelity Active ETFs performance risk: Considering Fidelity Active ETFs investment, be aware of the potential to outperform an index but also the risk of significantly trailing it.
While considering investment in Fidelity Active ETFs, it's important to understand the potential to outperform an index but also the risk of significantly trailing it. Neil Fryman from the Morning Brew Show recommends several books from the New York Times' list of the 100 best books of the 21st century, including "My Brilliant Friend" by Elena Ferrante, "The Corrections" by Jonathan Franzen, and "The Known World" by Edward P. Jones. Toby Howell, on the other hand, is currently reading "A Court of Thorns and Roses" and is considering creating his own list of recommended books. In other news, Meta AI can provide personalized training recommendations, helping to expand users' workout routines. Inflation rates decreased in June, with a yearly growth rate of 3%, the lowest since June 2023.
Latest Inflation Report: Latest report shows inflation may have slowed, housing sector saw smallest shelter price increase since 2021, but potential cracks in other consumer spending areas, Fed expected to cut interest rates in September, Powell acknowledges other economic risks
The latest report indicates that inflation may have been tamed, with prices declining and shelter prices seeing the smallest increase since 2021. This is good news for consumers, businesses, and the Fed, but the psychological impact of past inflation may take time to heal. The MVP of the report was the housing sector, where shelter prices only climbed 0.2%. However, there are signs of potential cracks in other areas of consumer spending, such as the snack industry, where price increases have outpaced the broader consumer price index. The Fed is expected to cut interest rates in September, which could help stimulate the economy and make borrowing cheaper. Jerome Powell has also acknowledged that elevated inflation is not the only risk facing the economy, with unemployment increasing for the past three months.
Airline profits: Despite record travel numbers, increased expenses and oversupply are causing a profit crunch for airlines, with Delta reporting a 29% drop in profits, and budget airlines being hit the hardest.
The airline industry is facing a profit crunch despite record-breaking travel numbers due to increased fuel prices, labor expenses, and an oversupply of seats and flights. Delta, which was expected to fare better due to its focus on international routes and premium seating, reported a 29% drop in profits, indicating a potentially rough earning season for airlines. The situation is particularly challenging for budget airlines without robust premium offerings. Additionally, major events like the Paris Olympics can lead to significant demand fluctuations, resulting in financial losses for airlines heavily exposed to those markets. In the case of Delta, its partnership with Air France leaves it vulnerable to a $100 million hit due to the Olympics. Meanwhile, in Texas, residents near a new Bitcoin mining facility are reporting health issues they believe are connected to the operation, adding another layer of complexity to the business landscape.
Bitcoin noise pollution: Bitcoin mining operations produce significant noise pollution, exceeding regulatory limits and leading to potential health issues. Stricter regulations are needed to mitigate the impact on local communities.
The expansion of Bitcoin mines and data centers is leading to conflicts with local communities due to the significant noise pollution they produce. Decibel levels from these operations can range from 70 to 90, which exceeds typical regulatory limits in many areas. This constant loud noise can lead to health issues, particularly related to cardiovascular conditions. Despite these concerns, regulations regarding noise are often lax, making it challenging for residents to seek relief. The Bitcoin mining industry, which consumes as much power as Switzerland annually, is experiencing a surge in commercial-scale operations in the US, resulting in more clashes between local communities and these buzzing behemoths. This issue goes beyond just the pay gap faced by female athletes in sports, as discussed earlier, and highlights the importance of addressing various financial inequities and planning for long-term money goals.
Tesla robo-taxi delay: Tesla's robo-taxi delay has caused investor concern, leading to a stock price drop, despite strong delivery reports and battery business growth.
Tesla's delay in revealing its robo-taxi has caused concern among investors, leading to a significant drop in the company's stock price. Tesla had experienced an impressive 11-day rally due to strong delivery reports and growth in its battery business. However, the delay in the robo-taxi announcement, which Elon Musk has been promising since 2015, has raised questions about the timeline for this product and the impact on Tesla's market share and car sales. Some investors are worried that this delay could be more than just a minor setback, given Musk's past promises and the significant valuation tied to the robo-taxi unit. The markets reaction suggests that investors are anxious about the potential impact on Tesla's growth prospects.
Costco's membership fee increase: Costco's membership fee increase often leads to a dip in stock price the day after, but the company has historically outperformed the market in the weeks leading up to the change, a trend known as buying the rumor and selling the news.
Costco, despite raising membership fees for the first time in seven years, has historically seen a dip in stock price the day after the announcement, but has generally outperformed the market in the weeks leading up to the change. This trend, referred to as buying the rumor and selling the news, is reminiscent of the subscription price increase strategy used by companies like Netflix. Costco's ability to keep prices low through membership fees and popular offerings like the $1.50 hot dog combo has made it a winner during inflation and the pandemic. Meanwhile, the extravagant wedding of Anant Ambani and Radhika Merchant, expected to cost over $150 million, has dominated headlines in India and beyond, with guests including former prime ministers, tech moguls, and celebrities. Despite criticism for flaunting wealth in a country with extreme economic inequality, the family is reportedly getting what they want, making this wedding a spectacle for the paparazzi.
Wealth displays: Extravagant wealth displays evoke diverse reactions, from admiration to frustration, and can lead to economic implications and unusual behaviors, while the house always has an edge in gambling.
Extravagant displays of wealth, such as the upcoming Ambani wedding in India or the closing of a casino like The Mirage in Las Vegas, can elicit various reactions from people. While some may view the wealthy individuals or institutions as aspirational, others may be frustrated by the traffic and economic implications. Regulations, like those requiring casinos to pay out progressive jackpots before closing, can lead to unusual behaviors. Despite the promises of potential winnings, the house always has an edge, and the money being paid out is often from gamblers' losses. The opening of institutions like the Mirage in Las Vegas marked a turning point, leading to an era of luxury and over-the-top spectacle, attracting millions of visitors each year.
Hard Rock Hotel Sculpture: A towering and classy guitar sculpture is expected to open at the new Hard Rock Hotel and Casino in Las Vegas, adding excitement to Neil's upcoming visit
Neil and his friend are planning a trip to Las Vegas to visit the new Hard Rock Hotel and Casino, which is set to open with a massive guitar sculpture on the strip. The sculpture is expected to be towering and classy, adding to the excitement of their upcoming visit. If you have any questions or want to ask the hosts a question, you can email morningbrewdaily@morningbrew.com. The show was produced by Morning Brew with Emily Milliron as the executive producer, Raymond Liu as the producer, Olivia Graham as the associate producer, Yuchena Waugu as the technical director, Billy Menino on audio, and Tara Makeup playing the slots at the Mirage. Devin Emory is the chief content officer. Neil had a great show and everyone wishes him well.