Money Masters Market Pulse Week 37

Inflation Hits Lowest Point Since 2021, OpenAI to Raise at 150Bn Valuation, and Earnings

September 13, 2024

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Dear Money Master,

Welcome to another edition of your financial weekly roundup! This week, we’re diving into China’s demographic changes, Open AI valuation, CPI and major moves by tech companies. Plus, we’ll take a deep dive into August’s deflation trends and what they mean for consumers and businesses alike. 🚀

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📰 Your Daily Financial Digest - September 13th, 2024

🌍 Economics:

  1. China to Raise Retirement Age Starting in 2025 👴
    China plans to raise its statutory retirement age starting in 2025, incrementally increasing it over 15 years. This comes as the country grapples with a shrinking workforce and looming pension deficits, aiming to stabilize the economy long-term. Read More

  2. Biden Targets Shein and Temu with New Trade Rules 💼
    The Biden administration announced new rules to limit the use of the de minimis trade exemption by Chinese retail giants like Shein and Temu. The exemption, which allows goods under $800 to bypass tariffs, has been widely used, giving these companies a competitive edge. Read More

  3. Berkshire Hathaway Continues Bank of America Sell-Off 💸
    Berkshire Hathaway has sold another $228.7 million of Bank of America stock, reducing its stake to 11%. This brings its total sales since July to more than $7 billion, though Bank of America remains its third-largest holding. Read More

💻 Technology:

  1. Alibaba’s Taobao Launches English Version in Singapore 🇸🇬
    Taobao’s AI-powered English-language version surged to the top of Singapore’s App Store following its release. This move aims to make shopping easier for non-Chinese users, showcasing Alibaba’s global expansion strategy. Read More

  2. Tiger Global to Join OpenAI’s $150 Billion Valuation Funding Round 🤖
    Tiger Global plans to invest in OpenAI’s latest funding round, which would more than double the AI company’s valuation to over $150 billion. Thrive Capital is leading the round with a $1 billion investment, with Microsoft, Nvidia, and Apple also reportedly in talks to join. Read More

  3. Samsung Shares Drop as Indian Factory Strike Continues 📉
    Samsung's stock fell as strikes at its southern Indian plant entered their fifth day. Workers demand wage increases, shorter hours, and union recognition, disrupting production of consumer electronics. Read More

  4. Grayscale Launches XRP Trust, Price of Token Jumps 🚀
    XRP saw a price surge after Grayscale launched a new trust giving accredited investors direct exposure to the token. Grayscale's move follows Ripple’s partial victory against the SEC in 2023, boosting confidence in the cryptocurrency. Read More

💹Earnings:

  1. Dick’s Sporting Goods Beats Q2 Expectations but Outlook Disappoints 🏀
    Dick’s Sporting Goods surpassed Q2 earnings estimates with $4.37 per share but issued muted full-year guidance, falling short of analysts’ expectations. The company raised its EPS forecast but warned of potential impacts from the upcoming U.S. elections. Read More

  2. Dollar Tree Shares Plunge After Cutting Full-Year Outlook 📉
    Dollar Tree lowered its full-year sales and profit outlook, citing increasing pressure on middle-income customers and higher expenses from store liability claims. Earnings per share for Q2 also missed expectations, coming in at 97 cents. Read More

  3. Adobe Shares Drop Despite Beating Q3 Estimates 💻
    Adobe reported better-than-expected Q3 revenue and earnings, but its stock fell due to soft Q4 guidance. The company expects revenue to be lower than analysts' expectations, despite growing Digital Media sales by 11%. Read More

  4. Oracle Boosts Long-Term Revenue Outlook, Shares Surge 📈
    Oracle raised its fiscal 2026 revenue guidance to at least $66 billion and forecasted over $104 billion in 2029, pushing its stock up. The company credits growth from cloud services and AI partnerships with Amazon, Google, and Microsoft. Read More

🔍 Deep Dive: Deflation Breakdown in August 2024 📊

In August 2024, inflation fell to its lowest level since February 2021, indicating a slow rise in overall prices. While this is a welcome relief for many, pockets of deflation—where prices actually drop—are emerging, especially in physical goods. Here's why deflation matters: although falling prices may seem beneficial to consumers, widespread deflation can signal weak demand, harming businesses and potentially leading to job losses.

Key Deflation Trends:

  • Food Prices Drop: Essential grocery items like apples (-13.9%), potatoes (-6.6%), ham (-3.4%), and fresh seafood (-2.7%) are seeing notable price declines. This has been largely driven by the normalization of supply chains post-pandemic and less consumer pressure on physical goods.

  • Energy Costs Decline: Energy prices have also fallen, with gasoline (-10.6%) and fuel oil (-12.1%) leading the way, giving consumers a break at the pump and with heating costs.

  • Big Ticket Goods: Categories like used cars (-10.4%), furniture (-5.1%), and appliances (-3.2%) have also seen price cuts, thanks to improved supply chains and lessened consumer demand.

While these deflationary pockets benefit consumers in the short term, sustained deflation could hurt businesses and signal broader economic challenges, especially if tied to declining demand.

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Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.