Weekly Good Reads: 5-1-1
US Jobs, Instability, Gold Purchases, Be Kind, DINKs, Gemini Live
Welcome to a new Weekly Good Reads 5-1-1 by Marianne, a 25-year investment practitioner writing about investing, economy, wellness, and something new I learned in AI/productivity.
Sharing the quote of the week:
Our attitude towards others determines their attitude towards us. ~ Earl Nightingale
Weeklies archive | Investing | Ideas | Index of charts and terms
Conversations with Female Investors and more (to inspire more females into finance and investment careers 🙌.)
Here’s my latest investing post in case you have missed it:
👉 One more: I am inviting you to try our firm’s digital investment software for creating customized portfolios tailored just for your goals and risk profile (for free):
Market and Data Comments
This past week, the US November jobs numbers (+227,000, 36k prior due to hurricanes and strikes) and +0.4% m/m rise in average hourly earnings gave the data the market wanted—decent economic growth—but with a slight uptick in the unemployment rate (to almost 4.3%) and a labour force that continues to decline (-335k).
The Fed is expected to cut another 25bp in December (implied rate-cut probability is now 85%) although the bump-up in long-term inflation expectations will prompt the Fed to be more cautious next year.
For a terrific explanation of the state of the US economy, watch SF Fed President Mary Daly’s recent interview at Stanford, when she mentioned one of the biggest challenges in the US economy is housing availability and affordability (also see Econ/Invest #2).
As to the markets, the S&P 500 reached an all-time high this week (+1%), propelled by a +6.8% rise in the “Magnificent 7” (also see Finance/Wealth article where
raved about the Mag-7 cash machine). At the same time, bonds rallied in the US this past week reacting to weaker November ISM services data and private sector job growth, supporting the Fed’s continuation to cut rates in December.While American “exceptionalism” and relative stock performances have been touted, high valuations and concentrations have prompted investment houses such as Goldman to predict a 3% per annum stock return in the next decade and Bank of America, 0 to 1%. And tariffs can add more wrinkles to the US stock performances.
Recently, the New York Fed added to analyses on Trump’s tariff policy. It highlighted “Import tariffs during President-elect Donald Trump's first term broadly lowered stock values on the day they were unveiled, and were associated with lower future profits, sales and employment for the firms whose equity prices were hit the hardest” (Reuters)—thus hurting US firms.
Bloomberg expects Trump’s initial tariffs would avoid consumer goods, bearing in mind the US public dissatisfaction with inflation.
And targeted tariffs are much more effective than broad tariffs at accomplishing the goal of securing specific supply chains. One reason is that targeted tariffs don’t have nearly as big an effect on exchange rates as broad tariffs…
Trump’s 20% tariff on all imports from all countries would actually weaken the effect of his 60% tariffs on China! If we only tax Chinese imports, we can shift demand away from China to other countries. But if we tax imports from everywhere, the dollar will appreciate, which will cancel out some of the impact of the China tariffs.
So if what the U.S. wants is to reduce its bilateral trade deficit with China, it shouldn’t put tariffs on imports from other countries. Trump’s 20% across-the-board tariff idea wouldn’t reduce our trade deficit meaningfully, but it would make it harder to shift our supply chain out of China.
Other notable news this week includes (1) bitcoin exceeding $100,000 thanks to expected more friendly US regulations and continuous ETF inflows, and (2) various political earthquakes related to ousting of sovereign heads and CEOs. The French PM quit after a no-confidence vote, leaving France with no budget passing. South Korean President Yoon announced and quickly reversed Martial Law and is likely given 6 months to step down after this Saturday’s impeachment vote.
Bloomberg highlighted a record number of CEO ousters (119) this year. Davia Temin, Temin & Co.’s founder commented: “You have to be superhuman to be a CEO today” due to fast technological advances (like GenAI, quantum computing), changing US administration, changing consumer expectations, active board participation when companies run into trouble, etc. Even more shocking news came when the CEO of UnitedHealthcare was shot dead on Wednesday, raising security concerns for the senior people.
This coming week we will monitor the US November CPI on Wednesday and PPI on Thursday, the ECB interest rate decision on Thursday, and China’s November CPI and PPI on Monday, November exports on Tuesday, and its Annual Central Economics Conference (CEWC) led by President Xi on Wednesday and Thursday.
Economy and Investments (Links):
Ten Implausible-Sounding Scenarios for 2025 (The Economist or via Archive)
The Housing Affordability Crunch (IMF)
Source: IMF Why America’s Economy is Soaring Ahead of its Rivals (FT or via Archive)
(reasons: higher business investment, faster productivity helped by higher R&D spending, higher energy supplies, etc.)
+ For professional and interested investors, here’s a link to the Outlooks for 2025 by Wall Street/investment firms I have saved for your enjoyment.
Finance/Wealth (Link):
Good Conspiracy: ESG, Assemblies, HPS (Money Stuff: The Podcast)
+ Buy ‘Magnificent Seven’ on Corrections, NYU’s Damodaran Says (Bloomberg or via Archive)
Wellness/Idea (Link):
Why Be Kind? You Might Live Longer (Quiz) and Biology of Kindness (The Harvard Gazette)
+ Is Reading Dying? (Justin Cox)
One Chart You Should Not Miss: Central Bank Gold Buying
Central banks around the world bought a record high amount of gold in 2022 (1,082 tonnes (t)) and a good amount in 2023 (1,037t) and in October, they purchased the highest amount YTD (60t). By Q3 2024, central banks have purchased 694t of gold, comparable to levels in 2022.
Emerging market central banks such as India, Turkey, and Poland have led the pack, adding 77t, 72t and 69t YTD to their gold reserves respectively. These three central banks account for 60% of total global net purchases in 2024.
Gold has been viewed favourably by central banks as a reserve asset as the complex geopolitical and financial environment (e.g. interest rate, inflation) has prompted the central bank to focus on accumulating and managing gold reserves for diversification and risk management. Central banks also expect gold reserves will be at a higher percentage in total foreign exchange reserves in 5 years’ time (World Gold Council).
One Term to Know: DINKs (Dual Income, No Kids)
According to a recent Harris Poll taken between July 18th to July 27th this year among 4,270 adults aged 18 and over, a group termed “DINKs” (dual income, no kids), is “a financially empowered group representing 5% of U.S. households, prioritizing personal wealth-building and high-value lifestyle choices over traditional milestones. With 61% of DINKs earning household incomes above $100,000 - this segment is redefining consumerism and investments through dual-income flexibility” (Yahoo).
DINKs may not be all about higher-quality life experiences but a survival strategy when the couple combine income for better financial security, especially after the financial trauma during the Pandemic.
[🌻] Things I Learn About AI/Productivity:
ChatGPT Canvas: OpenAI's Trojan Horse for Enterprise Domination (Section)
ChatGPT can become your default AI assistant if you can create/edit your writing and codes all within one app—putting enterprise-grade tools into the hands of consumers at consumer pricing.
What makes Canvas significant isn't the feature itself — it's the strategy behind it. During our testing, Greg pointed out something crucial: this isn't meant to be a writing tool like Lex or a coding tool like GitHub Copilot.
It's OpenAI's play to become the default workspace where everyone does their AI-assisted work.
Talking to the Gemini Live App.
I have a decent experience talking to the Gemini Live App on my phone.
What does Gemini Live do: Brainstorm ideas, explore new topics, and rehearse for important moments, all with real-time, spoken responses—right from the Gemini app (Google).
Let me give you an example - I asked Gemini Live (by pressing the bottom right icon) what I can do in San Francisco in one day.
You can choose a voice and listen to the results, and if you want to stop it, it will bring you back to the text. Not bad?
Please do not hesitate to get in touch if you have any questions!
Please also check out my Conversations with female fund managers, wealth advisors, and more.
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