Finance Knuggets
Jul 31, 2024
The latest economic data in the U.S. indicates steady state growth with slightly higher than expected inflation. Consumer and business spending continue to rise at a yearly pace of about 5.5%, and the gap between spending and production is relatively small. Factors such as increased productivity and the resolution of supply disruptions due to the pandemic and war are contributing to this positive outcome. However, there are concerns about the potential impact of interest rate changes on consumer spending, business investment, and hiring. Analysts are calling for the Federal Reserve to make a move soon, but rapid rate cuts could lead to an unwelcome acceleration in inflation.
Traders are focusing on a central bank this week, which may not be the Federal Reserve. Additionally, there is attention on big tech earnings for the latest quarter, particularly related to AI-related capex. Major companies such as Microsoft, Alphabet, and Meta have been increasing their spending on AI infrastructure, raising questions about the potential revenue justification for such investments.
There has been a significant amount of venture capital activity, with various companies in different sectors raising substantial amounts of funding. Additionally, there have been notable private equity deals, public offerings, and M&A activity, as well as fundraising efforts by investment firms. Lastly, there are concerns about AI’s problem with missing revenues and how AI is driving the venture capital market.
Stay Well!