1. Israeli officials stated that the Yemen attack will not be the last, as the Israeli Air Force launched attacks on key locations in Yemen, including Sana'a International Airport and the port of Hodeidah, as well as several oil and energy facilities.
2. The President of Belarus stated that they will receive Russian Oleshnik missile systems. President Alexander Lukashenko announced that Belarus will first receive ten missile systems from Russia and emphasized that if the Russians want to deploy more, they will deploy more.
3. It is reported that China's sixth-generation stealth fighter conducted its maiden flight under the escort of the J-20 Dragon.
4. The Philadelphia Fed revealed that the Biden administration previously claimed to have added 653,000 American jobs, but employment figures in the second quarter of 2023 saw a significant decline, indicating persistent issues with employment data since 2020 (Figure 1).
5. It is reported that China's artificial intelligence will break the chip barrier. #DeepSeek challenges although affected by U.S. chip sanctions, Chinese AI startups are developing rapidly.
DeepSeek and Moonshot AI claim that their performance can rival OpenAI's models, using innovative technologies like reinforcement learning and expert mixtures to overcome technical limitations. Data shows promising results, marking the strength of artificial intelligence in China.
6. Is the S&P 500 in a bubble? When will this bubble burst? (Figure 2)
7. Stifel's Bannister stated that slowing growth and a core inflation rate remaining around 3% could lead to a 10% correction in the stock market (not considering the annual 10% correction), as the S&P 500's price-to-earnings ratio has become overly expanded, which may signal an upcoming correction (Figure 3).
He believes that after two rate cuts, there will be a pause due to sticky inflation and zero fiscal visibility, with the greatest risk from an economic and policy perspective around mid-2025. He pointed out that even a newly elected president rarely cleans up the aftermath in U.S. history, increasing the risk (Figure 4).
8. Nvidia has long been a favorite stock among retail investors, attracting a massive influx of $30 billion from individual investors this year, according to data from Vanda Research, with net inflows growing ninefold compared to 2021.
The second most popular is the S&P 500 ETF.
9. The recent 100 basis point rate cut in the U.S. led to a 100 basis point increase in the yield on 10-year bonds. The bond market is sending a signal to the Federal Reserve that pursuing a rate cut cycle may fundamentally be a mistake, and there seems to be an increasing inclination towards implementing yield curve control to address these market dynamics.
10. Last week, initial claims for unemployment benefits fell to 219,000, while the market expected 223,000. Continued claims for unemployment benefits rose to the highest level in three years, reaching 1.91 million.
Interpretation:
Initial claims for unemployment benefits fell, but the unemployment rate rose, indicating two trends in the tight U.S. labor market.
Last week, initial claims for unemployment benefits in the U.S. slightly decreased to 219,000, below the expected 224,000, reaching the lowest level since November, despite high inflation and the Federal Reserve's restrictive policies, the labor market remains resilient.
But there is a twist; the continued claims for unemployment benefits rose to 1.91 million, the highest level in three years. What does this indicate?
The decline in new unemployment benefit claims indicates that companies are retaining workers, but the rise in continued unemployment benefit claims suggests that job seekers are struggling to find new opportunities, indicating that it has become more difficult for the unemployed to find work.
In today's high inflation and high interest rate economy, the Federal Reserve's tightening monetary policy mainly suppresses inflation by cooling spending, but due to a tight labor market, both workers and businesses face increasingly tricky economic conditions.
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