TL;DR
- The housing and mortgage markets continue to struggle, despite a pause in the Fed’s rate hikes and falling interest rates
- Meta is reportedly working on a competitor to Twitter called Threads, with Elon Musk hitting out at Zuckerberg in the most Elon way possible – by tweeting him a challenge to a cage fight
- Japan’s stock market is hot right now and Warren Buffet has dropped $20 billion an additional into Japanese companies
- Top weekly and monthly trades
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Major events that could affect your portfolio
With the Fed pausing interest rates for the first time in months, there’s finally a little bit of breathing room in the mortgage market. For the past three weeks we’ve seen the average 30 year mortgage fall, hitting 6.69% compared to 6.79% back on June 1st.
And while rates have been up and down since the beginning of the year, they are broadly down from the highs of late 2022 which saw rates notching a high of 7.08%.
But let’s be honest, these are hardly massive swings and rates are still substantially higher than they’ve been in a very long time. Go back to 2020 and the average rate was below 3% and stayed almost that low throughout all of 2021.
All of this is to say, moving house (and therefore getting a new mortgage) is not an attractive proposition right now. Despite the fact that rates have come off their all time highs, mortgage applications hit a 28 year low last quarter.
That means that housing market activity has fallen through the floor as well, with few households willing or able to take the financial hit to move house if it means a new mortgage at potentially double the interest.
For investors, this sort of data is important to watch, because the housing market is a fundamental driver of a huge amount of economic activity. Many sectors of the market generate revenue from housing, such as the banking sector, which is already under increased pressure after multiple banking collapses earlier this year.
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There’s always something happening with social media, but in the last couple of weeks it’s gotten a little more strange than usual.
First we’ve had the Reddit blackout, as moderators took the majority of subreddits private as a protest against the proposed changes to Reddit’s API access. With the company eyeing an IPO later in the year, they’re looking for ways to generate more revenue.
As one of the most popular sites in the world, Reddit is very under monetized compared to other social media platforms, with a big reason for that lying in the somewhat anti-establishment culture of Reddit itself. One change to remedy this was to announce significant charges for other apps to access Reddit’s API, similar to a change implemented by Elon Musk at Twitter.
The move has caused many third party apps to announce they’ll be forced to shut down.
Speaking of Twitter, Meta appears to be working on a competitor, looking to pounce on the turmoil being caused by life under Elon Musk. Rumored to be called Threads, Meta is working on hooking big name celebrities like Oprah and the Dalai Lama to launch the platform.
In response, Elon Musk has challenged Mark Zuckerberg to a cage fight. Seriously. Zuckerberg’s response? “Send me location.”
If the U.S. does eventually fall into a recession, that Pay Per View would probably be enough to pull it back out.
Regardless of the antics, Threads could be a massive value add for Meta shareholders if the company is able to swiftly cannibalize the Twitter (and to a lesser extent, Reddit) user base.
This week’s top theme from Q.ai
As far as market cap goes, the U.S. makes up around 60% of the total global market cap across all stock exchanges in every country. But that still leaves 40% of global value on the table. And sometimes, the best place to park your money (or at least some of it) is outside the United States.
Right now, Japan is the hottest market in the world. It’s no secret that 2022 was horrible for U.S. markets, with the S&P 500 down -19.95% for the year and the Nasdaq Composite dropping -33.89%. The Japanese Nikkei 225 held up significantly better, dropping -10.95%.
Over the last six months, the Nikkei is up 26.79% compared to the S&P 500 which has gained 13.97%.
Not only that, but Warren Buffet is also doubling down on Japan, having recently invested an additional $20 billion from the Berkshire Hathaway
BRK.B
For retail investors, gaining exposure to international markets isn’t always super simple. That’s why we created the AI-powered Global Trends Kit, which provides exposure to the entire world market, both US and overseas.
Not only does the Kit diversify across different economies, it diversifies across different assets as well, with our AI making weekly predictions and trades across global stocks, bonds and even alternative assets such as forex, gold, oil and the volatility index.
If you want a portfolio that invests in everything from Apple stock to wheat futures, this is the Kit to choose.
Top trade ideas
Here are some of the best ideas our AI systems are recommending for the next week and month.
Modine Manufacturing (MOD) – The thermal management company is a Top Buy for next week with our AI giving them an A rating in our Quality Value and Growth factors. Earnings per share is up 79% over the last 12 months.
Apyx Medical (APYX) – The energy-based medical technology company is a Top Short for next week with our AI giving them a D rating in Quality Value, Low Momentum Volatility, Technicals and Growth. Earnings per share was -$0.60 over the last 12 months.
Methode Electronics (MEI) – The electrical engineering company is a Top Buy for next month with an A rating in our AI’s Quality Value factor. Revenue is up 1.4% over the last 12 months.
Stronghold Digital Mining (SDIG) – The bitcoin mining company is a Top Short for next month with our AI giving them an F rating in Low Momentum Volatility. Earnings per share was -$32.89 over the last 12 months.
Our AI’s Top ETF trades for the next month are to invest in natural gas and oil stocks, and to short utilities and corporate bonds. Top Buys are the United States Natural Gas Fund, the Invesco DBO
DBO
Recently published Qbits
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