Hear About the Roquefort in the Olympics? It Blue Away the Competition! |
When it comes to cheese puns, I feel we've been sticking, here at N2K, with the far too well-known cheeses. But what about Italy's Casu Marzu cheese, which is famous for containing live maggots? I hear it's larva-ly for a Friday morning snack. And that, my editor says, is the last time you'll ever see me refer to it. Meanwhile, the Olympics' opening ceremony is tonight, and the U.S. economic picture is as confusing as a slice of Stinking Bishop. The cheddlines: Are you excited about the Olympics? Are you excited about the Olympics? Or does the thought leave you feeling like a caciocavallo podolico—sweet at first, but spicy and delicate after a while? That wasn't even a pun, I realize. It was cheese analogy. A cheddar-fore! Matt Davis, Need2Know Chedditor |
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1. This Isn't the Day to Check Your 401(k) |
What goes down must come up. At least that's what my Cheddar manager tells me, every time I call him in a panic, yelling, "Sell it all, Dean! Stick it under the mattress! I can't take the stress!"
Suffice to say this isn't a good day to log into your Schwab account just to see what your "retirement" funds are doing, unless you fancy flipping burgers to pay the rent when you're 75. I actually am rather proud of myself for not having done so yet, although who knows if that'll still be true by the time you're reading this. Just a little peek can't hurt, after all, can it?
YIKES.
Global shares also fell this week after a steep Wednesday drop on Wall Street due to disappointing profit reports from Tesla and Alphabet (they only made billions of dollars, instead of zillions of dollars—see yesterday's N2K for more!), which brought a halt to recent over-enthusiasm about the potential for AI to boost Big Tech's profits. Tokyo's Nikkei 225 saw a loss of over 3%, hitting its lowest since April, while major European markets like France's CAC 40 and Germany's DAX also faced declines.
The global decline reflects heightened anxiety over the technology sector's fitness, amid broader high expectations for U.S. company profits, particularly those within the tech heavy "Magnificent Seven" group. Energy markets also felt the impact, with benchmark U.S. crude and Brent crude experiencing drops in their valuations. Big tech can flip global market sentiment quicker than you can say "AI is overrated, bro," it seems, especially amidst the challenge of valuing AI development. The Dow did claw back some of its losses on Thursday, as did the S&P, but the NASDAQ continued to lag, down 3.5% since before the big two issued their results. Read More |
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2. U.S. Economic Growth Increased Last Quarter to a Healthy 2.8% |
When my 401(k) is down, I like to spend money on Amazon to distract myself. And that's good news. (For Amazon.) Because it wasn't all doom-and-gloom in the markets yesterday. In fact, a significant piece of good economic news also happened—the U.S. economy showed robust growth at a 2.8% annual rate last quarter, accelerating from a 1.4% pace in the previous quarter and outperforming economists' expectations of 1.9%.
The increase was largely driven by consumer and business spending, despite ongoing high interest rates. The growth suggests progress towards a possible "soft landing," a scenario where the economy slows sufficiently to curb inflation without entering a recession.
Consumer spending, a critical component of economic activity, increased at a 2.3% annual rate, with spending on goods also rising. Business investment also surged, highlighted by a notable 11.6% rise in equipment investment. Inflation also showed signs of easing, with core inflation, which excludes food and energy, slowing to 2.9% from 3.7% in the prior quarter. Based on these trends, the Federal Reserve is anticipated to lower interest rates soon, likely starting in September, which could further reduce borrowing costs.
Despite inflation cooling from last year's peak due to various economic measures and external factors, prices remain above pre-pandemic levels. Doesn't seem to be stopping us flexing our spending power, though, does it? Read More |
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| We got an exclusive look at @airweaveusa's fully recyclable cardboard beds for the 2024 Olympics.
First introduced during the 2020 Olympics in Tokyo, the beds have been criticized by some athletes, who claimed they were designed to "discourage intimacy" among athletes. Not that it ever works, apparently, what with all the sensuously athletic bodies running around.
However, the mattress offers customizable features such as three different modules for firmness and adjustability for height. The bed aims to align the spine and provide athletes with a longer and deeper sleep experience. We said SLEEP experience. D'ya hear? 🛏️🥇 |
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3. Let's Chase the Small-Cap Stock Gains! |
Or not! Smaller stocks on Wall Street, which have been lagging their larger counterparts for years, have begun to show notable strength of late. Renewed investor interest is partly driven by the anticipation of interest rate cuts, which are generally more beneficial to smaller companies burdened with heavier debt, allowing them relief from lower borrowing costs. The Russell 2000 index, which represents small-cap stocks, saw a significant rise of 11.5% over a five-day period starting July 11, vastly outperforming the modest 1.6% gain of the large stocks in the S&P 500 during the same timeframe. This surge attracted $9.9 billion into funds focusing on small U.S. stocks, marking the largest inflow since 2007.
The signals are encouraging, suggesting a healthier market environment characterized by a broad participation of stocks rather than reliance on a few big players (see "big tech crashes out on AI profit disappointment," above). But similar bouts of enthusiasm for a broader market rally have appeared sporadically, over the years, only to see the dominance of big tech resume, each time.
Professional investors remain skeptical about the sustainability of the small-cap rally. They point out challenges such as the struggle for profitability among a significant portion of small-cap companies, their greater dependence on consumer spending (which, er, is way up), and the lesser likelihood of benefiting from the AI trend, unlike their larger counterparts, who seem to be intent on buying up all the AI companies to beat out the competition. Or "monopolize the market" if you're European, or something. Apparently having a "diversified portfolio" is the smartest way to avoid getting caught up in unsustainable stock runs. But is there ever anything more satisfying than betting your entire net worth on a basketball game? Or, say, an Olympic event? Purely hypothetically. Read More |
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You Need 2 Know About This Box!
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Meet the Sunset Box, a quarterly subscription service sending home, wellness, and travel goodies straight to your doorstep, curated by editors at mag Sunset, the Western-lifestyle magazine that just so happens to be a sister company of ours. Since you clearly have good taste (you're an N2K subscriber, after all), we think you'll love this box. Use code CHEDDAR15 for 15% off your subscription. |
Note: Sadly does not contain any cheese. |
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4. Crowdstrike Offering $10 Vouchers for Outage |
Nothing says you really mean you're sorry for grounding global flights, halting hospital procedures and bank transactions than offering people a $10 Uber Eats gift card. File this one under "CrowdStrike should have cleared this through their PR firm first." Because CrowdStrike's PR firm, assuming they still have one at this point, would have said, "In an atmosphere where everything you do will be scrutinized by the press for signs of insensitivity, this is a stupid idea that risks minimizing all the crisis-management effort we've done to keep you guys employed and out of court. You are all absolute gold-star Muppets!"
But that's often how these things go. Someone does something well-meaning but lacks insight into the bigger picture and then everybody looks bad. On that note, so-called cyber-security firm CrowdStrike—whose CEO George Kurtz is about to appear before Congress to explain what happened—has expressed regret over the lost trust for those impacted by the global tech outage caused by his firm's faulty update rendering 8.5 million Windows devices inoperable. Now, the firm's chief business officer, who I think might get fired sooner than he expects, admitted to TechCrunch that he'd sent an email out making the $10 gift card offer, which got such a high uptake that Uber Eats then flagged the gift cards as potential fraud. In other words, a well-meaning effort by CrowdStrike to make amends for a global tech crash caused…yet another system to crash. Cue Alanis Morissette. Read More |
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5. Voulez-Vous Coucher Avec Cardboard? |
Cheddar's own Dave Briggs jumped up and down on one of the Olympics "anti-intimacy" beds just to prove that, in fact, these puppies are built for a veritable decathlon of activity, athletic or otherwise. With 16,000 athletes on the way to the Games, these architect-designed cardboard beds are fully recyclable, reducing the event's environmental impact.
The mattresses are also customizable, and each athlete is scanned by an AI system to determine the ideal feel, from soft all the way to, er, extra firm (can it, Beavis!). Swimmers with big, broad, muscular shoulders might get a soft part of the mattress at the top of the bed, and then harder for their legs, and so on, all thanks to AI, which is able to customize a mattress for a person without getting distracted by baser instincts.
Athletes weighing up to 400 pounds will sleep on these things, and more than 6,000 mattresses will also be donated to the French army after the Games. Thankfully they're "fully washable." Although why Dave needed to ask about that, we have no idea. Read More |
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| So, What Do You Think of Cheddar?
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We want to hear from you! From shows to site to this very newsletter, we'd love some feedback. |
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