Market News 7/18

Markets

Yesterday, the stock market experienced significant bullish momentum as the Dow Jones Industrial Average recorded its most impressive performance of the year. This marked the sixth consecutive day of gains for the index. In anticipation of important earnings announcements scheduled for this week, investor sentiment remained high. Furthermore, Activision Blizzard saw a slight increase in its stock value as Microsoft approached the deadline for its acquisition of the company. However, it appears that the closing date will be rescheduled due to ongoing negotiations with UK regulators.

Economy

Americans have more money now

In the United States, individuals are finding themselves with increased financial resources, leading to a surge in bank account balances compared to pre-pandemic levels. According to an analysis conducted by JPMorgan Chase, approximately 10% to 15% more money is now present in the checking and savings accounts of 9 million Chase customers compared to 2019. Additionally, after a period of trailing behind inflation, wages are finally rising at a faster rate than consumer prices. In the previous month, hourly wages increased by 4%, while the prices of consumer goods only rose by 3%.

This newfound financial stability is reflected in the spending habits of Americans, who are demonstrating a willingness to utilize their increased funds. However, despite the overall positive trend, median account balances have decreased by over 41% since reaching their peak in April 2021. This decline can be attributed to the distribution of stimulus checks during that period when people had limited opportunities to spend them due to pandemic restrictions. Nevertheless, consumer sentiment remains high, reaching almost a two-year peak this month, indicating a desire to engage in shopping activities.

This situation helps to elucidate why the anticipated recession, cautioned by Wall Street, has not materialized thus far, as reported by The Washington Post. It is hoped that this positive trend will continue in the future.

Conversely, the situation in Europe is different. The Wall Street Journal reports that Europeans are experiencing a decline in their economic well-being. Wages have decreased, and the impact of the ongoing Covid-19 pandemic and the conflict in Ukraine continues to be felt across the continent.

Politics

Russia nixed the landmark deal on Ukrainian grain.

In a recent development, Russia declined to renew an agreement that played a crucial role in maintaining stability in global food prices. This agreement allowed Ukraine to export grain through the Black Sea region. The decision was met with concern by UN Secretary-General António Guterres, who emphasized that it would negatively impact vulnerable populations worldwide, amplifying their struggles.

Furthermore, Russia made headlines regarding its treatment of foreign companies operating within its borders. Specifically, it seized the local assets of European companies Danone and Carlsberg, highlighting the risks faced by international businesses that choose to continue operations in Russia.

Additionally, a bridge connecting Russia to the Crimean Peninsula, which was annexed by Russia in 2014, was subjected to a Ukrainian attack. This incident resulted in damage to the bridge, further intensifying tensions between Russia and Ukraine.

Sports

Making millions

While earning a degree from Wharton School of the University of Pennsylvania is certainly commendable, if your goal is to accumulate significant wealth, you might want to consider a different path—one that involves being exceptionally tall at 6'10" and possessing impressive basketball skills. Surprisingly, the Wall Street Journal reports that there are currently more NBA players earning annual salaries of $30 million or more than there are CEOs of companies in the S&P 500 guaranteed the same level of income. This means that it's not just superstar players like LeBron James who are enjoying lucrative contracts; even relatively lesser-known players are securing substantial financial deals.

The Wall Street Journal specifically highlighted an agreement between the Indiana Pacers and Bruce Brown, a player who began last season on the bench but quietly contributed to his Denver Nuggets teammates' success in winning the championship. The deal with the Pacers could potentially earn Brown up to $45 million, demonstrating the significant financial opportunities available to skilled basketball players, regardless of their previous level of recognition.

Medicine

Experimental drug slows Alzheimer’s progression.

Eli Lilly has announced the results of clinical trials for its Alzheimer's treatment called donanemab. The findings revealed that the drug generally slowed down the progression of the disease by approximately one-third. In certain patients who received the medication during the early stages of Alzheimer's, the drug demonstrated an even more significant impact, reducing the disease's pace by up to 60%. This makes donanemab the second drug, following the recently approved and expensive Leqembi, to show effectiveness in treating Alzheimer's. Both drugs specifically target amyloid plaque, a prominent characteristic of the disease found in the brain. Eli Lilly has submitted an application for FDA approval of donanemab and anticipates a decision by the end of this year.