💔 No rate cut yet

The Federal Reserve dashed hopes of an early trim | The World Bank pushed up its expectations for the global economy | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for June 13th in 3:12 minutes.   👈 When everyone goes right, you might want to try going left. Join us for [The Insiders' Guide To Leveraged And Inverse ETF Trading]( at 5pm UK time today, and find out how to forge your own route. [Grab your free ticket]( Today's big stories - Despite calming inflation, the Federal Reserve signaled that investors might have to wait longer for a rate cut - Morgan Stanley’s model shows the US economy isn’t as robust as it seems – [Read Now]( - The World Bank hiked its forecast for the global economy, but one country seems to be doing most of the heavy lifting Smoke Signals [Smoke Signals] What’s going on here? The Federal Reserve (the Fed) suggested on Wednesday that there’ll only be one interest rate cut this year, despite a softer-than-expected inflation report coming out earlier the same day. What does this mean? May’s inflation came in calmer than expected. Prices stayed flat from the month before for the first time in nearly two years, bringing the annual inflation rate down to 3.3%. Plus, core inflation – which removes volatile food and energy prices – picked up by the smallest amount since August 2021. But despite those figures suggesting that inflation’s heading toward the Fed's 2% target once again, the central bank kept rates at their two-decade high of between 5.25% to 5.5%, as well as signaling just a single rate cut this year. Why should I care? For markets: Wake me up when September starts. That prediction isn’t unanimous, though. Seven Fed policymakers expect one cut this year, eight say two, and four a flat zero. Traders are still betting on two cuts, with about a 60% chance for the first starting as soon as September. In reality, it’ll all hinge on the next batches of data tracking economic growth and inflation. Just remember, data and investor sentiment are far from set in stone: just a few days ago, strong job numbers pushed back rate cut expectations. The bigger picture: Just right. The S&P 500 topped $5,400 for the first time on Wednesday. That’s because the US is hitting a “Goldilocks” phase, with the economy still looking robust while inflation seems to be heading south. That’s an ideal environment for stocks: the economy’s strong enough to spur on companies but weak enough to push the Fed toward rate cuts, which would reduce borrowing costs and increase stock values. That said, it could all change on a dime. On one hand, a hardy economy could keep inflation simmering. On the other, a drop in inflation could signal a faltering economy. You might also like: [2% isn’t a magic number – the Fed could consider a higher inflation target](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Smoke Signals&utm_campaign=daily-global-13-06-2024&utm_source=email) Analyst Take Morgan Stanley’s Cycle Model Is Stuck On “Downturn” [Morgan Stanley’s Cycle Model Is Stuck On “Downturn”]( [Photo of Stéphane Renevier, CFA] Stéphane Renevier, CFA, Analyst The US economy tends to move in a pattern, with alternating periods of [ups and downs](. But, if you’re just tracking the data, it can be [surprisingly tricky]( to figure out where it is in the flow. That’s why [Morgan Stanley]( developed a model that strips away the conflicting signals to get a better read on where the economy sits. And for the past year, it’s been perched squarely on [“downturn”](. That’s today’s Insight: [Morgan Stanley’s economic model shows the US stuck in downturn mode](. [Read or listen to the Insight here]( Five active ETFs that could whip your portfolio into shape Experts wax lyrical about the benefits of [getting active](. Brain teasers are said to help you through old age, a daily walk can wipe away the late-night overthinking, and a bit of hot yoga could even keep your knees nice and limber. [Active ETFs]( could get your portfolio moving, too. While passive funds buy you a slice of a whole index, active ones seek to beat the market by buying and selling assets at opportune times. They’re increasingly popular with retail investors, as they have the potential to [diversify portfolios](, make more complex investment strategies accessible, and maybe even [outdo the market](. Our free guide runs you through five main types of active ETFs, how you’d use them, and why you might want to: [take a look to discover the benefits of an active lifestyle](. [Check Out The Guide]( Bearing The Load [Bearing The Load] What’s going on here? The World Bank [lifted]( its 2024 global growth outlook to 2.6%, up 0.2 percentage points from January, shouldered by a stronger-than-expected performance from the US. What does this mean? Although the global economy isn’t expected to pick up to pre-pandemic levels until after 2026, the US is doing some serious heavy lifting. The World Bank is now expecting the US economy to grow by 2.5% this year, up from January's 1.6% estimate and matching last year’s pace. That accounts for a hefty 80% of the uptick in its global predictions. But it’s not good news for everyone: countries in Sub-Saharan Africa, the Middle East, and North Africa had their estimates slashed. The bank also predicts that global interest rates will stay at double their 2000 to 2019 average for the next three years, which will drag on economies and pile on the pressure for emerging markets that borrow in US dollars. Why should I care? Zooming out: Heavyweight champion of the world. The jury’s out on whether US stocks will continue to outperform as they have over the last decade. If the World Bank is right about the country's economy, then there’s no good reason to ditch your US stocks just yet. But if not, diversifying beyond developed markets could be a savvy move – you might even bag some up-and-coming investments before the rest of the world clocks on. The bigger picture: Sticking to their guns. Egypt, Pakistan, Nigeria, and Kenya have been embarking on aggressive policy shifts to try and repair their economies after years of currency crises. And they’re racking up a ton of debt, taken out in local currencies, as they go. So now, adventurous investors are seizing the opportunity to make double-digit returns by investing in that riskier debt, filled with newfound optimism that the countries – freshly bolstered with international aid – will manage to avoid default. You might also like: [Here’s how your “home bias” influences your portfolio’s returns.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Bearing The Load&utm_campaign=daily-global-13-06-2024&utm_source=email) 💬 Quote of the day "We know what we are, but know not what we may be." — William Shakespeare (An English playwright) [Tweet this]( Plenty of fintech businesses claim to be customer-centric, but few really know [what’s driving customer behavior](. Chris Worle is the Managing Director of Barclays Smart Investor, but he first made his mark at Hargreaves Lansdown, where he spent an impressive 19 years utilizing [content marketing]( to take it from a direct mail business to the UK’s biggest investment platform. We sat down with him to find out [how to build a profitable growth engine](. Spoiler alert: [content]( comes into it big time. [Check Out The Takeaways]( ✋ Two Markets You May Want To Avoid US interest rates are likely to be [higher for longer]( – the latest inflation and jobs reports only underscored that likelihood. And that presents a tricky situation for [certain corners]( of the market. [Real estate]( is one of those: with mortgage rates still near 20-year highs, sales activity has been sluggish. [Private equity](’s been no picnic, either. The co-president of industry giant Apollo Global said just last week that “everything’s not going to be OK” in that industry. [Let's find out what to expect for the troubled twosome](. [Read The Quicktake]( 🎯 On Our Radar 1. Deep down. The shocking true story of what really happened on [the Titan submersible](. 2. To utopia, and beyond. A fresh investing style could [build a better future]( for you and the planet.* 3. Call me by your name. A study has revealed that [nominative determinism]( might just be a real thing. 4. There’s value to be found in the NFT market. [Three key factors]( can help you separate the best deals from the rest.* 5. Bright lights. Bioluminescence is one of [nature’s wonders](, here’s how it came about. When you support our sponsors, you support us. Thanks for that. 🌍 Finimize Live 🤩 Coming up soon... All events in UK time.💰[The Insiders' Guide To Leveraged And Inverse ETF Trading](: 5pm, June 13th 🔒 [An Expert's Five-Year Investing Plan](: 5pm, June 18th 🤑 [How AI Can Help You Invest Like The Wealthy](: 5pm, June 25th 🏔️ [Gaining An Edge Beyond ETFs](: 8pm, July 9th 💃🏼 [Finimize Ladies Investing Club:]( 6.30pm, July 18th 🚀 [2024 Modern Investor Summit](: 2pm, December 3rd ❤️ Share with a friend Thanks for reading {NAME}. If you liked today's brief, we'd love for you to share it with a friend. You stay classy, {NAME} 😉 We’d love to hear your thoughts. [Give feedback]( Want to advertise with us too? 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