✈️ America's grounded

The US stopped vacation-ing, bonds are back in business, and the history of breakdancing | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for August 13th in 3:13 minutes.   🧠Your mindset shapes your day, your relationships, and yup, your money. So secure your spot at behavioral economist Dan Ariely's [Modern Investor Summit]( session, and find out how to build wealth like the uber rich. [Grab your free ticket]( Today's big stories - Americans pared down their vacation plans, indicating that the US is running low on fun money - How to turn the market’s volatility into an opportunity – [Read Now]( - Bonds are regaining their role as a portfolio hedge after years of letting investors down Vacation From The Vacation [Vacation From The Vacation] What’s going on here? US holidaymakers took time off from booking trips, which could push the stateside economy toward an unwelcome break. What does this mean? The travel industry’s latest earnings calls were hardly, ahem, high-flying. In fact, with US customers cutting back on bookings, "softness" was the buzzword across Expedia, Marriott, Airbnb, and Hilton – mentioned 16 times, no less. Naturally, those in the higher tax brackets were still jet-setting overseas, but that one-sided demand has left airlines slashing fares to fill empty seats on cheaper domestic flights. Even Disney’s noticed, reporting lower income at its theme parks and bracing for that to continue. Why should I care? For markets: Vacations are serious business. Travel spending is a key economic indicator: because folk cover their essentials before working through their disposable income, the amount they budget for vacations hints at both their financial situation and confidence. And remember, consumer spending drives about two-thirds of the US economy, so when Americans tighten their belts, businesses feel the pinch and might start cutting costs, often by laying off workers. Combine that travel drop-off with recent data – like worse-than-expected job numbers – showing that the US economy might not be as hardy as hoped, and you can see why economists are betting that the Federal Reserve will start cutting rates in September. The bigger picture: Investors stopped playing Risk. After a less-than-impressive earnings season, economists are wondering whether the recent hiring slowdown and uptick in unemployment are early signs of a recession or just a temporary hiccup. But junk bond investors, who deal with the debt of high-risk companies, aren’t taking any chances. See, last week’s sudden stock market panic made investors reevaluate the amount of risk in their portfolios – and they pulled the most money out of junk loan funds since early 2020, wary of the effect an economic slowdown could have on debt-laden companies. You might also like: [Don’t confuse volatility with risk.]( 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=Vacation From The Vacation&utm_campaign=daily-global-13-08-2024&utm_source=email) Analyst Take Six Actually Useful Things To Do When Markets Are Jumpy [Six Actually Useful Things To Do When Markets Are Jumpy]( [Photo of Reda Farran, CFA] Reda Farran, CFA, Analyst When markets get [volatile]( and stocks fall from green to red, it can be tempting to sell in the hopes of buying back in at a lower price. But you’d be wiser to hold your nerve. It’s virtually impossible to time the market perfectly when you sell, let alone again when you buy back in. So a [better move](, then, is to roll with the punches. And I know that doesn’t always come easy: it’s hard to be chill when [your money’s]( on the line. So, if you’re itching for something to do in those rough-going moments, here are a few [constructive things]( to keep you busy. That’s today’s Insight: [six crucial steps to take when markets get volatile](. [Read or listen to the Insight here]( SPONSORED BY SWISSBORG Your eight-in-one exchange, from crypto to fiat Think about how you used to book a vacation. Before Skyscanner, Google Flights, or Booking.com, you’d hit up your local travel agent and hope they weren’t ripping you off. After all, you wouldn’t have the time to hop around rival agents. Well, the same goes for [investing exchanges]( – with so many options, you can never be sure that you’re getting the best deal. That’s why [SwissBorg built a Smart Engine]( of eight exchanges, including foreign exchange giants LMAX, centralized ones like Binance, and decentralized options like Orca and Raydium. So now, you can [access the best exchange available]( – continually vetted by Swissborg’s smart agents in a matter of seconds – and switch between [fiat currency to crypto](, say, in a single tap. [Discover More]( When you support our sponsors, you support us. Thanks for that. If you want your brand featured here, [get in touch.]( The Name’s Bonds [The Name’s Bonds] What’s going on here? Bonds finally look stirred, not shaken, after rediscovering their role as a hedge for stocks. What does this mean? Investors know the score: bonds tend to rise when stocks fall, and vice versa. But that age-old relationship has been thrown into doubt in recent years – especially in 2022, when interest rate hikes caused both markets to plunge at the same time. That’s when the classic 60/40 portfolio – famed for its time-tested ratio of 60% US stocks and 40% US bonds – had its worst year since the global financial crisis. But during last week’s market rout, bonds finally reestablished themselves as a hedge for stock-heavy portfolios: while the S&P 500 fell by a hefty 6% during the first three trading days of August, US Treasuries saw an uptick of almost 2%. Why should I care? The bigger picture: Turning tide. The economic environment is shifting in favor of bonds. See, the Federal Reserve’s interest rate hikes have brought inflation closer to its target, but recent data has suggested that those rates might’ve weighed on the world’s biggest economy more than hoped. One of the factors behind last week’s sell-off was the fact that July’s US labor market report triggered the “Sahm Rule”. That’s an eerily accurate recession signal, set off when the unemployment rate’s three-month average rises by half a percentage point from its lowest level in the past year. So now, investors are expecting more rate cuts to come soon, and that should buoy up bonds. Zooming out: There’s always a but… Bonds might have one headwind in the future, though. The US’s massive debt pile looks to be on an unsustainable path, with interest expenses rising faster than the government’s ability to pay them. That creates an ever-deepening hole, with more bond sales needed to plug it. So with no credible plan to balance the books, some investors may start to give the government’s debt the cold shoulder. You might also like: [US government debt is a ticking time bomb.]( 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=The Name’s Bonds&utm_campaign=daily-global-13-08-2024&utm_source=email) 💬 Quote of the day "No act of kindness, no matter how small, is ever wasted." – Aesop (a Greek fabulist and storyteller) [Tweet this]( Your world stage is ready – and the gold medal can be arranged So you didn't make it in bouldering, beach volleyball, or breakdancing. The Olympics might be out of your grasp, then, but another world stage is calling you. We're looking for speakers for our [Modern Investor Summit]( this December this year – you know, the stage that hosted Jamie Dimon a few months ago. [Take a look at last year’s recording of CFA Institute’s session]( to get a feel for it. If you’re ready for your turn, [talk to the team before the slots fill up.]( [Drop Us A Line]( 👀 It’s Not Just You The stock market's massive bull market has lined consumers’ pockets, and it's been a boon for the government too. So it's not just us everyday folks praying against a change in the winds. The government wants stocks to avoid a crash too. [Here’s why (and it’s not about politics)](. [Read The Quicktake]( 🎯 On Our Radar 1. Breaking it down. Here’s a look at [the history of breakdancing]( and how it became an olympic sport. 2. AI might be savvy, but it's far from infallible. If you want to invest with the tech, [make sure you do it right](.** 3. For the love of cod. How Japanese restaurant chain [Nobu took over the world](. 4. Meet the hospitality industry's disruptor. [This newly public company]( is reinventing travel for nomads.* 5. Sending an SOS. The world’s oldest [message in a bottle]( might have been found on a New Jersey beach. **See Streetbeat's [disclosures](. When you support our sponsors, you support us. Thanks for that. 🌍 Finimize Live 🤩 Grab your tickets... 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