Wall Street's Pleasure Trade Hits New Highs

Subtitle: Plus: AI Stock Freefall, Trump’s VP Wild Card, and Eviction Wave ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Wall Street's Pleasure Trade Hits New Highs]( Subtitle: Plus: AI Stock Freefall, Trump’s VP Wild Card, and Eviction Wave [Josh Belanger](joshbelanger) Jul 16 joshbelanger   [READ IN APP](   The S&P 500 closed at a new all-time high, continuing a theme for most of 2024. Instead of grinding higher on tech stocks, financial stocks are seeing the money rotation. Banks are kicking off the earnings season with a clean sweep of beats, posting higher-than-expected quarterly gains. Who knew financials had this much firepower? It might be time to reconsider the market’s real power players. If banks are leading the way with buyers, that's a sign of a frothy market. The Momentum Stock Wave Breaks Generated by AI. Why it matters: The recent dip in megacap and AI-related stocks suggests a shift in market dynamics, hinting at potential changes in investment strategies. The Details: Last Thursday, big tech and AI stocks dropped. Small stocks, like those in the Russell 2000, had a great day, rising 3.6%. The big tech stocks fell 4.5%, pulling down the S&P 500. Zoom In: The change happened because U.S. consumer prices fell in June. This helped smaller stocks do well. Value stocks and global stocks also performed better. Big Picture: There are two reasons for this shift: - Slowing inflation means lower rates, which helps smaller companies. - Investors moved money from expensive big tech to cheaper small and value stocks. Bottom Line: The market is volatile, and big moves can happen based on economic data and investor sentiment. Trump's VP Pick: The Outsider Insider Generated by AI. Why it matters: JD Vance's rise as Trump’s VP candidate signals a big shift in GOP politics, impacting lobbying and policies. The Details: JD Vance, an Ohio senator, is now Trump’s running mate. GOP insiders see Vance as the future of their party. However, lobbyists and lawmakers are unsure how he will affect corporate priorities. Zoom In: Vance’s outsider status is causing a stir on K Street, the lobbying hub. Republican lobbyist Sam Geduldig says Vance's selection shows a shift from traditional GOP thinking. Despite only two years in the Senate, Vance has built a network of lobbyist donors, raising nearly $200,000 in the 2022 election cycle. Big Picture: Vance supports higher taxes on companies that outsource jobs. He is against Big Tech but likes cryptocurrency. These stances reflect his populist views. Bottom Line: Vance as VP suggests the GOP is moving towards populism, which will affect policies on corporate taxes, technology, and lobbying. Rising Evictions Reflect a Weakening Economy Generated by AI. Why it matters: Eviction rates are high in many U.S. cities and are not returning to pre-pandemic levels, affecting many families' stability. The Details: Eviction filings in several U.S. cities are up 35% or more compared to before 2020, says Princeton University's Eviction Lab. Cities like Las Vegas, Houston, and Phoenix have significant increases. For instance, Phoenix landlords filed over 8,000 eviction notices in January, the highest ever for that area. Zoom In: Rents are a major factor. Nationwide, rents rose 30% from 2020 to 2023. Even with some cities having renter protections, high living costs push many lower-income tenants close to eviction. In cities like New York and Philadelphia, stronger renter protections have kept eviction rates lower. Big Picture: Automation in property management makes it easier for landlords to file evictions. Higher rents mean even small income losses can lead to eviction. Many households spend 50% or more of their income on housing, making it hard to handle job losses or medical emergencies. Bottom Line: With less rental assistance now compared to the early pandemic, evictions remain high in some areas. This shows the ongoing housing crisis and the need for more renter support. Quick Sizzles - Cliffs' $2.5B Stelco Deal: Cleveland-Cliffs is buying Stelco Holdings for $2.5 billion, adding Canadian steel mills. CEO Lourenco Goncalves eyes U.S. Steel next, at a lower price than Nippon Steel's $14 billion bid. The deal closes in Q4. - Cotton Prices Dive: Brazil's cotton exports surged, dropping prices below $0.69 a pound. Increased Brazilian production and global demand for cheaper fabrics drive this fall. - Fink's ETF Surge: BlackRock CEO Larry Fink highlights a "barbell effect" in bonds as investors flock to low-cost ETFs and alternatives. BlackRock hits $10.6 trillion in assets, with record ETF inflows. Investors anticipate a U.S. rate cut. - China's Growth Misses: China's Q2 growth slowed to 4.7%, below forecasts. Weak consumer demand and property slumps offset better exports. Beijing may need more stimulus to meet its 5% annual target. - Goldman's Profit Boom: Goldman Sachs’ Q2 profits doubled to $3 billion, driven by revived dealmaking and strong trading. Investment banking revenue rose 21%, with solid gains in fixed-income and equities trading. You’re currently a free subscriber. Upgrade for the full experience and receive exclusive special reports like "How to Get Rich in The Stock Market" and "Congress' Secret Stock Playbook: The Top 5 Power Picks Revealed”. [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Josh Belanger 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()