The markets have had a steady week and look to finish flat. Consumer sentiment increased in June for the first time in six months, reaching 60.5, up 15.9% from last month. The CPI index for inflation was reported on Wednesday as rising only 0.1% in May, which is less than expected and places the annual inflation rate at 2.4%. This news caused markets to open higher on Wednesday. American and Chinese negotiators met in London on Monday and Tuesday to discuss trade negotiations. Although no agreements were reached, the two nations cited the meetings as productive and agreed upon a framework for the talks to be resolved.
In tariff news, President Trump told reporters that he would send letters to trading partners within the next few weeks to set unilateral tariff rates. This announcement comes at a time when the 90-day tariff pause is set to conclude on July 9. However, earlier this week, Treasury Secretary Scott Bessent told Congress it's "highly likely" that the tariff pause would be extended for countries negotiating in good faith with the administration. This week, the US and China also agreed on a negotiating framework for resolving rare earth mineral and technology exports. Trump's tariffs came under scrutiny last month, with the US Court of International Trade blocking their implementation as unlawful. However, a federal appeals court decided this week, saying the tariffs can temporarily stay in effect. The good news is that many consumer fears of inflation have yet to be realized for the tariffs in place this year.
Two large companies that reported earnings this week were Oracle and Adobe, both beating their earnings and revenue estimates. Oracle's revenue beat is attributed to their cloud infrastructure revenue surging 52%, aiming to compete with Amazon and Microsoft in cloud computing. Oracle is one of the few companies that has promised to invest in President Trump's AI project, Stargate. Meta also made headlines this week when they announced they're investing $14.3 billion in the data-labeling company Scale AI. Scale AI is an American artificial intelligence company based out of San Francisco and was founded just nine years ago by then-20-year-old Alexandr Wang. The deal also includes Wang leaving his company to help Meta develop their AI. Another company that reported earnings this week was the online pet food and product retailer Chewy. The pet retailer grew its quarterly revenue by 8% and boasts 21 million active customers. The company is positioned well for further growth as pet ownership in the US is rising, and according to Pew Research, 97% of pet owners consider their pets to be a part of their family.
In economic news, mortgage rates were flat this week, with the one-week average for the 30-year fixed interest rate ticking down one basis point to 6.84%, compared to one year ago, it was 6.95%. The 15-year fixed rate dropped two basis points to an average of 5.97%, down from last year's 6.17%. The unemployment rate for May came in last Friday at 4.2%. For May, Inflation and consumer sentiment figures both came in better than expected, with inflation at 2.4% and consumer sentiment at 60.5. These figures come a week before the Federal Reserve is scheduled to meet. The FOMC meeting is next Tuesday-Wednesday, and they are expected to keep interest rates as-is, within the current range of 4.25%-4.50%. Most analysts agree with this assessment, saying the Federal Reserve has time before lowering rates since inflation is cooling and the labor market remains resilient.
In closing, we turn our attention north to a city in Alberta, Canada called Lethbridge. One of the luckiest men in the world resides here: David Serkin. The Lethbridge retiree was on the news last month for winning not his first or second, but fourth-ever lottery jackpot. David Serkin is a cancer survivor who won three separate lottery jackpots within the previous year for roughly $2.5 million. He bought his first lottery ticket in 1982, and his first win occurred about a decade ago, winning $250,000. Serkin told officials that he enjoys the ritual of buying his ticket and checking to see if he won. "You check your ticket, and if you win, you're happy; if you don't, you can always try again." Within the last year, his luck returned in full force with Serkin winning $500,000 on August 20, 2024, $1m on November 16, 2024, and $1m just in the previous month. Serkin went on to say, "I'm a cancer survivor, and I'm retired, so I am just grateful for all of it.” He also acknowledged the astronomical odds he had in winning four tickets. Officials of the August lottery said that his odds of winning were just 1 in 33.3 million. With his profits, he said he plans to take his wife to Newfoundland to celebrate.
Ryan Motsinger
