6. Stock Market Update: Who Is "The Fed?" What's Happening w/Inflation and the Labor Market?

Jul 5, 2023

Dive into the intricacies of today's stock market, where inflation reigns supreme! Discover the role of 'the Fed' and how it shapes monetary policy and impacts consumer behavior. Learn about labor market shifts, especially regarding older workers, and how these dynamics contribute to inflation. The conversation also explores the potential of automation and immigration as solutions for labor shortages. Plus, get insights on how tech and AI are driving the market, and what the future might hold for investment trends!

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INSIGHT

How The Fed Battles Inflation

The Federal Reserve fights inflation primarily by raising interest rates to slow demand.
Raising rates makes loans and credit costlier, which constrains consumer spending and cools prices.

INSIGHT

Labor Shortages Drive Services Inflation

Current inflation concerns have shifted from goods to services, with labor shortages a leading cause.
The Fed can restrict demand but cannot directly fix supply problems like labor shortages.

INSIGHT

AI And Tech Are Propping Up Markets

Technology and AI are propping up market indices as investors price future productivity gains.
Because the S&P and Nasdaq are market-cap weighted, big tech gains lift overall market performance.

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What is the stock market doing today? What's going on with inflation? Learn this and more in our July 2023 "SMU."

The stock market is all around you!

We aren’t just talking about the current state of the stock market - we’re understanding how the things that are currently happening in the U.S. (and the world) affect the “forward-looking” value of stocks.

We’ve been laying down the foundation of what the stock market is, and now, we’re going to talk about what the current state of the stock market looks like, so that we can become savvy investors. Then, we can start getting into “the how” (that is, how to put this all into action for yourself).

Things we discussed in Ep. 06:

July 2023 theme of the market - inflation (surprise)
Who is “the Fed” and why do we care?
Monetary Policy (interest rates, reserves, banks)
How does the Fed’s decisions affect the stock market?
The labor market is back to where it was pre-pandemic, but we’re seeing different age ranges in the labor market (i.e. 50+ workers left during the pandemic). What will this mean?
This is what it sounds like, when the Hawk cries.
We’re probably going to need more automation and/or immigration to keep up with the labor needs.
Why does any of this matter and what does it have to do with stocks?
Restrictive policy (raising interest rates) makes the stock market go on sale 😉
Bull Market vs Bear Market (hint: + or - 20%)
How will the stock market change in the next 10 - 20 years?
Labor market report is coming!
Earnings season is coming!
What should we name these updates?

Upcoming episodes:
Jess will teach us how to have an investment thesis, so that we can make wise decisions while we pay attention to what’s happening in the world, and ultimately, the stock market. We have another educational episode coming up, then we’ll learn how to pick a brokerage firm/company, and theeennnn we’ll be on our way to building our own portfolios. Stay tuned and be sure to subscribe for updates!

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Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective.

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