Your Financial News Roundup
July 5, 2023
TL;DR
1. Economy: Goldman Sachs could be looking to end its partnership with Apple; while declines in oil supplies and consumer demand will likely stabilize oil prices.
2. Tech: Google and Meta plan to block news in Canada; meanwhile Meta’s Twitter competitor, Threads, will launch this Thursday on the iOS store.
3. World: Iran, the U.S. and the E.U. are making progress on a nuclear treaty; and riots broke out across France after a cop killed a teenager at a traffic stop.
Personal Finance Concept [Part 2/5]: Money Scripts – Money Avoidance
Economy
🍎 Breaking Up with a Giant: Between its credit card and savings account, Apple has pushed into financial services, partnering with Goldman Sachs to build its products. Traditionally serving Wall Street, Goldman Sachs dove into retail banking in recent years, but has lost $3B+ since. It’s rumored that Goldman Sachs wants to sell its arrangement with Apple to American Express as part of its larger effort to retreat from the consumer space. Goldman extended its Apple agreement to 2029, but backing out would require Apple’s approval. (Yahoo! Finance)
Our Take: This news is unlikely to hurt Apple’s $3T valuation as Goldman manages the back end, while Apple’s branding is upfront.Â
🛢️ Hold Steady: Oil prices were level this week as Saudia Arabia and Russia plan to cut their production in August while consumer demand has fallen. The cuts total to a 1.5% reduction in the global oil supply. Industrial activity, a key component of global demand, has shrunk around the world due to a decline in demand for consumer goods in China and Europe. Recent polls forecast it will be hard for oil prices to rise this year given global economic troubles. (New York Times)
Our Take: Gas prices likely won’t go up or will rise slightly for the rest of the year, especially during the busy summer travel season. That said, use an app like GasBuddy to get the best bang for your buck on gas!
Tech
💢 Google and Meta v. Canada: Google and Meta announced plans to block local news in Canada from their platforms after they were required to pay news providers for their content. Under the Online News Act, tech firms must form payment agreements with news outlets. Google struck similar deals with European and Australian news outlets but finds that Canada’s law is more onerous as it covers more types of content and mandates striking a deal with each news outlet. Meta says that Facebook users want less news as the number of interested users fell from 45 to 30% over 2016-22. (BBC)
Our Take: Similar laws are under consideration globally, pressuring Meta and Google to compensate local news outlets, which have fallen on hard financial times. But, the reduced demand for news on Facebook and surging use of AI (with no links) threatens to change the landscape.
👖Check Out My New Threads: Instagram’s answer to Twitter, Threads, is expected to launch in the iOS App Store tomorrow. Under Musk, Twitter’s follies create opportunities, as its new cap on viewable tweets drove users to rival apps, Bluesky and Post. Threads will port over your Instagram follows, giving you access to your existing communities. Threads will be a standalone app and is rumored to be decentralized, running on the same network behind Mastodon (the original decentralized social network). (TechCrunch)
Our Take: Elon’s mistakes have alienated much of Twitter’s core user base and induced competition in the micro-blogging space. Though Meta’s Threads is not a threat yet, it’s clear that Twitter is facing increasing competition in a crowded space.
World
🕊️ Treaty Talks Pickup: Talks between Iran, the U.S., and the E.U. around the 2015 nuclear treaty have picked up in a bid to curb its involvement with Russia and the pace of its nuclear program. The U.S. withdrew from the treaty under President Trump, while President Biden has sought to revive it. Sources say that the mood is positive and there has been progress, but no deal has been reached. Both the U.S. and Iran face elections in 2024 and could be motivated to make progress to boost their electoral outcomes. Accepting Iran back into the fold, Iran’s neighbors are helping facilitate negotiations. (CNN)
Our Take: Iran and its nuclear plans have been a source of tension in the Middle East, but this progress is a welcome sign amid the positive diplomatic trends in the region. Diplomatic efforts outside of the war in Ukraine have had less media coverage, allowing them to progress. A treaty with Iran would further stabilize the Middle East, and if it passes through the Senate, President Biden could see better reelection odds.
🇫🇷* France Riots: Last week, a 17-year-old teen, Nahel Merzouk, was killed by a French cop at a traffic stop. Since then, there have been mass riots throughout France, leading to thousands of arrests and tons of property damage. For instance, rioters launched rockets into one mayor’s home. President Macron ordered a massive police presence in major cities and city governments are helping to repair damaged buildings. Though riots are cooling, protests are still happening and tourist bookings in Paris have declined by 25%. (BBC)
Our Take: The riots reflect the difficulty of relations between traditional French people and the newer, black, Muslim immigrant population. This conflict is an example of the wider tension in Europe around integrating Muslims, mirroring American tensions on race relations and immigration.
Finance Concept of the Week
The Psychology of Money [Part 2/5]: Money Scripts — Money Avoidance
Money scripts are fundamental beliefs we develop over time regarding money and its significance in our lives. Just like how a script guides actors in a show or movie, money scripts influence how we navigate the financial aspects of our lives. For some people, they can empower us to make good financial decisions and put ourselves on a path toward financial independence. For others, they can lead us to engage in self-sabotaging behaviors or develop unhealthy financial habits.
There are 4 common types of money scripts:
- Money Avoidance
- Money Status
- Money Worship
- Money Vigilance
First up is money avoidance. A money avoider is likely to believe that “money is the root of all evil,” associating money to greed and corruption. Money avoiders tend to feel undeserving of money and guilty for desiring money, especially when others have less.
People who fall under this category tend to be extremely frugal and frequently worry about money. Money avoidance can lead to poor financial decisions, such as living in denial about your financial situation, not budgeting your money, and having a low income.
Examining the Roots of Limiting Money Beliefs
Many factors can lead to the development of money avoidance scripts. If you grow up in a household where money is rarely discussed, seen as a source of conflict or stress, or associated with negative emotions, you may develop money avoidance. Having parents or guardians who display fear or anxiety about money, lack financial stability, or communicate negative messages about wealth can lead you to develop similar beliefs.
If you faced any traumatic experiences growing up, such as financial loss, bankruptcy, or extreme poverty, that can also cause you to develop a fear toward money as a way to protect yourself from potential pain or vulnerability. Additionally, some cultures or religions may promote modesty, frugality, or detachment from material wealth while associating money with greed and corruption.
Other factors that can cause money avoidance beliefs include personal values and beliefs and psychological factors If you prioritize non-materialistic values, such as spirituality, relationships, or personal growth, you may adopt money avoidance beliefs to align with your values. Or, if you struggle with feelings of guilt, shame, or unworthiness, you may develop avoidance behaviors in the context of money.
Overcoming Limiting Money Beliefs
To rewrite money avoidance beliefs, the first step is to associate money with positive feelings instead of negative ones. For example, instead of saying “I don’t deserve to be rich,” say “I deserve financial independence and freedom.” Instead of saying “Good people shouldn’t care about money,” say “Good people deserve to be financially secure.”
As you rewire your thoughts, you also need to take action to change your bad habits. Stop living in denial about your finances and start taking a closer look at your financial statements, including your bank accounts, credit card bills, retirement accounts, etc.
Getting a better picture of how you spend your money and where all your money is going will guide you when you start budgeting your money. By creating a budget, you’ll get a clearer picture of your expenses and how much you can realistically afford to spend each month.
Consider any long-term financial goals you have, whether it’s saving for a wedding, home down payment, retirement, vacation, etc. As you set these goals, make sure they are specific, measurable, and realistic. Being able to check on your progress and how close you are towards reaching your goals will make it much easier to achieve them.
Tip of the Week
đź’¸ To simplify your investing, consider getting into an S&P 500 ETF or index fund to:
- lower your risk by diversifying across different companies and sectors
- get exposure internationally by holding global companies
- save on fees by using low-cost funds instead of actively managed ones
#Oof
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