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Office Closed | June 19th
In honor of Juneteenth, our office will be closed on Thursday, June 19th. We will resume normal business hours (8am - 5pm) on Friday, June 20th.
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Stocks Rise Again
U.S. stock indexes fell on Friday amid heightened anxiety in the Middle East, sending the market to a negative week overall. After recording gains the previous two weeks, the S&P 500 and the NASDAQ posted fractional weekly declines while the Dow finished down more than 1%.
The price of U.S. crude oil surged more than 7% on Friday to the highest level in four months after Israeli military strikes on Iranian nuclear facilities raised the prospect of oil supply disruptions and renewed inflationary pressures for the broader economy. On Friday afternoon, oil was trading around $73 per barrel, up nearly 12% for the week.
A monthly report on U.S. consumer prices showed that inflation remained somewhat muted, which eased concerns about the potentially inflationary impact from elevated tariffs. On a month-to-month basis, the Consumer Price Index rose 0.1% in May, less than most economists had expected. The annual inflation rate was 2.4%—in line with expectations and near a four-year low recorded in April.
An auction of U.S. 30-year Treasury bonds generated stronger-than-expected demand from investors, easing government debt worries that recently sent the 30-year bond’s yield above 5.00%. Thursday’s auction drew a yield of 4.84%, below the 4.91% closing yield recorded on Wednesday.
U.S. and Chinese officials discussed tariffs and other trade issues in a two-day session and reached a consensus on some of the key areas of dispute. Both sides said they’ll seek approval for the framework from the U.S. and Chinese presidents before implementing its terms.
U.S. consumer sentiment improved for the first time in six months, based on Friday’s preliminary monthly report from a University of Michigan survey. The increase from a late May index reading of 52.2 to June’s preliminary figure of 60.5 was a much bigger gain than economists had forecast, and survey participants’ recent concerns about inflation eased somewhat.
It’s widely expected that the U.S. Federal Reserve will keep interest rates unchanged again when it concludes a two-day meeting on Wednesday. However, rate cuts could still be coming; Friday’s prices in interest rate futures markets implied that most investors were expecting at least one to as many as three quarter-point rate cuts by year end, according to CME Group’s FedWatch tool.
Source: John Hancock Investment Management
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The U.S. dollar has served as the world's primary reserve currency for the past century, since it overtook the British pound after World War I. Some investors worry that geopolitics, fiscal challenges such as the national debt, trade policies, or emerging alternatives such as the renminbi or cryptocurrencies could threaten this status.
While these are real concerns, it’s important to understand that these worries are not new and tend to resurface during periods of economic uncertainty. In the 1980s, Japan's economic boom led to speculation that the yen might challenge the dollar. The introduction of the euro in the 2000s, along with China's economic rise, sparked similar predictions. More recently, the emergence of cryptocurrencies has prompted questions about the future of traditional currencies like the dollar.
Despite these fears, the dollar has maintained its central role in global finance through many economic cycles. This resilience reflects the depth and liquidity of U.S. financial markets, the relative stability of American institutions, and the dollar's continued use in international trade and investment. In general, the dollar continues to be viewed as a safe-haven asset during times of global economic crisis.
When it comes to our daily lives, it’s natural to view a strong dollar as always being positive. For consumers, a strong dollar makes traveling abroad more affordable and lowers the cost of imported goods, potentially reducing consumer inflation. So, when it comes to buying foreign goods and services, having a strong currency helps.
However, there are negatives to a strong dollar as well, especially when it comes to selling our goods and services. A strong dollar can make U.S. businesses less competitive since their products become more expensive for overseas buyers, potentially hurting American manufacturers and farmers. This is why many countries are often accused of keeping their currencies artificially low in order to boost their exports.
It’s easy to see that the ideal currency level depends on a balance of factors and isn’t just about strength or weakness.
| | Do You Know When You're Using Artificial Intelligence? | | |
Artificial intelligence (AI) is becoming a part of everyday life for many people in the United States, but we don’t always recognize it when we interact with it.
A recent Gallup poll asked Americans whether they had used any type of AI-enabled product over the last seven days.
- 36% said they had.
- 50% of those surveyed said they had not.
- 14% weren’t sure whether they had or not.
It’s not always clear when we’re using a product that uses AI. Consider the following list. Which of these do you think relies on AI?
- Wearable fitness trackers that evaluate sleep and exercise patterns
- A chatbot that answers your questions immediately
- Product recommendations that are based on previous purchases
- Security cameras that send alerts when a stranger is at the door
- Email services that remove spam before it gets to your inbox
- Music playlist recommendations from a digital music provider
When Pew Research surveyed more than 11,000 Americans, asking about “common ways they might encounter [AI] in daily life”, these were the examples they gave.
They found that wealthier individuals (52% of upper income participants) and those with more education (53% of postgrad and 46% of college grad participants) were most likely to recognize that all of these examples rely on AI. In addition, younger Americans were more aware of when they interacted with AI than older Americans were. Overall, less than one-third (30%) of those surveyed answered the question correctly.
The fact is that most people use AI and interact with it more frequently than they may realize.
“… when asked about their usage of six common AI-enabled products (personal virtual assistants, navigation apps, weather forecasting apps or websites, social media platforms, streaming services, or online shopping apps or websites), 99% of U.S. adults report using at least one of these in the past week, with 83% saying they have used at least four,” reported Ellyn Maese of Gallup.
Most Americans interact with AI at least once a week, and probably far more often.
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AJ Advisors
www.ajadvice.com
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Phone: (615) 709-8709
Fax: (615) 709-8709
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John Stauffer, CFP®
Partner
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Andrew Quinn, CFP®
Partner
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