Happy Monday! It’s Aug 12, 2024. We have three great stories to wrap up the past few weeks in markets, business, and the economy for you and your family.

Here are the highlights:

• Americans prep for the election: Biden has dropped out. What now?
• Betting on the Ballot: What is Wall Street doing ahead of the election?
• Can’t call it a comeback: The S&P 500 had its best day in two years after a wild week

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Americans Prepare for Turbulent Election Season

It wouldn’t be an election year if there wasn’t unexpected twists and craziness, but when it’s all said and done, it’s possible that the 2024 U.S. election could rank among the wackiest in American history. In the span of several weeks, America has quickly been thrust through headline after headline — with an assassination attempt, a switch-up on the presidential ticket, and volatile polling data underscoring the weirdness of our times.

• The matchup is set: An energized Donald J. Trump chose JD Vance as his Vice-President for the Republican ticket. However, just days after choosing the technocrat, Joe Biden announced he would not run for reelection in 2024 — endorsing Vice-President Kamala Harris to lead the party. Ahead of the Democratic National Convention in Chicago next week, Harris chose Minnesota Governor Tim Walz to join her on the ticket. A distant outlier, Robert F. Kennedy and VP choice Nicole Shanahan have readied up a third-party run which could command a single-digit percent of the popular vote, but likely not enough to win any single state.
• What does it mean? Among Republicans, hopes of a blowout have faded — with recent polling showing that Republicans and Democrats are now neck-at-neck heading into its most important days. With just 85 days remaining until the election, FiveThirtyEight shows that polling averages favor Harris by 2%, which doesn’t even clear the margin of error. Too close to call, the candidates are expected to spend hundreds of millions advocating for their respective campaigns.
• What will move the needle? Based on polling averages, six states are expected to seal the fate of the 2024 Presidential Election — Pennsylvania, Georgia, Michigan, Arizona, Wisconsin, and Nevada. However, Senate and House races across the country could also play a pivotal role in what kind of impact the president-elect will be capable of doing in their four-year term.

Why does it matter for EarlyBird families?

Recency bias is strong, so almost everybody will say that this election is the most important in modern history — nevermind 2000, 2016, or 2020. But whether you’re politically disaffected or extremely engaged, your vote could have a huge impact, even if your state is solid red or solid blue. You could affect the outcome of Congress, your state government, and your local government. If you’ve moved recently — or haven’t checked in on your registration in awhile — make sure you’re registered to vote at vote.org. And if you’re going to be out of town on Nov. 6, you can request an absentee ballot — or vote by mail in select states — or read up on what will be on your ballot.

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Betting on the Ballot: What is Wall Street doing?

After a flailing debate performance by President Joe Biden, Republicans became the popular pick to win the 2024 election, with analysts at Cook Political moving several states to “Lean Republican.” Many investors on Wall Street began to position for this eventuality, but since Kamala Harris has reignited optimism among Democrats and raised hundreds of millions for her campaign, many traders have been forced to unwind the Trump Trade. Now, many are holding off on making big changes to their portfolio — a sign of how quickly things can change on Wall Street.

• What’s the Trump Trade look like? The Republican frontrunner has promised to put “America First,” by raising tariffs on China and other countries — an effort meant to keep American industrials competitive with cheaper, overseas competitors.  For companies reliant on overseas labor and production, this could be a negative headwind. However, companies which have a strong domestic presence could be net beneficiaries. Pundits warn that Trump’s proposed policies could also mean a more relaxed environment for cryptocurrency, an extension on lower tax rates for wealthy Americans, and increased deficit spending — which would stand to exacerbate an already-ballooning national debt.
• What does the Kamala Trade look like? The Democratic frontrunner has said less about her plans for the economy, but many Democrats expect her to carry forward many of the successes of the Biden administration — which has boosted the fortune of clean energy firms, semiconductor companies, and industrials which have benefited from bipartisan bills such as the Inflation Reduction Act, the CHIPS and Science Act, and the Bipartisan Infrastructure Law. However, with unemployment seeing a modest uptick last month, Harris’s positioning on the economy could be increasingly scrutinized — with analysts warning that the ongoing trade wars imposed by the Trump and Biden Adminstration could drag the U.S. into recession.

Why does it matter for EarlyBird families?

At EarlyBird, we don’t do stock-picking — with the help of diversified portfolios, you’ll be exposed to many of America’s largest and most successful companies. As a rule of thumb, the portfolios built at EarlyBird are meant to go the distance. Running into the peak of election season, markets might experience turbulence. However, staying abreast of this volatility will keep you focused on the long-term goal — enriching your family and building wealth. When stocks go down, there’s no real reason to panic. For more evidence of that, just consider what happened last week… (More on that in our final story.)

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Can’t Call It a Comeback: Stocks Gyrate During a Wild Week

Last Monday, the world woke up to a sea of red across global stock markets. But by Friday, the S&P 500 had posted its best single-day performance in two years, reversing a downturn that some pundits were quick to call a “crash.”

• What’s happened? Sophisticated investors have been making millions on something called a “carry trade.” The Japanese Yen boasted a 0% interest rate, allowing investors to borrow the currency, then buy another asset like stocks. However, because of an unexpected increase to the Yen’s interest rate, billions of dollars changed hands on Monday. In Japan, the stock market had its worst day since Black Monday in 1987. By contrast, the S&P 500 — America’s most-valuable index — fell just 3%.
• Why is the S&P 500 down this month? After a banner start to the year — which saw the S&P 500 rise nearly 20% in the first six months of the year — the index fell 4% over the past month. For the most part, active investors are taking profits from large American companies and shifting their money into other investments where the perceived rewards could be greater. Some are also trying to get in front of market anxieties: consumer confidence has been waning,  the election is on the horizon, and unemployment spiked more than expected last month — all of these factors have some investors choosing to sit on the sidelines.
• Why did U.S. stocks bounce back? The market can be quirky and inexplicable, sometimes for reasons which are hard to understand for the layperson. That’s because there are lots of ways to make money in the stock market — and hundreds more ways to lose it. However, many Wall Street professionals joke: “nothing really happens.” In many cases, the phrase “this time is different” is more detrimental to your long-term wealth than any short-term losses you could incur.

Why does it matter for EarlyBird families?

However, despite that, the S&P 500 remains up 12.6% year-to-date — an impressive feat for the first eight months of the year. However, tracking the day-to-day performance of the index matters little if you’re in it for the long run. Even more so, having a diversified portfolio is a huge opportunity, especially as investors are taking profits — and many are moving them into smaller businesses. Depending on the aggressiveness of your family’s EarlyBird portfolio, you get a little slice of all that the global markets have to offer. That allows you to sit back, relax, and make the most of your money without thinking too much about the day-to-day.

What else is up?

• Salt Lake City will get 2034 Olympic Winter Games: After hosting the 2002 Winter Games, Salt Lake City will once again welcome snow-faring Olympians in 2034. Using much of the infrastructure from the 2002 games, Salt Lake City’s 2034 Olympics could be one of the cheapest and most sustainable in history. Read more in NBC Olympics.
• Apple begins work on foldable iPhone: Forget about AI… soon, you might be able to fold your iPhone. Apple is reportedly angling to launch two foldable handsets, with a report from one analyst forecasting a 2026 launch. Read more in 9to5Mac.
• Delta expects $500 million loss on CrowdStrike outage: As if losing $100 million on the Olympics wasn’t bad enough, airline giant Delta says that it lost half a billion dollars as a reuslt of an outage with cybersecurity vendor CrowdStrike. The company plans to sue for losses in what could be a prolonged court battle. Read more in BBC.