©®™Uguba™ndubuisi™blog |: Morning Brief: Tech fragility, an EV pivot, and a 60/40 comeback

Saturday 20 July 2024

Morning Brief: Tech fragility, an EV pivot, and a 60/40 comeback

Saturday, Jul 20

👋 Good morning! Here are five key stories for the weekend.

5 key stories for the weekend

📉 A tough week: After Tuesday's all-time high of 5,667, the S&P 500 ended up finishing the week at 5,505, losing around 2.8% in the tech sell-off as the Nasdaq fell 4.1%. After the losses, the S&P 500 is now back to levels from the first week of July.

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👾 Tech fragility: If this week showed the weakness in tech stocks, Friday showed us actual tech weakness as computer systems running Microsoft Windows were crashed by an issue with cybersecurity firm CrowdStrike. The global IT outage that grounded flights and cut off 911 access wasn't a cyberattack, but merely a "defect in a single content update." Markets sent CrowdStrike stock down around 11% Friday.

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⚡️ EV pivot: Ford has swapped out large EV production for more Super Duty pickup capacity, adding a third assembly plant for the popular F-Series trucks in Ontario, Canada. The move also comes as Donald Trump vows to end the US's current EV strategy on "day one" if he wins — another force now acting on the EV market. Tesla stock dropped around 4% on that news.

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📈 The 60/40 trade is alive: The classic investment strategy of allocating 60% of a portfolio to stocks and 40% to bonds has been considered largely dead by many after years of explosive stocks and tepid bond returns. But the conventional approach to saving for retirement has gotten a second wind thanks to a revitalized bond market that expects a Fed cut. And Vanguard senior investment strategist Todd Schlanger is bullish on this strategy going forward.

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📺 Investors shrug at Netflix: Netflix's quarterly results initially sent the stock down 6% before paring back almost all of the losses. The disappointing revenue outlook came in tandem with an expectations-beating Q2 and phase-out of its cheapest ad-free plan, which will send consumers to either pay more or add to the new ad-supported strategy that's shown promising growth. And on top of that, investors are weighing another gamble the company is making: a bet on India. Netflix is raking in new subscribers in the market, which has typically been challenging for competitors.

3 conversations we're still thinking about

🏷️ Federal Reserve Bank of Chicago president Austan Goolsbee on inflation and a rate cut.

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💧 Fifth Third Bancorp CEO Tim Spence on why the bank holds so much liquidity.

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📈 Blackstone COO Jonathan Gray on why the company's stock climbed after missing on profit.

Morning Brief is written and edited by Ethan Wolff-Mann. For the web version, click here. Follow all the action throughout the day on Yahoo Finance and on the Yahoo Finance app.