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Click here to read this on StonyFinLab.org
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Featured Student Column: Economy Research Report
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Research Assistant: Daniel Lu*
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This report provides a detailed analysis of recent market trends, focusing on the U.S. stock market, healthcare sector, gold prices, and broader economic implications of President Trump's policies. Following a brief "Trump Rally," markets stabilized, influenced by shifts in interest rates and inflation expectations. The healthcare sector faces challenges, including Medicare payment issues and political appointments, but remains a long-term investment opportunity. Gold, initially recommended for sale, has seen renewed demand due to geopolitical tensions and inflationary concerns. The report also highlights risks of overvaluation in top tech firms and recommends a diversified approach, focusing on individual company fundamentals to navigate potential market bubbles.
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Car loan delinquency rates have usually stayed around the 3.5% mark before COVID-19, dropping to 2.3% during the low interest rates of COVID-19. Post-Covid however, delinquency rates have surged to a recent high of 3.81%. However, bond buyers still invest in these sub-prime loans, based on the assumption that the economy holds up. These subprime debts have been so popular that private equity firms have been using them to create private asset-backed debt.
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The article talks about the rapidly growing power demands of artificial intelligence, expected to surge over 1,000% by 2030, which are pushing major tech companies like Microsoft, Google, and Amazon to invest heavily in nuclear energy to ensure a stable and sustainable energy supply. These investments include commitments to traditional nuclear facilities and advancements in small modular reactors, which are considered safer, and quicker to build. This shift also aligns with climate goals and the push for decarbonization.
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Donald Trump has selected Howard Lutnick, CEO of Cantor Fitzgerald, as his Commerce Secretary. A key Wall Street ally and co-chair of Trump’s transition team, he is tasked with Trump’s "tariff and trade agenda," which includes tariff hikes on imports, particularly from China. Lutnick has criticized job outsourcing, inflation, and climate policies. While Trump’s proposed tariffs could heighten inflation concerns, their full impact remains debated.
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Goldman Sachs and Morgan Stanley, have turned more bearish on Chinese stocks despite stimulus efforts by China's government. Both firms cut their forecasts for the MSCI China Index, citing slowing economic growth, and risks from potential U.S. tariffs under Donald Trump. The MSCI China Index initially surged after stimulus announcements in September but has since dropped 15%, reflecting challenges. The potential for U.S. tariffs further clouds the outlook, with analysts predicting market volatility in the months ahead.
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Thanks to our members and volunteers (Seungyun Nam, Rishi Jain and Daoqi Fang) for contributions to this newsletter.
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Stony Finance Lab is a community-based finance network that aims to promote personal financial responsibility and helps the community to achieve financial confidence and financial independence through life-long learning. The emails are to distribute news and information on finance research, events, jobs related to personal finance, investments of financial and digital assets, academic finance, and entrepreneurship. All emails are for information sharing only and shall not be deemed as financial advice. The Lab is not liable for the consequence of using any information contained in the emails.
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