It Girl Identity: Issue 15

It Girl Identity Newsletter

Grab your pumpkin cold brew and read what's moving markets this week, learn about why you need an emergency fund, and enjoy our curated It Girl Identity recommendations!

What’s Moving Markets

Just as New York Fashion Week captured the spotlight in the fashion industry, this week’s financial focus is squarely on the Federal Reserve's interest rate decision, with a crucial announcement set for Wednesday. Anticipation is high due to uncertainty over potential rate cuts, which has already driven significant stock movements. Additionally, the week will feature a busy earnings calendar, including reports from major companies like FedEx (FDX) and General Mills (GIS).

What’s Up

• Oracle (ORCL): Oracle (ORCL) is positioned for growth in AI, despite missing earlier moves into cloud computing.

• Gold (XAU/USD): Gold futures rose 1.2% to a new all-time high, benefiting from uncertainty around the Federal Reserve’s next moves.

• Russell 2000 (IWM): The Russell 2000 index climbed 2.5% on Friday as small-cap stocks, which are sensitive to rate changes, gained from potential lower interest rates.

• Nasdaq Regional Banking Index: The index rose 2.7%, benefiting from anticipated lower rates that would boost bank securities portfolios.

• Dividend Increases: Companies forecasted to increase their quarterly dividend payouts:

  • Microsoft (MSFT): Increasing to $0.83 from $0.75

  • Starbucks (SBUX): Increasing to $0.61 from $0.57

• Top S&P 500 Gainers: Broadcom, Inc. (AVGO) +22%. Super Micro Computer, Inc. (SMCI) +18%. Warner Bros. Discovery, Inc. (WBD) +18%. Vistra Corp. (VST) +16%. Nvidia Corp. (NVDA) +16%.

What’s Down  

• JPMorgan Chase (JPM): JPMorgan Chase (JPM) fell 1.1% after warning that lower interest rates could significantly impact its net interest income more than expected.

• Ally Financial (ALLY): Ally Financial (ALLY) plunged 18% following a warning about worsening credit conditions among borrowers.

• Boeing (BA): Boeing (BA) faced challenges as its largest labor union voted to strike, halting production of key jets like the 737, 777, and 767. This poses a significant test for new CEO Kelly Ortberg and could impact Boeing's financials and industry reputation.

• Top S&P 500 Losers: Humana, Inc. (HUM) -10%. Tyson Foods, Inc. (TSN) -7%. Moderna, Inc. (MRNA) -6%. APA Corporation (APA) -5%. Bath & Body Works, Inc. (BBWI) -5%.

Markets and Economy

• Macroeconomic Conditions:

  • US Inflation: Inflation has slowed to 2.5%, getting closer to the Federal Reserve's target of 2%. Investors are now debating whether the Fed will cut interest rates by 25 or 50 basis points (bps). This optimism has boosted the stock market, adding $1.3 trillion to the S&P 500 since Monday. Two categories still have high inflation: shelter (5.1%) and transportation (8.8%). Also, the 2-10 year Treasury yield curve is no longer inverted, which hasn’t happened since July 2022.

    • Basis points (bps): Way to measure small changes in interest rates (1 bps = 0.01%).

    • 2-10 Year Treasury Yield: This refers to the interest rates on U.S. government bonds. When the yield inverts, it means short-term bonds have higher interest than long-term bonds, which can signal a recession. The un-inversion means things are returning to normal.

  • Bank Policies: A revised Basel III endgame proposal revealed that lenders would only face a 9% hike in capital requirements instead of the 19% increase originally planned. The updated deal serves as a benefit for large Wall Street banks.

    • Bank Policies (Basel III): Basel III is a set of international banking rules that tell banks how much money they need to keep in reserve to be financially safe. A smaller capital requirement means banks don’t need to hold as much extra cash.

• Global Economy: 

  • Europe: The European Central Bank just cut interest rates down to 3.5%, marking the second rate cut in three months. Economic growth has dwindled in the EU with weak private consumption and investment, and the outlook for growth downgraded to 0.8% from 0.9% projected in June. The euro climbed as a result in inverse variation to the dollar.

• Retail: Analysts at Barclays have adopted a bearish stance on the retail sector, downgrading three major brands: Adidas (ADS), Burberry (BRBY), and Kering (KER). Kering is a multinational corporation that owns luxury brands such as Gucci and Yves Saint Laurent. This follows the analyst’s observation of the continued weakness in China's consumer market.

IPOs & Mergers and Acquisitions

• Sirius XM Split: SiriusXM Holdings officially separated from its parent company, Liberty Media, and began trading as an independent company with a simpler capital structure. They also did a reverse stock split (turning 10 shares into 1) and announced a new $18 billion share buyback program.

• WPP Acquisition: London-based advertising giant WPP acquired New Commercial Arts (NCA), a leading UK creative agency. The deal adds 100 staff and key clients like Vodafone and Uber to WPP’s Ogilvy division. Despite the rise of AI in advertising, WPP’s CEO emphasized the importance of creative ideas. This acquisition is part of WPP's larger strategy to invest in AI while maintaining strong creative talent.

• Swiggy IPO: Indian food delivery company, Swiggy, is planning what could be India’s biggest IPO this year. Swiggy aims to raise $1.4 billion, including $600 million from new shares and $800 million from existing investors. A key shareholder meeting on October 3 will determine the final IPO plans, as Swiggy faces tough competition in the market.

Earnings Calendar

Sources: Yahoo Finance, TechCrunch, The Financial Times

This Week's Major U.S. Economic Reports & Fed Speakers

Here is a quick breakdown of this week’s Fed Speaker events and economic indicators, what they mean, and their forecasts!

Monday, September 16

• Empire State Manufacturing Survey (8:30 am): A monthly survey of manufacturers in New York State, reflecting business conditions and economic outlook. Expected: -5.0; Previous: -4.7.

Tuesday, September 17

• U.S. Retail Sales (8:30 am): Measures the total receipts of retail stores, indicating consumer spending. Expected: -0.3%; Previous: 1.0%.

• Home Builder Confidence Index (10:00 am): Measures builder confidence in the housing market, influencing future housing starts. Expected: 40; Previous: 39.

Wednesday, September 18

• FOMC Interest-Rate Decision (2:00 pm): The Federal Open Market Committee’s decision on interest rates, important for monetary policy and market expectations.

• Fed Chair Powell Press Conference (2:30 pm): A press conference by Federal Reserve Chair Jerome Powell discussing the FOMC’s decision and economic outlook.

Thursday, September 19

• Initial Jobless Claims (8:30 am): Number of new claims for unemployment benefits, indicating the health of the job market. Expected: 230,000; Previous: 230,000.

• U.S. Leading Economic Indicators (10:00 am): An index of ten economic indicators predicting future economic activity. Expected: -0.4%; Previous: -0.6%.

Sources: Business Insider, WSJ, Reuters, The Guardian, MarketWatch, Nasdaq, BBC News, The Motley Fool, The Financial Times, Benzinga, MarketBeat

How to Build an Emergency Fund

Last week, we broke down everything we knew about credit cards! This week, let’s focus on building an emergency fund—your financial safety net for life's unexpected moments. Remember: an it girl is ALWAYS prepared!

1. Why You Need an Emergency Fund

We recommend having an emergency fund because it gives you peace of mind and financial security. Without one, unexpected expenses could force you into debt or make it hard to pay your bills. Financial experts recommend having enough to cover 3-6 months of living expenses. This can help you manage anything from a job loss to a big repair.

2. How Much Should You Save?

Your emergency fund should be tailored to your lifestyle. To calculate how much you need:

• Step 1: Add up your basic monthly expenses, like rent/mortgage, utilities, groceries, and transportation.

• Step 2: Multiply this by 3 to 6, depending on your comfort level. If you have a stable job and low risk, aim for 3 months of expenses. If your income is less predictable, shoot for closer to 6 months.

For example, if your monthly expenses total $2,000, you’ll want to save between $6,000 and $12,000.

3. Start Small and Build Up

Building an emergency fund doesn’t happen overnight. Here’s how you can get started:

• Set a Small Initial Goal: Start with a goal of $500 or $1,000. Even a small cushion will help in a pinch.

• Automate Your Savings: Set up automatic transfers from your checking account to a savings account. Start with a small amount each month, then increase it as your budget allows.

• Use Spare Change: Apps like Acorns or Chime round up your purchases and save the difference. This way, you save without even noticing.

4. Where to Keep Your Emergency Fund

Accessibility is key for an emergency fund—you need to be able to access it quickly in case of a true emergency. Here are a few options:

• High-Yield Savings Account: This is the most common option. It earns more interest than a regular savings account, helping your money grow while keeping it safe and liquid (easily accessible).

• Money Market Account: Similar to a savings account but often with a higher interest rate. Some come with checks or debit cards, making it easy to use in an emergency.

5. How to Prioritize Your Savings

When building an emergency fund, it’s essential to make it a priority. Here are a few ways to free up money:

• Cut Unnecessary Expenses: Review your monthly spending for areas you can trim, like subscription services or dining out. Redirect that money into your savings.

• Save Windfalls: Any extra income like tax refunds, bonuses, or gifts should go straight into your emergency fund.

• Set a Monthly Savings Goal: Aiming to save a specific amount each month can help you stay on track.

6. When to Use Your Emergency Fund

Use your emergency fund only for true emergencies—unexpected, necessary expenses like:

• Medical bills

• Car or home repairs

• Job loss or reduced income

Avoid dipping into this fund for vacations, shopping, or non-essential purchases. Keeping your emergency fund intact will protect your financial security.

7. Replenishing Your Fund

If you ever need to dip into your emergency fund, make a plan to rebuild it as soon as possible. Start saving again until you’ve built it back up to your target amount.

Building an emergency fund is one of the smartest financial moves you can make. It takes time and discipline, but by starting small and staying consistent, you’ll build a safety net that gives you peace of mind and financial security. Follow these steps, and you’ll be well on your way to creating a solid foundation for whatever life throws your way!

Disclaimer: Information shared here is for educational purposes only. Consult a financial advisor for personalized advice.

It Girl Recommendations

Shop Our Other Recommendations Here: health, fashion, fitness, education, beauty, and skincare...

Physician’s Choice Collagen Powder: Elevate Your Health with Collagen Powder this semester! Shop Now Through Our TikTok Shop!

• Looking to boost your bone health and skin vitality? Daily collagen powder may help improve bone density, slow aging, and enhance skin hydration and elasticity. Try Physician’s Choice Collagen Powder for a daily boost—just add it to your coffee, yogurt, or smoothies! Try Physician’s Choice Collagen Powder for a daily boost!

Pumpkin Cold Brew Recipe

Financial Fashion

Outfits are never complete without appropriate accessories! See below our current favorites:

• Top Left: Zara

• Top Right: H&M

• Bottom Left: Zara

• Bottom Right: H&M

Follow Our Other Socials

• TikTok

• Instagram

• LinkedIn

• Benable

• Amazon Storefront

See you next Monday, It Girls!

With Love,

It Girl Identity