Summer financial strain may potentially affect numerous U.S. residents.
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Summer spending plans reveal that consumers intend to cut back on going out and traveling this year, as per the 2024 KPMG Consumer Pulse Survey. This shift is a contrast to last year's extravagant spending on "Barbenheimer," Taylor Swift and Beyoncé concerts, and vacations.
On average, consumers predict a decrease in monthly spending on dining out by 9%, for entertainment and media by 8%, and for travel and vacations by 7%.
Even essential spending might feel the pinch. Only 21% of consumers plan to increase their spending on personal care products, a notable drop from 32% the previous year, according to the survey.
"Consumers are tightening their belts another notch as they seek discounts, and some essentials are being impacted," said Duleep Rodrigo, KPMG’s US consumer and retail sector leader, in a release.
Instead of hiking prices to offset inflation, some businesses have instead chosen to decrease the size of products like cleaning products, coffee, and candies. This move, though it keeps the overall price the same, makes the products more expensive per unit, which has garnered criticism from customers. And it seems that consumers are growing weary. Sales at US retailers increased by a meager 0.1% in May compared to the previous month, as per a report from the Commerce Department.
Slow consumer spending should help temper the economy and enable the Federal Reserve to lower interest rates earlier rather than later, provided inflation also begins to move closer to the central bank's 2% goal. However, a sudden, unexpected decline in spending, a significant part of economic output, might signal a slide into recession territory.
Consumers are now seeking more than just the lowest prices; they want quality, durable products that might require a slight increase in cost.
Retailers providing more value for money, such as Ross Stores, TJ Maxx, HomeGoods-parent TJX, Dollar General, and Walmart, have seen growth. However, companies like Abercrombie & Fitch and Williams-Sonoma, known for their higher prices but high-quality goods, are also experiencing robust sales.
Consumer sentiment worsened as they grapple with high inflation and borrowing rates. The University of Michigan's early June reading of consumer sentiment indicated that attitudes towards the economy were roughly on par with May, which saw a nearly 10% decline after a string of little change.
There could be some relief for consumers later this year. Cool inflation data in May has prompted investors to increase their bets that the Federal Reserve will lower rates this year. At its June policy meeting, the Fed projected one cut this year and four in 2025.
Millionaires are deserting Britain in droves
This year could see a record number of millionaires departing the United Kingdom due to political instability and the possibility of higher taxes under a potential Labour government. The allure of the UK, once a favorite among the wealthy, is diminishing.
As many as 9,500 individuals with at least $1 million in liquid, investable assets, may exit the country, more than double the number that left in 2023, according to data from migration advisers Henley & Partners.
"These figures reflect a growing list of factors reducing the appeal of the UK to high-net-worth individuals," Hannah White, CEO of the Institute for Government, wrote in a report. "The hangover from Brexit persists, with the City of London no longer perceived as the financial hub of the world."
The report is based on data from investment firm New World Wealth on 150,000 high-net-worth individuals. The firm counts only individuals who stay in their new country for more than half the year, focusing primarily on company founders, chairs, CEOs, presidents, directors, and managing partners.
The ongoing exodus from the UK, around 16,500 millionaires since 2017, is part of a global trend of the rich migrating, which appears to be gathering pace. The Henley Private Wealth Migration report found that 128,000 millionaires are expected to move this year, surpassing last year's record by 8,000.
Read more here.
Nvidia snatches the top spot from Microsoft as the world's largest public company
Nvidia, the tech industry's darling of artificial intelligence, is now the most valuable company in the world, surpassing Microsoft. Nvidia's market capitalization closed at approximately $3.34 trillion on Tuesday, surpassing Microsoft's $3.32 trillion value. Apple holds the third-largest market cap in the US with a value of $3.27 trillion.
Nvidia's stock soared by 3.5% on Tuesday. Microsoft shares dropped by 0.5%, and Apple shares dipped by 1.1%. Earlier this month, Nvidia joined the exclusive club of US companies to exceed a $3 trillion market cap.
Nvidia's shares have been on a rapid upward trajectory for the past year and a half. Nvidia's chips are unmatched in their ability to produce processors that power artificial intelligence systems, including those for generative AI, the technology that powers OpenAI's ChatGPT, capable of creating text, images, and other media.
Read more here.
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In light of the financial strain during summer, some individuals might consider investing their savings more carefully to mitigate potential losses. This shift in mindset could lead more people to explore business opportunities with a focus on providing value and quality, as demonstrated by the growth of retailers like Ross Stores and Walmart.
Given the economic instability in the UK, some millionaires who have at least $1 million in investable assets are considering relocating to countries with more favorable tax policies and political climates. This trend of millionaires leaving the UK has been ongoing since 2017, and it's expected to continue, with as many as 9,500 individuals planning to depart this year.
