My Brain Food This Week...

Aug 11, 2024

I wrote about the U.S financial markets, Japan and how this could affect South Africa. You can read that letter here

Is the U.S in a recession and should we be worried?
After the drama of early last week in financial markets a number of metrics have been highlighted relating to the U.S economy, pointing towards a possible recession. U.S GDP has been trending lower on a per quarter basis, going from 4.9% in Q3 2023 to 1.4% in Q1 2024. The unemployment rate in the U.S has been rising from 3.8% in March 2024 and reached 4.3% in July of this year. Non-farm payrolls went from 216 000 jobs added in May 2024, down to 144 000 in July 2024 (well below the forecasted 175k jobs for July this year). Luckily the federal reserve has a lot of ammunition in interest rate policy, with interest rates in the U.S at +5%. Should the U.S get closer to a recession, there might be a path to dim that flame early, and quickly.
Anduril raises $1.5B at a $14B valuation. What does this mean?
In the U.S there are currently only five major defense contractors (Lockheed Martin, RTX, Northrop Grumman, Boeing, and General Dynamics) who are all fairly seasoned companies and the landscape for defense contracts is ripe for change. Anduril brings a breath of fresh air with their innovative approaches to defense and military capabilities. The drive for innovation and patriotism in the U.S should be inspiring for all other countries, highlighting why countries like the U.S are superpowers.

Self-Taught MBA