This Week’s Takeaways:
- Chair Powell indicated rate cuts are coming, which should be bullish for stocks assuming corporate earnings hold up.
- RA owners with SALT deductions considering Roth conversions should be careful triggering income that puts them above $500,000 and make larger charitable contributions this year to offset the converted income since the charitable contributions rules are changing next year.
- Use AI to learn about concepts, read through to cited sources to make sure they were summarized accurately, but beware that AI can’t differentiate between good and bad ideas and faces accuracy issues.
- 95% of organizations studied get zero return on their AI investment, which could be a risk for a market that’s overly tied to the AI narrative.
- Residential real estate is slowing, with year-over-year sales being down 8% and more than a 1/3 of the nation’s largest housing markets are seeing falling prices.
- Plus my latest book recommendation and Things to Do This Weekend in Boston.
Powell Pivot Clears Path for Rate Cuts by Professor Jeremy J. Siegel
Investors are interpreting Chair Powell’s Jackson Hole speech as a dovish pivot toward rate cuts that downplayed tariff inflation as one-time and acknowledged labor market concerns. This should be bullish for stock market investors assuming earnings hold up.
What Trump’s Megabill Means for Roth IRA Conversions by The Wall Street Journal
The major rules haven’t changed, but IRA owners with SALT deductions considering Roth conversions should be careful triggering income that puts them above $500,000 and make larger charitable contributions this year to offset the converted income since the charitable contributions rules are changing next year.
Can ChatGPT Revolutionize Your Retirement Strategy? by Investopedia
AI is a good tool for learning about financial concepts, but it lacks critical thinking to apply those ideas or tell good ones from bad, and you need to review the sources it’s using to verify accuracy.
MIT study on AI profits rattles tech investors by Axios
95% of organizations studied get zero return on their AI investment, which could be a risk for a market that’s overly tied to the AI narrative.
New Home Sales Dip in July by Wells Fargo
Sales slipped 8.2% year-over-year, implying that high mortgage rates, economic uncertainty, and a softening labor market are keeping buyers on the sidelines.
See also: Number of major housing markets with falling home prices stands at 105—up from 31 in January by ResiClub
More than a third of the largest metro area housing markets are seeing falling home prices year-over-year.
Book Recommendation
Battle Cry of Freedom: The Civil War Era by James McPherson
This one was a reread. Considered the single best one-volume book about The Civil War, it still holds up, but I wonder if there are better options published since then. It takes him about 200 pages to get to the war.
Boston Corner
Mass. biotech industry shrinks amid headwinds, Trump cuts
