401(k) Dictatorship

Market Sizzle: Forced Savings, AI Surge, Retail Options, Tequila Clash ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [401(k) Dictatorship]( Market Sizzle: Forced Savings, AI Surge, Retail Options, Tequila Clash [Josh Belanger](joshbelanger) Jul 2 joshbelanger   [READ IN APP](   Ever feel like your paycheck is under siege? Welcome to the new era of the "401(k) Dictatorship." Companies are cranking up auto-enrollment rates to 6% or more. Is this forced savings frenzy a smart move for your future, or just another hit to your wallet? Let's dive in and find out if you should save 6% or suffer. Save 6% or Suffer New hires now save more in their 401(k) plans. Nearly a third of companies auto-enroll workers at 6% of their salaries, up from a decade ago. This change helps employees get more from employer matches, boosting savings. In 2023, auto-enrolled workers saved 12.7% on average, while non-auto-enrolled saved 10.3%. Automatic enrollment makes saving easier, especially for young workers. Companies have found that higher default rates don't cause more opt-outs. Some firms, like Boston Consulting Group, auto-enroll at 10%. This ensures employees reach the recommended 15% savings rate. More companies are adopting this approach, helping workers save more for retirement. AI Stocks Skyrocket Alone The second quarter saw modest stock gains, but with big differences. The S&P 500 index went up by 3.9%. AI stocks rose 14.7%, while others dropped 1.2%. Nvidia even became the world's most valuable company briefly. Six out of eleven sectors, like healthcare and energy, lost value. Meanwhile, tech and telecom sectors grew. Volatility is low for the S&P 500, but single stocks are swinging wildly. Many investors now bet against volatility. High interest rates are here to stay. Markets are adjusting, with investors favoring big, strong-balance-sheet companies over smaller, weaker ones. France's political risk is also impacting European markets. While the S&P 500 saw gains, the Stoxx Europe 600 fell 8.9%. Some see a market correction coming once the AI rally ends, but others hope for broader gains when rates fall. Retail Traders' Option Frenzy Retail traders are booming in the US options market. They made up 18.3% of total options activity in June. Most of their trades were short-term, expiring in a week or less. Tech stocks are their favorite, especially AI companies like Nvidia. This has helped push the S&P 500 Index to new highs. Retail investors prefer bullish call options over puts, seeking to catch the tech rally. These traders use options for better leverage or as protection on their broad market ETF positions. They often sell covered calls or buy protective puts for income and hedging. Tequila Battle in Mexico Grover and Scarlet Sanschagrin, founders of Tequila Matchmaker, had their house raided by Mexican authorities. They were accused of making fake tequila. The Sanschagrins certify tequilas as additive-free. Mexico’s tequila regulator, CRT, filed the complaint, claiming their program hurts tequila’s reputation. Additives in tequila add flavor and color. Under Mexican law, if under 1% of a tequila's weight, additives don't need to be disclosed. The Sanschagrins believe people should know what’s in their tequila. Tequila production is booming, driven by high demand from the U.S. The fight is between traditional tequila makers and big companies using modern methods. Additive-free tequila is popular. Many consumers want to know what’s in their drinks. The debate over what makes true tequila continues. Quick Sizzles - BlackRock's ESG Backlash: BlackRock supports a coalition opposing political agendas in pensions, aiming to keep investment decisions free from politics. - Banks AI Hesitation: Big banks are slow to adopt AI due to job loss fears, regulatory concerns, and institutional inertia, despite potential benefits. - Stock Market Glitches: Increased end-of-day trading raises concerns about market vulnerabilities and potential system failures. - Boeing Buys Back: Boeing acquires Spirit AeroSystems to address manufacturing issues and improve quality control. - Lumber Prices Fall: Lumber prices tumble despite building season, signaling a slowdown in residential construction. - Undersea Power Lines: Ambitious project aims to connect Moroccan wind and solar farms to the UK with a 2,500-mile subsea power line. - Amazon's AI Investment: Amazon plans to spend over $100 billion on AI infrastructure in the next decade, shifting focus from retail to cloud computing. 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