🦘 USA Sends Global Markets Into A Freefall, Rate Cut Hopes Increasing, The Disturbing Number of Homeless Kids

G’day everyone!

Here’s what we’ve got in store for you today:

• USA Sends Global Markets Into A Freefall

• Rate Cut Hopes Increasing

• The Disturbing Number of Homeless Kids

Let’s have a look at the market snapshot before jumping into the news:

Brace Yourself: Global Stock Markets Tumble Amid US Recession Fears

Buckle up, folks – it's a rocky ride in the world of stocks.

This Friday, global markets took a nosedive as jitters over the US economy's health sparked a selling frenzy.

The S&P 500 slid 2.5%, its worst dip since 2022, and the Dow Jones plummeted by 954 points. Tech-heavy Nasdaq wasn't spared, dropping an eye-popping 3.2%, putting it 10% below its July peak.

The panic button was hit after a disappointing jobs report revealed unemployment climbing to its highest since October 2021, stoking recession fears.

This gloomy picture didn't spare markets in Europe, China, and Japan, where the Nikkei suffered its second-largest points drop in history.

With the latest data showing job growth far below expectations, all eyes are on the Federal Reserve.

Economists suggest that to dodge a severe recession, the Fed might need to slash interest rates more rapidly than planned.

Banks like JPMorgan foresee multiple rate cuts, totaling a reduction of 1.25 percentage points by year-end.

This turbulence spells potential trouble for retirement savings and 401(k) investments, but there’s a silver lining: substantial rate cuts might eventually revive the economy.

However, the full impact could take months to materialize.

For now, it’s a tense waiting game to see how these economic ripples will unfold. Keep your seatbelts fastened!

Ho-Ho-Hope for Borrowers: Interest Rate Cuts by Christmas?

Forget the reindeer, it’s the Reserve Bank of Australia (RBA) that might bring a gift to Aussie borrowers this Christmas.

After months of holding steady at a 12-year high of 4.35%, a rate cut could be on the cards by the year’s end, according to the latest buzz from economic experts and major banks.

The Finder’s Cash Rate Survey is lighting up with predictions: 81% of experts believe the RBA will hold rates in August, but 25% foresee a cut by December.

Leading the optimistic charge, Commonwealth Bank and Westpac are banking on a festive 0.25% rate cut in November.

Why the cheer? The inflation figures have eased slightly, with the “trimmed mean” inflation measure dropping to 3.9%. This lower pressure is making experts feel "more conviction" about a rate reduction.

Commonwealth Bank's Gareth Aird calls the August hold decision a “straightforward” one.

Meanwhile, Westpac’s Luci Ellis agrees, eyeing gradual cuts to bring rates down to 3.1% by the end of 2025.

But not everyone's singing from the same carol sheet.

ANZ and NAB have pushed their predictions for a rate cut to 2025, with NAB not expecting any trimming until June 2025.

Still, with 41% of borrowers saying they struggled with mortgages in July, many Aussies are eagerly waiting to unwrap some relief this Christmas. Grab your eggnog and keep those fingers crossed!

Housing Crisis Hit Hard: 46,000 Aussie Kids Homeless

Australia's housing crisis has taken a disturbing turn, with new data unveiling that nearly 120,000 Aussies are homeless, and close to 46,000 of them are children or young adults under 24.

The nonprofit Kids Under Cover rings the alarm bell, urging state and federal governments to inject funds into programs to protect young people from a life on the streets.

In an eye-opening revelation, over 80% of youth seeking help from homeless services in 2022-23 were flying solo, without a parent or guardian.

These figures, likely an underestimate, emphasize the urgent need for intervention to prevent young teens from slipping into homelessness.

Steven Nash, CEO of the charity, points out the harsh reality: many of those roughing it out today first experienced homelessness as kids.

His solution? Focus on early intervention and support to break the cycle before it starts.

This plea comes as inflation impacts even those secure in their homes, with rising mortgage and rent costs drawing concern from Treasurer Jim Chalmers as the election nears.

Housing Minister Clare O’Neil faces mounting pressure to address these issues, with affordability and market access remaining central challenges.

With three-quarters of recent homebuyers encountering hurdles and affordability hitting families hardest, the housing crisis isn't just a statistic - it's a pressing issue demanding immediate action.

Australia's Spending Slide: What Aussies Are Cutting Back On

After a surprising upswing, Aussie wallets are tightening up with household spending dropping by 0.5% in June, according to fresh data from the Australian Bureau of Statistics (ABS).

This dip comes after two months of consecutive increases.

What's behind the belt-tightening? Aussies are spending less on fun stuff like events, hotel stays, and dining out.

This category dropped a notable 1.8%, as people decided to skip that extra movie night or fancy dinner.

However, end-of-financial-year sales gave goods spending a slight bump, up by 0.5%.

Even non-discretionary spendings, like car repairs and groceries, saw a cutback.

But it's not all doom and gloom; spending on health, household equipment, and miscellaneous goods still saw increases, with some states like Western Australia and Queensland leading the pack.

In the big picture, year-on-year spending is still up in all states and territories, but with an eyebrow-raising 12.8% drop in alcohol and tobacco spendings compared to last year.

Maybe Aussies are getting a bit more health-conscious?

As the inflation rate nudges up to 3.8%, the Australian Council of Social Service is urging the Reserve Bank to think twice before hiking interest rates again.

The fear is that another increase could hurt jobs and incomes, making life even tougher for those on low and modest incomes.

The Reserve Bank is scheduled to make its next move on interest rates soon, so all eyes are on Tuesday's announcement. 

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