RETIREMENT

Golden Years Go Gray as Retirement Age Keeps Climbing

Hope you like your job, ‘cause you might be doing it for a long, long time. Countries worldwide are considering raising their retirement ages as people live longer and birth rates decline. This shift creates an imbalance in the global economy, with more retirees and fewer workers to support pension systems, stressing healthcare systems and national budgets. While these changes might make sense on paper, not everyone agrees.

The age-old problem: Last year, French President Emmanuel Macron raised France’s retirement age from 62 to 64, sparking significant public outcry and street protests. Following this, other countries have started to increase their retirement ages as well. In China, where many workers have traditionally retired between 50 to 60, the government announced plans to bump the retirement age due to a workforce shortage and declining birth rates. And most dramatically, a think tank is recommending the UK government consider altering the pension age to 75 to boost retirement savings. These changes are causing widespread discontent among younger citizens on social media, who are concerned about longer working years and poor job prospects.

• Gao Lingyun from the Institute of World Economics and Politics supports delaying retirement, stating, “It can increase the accumulation of social welfare and alleviate labor shortages due to population aging.”

• On the other hand, the National Pensioners Convention’s Jan Shortt criticizes this idea saying, “Making those already living with ill health wait even longer to claim their pension will only increase poverty and the demand on already-creaking services.”

Raising The (Retirement) Bar

In the US, the retirement age is currently 67, but some politicians suggest changing it to 70. By 2035, retirees might face a 17% reduction in full benefits due to concerns about Social Security shortfalls. As baby boomers reach their retirement years, many are working into their 70s because of growing living costs and the diminishing presence of workplace pensions. Last year, 20% of Americans over 65 were still working, nearly double the number from 35 years ago.

• If the retirement age goes up, nearly three-quarters of Americans could see their benefits cut — potentially leaving low- and moderate-income workers financially vulnerable when they retire.

• Proposed changes could result in a 14.3% reduction in benefits, costing median wage retirees up to $99K over ten years — or as much as 54% of their total account balance, depending on their age.

Pension tension: Social Security is the primary income source for 60% of US retirees, yet only 34% of future retirees believe it will be sufficient. While raising Social Security’s retirement age aims to reduce the long-term deficit, lowering it doesn’t seem feasible for supporting US seniors. Psychiatrist Gary Small suggests that raising the retirement age might help people maintain daily routines and potentially reduce the risk of cognitive decline.

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LARGECAP RECAP

📉 JPMorgan Analysts See “Buy the Dip” Opportunity After Global Stock Slump

Even before yesterday’s tumble in global stocks, triggered by the Bank of Japan’s rate hike and US unemployment numbers, the tech-heavy Nasdaq-100 and growth-flavored Russell 2000 indexes were struggling, each down ~10% over the past seven trading days. But JPMorgan analysts suggest that the cloudy days might finally be coming to a head, hinting that a “buy the dip” opportunity could be on the horizon.

• JPMorgan analysts believe that the rotation out of tech stocks is “mostly done,” but they caution investors to be careful, noting that economic data will be a factor in determining whether markets will recover.

• The company said the outcome of upcoming economic readouts like inflation and manufacturing could offer investors the opportunity to buy at acceptable valuations and prices.

Still worried? Don’t be. Despite Japan experiencing its worst single-day of trading since Black Monday in 1987, the Nikkei 225 index clawed back most of its losses yesterday — rising 10%. Virtually every other global market finished the day higher, including all of America’s most-watched indexes. Market volatility is part of the investment process, and sometimes the best approach is to stay the course — or keep buying.

Warning: Do you hold these 3 stocks? A 50% loss means you’ll need a 100% rebound… just to break even. And now, one Wall Street legend shows how to protect your downside from a stock market crash with his $5,000 system. It reveals the rating (Bearish, bullish, neutral) for 3 popular stocks — chances are you have them in your portfolio. Check it out for free today.*

Markets & Economy

Uber accelerates past Q2 with earnings beat: Uber ($UBER) reported impressive second-quarter results, growing revenue by 16% from last year and surpassing analyst earnings estimates by ~52%. Revenue hit $10.7B, with 156M monthly active users. [Read]

Celsius energizes with earnings surprise: Celsius Holdings ($CELH) shares climbed after reporting Q2 earnings, exceeding expectations by ~17%. Revenue reached $402M, up 23% year-over-year, showing strong gains in the energy drink sector. [Read]

Crypto ETFs face first major test: Bitcoin and Ether ETFs experienced their first significant market challenge as the crypto market erased $370B in 24 hours. Despite the volatility, most ETF investors held firm, with spot Bitcoin ETFs seeing minimal outflows and Ether ETFs recording net inflows. [Read]

Business & Wealth

OpenAI co-founder joins rival Anthropic: John Schulman, a pivotal figure in ChatGPT’s development, left OpenAI for competitor Anthropic to focus on AI alignment research. His departure leaves only three of OpenAI’s original 11 founders at the company amid reports of other high-profile exits. [Read]

Prison healthcare hindered by small co-pays: A new study shows that small co-payments for medical care in prisons drastically reduce inmates’ healthcare visits. This practice, implemented in up to 90% of US prisons, raises concerns about worsening health outcomes among the incarcerated. [Read]

Movie-going evolves post-pandemic: The film industry is adapting to changing viewer habits, with theaters focusing on premium experiences. While overall attendance remains lower, recent successes like “Deadpool & Wolverine” and “Inside Out 2” show audiences still value theatrical experiences. [Read]

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DIGIT OF THE DAY

VIX Sees Third Major Spike in History Following Bank of Japan’s Unexpected Rate Hike

Sometimes, the market can make things seem worse than they are — and that’s exactly what happened with the VIX this week. Often called “Wall Street’s fear gauge,” the CBOE Volatility Index (VIX) measures volatility in S&P 500 options, offering early clues about investor sentiment. Historically, it has served as a barometer for rocky times in the market and spiked during major disruptions like the 2008 Financial Crisis and the 2020 COVID-19 crash. This week, it added a third notable event: the Bank of Japan’s surprise interest rate hike.

• On Monday, the VIX surged by 42 points, marking its largest single-day increase since 1990.

• Many traders had expected the market to stay calm, so when it began to fall, they had to quickly adjust their bets, which exacerbated the declines.

The VIX fix: Despite this escalation, global markets quickly showed signs of resilience. Although a rising VIX typically signals heightened uncertainty, this recent jump was triggered by global market downturns, prompting investors to buy options for protection against short-term drops. The swift recoveries of the Japan Nikkei 225, Nasdaq, and S&P 500 the following day suggest that the VIX’s burst reflected traders’ reactions to unexpected news rather than a fundamental decline in market health.