🎙️ Magic Number

Most stocks fell today, but the three major U.S. indexes are set to increase in May. The Nasdaq is leading the charge.

☀️ After hitting a fresh record high on Tuesday, the tech-focused index is on track for its best May since 2003. What lies ahead with summer on the horizon?

As one analyst noted, investors wonder: “Is the macro environment really changing? Some of the things that were expected to happen, the probability of them happening is decreasing.” (Notably, rate cuts.)

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• The loneliness of the American worker

• How much happiness your salary buys

This, and more, in just 5 minutes to read.

Chart of the Day

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In The News

💼 The Loneliness of the American Worker

How well do you know your colleagues outside of work?

The pandemic exacerbated America’s loneliness epidemic. Now, there’s a rise in loneliness in the workforce, too. 

A growing number of workers feel a "sort of an emptiness or lack of belonging" despite working one, two, or even three jobs. 

Employers and researchers are exploring the impact of workplace changes on this loneliness epidemic, as declared by the U.S. Surgeon General. For instance, 1-800-Flowers.com has a popular company-wide chat group called “Loneliness.”

Consider:

• Over 40% of fully remote workers sometimes go days without leaving the house.
  

• Many in-office workers work remotely, even at the office: They spend nearly a quarter of their time in virtual meetings, with only 8% in face-to-face meetings.
  

• Meeting time has tripled since 2020, reducing casual interactions that foster happiness, per Microsoft.
  

• The percentage of workers who knew their colleagues personally dropped from 79% in 2019 to 68% in 2023.
  

• The number of U.S. adults who consider themselves lonely increased from 46% in 2018 to 58% recently, per Cigna.
  

Why it matters:

Loneliness impacts workers’ moods and ability to produce quality work. Cigna estimates that it costs companies $154 billion annually.

The small talk boost: Companies are trying to address the issue with new rollouts such as more lunch activities, after-work events and retreats, in-person meetings, and better amenities to foster small talk. 

• One Rutgers University study found that small talk at work “reduces stress and increases positivity.” Yet virtual meetings often exacerbate loneliness. One survey revealed that heavily meeting-laden employees felt lonelier.

Serendipity: Physical office presence enhances connections but with diminishing returns. Syndezo data shows a 20%-30% increase in serendipitous connections when employees come to the office, with the benefits tapering after about three days per week.

• Ernst & Young encourages team calls to start with personal conversations. 

• Researchers also believe a heightened focus on productivity has often replaced connection and a sense of belonging. 

In sum, though modern work offers many ways to connect, the loss of in-person interactions contributes to the loneliness epidemic, which affects remote and in-office workers alike.

Read more

More Headlines

⚽ Dick’s Sporting Goods stock soars on hot consumer spending

☎️ T-Mobile will acquire most of U.S. Cellular for $4.4 billion

💰 Elon Musk’s xAI raised $6 billion in fresh funding

🔊 Google CEO explains the future of the web in an AI world

⛽ ConocoPhillips agrees to buy Marathon Oil in $17 billion all-stock deal

📈 Why Nvidia's stock split isn't something for investors to ignore

💸 How Much Happiness Your Salary Can Buy

Can money buy happiness?

 It’s a loaded question, and it truly depends on one’s lifestyle, goals, and definition of “happiness.”

As the bestselling author Morgan Housel once wrote, “Money buys happiness in the same way drugs bring pleasure: Incredible if done right, dangerous if used to mask a weakness, and disastrous when no amount is enough.”

The idea that $75,000 or around $1000,000 is the peak salary for happiness is misleading, according to a story Wednesday in The Wall Street Journal. 

• The $75,000 figure — originally from a 2010 study by Nobel laureates — equates to about $110,000 today.
  

• Recent research suggests that happiness does not peak at a specific income and that money impacts happiness beyond that threshold.

10,000 hours: Matt Killingsworth from the University of Pennsylvania's Wharton School emphasizes that money shouldn't be the sole pursuit of happiness but is still a key factor. The $75,000 figure, much like Malcolm Gladwell's 10,000-hour rule, became popular due to its simplicity. But both numbers oversimplify the nuanced science behind them.

• Killingsworth's 2021 study, which involved more detailed happiness measurements, found that day-to-day moods continued to improve beyond $75,000 in 2010 dollars. This was confirmed in collaboration with the late Daniel Kahneman, a co-author of the original study.

Killingsworth suggests something profound: Money's value lies in the choices it enables rather than what it buys. In other words, people with high savings rates and sizable investments can more easily pay for “easy” living, like housekeepers, vacations, Ubers, cooked meals, etc. 

Of note: Higher happiness in adolescence is also linked to higher earnings by age 30, as per a 2012 study.

Why it matters:

As income rises, its impact on happiness diminishes. For example, doubling an income from $50,000 to $100,000 requires another doubling to $200,000 for a similar happiness boost. 

The magic number: Happiness stops increasing at around $100,000 for some and rises faster for others. This indicates that money's impact varies among individuals (no surprise there). “For some people, money just matters more than others,” Killingsworth said. (He’s studying exactly why that’s the case; it’s likely rooted in childhood.) 

• There is no consensus on a magic number where happiness peaks. Studies by Killingsworth and others suggest no such point, possibly due to insufficient data at very high-income levels.
  

• Other economists have noted the difficulty in studying the rich and suggest that beyond a certain income, happiness gains are minimal.

Bottom line(s): Higher income is generally associated with greater satisfaction, though it gets murky. “It would be absolutely wrong to reduce the pursuit of happiness to the pursuit of money,” Killingsworth said. “At the same time, it would also be wrong to totally discard money as a meaningful factor.”

Read more

Quick Poll

On Friday, we asked: How much do you trust your gut when making investment choices?

— Someone who mostly trusts their gut said, “I use numbers to filter value, but my gut has the final say. It helps me to sleep at night.”

— Another reader who always trusts their gut added, “If my guts say no, I do not care about professional analysis.”

See you next time!

That's it for today on We Study Markets!

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