Gross domestic product increased at an annualized rate of 3.0% in the second quarter, according to the second estimate released by the Commerce Department’s Bureau of Economic Analysis. The update primarily reflected an upward revision in consumer spending.

Total nonfarm payroll employment in the U.S. grew by a tepid 142,000 jobs in August, with a strong concentration in the construction industry. Average hours worked and average pay per hour both edged up while the unemployment rate ticked down to 4.2%.

Initial jobless claims increased by 2,000 to 230,000, seasonally adjusted, in the week ending September 7. The four-week moving average, which removes volatility, decreased by 500 to 230,250.

The Consumer Price Index for All Urban Consumers rose a modest 0.2% in August on a seasonally adjusted basis, according to the Labor Department, similar to July’s rate. Over the last 12 months, the all-items index increased 2.5% before seasonal adjustment, compared to 2.9% in the preceding month. Core inflation, which excludes volatile food and energy prices, was higher at 3.2% year-over-year. While energy prices declined, shelter costs continue to be inflation’s biggest driver in absolute terms. The biggest percentage hike, though, was in airline tickets.

The Commerce Department’s latest reading of the Personal Consumption Expenditures index – the Federal Reserve’s preferred inflation metric – increased by 0.2% in July, or 2.5% year-over-year.

The Conference Board’s Consumer Confidence Index ended August at 103.3, a slight improvement from July. A reading of 100 signifies consumer confidence is equal to where it was in 1985.

The S&P 500 gained +2.4% on a total-return basis in August. The CBOE VIX “fear gauge” closed at 15.00, an 8.3% drop from the anxious moments just before early August’s mini-correction.

The 10-year Treasury note ended June with a 3.911% yield, having started the month at 4.105%.

London’s FTSE 100, Amsterdam’s Euronext 100 and Frankfurt’s DAX, and were up +0.1%, +0.6% and +2.2% respectively, continuing their slow-but-steady advance.

Hong Kong’s Hang Seng surged +3.7% while Tokyo’s Nikkei 225 and Shanghai’s SSE Composite declined -1.2% and -3.3% respectively.

In the 1990s, economists made a lot of money parsing every word the Federal Reserve chair said, trying to divine some kernel of arcane knowledge out of this seemingly all-wise oracle. Those guys must really miss Alan Greenspan.

Jay Powell, who sits at the head of that table now, means what he says and he said this in late August: “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.” Not much room for interpretation there. Interest rates are coming down.

According to the CME FedWatch Tool, Wall Street traders surveyed are 100% certain a Fed funds target rate cut will be announced at the central bankers’ September 18 meeting, although they’re split 80/20 between expecting a quarter-point decrease or a half-point one.

West Texas Intermediate crude prices continued to slide, ending July at $73.55 per barrel, down -5.6%.

Gold prices rose +4.2% to end the month at $2,537.60 per ounce.

The dollar strengthened by between 2.1% and 2.6% in London, Frankfurt and Tokyo.

Bellwether cryptocurrency bitcoin fell 9.5% to end August at $59,110.

“Your Uber will be landing in 4 min”

If you have $135,000, you could own a flying car in a matter of months. Not years. Months. That’s how close we are. And even if you don’t envision one in your driveway, you’ll be able to hire one for a short trip when you want to arrive in style.

This is all part of the new Advanced Air Mobility niche we discussed here in May. Use cases include urban, regional, public transit, cargo and recreational niches.

We’ll tell you more about this, but can we ask a favor first? If you buy one, please land it in front of a high-end restaurant, flip the keys to the valet, then send us a snapshot of his expression.

Alef aloft

For years, we’ve all been asking: “Where’s my flying car?” Fact is, any number of challenges needed to be overcome.

At the top of that list is power. Battery performance, range and payload capacity were the critical factors. The engineers also had to figure out how to configure the wings so that your flying car could also function as a … car.

These issues have each been addressed, and we now know of at least three flying car models that have been approved by the U.S. Federal Aviation Authority for personal use. (At least five Europeans are also in the mix, as is at least one Chinese firm.) Joby Aviation (NYSE:JOBY), Beta Technologies, Volocopter and other designers are even farther ahead with their models, but theirs are aircraft-only without the ability to pull into a suburban garage.

The Alef Model A, a road-drivable, electric, vertical-takeoff-and-landing flying car, is backed by Tim Draper, the Silicon Valley investors who bankrolled Elon Musk. According to eVTOL News, Alef will deliver preorders of the two-passenger aircraft in time for Christmas 2025. (How do you explain to the kids all the reindeer parts on the lawn? We got nothing.)

Alef Model A

While it can park in a standard parking space, it can only crawl along at around 25 mph on the road; its cruising speed is not yet published, but it has to be faster than that. That said, it can only fly about 110 miles on a charge with two people and 200 pounds of payload, while it can drive 200 miles.

The Model A boasts a choice in powertrain: electric or hydrogen. While this sounds like an environmentally driven decision, it’s mainly a matter of force vs. mass. We’ve reached the point where these energy sources – as heavy as they are – have become lighter than a more complex internal-combustion system with a full tank of carbon-based fuel.

Alef’s was the first flying car to win FAA approval for flight testing and, now that the door has been unsealed, others are coming up behind.

The Doroni H1-X is scheduled for delivery in 2026. The prototype has already been flight-tested and Doroni says the commercial model will go wheels-up (technically, wheels-sideways) by the end of this year.

Doroni H1-X

Aska is another flying car ready for vertical takeoff. Its A5 model boasts a 250-mile range, but is still in the tethered flight stage, so that’s entirely hypothetical.

Aska A5

Flight regulations are in flight

Regulatory concerns include noise pollution and other environmental impacts, as well as such obvious questions as “Who’s allowed to fly these?” and “How are we going to manage a whole new class of air traffic?”

A lot of this will be addressed by the FAA’s pending MOSAIC rule, which should be finalized next year. An acronym for “Modernization of Special Airworthiness Certification,” it would more than double the allowable weight of a light sport aircraft. That’s been 1,320 pounds, up from zero pounds 20 years ago because LSAs didn’t exist prior to 2004.

That’s also when they invented the LSA pilot, who must meet these stringent conditions:

• Be at least 16 years old,
• Speak and read English, and
• Be healthy enough to qualify for a state driver’s license.

At least, that’s all you need to get started. Now you have to pass a written test, spend around $10,000 and 30 hours on lessons, then take the practical.

Doroni told Flying magazine’s Jack Daleo that the H1-X is “so intuitive that a four-year-old could fly it.” A ton-and-a-half block of plastic and lithium hurtling thousands of miles above the earth in excess of 100 mph? Maybe we need to wait until the kids prove they can be trusted with their cell phones first.

What MOSAIC does is expand the LSA class – which includes balloons and powered parachutes as well as gyroplanes and simplified-control aircraft – to include personal eVTOLs.

Lessons to learn – and teach

A lot of very rich kids are going to want to fly their dates to the prom next year and, if the FAA starts granting airworthiness certificates, the hardware will be available. The Prom King and his court will need help getting their LSA licenses, though. That’s where some entrepreneurs will find an opportunity. They’d need to get specific-model training first but that won’t take long, and then they’ll be able to open up LSA schools.

And to pay off their first flying car, they could do what everyone else does to pay off their new ground transportation: hire out as a rideshare. Such cities as New York, Chicago and Los Angeles can’t wait for these, because they’re quieter and less polluting than helicopters. They might even beat Uber to the market.

Of course, the air traffic control kinks need to be worked out, but people will probably be able to fly their personal eVTOL anywhere that corporate helicopters are allowed. After that, we’re in uncharted territory. It’s hard enough to get drivers to look left and right before pulling into traffic – how are we going to make them look up and down as well now too?

The next question is: Where can you drive it? At least three states – New York, Pennsylvania and Minnesota – are looking to pass legislation that would license them as if they were any other class of street-legal vehicle.

If you’re not inclined to open your own LSA academy, you could still benefit from the eVTOL craze through passive investment. Every one of the companies mentioned here are looking for direct funding, and it’s only a matter of time before publicly traded companies or SPACs acquire them. Joby, backed by Uber, is already on the Big Board as a publicly-traded stock. It’s hard to keep your eye in the sky and your ear to the ground, so you might want to discuss investment opportunities with a trusted financial advisor.

-David

David Camarillo, CFP®, ChFC, CFS

Director of Advisory Services

David is a proud Trinity University alum, where he earned his Bachelor of Arts in English and History. He started his career in the financial services industry in 2005 at Wells Fargo, and in 2007 he joined H.D. Vest Financial Services where he consulted for the company’s top financial advisors. He held a Series 7 and 66 until 2018, and he still holds life and health insurance agent and variable insurance products agent. He obtained the Certified Financial Planner™ (CFP) designation in 2011, the Chartered Financial Consultant (ChFC) designation in 2014, and holds the Certified Funds Specialist (CFS) designation. David has been a Wealth Advisor with Smith Anglin since 2014, and in 2019 he was promoted to Director of Advisory Services.

Outside the office David stays active with his wife, Mayra, and two kids, David Jr. and Amelia. David is an avid runner, racing everything from the 5k to the marathon. He enjoys hiking nature trails with his family and their dog, Bo, and playing guitar loudly when possible. He also volunteers with Back on My Feet and the North Texas Food Bank.