Reads
- Gloomy Consumers Spend More
- Why China’s Miracle Growth Story May Be Coming to an End
- Russia Takes Its Ukraine Information War Into Video Games
- A Spending Boom Fuels Russia’s Wartime Economy, Raising Bubble Fears
- Why One Country Is Struggling to Break Away From Russian Gas
- Extreme Heat and Aging Power Grids Are a Deadly Combination
- A Record $90 Billion in Ship Orders Loom Over Boom-Bust Industry
- Asia’s Richest Families Fuel Race for Lucrative Finance Jobs
- Traders Brace for $102 Billion Wave of Treasury Bond Sales
- Why the Drivers of Lower Inflation Matter
- Clock on the Fed’s ‘Soft Landing’ May Already Be Ticking
- Why the FTC’s Lina Khan Is Taking on Big Tech, Even if It Means Losing
- Lots of US Homeowners Want to Move. They Just Have Nowhere to Go
- Has America’s Air Travel Boom Peaked?
- Elon Musk’s Unmatched Power in the Stars
- Walmart Buys Tiger Global’s Flipkart Stake for $1.4 Billion
- After $700 Million U.S. Bailout, Trucking Firm Is Shutting Down
- Ford Realizes Customers Can’t Quit Hybrids
- Is It an E-Bike, or a Motorcycle for Children?
- China-Founded Rivals Shein and Temu Ramp Up War for American Shoppers
- That Cool New Bookstore? It’s a Barnes & Noble
- The Psychedelics Stock Universe Is Shrinking, Despite the Hype
- Membership Falters
- Europe Avoids China’s Belt and Road Forum, Keeping a Distance From Xi and Putin
- Europe Vowed to Make Russia Pay for the War. It’s Not That Easy
- Global Bonds Slide on Surprise Bank of Japan Move
- He Held Up a Bank to Get His Own Money
- Social Security’s Next Cost-of-Living Raise Is Forecast Around 3%
- Wall St. Pessimists Are Getting Used to Being Wrong
- Why ‘Soft Landing’ Optimists Shouldn’t Celebrate Just Yet
- $2 Billion Default Followed Warnings to Everyone but Investors
- What Fed Hikes? Much of America’s Consumer Debt Is Still Riding Ultralow Interest Rates
- The Extreme Solutions That Can Fix Climate Change
- Exxon and Chevron Stalk More Shale Deals as Profits Dip
- Volkswagen Seeks to Reclaim China Crown in Deal With EV-Maker XPeng
- Ford Raises Profit Forecast Despite Steeper EV Losses
- 5 Ways That Buying a Car Has Drastically Changed
- Biogen to Buy Reata for $7.3 Billion in Rare-Disease Expansion
- Aided by A.I. Language Models, Google’s Robots Are Getting Smart
- P&G Earnings Show Its Pricing Power Endures
- The Former Banker Gambling on FanDuel’s American Dream
- Adidas Plans Sale of Second Yeezy Batch to Eat Into Stockpile
Todays Open Interest Change
PREMIUM
Prepper
The mega rally on Wall Street in 2023 hasn't been the only thing that many economists and analysts have gotten wrong. The staggering drop in inflation has confounded many market watchers, with the Consumer Price Index falling to 3%, from a high of over 9% seen last summer, as well as the central bank's favored inflation gauge - the core personal consumption expenditures price index. Data on Friday showed the figure to have moderated on a M/M and Y/Y basis, inching closer to the Fed's key 2% target that is needed for stable prices in the U.S. economy.
Fool me once? Following an infamous "transitory" call from 2021, Jay Powell and Co. made a serious policy U-turn, ratcheting up rates from near zero to 5.5% in the span of 16 months. A technical recession ensued in the first half of 2022, but the U.S. economy has been resilient since then, with quarterly GDP recently growing at a 2.4% annualized rate, or almost a full percentage point stronger than the 1.5% expected. Inflation numbers have also routinely come in better than anticipated, prompting many investors to consider whether the central bank continues to be overly cautious in its fight against inflation to compensate for criticism that it had been late (really late) to the game.
"Inflation has moderated somewhat since the middle of last year, nonetheless the process of getting inflation back down to 2% has a long way to go," Powell said at his press conference last week. "We'd really want to be sure that inflation is coming down in a sustainable [way]. It's hard to make - I'm not going to try to make - a numerical assessment of when and where that would be. So we intend, again, to keep policy restrictive until we're confident that inflation is coming down sustainably."
What to watch: As mentioned previously, Powell did shift his tone especially with regards to the outlook for the U.S. economy, with Fed staff no longer predicting a recession. However, the debate still rages on over whether disinflation will be able to find a permanent footing, as well as the impact of additional rate hikes. "Some Fed officials are not yet convinced they've done enough - and don't want inflation to resurge on their watch," noted the American Institute For Economic Research. "If disinflation continues over the next few months, such a hike could prove devastating - not merely wiping out inflation, but economic growth and employment as well." Take the WSB survey.
58 MPG
Seeking to cut greenhouse gas emissions, the Biden administration has issued a proposal directing automakers to raise the fuel economy of their vehicles to a fleet-wide average of 58 miles per gallon by 2032. The proposed rules by the National Highway Traffic Safety Administration would be applicable starting in model year 2027, while new fuel efficiency standards for heavy-duty pickup trucks and vans would rise 10% annually. The NHTSA also said it would try to align regulations with the Environmental Protection Agency's proposed vehicle emissions reductions. Many U.S. automakers are already in the middle of electrifying their fleets, but any changes could impact the plans of Ford (F), General Motors (GM) and Stellantis (STLA). (357 comments)
War escalation
Ukrainian drones damaged two office buildings close to the Kremlin and a pig breeding complex on Sunday, marking the third such strike over the past week. While Ukrainian officials didn't acknowledge the attacks, President Volodymyr Zelenskyy said: "Gradually, the war is returning to the territory of Russia." Meanwhile, African leaders met with Vladimir Putin to discuss resuming the Black Sea grain deal in the wake of attacks on Ukrainian ports, though Russia seems to be preparing for an even bigger and longer war, in light of recent changes made to military conscription and the Kremlin's overflowing war chest. Former President Dmitry Medvedev also said Moscow would be forced to use a nuclear weapon if Kyiv's counteroffensive turned out to be successful. (14 comments)
Only Bitcoin
The SEC asked Coinbase Global (COIN) to halt trading in all cryptocurrencies except Bitcoin (BTC-USD) before suing the exchange in early June, according to the exchange's CEO Brian Armstrong. The request indicates the SEC's intent to expand its oversight of the crypto industry, at a time when U.S. regulatory authorities are still vying for control. "Delisting every asset other than BTC would've essentially meant the end of the crypto industry in the U.S.," Armstrong declared. Investing Group Leader Dilantha De Silva also highlighted the intensifying battle, saying, "The watchdog is very likely to come hard at Coinbase to establish its relevance, given that Coinbase argues the SEC does not have sufficient jurisdiction." (6 comments)
Today's Markets
In Asia, Japan +1.3%. Hong Kong +0.7%. China +0.5%. India +0.6%.
In Europe, at midday, London flat. Paris +0.7%. Frankfurt +0.2%.
Futures at 7:00, Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.8% to $81.24. Gold -0.2% to $1,996.60. Bitcoin +0.3% to $29,387.
Ten-year Treasury Yield flat at 3.97%.
Today's Economic Calendar
9:45 Chicago PMI
10:30 Dallas Fed Manufacturing Survey
Companies reporting earnings today »
What else is happening...
Yellow (YELL) shuts down operations, plans to file for bankruptcy.
Walmart (WMT) pays $1.4B to raise stake in Indian e-commerce giant.
China manufacturing activity shrinks for fourth straight month in July.
Credit card delinquencies tick up, net charge-offs fall in June.
Disaster-prone areas turn haven for those seeking cheaper homes.
J&J's (JNJ) bankruptcy plan to handle talc lawsuits is rejected again.
Biogen (BIIB) to buy Reata (RETA) at enterprise value of $7.3B.
RSV treatment market to surge past $9B by 2029 from $1B today.
Assessing the impact of proposed Basel III endgame rules on banks.
What does Oddity Tech (ODD) signal about AI's future on Wall Street?