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Your Quiver | Wednesday, May 24, 2023

CIO | Nadine Terman @SolsteinCapital details what she's seeing in global financial markets.

Buckle Up

There is no debt-ceiling deal as of the time of writing this note. There are no additional meetings scheduled. They’re at a standoff. Buckle up. Republicans want concessions that could cost 570k jobs, according to BBG. Overall estimated concessions would kill the economy, which they are noting could be worse for the stock market than moving past the X date without a deal.

Moment of Truth

McKinsey says that the US is facing a moment of truth, laying out 4 scenarios for the future. It warns that the US could have a meltdown in asset prices with slow growth—OR—it could enhance its productivity such that wealth, income, and balance sheets would benefit. I’ll take # 2, please.

Going Hard

Traders expect UK rates hitting 5.5%, with a 25bps hike in June pretty much in the bag. That would definitely move capital from US bonds to theirs and pressure the USD.

Big Buybacks

Per the WSJ, US companies in the Russell 3000 have announced >$600bn of share buybacks this year, similar to last year’s record pace—but obviously at much higher valuations. In 2022, they announced $1.27trn of share repurchases and completed $1.05trn, according to Birinyi. Consider that traditional buyers have been selling lately, and you can see the shareholder lawsuits coming. Some of the biggest tech companies have been the largest buyers YTD, and their share prices have responded accordingly (up).


Germany’s business outlook caught a cold. It’s deteriorated for the first time since Oct, with manufacturing down. The lfo gauge fell to 88.6 this month.

China Down Overnight

Hang Seng -1.62%, CSI 300 -1.38%, Shanghai -1.28%, Shenzhen -0.84%. That’s one step closer to stimulus.


Japan’s wages are growing because pay raises are greater than their inflation rate. Plus, their manufacturing sentiment turned positive for the first time this year. Japanese investors also have a lot to cheer about, with the market on a tear. But watch out, per ASR, small caps are in a “stretched pessimism” range, with Value also struggling versus Growth. So, mix matters.

FOMC Minutes

The Fed will distribute its latest Minutes today. To note, they raised the overnight benchmark rate to 5-5.25%. Traders are estimating a June hike at 40%, which per UBS is the peak we saw during the banking crisis. Futures also are considering more tightening in July if June is a pause. You know there’s no rate hike if there is no debt deal.

If You Can't Beat 'Em, Join 'Em

Bloomberg reports this morning that the popular diet app, Noom, which for years has touted its “psychological path to weight loss” has decided to offer its customers GLP-1 drugs from Novo Nordisk and Eli Lilly. Along with Weight Watchers, Noom’s announcement is yet another meaningful step in broadening GLP-1 usage for weight loss.