Yellen and other gov officials are going to tag a broader group of financial firms as too-big-to-fail, which would probably translate into greater regulatory oversight and compliance for the bunch. So, heavy hitters, pun intended, like BlackRock, Fidelity, and Vanguard are already pushing back alongside mortgage lenders, insurers, and other financial firms. They look at their banking friends and don’t want the gov to expand their idea of systematic risk. In all, the potential targeted firms are hoping to look like a slimmed-down version of themselves before any decisions are made.
BBG noted the increase in rich Chinese kids who study in the US and return home to China “sea turtles,” instead of remaining in the US to work and gain citizenship. They pointed to lackluster events at Harvard that used to bring together business titans from both countries as well as wealthy offspring. But returning home means that buying Apple watches for pets is a no-no, as is political activism, as they have to try look a little more humble and “with the program.” With fewer cross-cultural students, though, the fear is that geopolitical tensions in the future could rise.
Many of us probably remember the Chevy Nova (translated to no-go, a bad name for a car). Well, the big auto makers are bracing for more walkouts, as there is no deal with the UAW—and the two sides remain far apart. The strike is estimated to be reducing the companies’ output by about 3,200 cars/day.
Amazon is going to run ads on prime video starting in 2024, unless you pay $2.99/mo to avoid them. That’s one way to increase profits—get them from advertisers or from your existing customers. Netflix and Walt Disney are taking notes, for sure. They both raised subscription prices and introduced ads.
India has been one of the beneficiaries of the fallout from worsening US-China relations. Now, BBG notes that JPM is going to add Indian gov bonds to its benchmark EM index in June 2024, which StanChart estimates could drive inflows of as much as $25 billion within 9 months. The inclusion is expected to make Indian equities more attractive as well, as investors consider India versus China.
The BOJ kept its monetary policy unchanged. Ueda said the time frame to end yield curve control hasn’t changed much. The decision came as Japan’s consumer inflation was high. Consumer prices excluding fresh food rose 3.1% y/y—versus declining, as the BOJ had projected.
The Chinese gov is trying various things to stimulate its economy and attract foreign investment, outside of some obvious choices. Now, they may relax foreign ownership caps in listed local companies from the current 30% level. Single foreign shareholders are capped at 10%.
JPM is forecasting crude at $100 in the long term “with the oil supercycle on track.” If that happens, don’t start penciling in rate cuts….anywhere. Russia’s surprise export ban isn’t helping the Fed either.
UBS points out that forward multiples “still reside well above the upper bound for the band of fair value that persisted for most of the back half of the last decade.”
BBG is out with a story about accountants leaving their jobs because they are bored and unhappy for other reasons. Ironically, I could not finish the story because it was extremely boring to hear about accountants’ mass boredom and exodus. My takeaway is that you should expect your bill to rise, with labor supply down.