That’s what we’ve got this week. Yesterday we saw the tightest session range for the SPY in almost 4 weeks. Next week folks come back from the beach and head into conference season, so we don’t expect this to last too long.
As a friendly reminder, Friday’s Jobs Report and CPI stats coming in Sep will most likely be the push towards a dovish or hawkish Fed response next month. Data shows that we could still get a recession in 1H24, and core inflation is down but not at their target 2%. So, we either need to see inflation coming down fast (not likely, in our view) so that the Fed can officially pause and tie up their rate hike box with a bow, or we’ll be in a “will they or won’t they” situation for a while longer.
Per our note yesterday, below we share the drugs that could face up to 50% pricing cuts by Medicare. The first cuts will occur in 2026. J&J was the hardest hit with 2 drugs on the list.
OpenAI revealed ChatGPT Enterprise, with enterprise-grade security and a speed boost.
Thanks to BTIG and Data Trek, this chart shows that earnings estimates are down meaningfully via 30-day earnings revision data for many of the big tech names except for Amazon and Nvidia.
The FDIC is headed towards new regulations for midsize banks after 3 regional banks went poof this year. Lenders with at least $100 billion in assets will have to issue enough long-term debt to cover capital losses and backstop wind-down plans.
The SF Fed’s bank-supervision chief is out, after a report showed shortcomings during the SVB collapse, per Bloomberg.
Bloomberg has a story that Walmart, Walgreens, and CVS are introducing new care options normally available only at doctor’s offices. Maybe they should prioritize shorter lines before trying to think outside the box.
China is trying everything to get their economy’s mojo back. They may cut interest rates on existing mortgages this week, which would be the 1st time since the GFC. Plus, the larger banks may lower deposit rates for the 3rd time this year, to make saving less attractive. Plus, there supposedly could be a task force to boost market liquidity in Hong Kong.
Toyota suspended ops at 13 plants in Japan citing system failure, per the NHK.
Remember when Japan couldn’t get inflation up….for most of our recent memories? Well, the country is now thinking up ways to counter inflation as price and wage rises show signs of broadening, per Reuters. The Nikkei says they’re looking expand energy subsidies to curb rising prices. Probably because unemployment is up a bit, they cannot take a victory lap after 25 years.
Companies in the EZ that borrowed trillions of euros before the rate hikes are facing refinancing deadlines in 2025 and 2026, which will be the peak. So, unless the global economy tanks so much that central banks unwind the LTM rate hikes with equal easing, analysts warn that we’ll be seeing a lot more defaults and expense cuts. Bloomberg notes that a metric of refinancing risks is at a record high.
Traders are keeping watch on demand figures out of the US and China, and the px is being propped up by the expectation that OPEC+ will extend output cuts to October. Aramco could raise the px of its Arab Light crude for Oct sales to Asia. This would be the highest px since last Dec. Definitely not an inflation-reducing move.