Today we will see what the market’s reaction is to a mix of drivers—from an options expiry to an out-of-cycle rebalance for the NASDAQ to a big stretch of earnings releases, including $GOOG, $XOM, $META, and $MSFT.
The yen weakened because investors don’t think the BoJ will change its yield curve control program. No rate hike coming next week, basically. Japan’s core inflation rose in-line with forecasts, per the FT.
Amex is down pre-market because the co missed revenue forecasts. Users must have slowed their revenge travel, as mgmt. noted that this quarter’s results are probably more representative of expected growth going forward. Interestingly, consumers are still spending on food deliveries—but also with increased restaurant spend.
MiFID II slashed research staff from banks. Now, regulators have done a U-turn, and it’s not clear they can undo their mess. In brief, they forced asset managers in the UK/EZ to get paid for research separately from trading. So, research spend dropped by almost 33% since 2015, according to BBG, and headcount declined by around -26% at the largest shops, according to Coalition Greenwich. Managers successfully complied while readjusting their business practices. A lot of big shops ate the cost for bringing on analysts or paying for research.
Blackstone becomes the first private-equity firm to have $1T under management, per the NY Times.
The Senate voted to ban the sale of US strategic oil reserves to China, according to Bloomberg Law. So, no key tech, no key pharma, and no key energy.
Biden ordered a study on how to end future debt ceiling impasses, per Bloomberg. Let’s hope they find a solution that doesn’t hit an impasse.
That’s what investors (and consumers) are saying with their actions in response to China’s attempt to boost its economy via EV sales. Per Reuters, consumers are holding tight onto their pocketbooks because they can see the numbers—China’s growth rate has cooled. Investors want to see stimulus, so that consumers spend the new capital. Tesla’s price drops forced 40 brands to discount their vehicles too, which is the opposite of what the gov wants. It unexpectedly extended a tax break on new energy vehicles until 2027 back in June. But more purchases at lower prices dampens the same revenues that the gov wants to see grow.
Co-head of liquid credit and head of US loans and structured credit at Carlyle, Basmadjian said that companies aren’t dealing with their loans as quickly as they should. Some of the biggest investors will be less able to buy leveraged loans because more CLOs are exiting their possible reinvestment periods. One year ago, roughly 90% of CLOs supposedly could extend a loan, and now that number is estimated at around 60-70%, declining for the next few quarters. Plus, she warned that the loans maturing in 2024 and 2025 are of lesser quality.
You’ve probably heard of the TikTok trend towards no-fuss snack plates versus full meals, called a “Girl Dinner.” The numbers back it up. Circana says that between 2018-2022, sales of salty snacks in the US grew by +42%. About 27% of folks say they are snacking more than last year. Whether a reflection of budget balancing or being tired of pandemic cooking or reprioritization, it appears that the trend will continue for some time. But what’s not on the Girl Dinner menu? See below—pork rinds.
