I’ve got the Demi Lovato song in my head, with Fed Chair Powell warning that the Fed is not confident that it’s actions to date will bring inflation back down to the target level, per the Bloomberg. Reuters points out that perhaps he is fluffing his hawkish arms as pushback against loosening financial conditions.
Next week China’s Xi plans to meet Biden in SF. I expect a lot of puffed up geopolitical chests and not much progress on bringing the two countries back together. The soundtrack for the meet may not be as bad as Team America World Police’s theme song (warning, there is profanity—it is a comedy from South Park creators after all), but don’t expect much. What’s been the effect of China’s slow economy? Nikkei says that it took 9% off global manufacturers’ profits. That is not chump change.
In the EZ, German officials are promising more military spending, per Bloomberg. If you’ve followed our notes, you’ll know that they’ve been skimping on their spend, benefitting from countries such as the US spending its fuller share. With WAR closer to home in the past few years, they’re looking to be a “central hub” for NATO.
These retail boots were made for walkin. They pulled nearly $16bn from stocks in Oct, more than in any month in the past 2 yrs, per Bloomberg. Enjoy the video, and let me know if you find their pants. In the same month, corporate bond ETFs suffered record outflows as investors put their money into government bond funds, per the FT.
Yesterday, the world’s biggest bank (Industrial & Commercial Bank of China) had to send its trades via a USB stick per a messenger. The bank was hit by a cyberattack, making it unable to clear a ton of UST trades after entities that usually settle transactions were disconnected from the systems hit. This disrupted market-makers, brokerages, banks, etc. that had to reroute trades.
US consumers’ long-term inflation expectations just got a bit higher, to a peak since 2011. They expect prices will grow by 3.2% over the next 5-10 yrs, up from 3% expected last month. Usually when that happens, it affects their behavior.
BBG is out with a fascinating piece about Chinese youth only eating/shopping in the basement floors of big buildings, the labyrinth that leads to subways and other skyscrapers. The “lie-flat” youth, also called “professional children,” complain that they can only afford bubble-tea, bakeries, and pop-up stalls.
Kratom is gaining popularity in the US. It’s an opioid-like drink with ingredients extracted from a Southeast Asian plant, yet one marketed as a wholesome alternative to alcohol. Risks are concerning (e.g. addiction), so be forewarned.