Core PCE reported the smallest m/m increase since late 2020, which is fueling the market this morning. The Fed loves this figure, so it may sway them to pause at their next meeting as well.
It’s not just Britney getting into the action (enjoy here). Investors in p/e funds aren’t getting the liquidity they expected, so they’re borrowing against their stakes at double-digit rates. Firms are holding $4.8 trn in assets and waiting for better markets for liquidity opportunities with M&A or IPOs. Know what the underlying has? Tons of leverage and high multiples on the books. Know what borrowing at high interest rates against that is like? Playing with Knives. Possible, but not recommended.
Congress couldn’t get their act together. The last shutdown during the Trump admin was the longest in 40 years, per CNN. So, we’ll see the appetite of Congress to make a new record. Americans are tired of this nonsense.
Evergrande has halted trading. Looking broader, per BBG, China’s property developers are short 19 trn yuan, roughly 15% of GDP. So, it’s not as easy as the US bailing out big banks. Solvency is on everyone’s minds. Analysts estimate that 70% of household wealth is tied to real estate. If you’re a home buyer, construction worker, lender, supplier, investor, or someone related to this debacle in the government, you know there is further pain. So, the country’s 1.4bn consumers probably won’t be in full-spend mode during Golden Week, which starts today and ends on the 6th.
Nike beat on the bottom line and reiterated its focus on running shoes, per Reuters. Demand has been strong and growing. China mentions were upbeat.
All pandas in American zoos are being returned to China by the end of 2024. No more Panda Diplomacy. They’re mad about our tech export bans, because China will have to spend mega cash to advance its domestic semiconductor industry—and fast. They’re busy propping up real estate-related companies, so they can’t invest enough to support their targeted 70% of chips needed for smart phones, autos, computers and auto products by 2030. In the meantime, their stash of ASML products will have to be serviced or replaced, and as long as the limits remain, they are somewhat stuck. You’ll still have companies like Nvidia redesigning products to get around the rules.
Arnault is under investigation for potential money laundering with a Russian businessman. You can read the details, but basically there were various intermediaries that masked fund origin/identities during a real estate transaction. Considering the fact that those involved are billionaires, if the news is true, then these shenanigans worth $20mm seem pretty wreckless.
Greenhushing is when fund managers understate their ESG efforts, sometimes to reduce which disclosure/compliance bucket they fit in.