August 11, 2023

📰 News Organizations

• US Core CPI Posts Smallest Back-to-Back Increases in Two Years. The core consumer price index rose 0.2% for a second month. That marked the smallest back-to-back gains in more than two years. More than 90% of the increase in the overall CPI was due to housing costs. Prices of used vehicles and airfares decreased, groceries rose.
  

• Novo Nordisk To Acquire Obesity Drug Maker Inversago Pharma. Novo Nordisk will acquire Inversago Pharma for up to $1.08 billion to broaden the Danish company’s weight loss portfolio. The deal is Novo Nordisk’s latest attempt to capitalize on the weight loss industry gold rush.
  

• Coach Owner Strikes $8.5 Billion Deal for Parent of Michael Kors, Versace. The all-cash deal, which has been under discussion for months, is valued at $8.5 billion. Tapestry said that the combined fashion house will generate sales of more than $12 billion annually.
  

• Disney to Significantly Raise Prices of Streaming Services. Disney unveiled a round of major price increases to its streaming products, raising the cost of the ad-free versions of Disney+ and Hulu by more than 20% each. The company also vowed to crack down on password-sharing.
  

• European Gas Prices Jumped Nearly 40% On Australia Supply Fears. The surge in gas prices came on news of a potential LNG facility strike at major plants in Australia as workers campaign for higher pay and improved job security.

🐦 Twitter

• Citi analysts led by Andrew Hollenhorst continue to see inflation picking back up later this year after today’s CPI report. “The most notable surprise was another 8% decline in airfares.” They don’t expect weakness in airfares to last, especially in light of higher energy costs. Source.
  

• New all-time high for NYC apartment rents in July … Manhattan’s median rent hit $4,400 (+2.3% from June); Brooklyn’s median rent jumped by 11% to $3,950; Northwest Queens’ median rent climbed by 1.9% to $3,641 per Miller Samuel and Douglas Elliman. Source.
  

• Investors accounted for ~24% of all US home purchase activity in Q2-2023. As is always the case, small investors were the overwhelming majority of those purchases (see red box). These 'mom-and-pop' investors bought ~64 times the number of homes that institutions did in Q2-2023. Source.
  

• Conor Sen says: “My main macro worry for 2024 is that we’re enjoying the benefit of a big one-time post-pandemic supply side deflation in goods and shelter, and with real GDP growth running around 3% we’re using up that slack, and the other side of this could be 3-4% inflation.” Source.
  

• The valuation component of this year's stock-market rally may be ending. That means earnings will need to do the heavy lifting from here. The forward P/E ratio for the S&P 500 has expanded by 27%, which is shy of the average 44%. Source.
  

• With 89% of companies reported, S&P 500 GAAP earnings have come in much better than expected. YoY growth rate of 16% is highest since Q4 2021. Source.

📓 Online Publications

• Microsoft, Aptos Labs Team Up on New Blockchain AI Tools. The companies are working together to launch Aptos Assistant, a ChatGPT-integrated bot designed to act as an onboarding tool to provide users and developers in the Aptos ecosystem with natural language assistance.

• Coinbase's New Base Blockchain Draws Modest $10M of Inflows on Launch Day. Just over $10 million was bridged, or transferred, to the new blockchain in the past 24 hours, with just over 15,000 new users and 40% fewer transactions than Wednesday.

• Russia To Begin Central Bank Digital Currency Trials With 13 Banks. Those taking part in the pilot initiative will have the opportunity to employ digital rubles for payments at 30 retail establishments situated across 11 cities in Russia. The intention is to broaden the roster of pilot participants by the conclusion of 2023.

• Binance Labs Commits $5 Million To Invest In Curve DAO Tokens. Yi He, co-founder of Binance and head of Binance Labs, announced the collaboration that will also see Curve Finance deploy to the Binance-backed BNB Chain.

• Nvidia Is Partnering With Hugging Face. The new service on Hugging Face will be called Training Cluster as a Service. Nvidia's collaboration with Hugging Face will help make AI training services even more accessible and further cement Nvidia's dominance in the industry.

• Mortgage Delinquencies Decrease in the Second Quarter of 2023. The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 3.37 percent of all loans outstanding at the end of the second quarter of 2023.

🎧 Podcasts

• The Chinese Economy Falls Into Deflation. The Chinese government announced its consumer price index was down 0.3 percent. This means prices are actually dropping an economists do not expect this deflationary period to last for a long time as there are signs of higher consumption of services. Source(1:49)

• Google And Universal Music Negotiate Deal Over AI ‘Deepfakes’. Google and Universal Music are in talks to license artists’ voices for AI-generated songs. The goal is to develop a tool for fans to produce the deepfake tracks legitimately and pay the copyright owners for it. Source(8:49)
  

• Market Psychology is Too Anchored In The Past. Kevin Muir says that people are underestimating how persistent inflation can be, leading them to flock to the bond market. This prevailing optimism about bonds is expected to endure, so rather than merely shorting bonds, a wiser strategy involves embracing a stance favorable to long inflation. Source(24:22)
  

• Homeowners Are Experiencing The Lowest Interest Rates. Jason Hartman argues that while some people may be concerned about the recent increase in mortgage debt service payments as a percentage of disposable income, the current burden is still much lower than in previous years, indicating that the market is not in distress. Source(3:25)
  

• AMC Records Second Highest Attendance Since Q4 in 2019. Profit amounted to $8.6 million, or 1 cent a share, reversing a year-ago loss, the theater chain said Tuesday. Revenue grew 16% to $1.35 billion. Analysts had forecast a loss of 4 cents a share and revenue of $1.29 billion. Source(14:10)