September 15, 2023

📰 News Organizations

• US Producer Prices Rise Most in More Than a Year on Energy Costs. Prices paid to US producers increased in August by the most in more than a year, boosted by rising energy and transportation costs. Gasoline costs rose 20%, fueling bigger-than-expected PPI gain.

• Nvidia And Capital One Back Databricks At $43 Billion Valuation. Databricks raised more than $500 million in fresh capital at a $43 billion valuation. Databricks, a top contender for an IPO, has stayed in growth mode and hasn’t announced any layoffs so far.

• European Central Bank Raises Key Interest Rate to Record High. The rate increase, the ECB’s 10th in a row, took its deposit rate to 4% from below zero last year, as it chooses to press ahead with its fight against persistent inflation. The ECB didn’t rule out further rate increases.

• Delta Air Lines Cuts Profit Outlook. Delta now expects adjusted earnings per share to range from $1.85 to $2.05 in the third quarter, as investor enthusiasm over surging summer travel demand has been replaced by concerns over signs of a slowdown and higher fuel prices.

• JPMorgan Chase to Offer Online Payroll Services. The bank has picked fintech player Gusto to provide the underlying technology for the feature. The product will help JPMorgan compete with fintech players like Square and PayPal, which already have payroll services.

• SoftBank's Arm Soars in Trading Debut, Marking Year’s Biggest IPO. Arm Holdings Plc climbed 25% gain in its trading debut after raising $4.87 billion in the year’s biggest initial public offering, delivering a boost for both equity markets and SoftBank Group Corp.

🐦 Twitter

• Home builders rely on FHA/VA loans, which are assumable, and builders have been buying down rates on these loans. If rates stay high, in theory these homes could carry a premium, assuming next buyer pursues assumable option to lock-in original buy down rate. Source.
  

• Low interest rates/low inflation facilitated political sorting into one party that cuts taxes and one party that increases spending. Sustained high interest rates/higher inflation could make this partisan sorting untenable. Source.
  

• 11 months off S&P 500’s October 2022 low and only 39% of Russell 2000 members are trading above their 200-day moving average … back when we were 11 months off 2020 low, there were >90% of members trading above their 200-day moving average. Source.
  

• The yield on Japanese 10-year government bonds has moved up to 0.72%, the highest level since January 2014. The Bank of Japan is now "allowing" the 10-year to move higher (up to 1%), a big shift from a few years ago. Source.
  

• Chinese auto makers have grown their EU market share from less than 1% in 2021 to 2.8% this year (and more than 8% in EVs.) China controls two-thirds of global capacity for processing lithium & produced 10x as many battery vehicles last year as Germany. Source.
  

• Howard Schultz steps down from Starbucks board. The board announcement comes shortly after Schultz ended his third stint as the company’s CEO. Source.

📓 Online Publications

• Deutsche Bank Partners With Taurus To Offer Digital Asset Custody. The banking giant will integrate Taurus' custody and tokenization technology to manage cryptocurrencies, tokenized assets and digital currencies, according to a statement.
  

• Sony Unveils Plans To Develop Blockchain. Sony Network Communications, a subsidiary of the $106B multinational conglomerate, is teaming up with Astar Network’s spin-off, Startale Labs, to develop a blockchain to host blockchain-based offerings from Sony.
  

• Coinbase to Add Support for Lightning Network. It’s one of the biggest endorsements yet for the blockchain that makes Bitcoin a more realistic option for payments by dramatically speeding up transactions.
  

• Bybit Expects To Exit UK Market As New Regulations Loom. The Financial Conduct Authority will, on Oct. 8, enforce new rules — which include a cooling-off period for first-time investors — that it hopes will make the marketing of crypto products more transparent and more accurate.
  

• Google Cloud Teams Up With Web3 Startup To Make DeFi Mainstream. The DeFi infrastructure provider Orderly Network has teamed up with Google Cloud to develop off-chain components of DeFi infrastructure focused on tackling self-custody and transparency challenges.

🎧 Podcasts

• CEO Exit Throws Wrench Into BP. BP’s existing plans and strategies are build around Bernard Looney. And so as much as BP wants to say the strategy will remain unchanged, it’s definitely gonna be challenging for them to lose him and keep going as if it’s business as usual. Source(5:40)

• Consumers to Limit Spending Due to Student Loans. The clock is ticking for people with student loans in the US. Payments are set to restart next month, and that will probably mean some belt tightening for millions of borrowers. Source(9:05)
  

• Tech Titans Hit Capitol Hill to Talk About AI. The get together was organized by Senate Majority Leader Chuck Schumer. According to various reports, Mark Zuckerberg, Sam Altman and Bill Gates often clashed over diverging views on the risks of open source A.I. research. Source(10:04)
  

• Central Banks to Maintain Caution Amidst Economic Uncertainty. Analysts expect the Fed and ECB to resist rate cuts in 2024, signaling economic stability. Bond yields are projected to remain low until clear evidence of a recession and higher unemployment numbers emerge. Source(4:48)
  

• Real Estate Market Remains Strong Despite Economic Challenges. Jason Hartman says that low-interest rates have led to affordable mortgage payments for many homeowners, making it unlikely for a real estate crash to occur without distressed sellers in mass quantities. Source(4:33)