September 27, 2023

📰 News Organizations

• FTC and 17 States Sue Amazon On Antitrust Charges. The US FTC is accusing the e-commerce giant of stifling competition and monopolizing online marketplace services by degrading quality for shoppers and overcharging sellers.
  

• Tesla’s China Exports in Crosshairs of EU Anti-Subsidy Probe. During the evidence-gathering that precipitated this month’s surprise announcement of an EU anti-subsidy probe into Chinese EVs, the Tesla was among the companies found to have likely benefited.

• Walmart to Roll Out New Prepaid Phone Service. Walmart Inc. is expanding its offerings of prepaid phone plans with MobileX, a wireless service launched earlier this year by Boost cofounder Peter Adderton. Walmart will be MobileX’s first and exclusive retail partner.
  

• Ford Pauses Work on $3.5 billion EV Battery Plant in Michigan. Ford has paused work on a $3.5 billion EV battery plant in Michigan, citing concerns about its ability to competitively operate the plant at a time when it remains locked in broader contract negotiations.

• Movie Theater Shares Pop After Writers, Studios Deal. AMC, Cinemark and IMAX shares were up Monday following news of a tentative deal between Hollywood writers and studios. Shares of studio owners, meanwhile, were largely down.

• Mega-Rich Are Betting on US Renters to Grow Their Billions. The wealthiest individuals see potential growth in the rental market. The appeal lies in declining property prices and the potential for rent increases, which are attracting these mega-rich buyers.

🐦 Twitter

• Big bank CEOs see inflation being stickier than many expect as the US economy remains resilient. The solution, in their eyes, will likely be even higher rates that will force a downturn. JPMorgan CEO Jamie Dimon games out 7% Fed funds rates. Source.
  

• With all these hits to the consumer (student loans, higher rates, softening employment), a key question to keep an eye on is how demand is holding up. After a pretty soft August, small bounce back, but still pretty weak relative to the robustness earlier in '23. Source.
  

• 10-Year Treasury Yield moved up to 4.55% today, highest since Oct 2007. Real 10-Year Yield (adjusted for expected inflation) of 2.18% is the highest since Jan 2009. Good times for new bond investors, bad times for existing bond investors. Source.
  

• Hedge Funds cut leverage at the fastest pace since the 2020 crash. JPMorgan says short selling is rising and Goldman Sachs basket of the most-shorted stocks is down more than 10% this month. Source.
  

• CPI is 12 months behind the home price curve. The problem is that the curve is now rising again on a YoY basis. By the time shelter CPI bottoms, actual home prices and rents will be surging again. Source.
  

• Euro has a lot further to fall. There are three catalysts that'll take it below parity: Weak growth as damage from Putin's energy shock becomes clear; falling inflation - there is no demand-driven inflation; fiscal dominance of the ECB. Fair value of EUR/$ is 0.90. Source.

📓 Online Publications

• Home Prices Climbed for Sixth Consecutive Month to New High. The S&P Case-Shiller US National Home Price Index in July increased 0.6% month over month and 1% over the last 12 months, on a seasonally adjusted basis, surpassing the record set in June 2022.
  

• U.S. New-Home Sales Fall 8.7% in August Amid High Mortgage Rates. Regionally, the Northeast led the nation in new home sales, posting an increase of 6.7%. New home sales fell across the rest of the U.S., with the sharpest drop recorded in the Midwest at 17.2.
  

• Housing Crash Still Unlikely. A crash like the Great Financial Crisis is unlikely due to reduced use of adjustable-rate mortgages, improved borrower credit, and housing supply shortages, with financially stable households. Significant job losses are needed for a crash.
  

• Intercept On Track to be Acquired by Alfasigma. With the combination, Alfasigma looks to expand its treatment portfolio in gastroenterology and hepatology and exposure to the U.S. market. Alfasigma is poised to buy Intercept at a price of $19 per share.
  

• Costco to Offer Virtual Medical Care. Costco members can now get an online checkup for as low as $29. The warehouse club giant is partnering with Sesame to help members book virtual visits in all 50 states.

🎧 Podcasts

• Inflation Challenges Traditional Diversification. The current economic environment poses challenges with rising inflation and sluggish growth. Traditional diversification strategies involving bonds are being questioned for their effectiveness in risk mitigation. Source(4:44)

• AI Expected to Double FDP in US and Other Countries. Beth Kindig says AI's GDP impact is expected to outpace mobile, which started as a $5 trillion market, potentially exceeding the current $15 trillion market, marking a four to five-fold increase in potential contribution. Source(25:38)
  

• Netflix Emerged as Winner During the Writers Strike. The consumer did not care about the strike and was still looking for shows to watch. While all the shows stopped, Netflix was busy putting on shows from overseas which increased its subscriber count. Source(13:14)
  

• Multifamily Real Estate Faces Recovery, $50B Losses. Neil outlines two scenarios: one with rate cuts for stability and another with persistently high rates causing financial stress. Recovery is expected by Q1 2025, with potential $50 billion losses for investors in a trillion-dollar market. Source(8:49)
  

• OpenAI and Spotify Collaborate for Podcast Translation. Spotify will introduce podcast translation into various languages. This feature is only available to select podcasters and offers translation in a limited number of languages but Spotify has plans to expand in the future.. Source(6:06)