September 4, 2023

📰 News Organizations

• Blackstone, Airbnb to Join S&P 500 After Index Rebalancing. The New York-based Blackstone and Airbnb will replace Lincoln National Corp. and Newell Brands Inc. prior to the start of trading on Sept. 18, S&P Dow Jones Indices said in a press release late Friday.

• Arm Looks to Target IPO at $50 Billion to $55 Billion Valuation. Arm plans to start meeting with prospective investors as early as Tuesday ahead of its stock-market debut on the Nasdaq exchange the following week.

• Microsoft-Backed Rubrik Aims for IPO as Soon as This Year. The cloud and data security startup backed by Microsoft Corp. is on track to hold its initial public offering this year and its investor roadshow could start as early as October.

• Tesla Leads Race to Draw Federal Money for Charging Networks. The federal funds, part of a national effort to build out the country’s charging network, might help solidify Tesla as a dominant force in the charging market.

• Private Equity, Hedge Funds Sue SEC to Fend off Oversight. A coalition representing the biggest private-equity and hedge funds sued the Securities and Exchange Commission. The lawsuit argues that the SEC overstepped its legal authority in completing the regulations.
  

• The Housing Market Is Approaching Its Slow Season. Existing home sales fell in July. Pending home sales remained well below year-ago levels. More of the same is expected this fall, according to analysts, as the housing market typically slows down toward the end of the year.

🐦 Twitter

• US National Debt has now increased by $1.45 trillion since the debt ceiling was suspended 3 months ago and is fast approaching $33 trillion. In the past five years, the national debt has increased by 53%, from $21.4 trillion to $32.9 trillion. Source.
  

• We just witnessed the fastest ever deterioration in U.S. housing affordability. That’ll happen when national home prices spike +40% in just over two years (2020-2022), followed by a historic mortgage rate shock (3% to 7%). Source.

• It's not the inversion that signals recession but the steeping that typically marks the start. The Fed's anchoring of the short-end increases the likelihood steepening process moves faster than expected. Source.
  

• The budget deficit is 8.4% of GDP right now, about as deep into the red as you will see, outside of Covid. This is occurring even though the economy is ostensibly growing, many people are employed, and so on. What happens if the economic Soft Landing™ doesn't happen? Source.
  

• U.S. companies have $600 billion in corporate debt set to mature this year, a total that will grow to more than $1 trillion a year from 2025 until 2028. Source.

📓 Online Publications

• Vehicles Sales at 15.04 million SAAR in August; Up 14% YoY. Lean inventory, elevated prices, and lukewarm incentives, combined with rising interest rates, could be keeping more buyers out of the market. This time, vehicle sales were more suppressed by supply chain issues.
  

• Hiring Is On The Rise, But Also Worse Than Once Thought. Payroll employment increased in August, but with the markdowns in the rate of job growth for June and July noted in this report, the cumulative effect is a noticeable slowdown in the job market.
  

• Housing Affordability Is Now at Its Worst Level Since 1984. The monthly payment on a typical home in July requires 38% of a median household’s income, up from 36.8% the previous month. That makes housing the least affordable it’s been since 1984, Black Knight said.

• Intel Received Prepayment From "A Large Unnamed Customer". The customer wanted to secure capacity at Intel's foundry for producing specialized semiconductors. Analysts say revenue from Intel's foundry business could begin growing as early as this year.

🎧 Podcasts

• Debt Purchases by Fed May Be Vital to Safeguard Banks. As the Fed reduces its balance sheet and the government issues substantial debt for essential needs, Fed intervention in debt purchases may be required to protect banks and maintain investor interest. Source(18:00)

• SME Job Openings Decline Signal Possible Recession in 2024. Andreas Steno Larsen says that SME job openings have been decreasing, which typically correlates with longer unemployment durations. This suggests a potential recession in 2024, challenging the prevailing economic outlook. Source(23:30)
  

• Eurozone Core Inflation Edges Down Ahead Of Crunch ECB Decision. The European Central Bank is facing a bit of a dilemma in the run-up to its meeting later this month. Inflation data from the eurozone came in just a tad hotter than expected, even as core inflation edged down. Source(1:02)

• Switzerland Unveils Money Laundering Clampdown. The Swiss finance minister proposed a package of measures to tackle money laundering and the use of illicit funds. If these become law, then all corporate entities or trusts in Switzerland will have to register with the Swiss government. Source(6:36)