July 6, 2023
Fed Signals Determination to Raise Rates After June Pause
📰 News Organizations
Fed Signals Determination to Raise Rates After June Pause. Almost all Federal Reserve officials at their June meeting indicated further policy tightening is likely, if at a slower pace than the rapid-fire rate increases that had characterized monetary policy since early 2022, according to minutes released Wednesday.
TweetDeck Moves Behind Paywall, Limited to Twitter Blue Subscribers. Twitter's decision to place TweetDeck behind a paywall exclusively for Twitter Blue subscribers is projected by some to spell the end for the once-popular app, which was favored by power users. Some users have already been deterred by recent limitations imposed on viewing tweets.
Moderna Stock Surges on $1 Billion Deal for Vaccine Production in China. Following a memorandum of understanding and a land collaboration agreement, Moderna has struck a deal with China to research and develop messenger RNA medicines in the country, with a reported investment size of approximately $1 billion.
UPS and Teamsters Encounter Obstacles in Labor Talks, Potential Strike Looms. Contract talks between UPS and the Teamsters union hit a roadblock as both sides accused each other of walking away from negotiations, jeopardizing a new agreement before the current deal expires on July 31.
Spotify CEO's Startup, Neko Health, Gains Prominent Backers. Neko Health, the startup led by Spotify CEO, has attracted significant support from prominent investors, including Niklas Zennstrom of Skype and Klaus Hommels of Lakestar. With participation from Atomico and General Catalyst, the round of investments has led to the inclusion of Zennstrom on the company's board.
Australia and Indonesia Ink EV Battery Deal. Amid discussions on economic partnerships, Australia and Indonesia have signed a bilateral agreement focused on EV battery cooperation. With Indonesia aiming to develop its EV manufacturing industry, securing a lithium supply from Australia will be crucial for its success.
McKinsey Warns of Clean-Energy Metals Shortages. McKinsey & Co. joins the growing chorus of warnings about impending shortages of metals critical for the clean-energy transition, which could hinder the widespread adoption of electric cars, wind turbines, and solar panels. These shortages are likely to drive up supply-chain costs and prices of low-carbon products, potentially impeding global decarbonization efforts.
Rents are dropping. Hardest-hit cities include Austin, Las Vegas, and Phoenix, where rental rates are down -6% over the last year. Meanwhile - taxes, insurance, and interest costs are up significantly. Cocktail that could mean forced selling in H2 2023. Source.
June ETF flows were a return to risk-on trade; equity ETFs made up ~80% of inflows on rolling 1m basis; large and mid-cap ETFs took up >50% of flows in June and nearly $19 billion in inflows last week; remaining 20% of inflows were shared among gov’t, corporate, municipal, and aggregate bond ETFs, which saw moderately mixed flows last week. Source.
The stock market has a 70% chance of crashing in a few years warns Jeremy Grantham, co-founder of GMO. Grantham believes there is an asset bubble forming that is on the verge of implosion. Source.
U.S. DURABLE GOODS orders for nondefence capital goods excluding aircraft were up by just +2.0% in the three months from March to May compared with the same period a year earlier, in nominal terms, so after adjusting for inflation were likely down in real terms. Source.
Blackstone Real Estate Investment Trust announces major liquidations including $3.1 billion worth of its commercial portfolio and potentially its holdings in Las Vegas. Source.
📓 Online Publications
Housing Challenges To Persist as Inflation Cools. Leading economists think the summer will, for the most part, be a continuation of spring trends with existing and pending home sales struggling to maintain traction amid double-digit drops in new listings and inventory. On the bright side, they think that barring any kind of new macroeconomic shocks, inflation is expected to cool going forward and so that ought to bring mortgage rates down.
The FTC Closes In on Influencers. The US Federal Trade Commission updated its guidelines on how influencers and celebrities endorse products on social media. Basically, a small visible "#ad" in the text beneath an Instagram post isn't going to cut it anymore. Influencers will have to place their disclosures on their actual videos instead of writing them as a caption.
Asking Rent Growth Flat Year-Over-Year. Slow household formation and an increase in housing supply are projected to exert downward pressure on rents, leading to a rising vacancy rate. Overall rent growth is declining, deviating from the usual seasonal trend, and it is anticipated that the next ApartmentList report will show a year-over-year decrease in asking rents due to substantial rent increases observed last year.
World's First Fully Electric Flying Car Receives $250M in Preorders. Alef Aeronautics has received FAA approval for test flights of their $300,000 electric model. "Model A", which is the name of the car has a 200-mile driving range and 110-mile flight range. The enthusiasm for airborne transportation is undeniable with over $250 million in preorders, equivalent to 834 cars. Source(23:12)
Switzerland Tightens Stance on Russian Oil Sanctions, Questions Oil Trader's Actions. The Swiss government is intensifying its approach to Russian sanctions, as it investigates Geneva-based trader Paramount, signaling increased scrutiny on compliance with Western sanctions on Russian oil. Source(1:52)
Investors Spend $200mn on ‘Worthless’ Bed Bath & Beyond Shares. Despite being delisted after bankruptcy, American retailer Bed Bath & Beyond has experienced a 300% surge in over-the-counter trading, with meme stock traders investing nearly $200mn in what is perceived as a worthless company. Source(10:27)
Easing Zoning Restrictions May Be Key to Boost Housing. Jason Hartman says the way to solve the housing problem is to increase supply. All the other issues are just nibbling around the edges. He thinks the only way to increase the supply of housing is for government to ease up on zoning restrictions and building codes and they just have to make it easier to build houses faster and cheaper. Source(35:54)