What we’re reading (10/19)
“The Warning Signs Lurking Below The Surface Of A Record Market” (Wall Street Journal). “Wall Street is starting to get a little defensive. In the midst of the market’s most unsettling stretch since August, investors have turned to utilities, healthcare stocks and consumer staples—industries that reliably churn out profits no matter the economic conditions. Electricity, drugs and groceries are always in demand, even when consumers buy fewer cars, phones and streaming services. Those three defensive sectors are on track to lead the S&P 500 index this month for the first time since June 2022. Investors have also sheltered in bonds”
“IMF Chief Economist Discusses Tariffs, ‘Dim’ 2026 Growth Outlook” (Yahoo! Finance). “The International Monetary Fund (IMF) released its 2026 World Economic Outlook. IMF chief economist, Pierre Olivier Gourinchas, sits down with Yahoo Finance Fed Correspondent Jennifer Schonberger to discuss the report and how President Trump's tariff policies contribute to ‘dim’ anticipated economic growth in 2026.”
“Wall Street Has Been Worried About Bad Loans For Weeks. Now Those Fears Are Spreading” (CNN Business). “Several financial groups are wrestling with bad loans, raising worries on Wall Street of more to come. For weeks, investors have focused on Jefferies Financial Group, an investment bank that has at least $45 million worth of exposure to First Brands, an auto-parts supplier that filed for bankruptcy last month. But on Thursday, they turned some of their attention to two regional banks, Western Alliance Bancorp and Zions Bancorp, after concerns about some of their loans as well.”
“Rise Of ‘Shadow Banking’ Brings New Financial Risks, Experts Say” (Washington Post). “A spate of recent fraud cases and bankruptcies has raised new concerns about a growing class of largely unregulated loans, with a sell-off in U.S. banking stocks bleeding into global markets this week. A pair of regional banks this week disclosed lawsuits involving allegedly fraudulent business loans, while the failure of two companies in the automotive sector dinged some Wall Street titans, including JPMorgan.”
“Why The AI Economy Might Not Be 1990s Redux” (Axios). “There are significant differences in the current economic and demographic backdrop — and the nature of the AI rollout — that could mean inflation remains a problem and the job picture more worrying, even if AI lives up to its promise.”
