What we’re reading (11/14)
“Cooling Inflation Likely Ends Fed Rate Hikes” (Wall Street Journal). “Inflation’s broad slowdown extended through October, likely ending the Federal Reserve’s historic interest-rate increases and sparking big rallies on Wall Street. Consumer prices overall were flat last month and rose 3.2% from a year earlier, a slower pace than in September, the Labor Department said Tuesday. Overall inflation hit a recent peak of 9.1% in June 2022.”
“S&P 500 Notches Best Day Since April, Dow Leaps Nearly 500 Points On Soft Inflation Report” (CNBC). “Stocks rallied Tuesday, building on their strong November gains, as Wall Street cheered new U.S. inflation data that raised hopes of the Federal Reserve wrapping up its rate-hiking campaign. The Dow Jones Industrial Average jumped 489.83 points, or 1.43%, to end at 34,827.70. The S&P 500 rallied 1.91%, briefly trading above the key 4,500 level, to settle at 4,495.70. It was the best day since April for the broad-market index. The Nasdaq Composite jumped 2.37% to close at 14,094.38.”
“RIP Goldman Sachs” (Business Insider*). “‘It's not the swashbuckling traders of old, and I do think there's some lost romance there,’ says Dees, my fellow analyst who now heads global banking and markets for Goldman. ‘There's a lot of people who look and say, ‘Ah, that period of yesteryear where someone could put a trade on distressed credits in Thailand and make a billion dollars and beat his chest’ — I get it. But that's not realistic. They're nostalgic for a thing that can't exist today at any bank, under the current regulatory system. This place is still about excellence. It's just going to have to be in a different format.’”
“Macro Outlook 2024: The Hard Part Is Over” (Goldman Sachs). “We continue to see only limited recession risk and reaffirm our 15% US n recession probability. We expect several tailwinds to global growth in 2024, including strong real household income growth, a smaller drag from monetary and fiscal tightening, a recovery in manufacturing activity, and an increased willingness of central banks to deliver insurance cuts if growth slows.”
“Investor Michael Burry Of ‘Big Short’ Fame Has Closed Bets Against S&P 500, Nasdaq” (Yahoo! Finance). “Burry's hedge fund Scion Capital disclosed Tuesday in a federal filing with the SEC that it had closed out "put" positions on the SPDR S&P 500 ETF (SPY) and Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 index, as of the end of September. Those bearish bets amounted to more than $1.6 billion as of the last trading day of the second quarter. The indexes fell 3.6% and 3%, respectively, during the third quarter.”
* Note: As of today, Insider is apparently going back to going as “Business Insider” (see letter from the editor, here).
