What we’re reading (5/21)
“Bond Market Jitters Rise On ‘Narrative Shift’ From Positive Tariff News To Mounting US Debt Crisis” (Yahoo! Finance). “Bond market jitters are back — and this time, it’s not just about inflation. Long-term Treasury yields surged to kick off the week as Moody’s US credit downgrade reignited market concerns over the country’s worsening fiscal trajectory…Yields ticked higher again Tuesday, and by Wednesday the 30-year climbed back above the closely watched 5% mark. In afternoon trading, a weak Treasury auction sent yields even higher. It ended the trading day up about 12 basis points near 5.09%. The 10-year yield traded around 4.6%, the highest since February.”
“Nike Set To Raise Prices Next Week, Plans To Sell On Amazon Again” (Reuters). “Nike is planning to raise prices of some products from next week and will sell items on Amazon after six years, the company said on Wednesday. The footwear retailer will increase prices on apparel and equipment for adults between $2 and $10, while those priced between $100 and $150 will see a $5 hike, it said. The company sources a significant portion of its footwear from China and Vietnam. With the critical back-to-school shopping season approaching, Nike will not raise prices for children's products.”
“Walmart To Cut 1,500 Corporate Jobs In Restructuring” (Wall Street Journal). “Walmart and other retailers have been cutting costs, putting pressure on suppliers, shifting production to other countries and increasing prices to offset the cost of tariffs. Last week, Walmart said that it would raise some prices because of tariffs, prompting President Trump to criticize the company. The company reported strong sales growth in the latest quarter and executives said they would work to manage profits to keep prices as steady as possible.”
“Why Credit Ratings Do (Kinda) Matter” (Financial Times). “[C]redit rating agencies remain a (very profitable) fixture of the financial world, puzzling many outside observers. How can this pointless/malignant/backwards-looking (delete according to personal preference) oligopoly still endure in 2025? The most common explanation is that their importance remains embedded in the regulatory system, but this fails to explain exactly why that happened in the first place, or why efforts to lessen their grip since 2008 have failed. The best rationale we’ve come across is from David Beers, the head of sovereign ratings at S&P at the time of the first US downgrade in 2011 (and the father of an amazing public database of sovereign debt defaults). The rating agencies have helped form a ‘common language of credit risk’, he argues, which allows investors, borrowers and bankers to talk to each other.”
“An Awkward Truth About American Work” (The Atlantic). “Read’s indictment of MLM outfits is predictable enough, but her research also reveals how much corporate America has in common with this shady economy, which has long been dismissed as a kooky sideshow. Corporations have borrowed from the methods of MLM companies—hiring large, contingent workforces; pushing employees to think like entrepreneurs; and lobbying hard for friendlier regulations. MLMs turn out to be more closely aligned with the center of corporate life (and political power) than many people might like to think.”
