What we’re reading (7/20)
“Dow, S&P 500, Nasdaq Futures Tread Water Ahead Of Tech Earnings As Tariff Deadline Looms” (Yahoo! Finance). “US stock futures were flat in Sunday evening trading, as markets entered a critical week defined by megacap earnings and continued risk around President Trump's looming tariffs. S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures all hovered around the baseline, reflecting a cautious tone after last week’s record-setting rally in growth names. The Nasdaq advanced 1.5% last week, while the S&P 500 added 0.6%. The Dow lagged, finishing slightly negative.”
“Debt Reckoning” (Harper’s Magazine). “The financial system is much safer now because all parties use the safest-possible collateral. But how safe can such a collective dependency be? If everyone has promised their Treasuries away, and Treasury prices fall, then everyone suddenly needs more. This could spark a spiral, the kind we maybe saw glimpses of after Liberation Day and that seems, at best, difficult and expensive to stop. ‘We’ve rebuilt our entire financial system’s regulatory environment after the financial crisis, and a fundamental linchpin in that whole system is that the Treasury market functions well,’ [NYU Stern Professor Jeffrey] Meli told me. ‘If it doesn’t function well, this system that we built is on a house of cards.’”
“Firing Powell Would Shatter The Economy’s Inflation Defenses” (Wall Street Journal). “The Fed would no longer be an independent check on the government, but just another part of that government with inflation subordinated to other priorities, such as the cost of the national debt. What would happen then? Markets wouldn’t like it, though predictions of a crash look overwrought. Stocks have hit records while discounting some possibility of Trump removing Powell. The lag between monetary policy and inflation is long and variable. The real consequences of a subservient Fed would show up gradually, once inflation pressures emerge and the Fed, fearful of crossing the president, fails to act.”
“Delta Air Lines Is Using AI To Set The Maximum Price You’re Willing To Pay” (The Verge). “While personalized pricing isn’t unique to Delta, the airline has been particularly candid about embracing it. During that November call, Hauenstein said the AI ticketing system is ‘a full reengineering of how we price and how we will be pricing in the future,’ and described the rollout as ‘a multiyear, multi-step process.’ Hauenstein acknowledged that Delta was excited about the initial revenue results it saw in testing, but noted the shift to AI-determined pricing could ‘be very dangerous, if it’s not controlled and it’s not done correctly.’”
“Industrial Colossus: China Vs 1950s America” (Cogitations). “Chinese industrial policy maximalist Lu Feng argues that China today resembles the United States on the eve of World War I. But the analogy is faulty. China’s industrial strength—and its broader economic trajectory—is much closer to the United States of the 1950s.”
