What we’re reading (8/28)
“Higher Prices Are Coming For Household Staples” (Wall Street Journal). “U.S. companies have an unwelcome message for inflation-weary consumers: Prices are going up. Companies including Hormel Foods, J.M. Smucker and Ace Hardware said this week they would raise prices for reasons ranging from higher meat costs to tariffs. Large retailers like Walmart, Target and Best Buy said some tariff-related price increases are already in place. More are on the way.”
“Big Tech Investment Powers Nvidia Results, But Wall Street Says ‘Inevitable’ Slowdown Looms” (Yahoo! Finance). “Big Tech's massive artificial intelligence investments continued to fuel Nvidia’s (NVDA) rapidly growing data center business in the second quarter, but Wall Street is flagging the risk of a slowdown and what that means for the AI chipmaker.”
“The Calculus Of Value” (Howard Marks). “What’s the bottom line of the calculus? Fundamentals appear to me to be less good overall than they were seven months ago, but at the same time, asset prices are high relative to earnings, higher than they were at the end of 2024, and at high valuations relative to history. Most bull markets are built through the addition of a “constellation of positives” on top of a well-functioning economy. Today I see elements that include the following: the positive psychology and ‘wealth effect’ resulting from recent gains in markets, high-end real estate, and crypto, the belief that, for most investors, there really is no alternative to the U.S. markets, and the excitement surrounding today’s new, new thing: AI.”
“The Heroes Of US Central Banking” (Steven Roach). “The dual mandate – price stability and full employment – has created a tough balancing act for the central bank. Powell methodically laid out the factors currently weighing on both, from tariffs and immigration policy (which are affecting supply as well as demand) to the recent underlying loss of momentum in employment and GDP growth. Powell drew comfort from a still-low unemployment rate but emphasized a “curious kind of balance” in the labor market. That is Fedspeak for “precarious,” in that it could quickly give way to higher joblessness. I take this as a key factor in assessing the shifting balance of risks that will guide future policy actions.”
“The Boss Has Had It With All The Office Activists” (Wall Street Journal). “The new, hard-line playbook that companies are adopting to confront employee activism reflects two developments: One is a political climate in which companies risk the ire of the White House—and some consumers—if they appear to cater to ‘woke’ forces, including their own staff. The other is an ever-tougher job market in which white-collar workers—especially in tech—have lost considerable leverage. The result is a more adversarial employer-employee dynamic in which bosses are far less concerned with accommodating their workers’ political and personal views. These days, many business leaders would just as soon trim head count as appease vocal staff. That has fired up some office activists even more.”
