After the CPI shock earlier in the week, Wall Street is bracing for a new set of data, including Thursday’s retail sales, amid economic signs of a tightening yield curve between 2- and 10-year bonds. There is good news though as the tragic rail strike can be averted.
We don’t have billionaire investor and hedge fund manager Ray Dalio cheering us on. Call of the day The Fed has asserted that it has no choice but to move interest rates higher into stocks.
And he put some pretty accurate guesses out there. “I estimate that going up to 4.5% from where they are would have a 20% negative impact on equity value,” Dalio said in a LinkedIn post on Tuesday.
Some predict the Fed could raise interest rates by 100 basis points next week, a move not seen since the inflationary boom of the 80s. The central bank’s short-term rate ranges from 2.25% to 2.5%, but Nomura, for one, sees that rate heading to 4.75% by 2023.
Dalio, however, thinks that interest rates could reach the high end of the 4.5%-to-6% range. “This reduces private sector credit growth, which leads to private sector spending, and thus the economy shrinks,” he says.
Behind this forecast, the founder of Bridgewater Associates is taking a sharper view of where the market is headed for inflation – which he sees at 2.6% over the next 10 years and 4.5 to 5% in the medium term, barring shocks.
Read: Why a US inflation report shook global financial markets – and what’s next
What happens when people start losing money in the markets – the so-called “wealth effect” – is that they and their lenders are more cautious and expect less spending.
“It seems to me that inflation will remain higher than people and the Fed would like (with year-over-year inflation falling), that interest rates will rise, that other markets will slow down, and that the economy will be weaker than expected, regardless of the escalating internal and external conflicts and the consequences.” .
The markets
Stock future ES00
YM00
NQ00
Joined, with Treasury BX:TMUBMUSD10Y
BX: TMUBMUSD02Y
Exit and dollar DXY
Simplify some.
Fuel price CL
They tilt south with gold GC00.
China shares CN: SHCOMP
HK: HSI
It slipped after the country’s central bank left rates unchanged. European natural gas price GWM00
They are on the rise again. Bitcoin BTCUSD
It’s trading for just over $20,000.
The noise
Union Pacific UNP shares,
Norfolk South NSC
and CSX CSX
They are rallying in the early morning hours after the White House announced a tentative railroad deal with labor unions. No deal by Friday means strikes and havoc in supply chains, grain markets and the coming holidays. Read more here.
In addition to August retail sales, we also get weekly jobless claims, the Philly Fed and Empire State manufacturing indexes, and import prices. Industrial production and business inventories follow.
Adobe shares ADBE.
After the software company reported a $20 billion deal to buy graphic design startup Figma.
Vitalik Buterin, one of the founders of Ethereum, says that the merger is done, which means the birth of a more environmentally friendly crypto. Ethereum ETHUSD
Now it is small.
New lawsuit claims Tesla claims TSLA.
It makes false promises on autopilot and full self-driving features. And move on Tesla, Apple AAPL
It’s Wall Street’s biggest short bet right now.
Erickson Eric
SE: ERIC
SE: ERIC
Credit Suisse, which cited inflation, is easing after doubling down. Analysts have picked up Nokia FI:NOKIA.
Enough
Although the stock is not moving, to be better.
Cathy Wood’s Ark Investment Management continued its heavy buying spree after Tuesday’s market decline, primarily beating Roku ROKU..
Comment: Pinterest has never positioned itself as a social network. until now.
Patagonia billionaire Yvonne Chouinard is donating his entire $3 billion company to the climate fight.
The best of the web
No US shale bailout for Europe.
Turkey received an additional $24.4 billion in additional spending.
The queue to pay her respects to the Queen is 2.6 miles long and counting.
Tickers
As of 6 a.m. ET, the most sought-after tickets on MarketWatch were:
|
Ticker |
Security name |
|
TSLA |
Tesla |
|
GME |
Stop the game |
|
AMC |
AMC Entertainment |
|
BBB |
Bed bath and beyond |
|
HKD |
AMTD Digital |
|
NIO |
NIO |
|
APL |
Apple |
|
APE |
AMC Entertainment Preferred Shares |
|
AMZN |
Amazon |
|
NVDA |
Nivea |
It is read randomly
Scientists try to teach robots humor.
Sausage, mozzarella, dough. Get a South Korean hot dog.
What we need to know starts early and will be updated right up until the opening bell, but sign up here to get it delivered to your inbox once. The emailed version will be sent around 7:30 am Eastern.