September 11th - 15th, 2023
The combination of a higher-than-expected inflation report and positive earnings have helped keep equity and bond markets stable
Equities remain stable as the S&P is up ~0.5%, the Nasdaq is up ~0.3%, and the Dow is up 0.75% across the week
U.S. Treasury Bonds have remained stable across this week in maintaining a current yield of ~4.3% for 10-Yr U.S. Treasury Notes, highlighting future sentiment of stable interest rates
Consumer prices rose in August at the fastest pace in more than a year due to a jump in energy costs, with overall inflation increasing from 3.2% to 3.7% in August – the hotter than expected inflation result forecasts a future likelihood of further rate hikes [WSJ]
Higher gasoline prices have boosted retail sales, with a monthly increase of 0.6% [WSJ]
Growing conflict within the Middle East and a strengthening dollar have complicated commodity markets and U.S. foreign policy
The overall supplemental poverty rate jumped from 7.8% in 2021 to 12.4% in 2022 and the child poverty rate increased from 5.2% in 2021 to 12.4% in 2022, translating to 5 million more children falling into poverty – program expirations and high inflation have erased progress on U.S. poverty alleviation [CNN]
Prices of heavy fuels that power trucks, airplanes, and ships have risen more than crude oil and gasoline, adding financial pressure to construction, transportation, and farming stakeholders – OPEC+ production cuts suggest prices will continue to rise in Q3 [WSJ]
Uranium prices have risen 50% in the past year, adding financial pressure to countries reliant on nuclear power as western sanctions in Russia continue to hamper the process from mining to enrichment [WSJ]
Strong cash positions and a bullish economic outlook support a favorable environment for future large-cap M&A transactions
Kroger will sell over 400 grocery stores to C&S Wholesale Grocers for $1.9B cash in an effort to get regulatory approval for its $25B takeover of rival Albertsons [RT]
$14B building materials firm Kingspan Group made an informal approach to combine with $12.5B construction materials manufacturer Carlisle Companies, which rebuffed the tie-up offer [BBG]
Food manufacturer J.M. Smucker agreed to acquire Twinkies maker Hostess Brands for ~$5.6B [BBG]
Alternative investor 777 Partners is nearing a deal to acquire Everton Football Club from owner Farhad Moshiri [BBG]
Apollo Global Management is among suitors competing to acquire International Game Technology’s global gaming division, which could fetch $4B-$5B, including debt [BBG]
CrownRock LP is exploring a sale that could value the US oil and gas producer at well over $10B, including debt [RT]
Recent developments across four key industries highlight the increasing importance of current financial regulation and consumer spending
Energy & Natural Resources
CEO of BP, Bernard Looney has resigned, providing additional opportunities for BP to limit current initiatives and strategically refer back to increasing oil production [WSJ]
Soaring energy prices pose a risk for broader consumer inflation, affecting airline fares, transportation costs, and various goods and services [WSJ]
Technology, Media, & Telecommunications
British chips Designer ‘Arm’ listed the biggest public offering of the year with prices rising ~25% in the first day of trading, providing future tech-IPO candidates with positive momentum [WSJ]
Apple virtually debuted the iPhone 15 release with new features, battery capacity, and a USB-C port amidst sluggish smartphone demand [BBG]
Healthcare & Life Sciences
Johnson & Johnson is rebranding and refocusing as their new logo reflects a shift toward its prescription-drug and medical-device businesses following the split from its consumer-health division [WSJ]
Recent reports highlight health insurers marking up prices of generics for cancer, multiple sclerosis and other complicated diseases on average of 24x of manufacturing prices [WSJ]
Financial Services
Banks have been loading up on $1.2T in risky ‘hot’ deposits recognized as brokered deposits – the 86% increase this year has regulators worried as these non-customer deposits serve to shore up balance sheets [WSJ]
Bank CEOs push back on regulators pursuing furthercapital requirements for financial institutions [BBG]
North Africa's catastrophic events were the leading news stories, while AI and U.S. politics also undertook significant developmentss
The past week has been catastrophic for Northern Africa with floods in Libya and an earthquake in Morocco killing 5,000 and 8,000 people – humanitarian efforts have dealt with political complications [BBG]
ChatGPT traffic has slipped for the third month in a row, although new analysis suggests the decline will end this month – a mixture of cooled AI “hype” around consumers and the cyclical implications within college use are the leading causes [RT]
Hunter Biden has been indicted on gun charges related to a 2018 firearm purchase, potentially deepening his legal troubles and causing political complications to be expected during President Biden's re-election campaign [WSJ]
Gavin McManus
Sep 15, 2023
