Economy on fire in the US - while China sinks to new lows.

Housing market sentiment slows - hit by high mortgage rates.

Big break for big insurers.

The Closest to The Pin Winner!

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Warm Up

- Musk/Zuck cage-fight news (AGAIN)

- FITCH - at it again

- M&A in Steel industry

- China eco spooks markets (Ghost Economics hits)

- Impact of Maui Fires - Focus on A Utility Company

Market Update

- Sentiment shifting - AI craze dulls some tech selling off

- Housing index drops - (builder sentiment) - 7% mortgage rates hit hard

- EV price wars - led by Elon (beat them and bury them)

- Disinflation is slowing ( Confusing?)

Inflation

- PPI comes out hot

- Concern rising that there is commodity inflation returning

- Talk of one more hike this year then cuts mid-2024 (Goldman Sachs Update)

- Meanwhile - rates movin' up

10's Moving

Yield Curve

- Getting Crazy!

2/10's

Earnings Season - Almost ending

- The blended year-over-year earnings decline for the second quarter is -5.2% today, compared to an earnings decline of -7.4% last week and an earnings decline of -7.0% at the end of the second quarter (June 30).

- If -5.2% is the actual decline for the quarter, it will mark the largest year-over-year earnings decline reported by the index since Q3 2020 (-5.7%). It will also mark the third straight quarter in which the index has reported a year-over-year decrease in earnings.

- Big mega-cap numbers helped over last week

Fitch - Another Warning

- Discussed the rationale with Moody's last week

- A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase.

- Another one-notch downgrade of the industry's score, to A+ from AA-, would force Fitch to reevaluate ratings on each of the more than 70 U.S. banks it covers

Yen - Intervention

- Yen hits 145 - level that has had BOJ intervention previously

- Weakening due to easy monetary policy while everywhere else is tightening

Yen

Japan

- 6% GDP (annualized) - expectations were for 3.1%

- How do you keep rates at historic lows?

China

- Just bad news after bad news

- So bad they announce a surprise rate cut last night

- Discontinued reporting on unemployment of young people - (was record level of  21%+ last month)

- Retail sales rose by 2.5% in July from a year ago, below expectations for a 4.5% increase,

- Industrial production rose by 3.7% in July from a year ago, below the 4.4% increase analysts had expected

- Fixed asset investment rose by 3.4% for the first seven months of the year from a year ago, below the 3.8% forecast

- The urban unemployment rate ticked up to 5.3% in July from 5.2% in June

More China

- One of China’s largest private wealth managers has triggered fresh anxiety about the health of the country’s shadow banking industry after missing payments on multiple high-yield investment products.

- Zhongzhi is among the biggest players in the country’s $2.9 trillion trust industry, which combines characteristics of commercial and investment banking, private equity and wealth management.

- Firms in the sector pool savings from wealthy households and corporate clients to offer loans and invest in real estate, stocks, bonds and commodities.

Russian Ruble Woes

- Ruble hits 17 month low - discussion that this is because Russia losing the war?

- Russia's central bank on Tuesday hiked interest rates by 350 basis points to 12% at an emergency meeting

Cage Fight - Done

- Zuck: "I think we can all agree Elon isn't serious and it's time to mo...