Wall Street Journal (August 11)
“It was obvious when Tokyo and Washington intervened recently to stabilize the value of the yen that the intervention wouldn’t stick, and sure enough. The Japanese currency has commenced a new downward march, so perhaps it’s time for a new plan…. Absent fundamental policy changes in Japan, no intervention from anyone will prop up the yen indefinitely.”
Tags: Currency, Downward march, Fundamental, Intervention, Japan, New plan, Obvious, Policy changes, Prop up, Stabilize, Tokyo, Value, Washington, Yen
Financial Times (August 10)
“The yen has given up roughly half its gains following the historic joint intervention by the US and Japan, with investors saying the lack of a ‘unified voice’ among central banks lessened its market impact.” The prevailing view is that “the intervention would be unlikely to provide lasting support unless it was accompanied by interest rate rises from the Bank of Japan” and that the intervention might have been more effective with greater international co-operation, specifically involving the ECB, which was not consulted.
Tags: BOJ, Central banks, Co-operation, ECB, Gains, Interest rate, Investors, Japan, Joint intervention, Lasting support, Market impact, U.S., Yen
MarketWatch (August 10)
“The S&P 500’s earnings story is getting stronger and broader, and that’s good news for the stock market — particularly for shares of industrial, financial and technology firms.” With earnings already reported by 80% of S&P 500 constituents, “it is safe to say that this earnings season is on track to be a blowout.” What’s more, “nontech companies are leading tech with a higher margin of earnings outperformance relative to expectations. Nontech companies have topped estimates by about 10%,” while the Magnificent Seven and other tech companies are averaging a 4% beat rate.
Tags: Blowout, Broader, Earnings, Expectations, Financial, Industrial, Nontech, Outperformance, S&P 500, Shares, Stock market, Stronger, Technology
The Guardian (August 9)
“India is attempting to do something the world has never seen before…. No major economy has tried to expand GDP nearly eightfold within a generation while simultaneously redirecting its energy and industrial systems to reach net zero within two generations.” This is remarkable. “China industrialised at vast scale, but not on a sustainable net zero path. Korea, Japan and Europe became wealthy by industrialising before decarbonizing,” but “the world’s most populous country has to do this while also reducing emissions.” And India doesn’t have much choice. “In April, on a single day, all of the planet’s top 50 hottest cities were in India.”
Tags: China, Decarbonizing, Emissions, Energy, Europe, GDP, Hottest cities, India, Industrial systems, Industrialized, Japan, Korea, Major economy, Net zero, Scale, Sustainable, Wealthy
The New York Times (August 8)
“President Trump’s war against Iran has depleted U.S. weapons stockpiles to troubling levels, siphoning supplies from Asia and Europe…. The rapidly shrinking supply of air-defense missiles and other critical weaponry in Europe and Asia not only leaves the U.S. military less equipped, but could also leave Russia and China feeling emboldened should they contemplate a potential conflict with the United States.”
Tags: Air-defense missiles, Asia, China, Conflict, Depleted, Emboldened, Europe, Iran, Military, Russia, Shrinking supply, Troubling, Trump, U.S., War, Weapons stockpiles
Barron’s (August 7)
“America’s biggest contemporary economic problem is probably a lack of sufficient U.S. labor force growth.” Since 2000, the domestic labor force “has only risen at a 0.9% pace, and since 2020, at only a 0.35% pace.” In the previous 50 years, annualized growth average 1.7%. “U.S. labor force growth has nearly flatlined in recent years” for reasons “including aging demographics (a retiring workforce), a cultural shift toward later family formations, families having fewer children, and much slower net U.S. immigration…. Simply put, the U.S. does not now, nor will it in the coming years, likely have sufficient labor force growth to actually enjoy a real productivity boom.”
Tags: Productivity boom
Bloomberg (August 6)
“With fiscal concerns, a trade war and the ongoing conflict in the Middle East also threatening to underpin inflation, some in markets are starting to reassess their taste for US bonds and the dollar amid concern that US policy is again becoming hard to decipher.” Some of those concerns have been created by Scott Bessent and Kevin Warsh, who were called “a double whammy to global markets that investors can’t ignore.” Some bond and currency investors are now “debating if it’s time to dust off last year’s ‘Sell America’ trade.”
Tags: Bessent, Big Players, Dead cat bounce, Guesses, Joint, Katayama, Manipulation, Markets, Perplexes, Underlying fundamentals, Volatility, Yen intervention
The Times (August 5)
“The ruse to offset new ‘assets’ may allow the Burnham government to say it has not broken its fiscal rules,” but more borrowing “is still more borrowing. And more borrowing will mean more expensive interest payments….. Whether it is the NHS, benefits or the state pension, spending is too high. For the UK to avoid fiscal disaster, it must be restrained if the debt pile is ever to shrink. Rising borrowing cannot continue indefinitely.
Tags: Assets, Benefits, Borrowing, Burnham, Debt, Expensive, Fiscal disaster, Government, Interest payments, NHS, Offset, Pension, Ruse, Spending, UK
Wall Street Journal (August 4)
“The AI boom is transforming the American economy beyond recognition” and has recently been estimated to account for one third of domestic economic growth. “Mapping out exactly how much strength the economy is drawing from AI is less than straightforward, and prone to error. Even so, it appears substantial.” But this welcome source of momentum also presents risk. “The strength that the economy is drawing from the AI boom is also a vulnerability: What would happen if the boom fizzled out?”
Tags: AI boom, Economic growth, Economy, Mapping, Momentum, One third, Risk, Strength, Substantial, Transforming, U.S., Vulnerability
Motley Fool (August 2)
“While earnings season has been a mixed bag, with investors punishing companies spending exorbitantly on their artificial intelligence data center build-outs, it was the Federal Open Market Committee’s (FOMC) decision to leave interest rates unchanged that roiled the iconic Dow Jones Industrial Average, benchmark S&P 500, and technology-powered Nasdaq Composite. The Dow’s greater-than 1,100-point loss on July 29 was its worst single-day performance in over a year.”
Tags: AI, Companies, Dow, Earnings season, FOMC, Interest rates, Investors, Mixed bag, Nasdaq Composite, Punishing, Roiled, S&P 500, Spending. Data center build-outs