 | | |  Good morning. Consumer spending has been holding up well this year, even in spite of multi-decade-high inflation rates and supply chain issues. Part of the reason? Consumers are going into debt. Total consumer debt rose by $23.8 billion in July, and has not topped a record $4.64 trillion. Adding in mortgage debt, the total is closer to $16.2 trillion, and has been growing at $30 billion per months this year.
Typically, in a slowing economy, consumers will look to pay down debt and act defensively. This may be a sign that consumers see inflation slowing in 2023 at long last, or that they expect some kind of additional stimulus or bailout to cover things. Otherwise, consumers will have to cut back harder than they would have without the additional credit card spending.
For now, the news suggests that we may have a harder slowdown ahead. So it's not time to get fully bullish yet, and to look for more trades with downside potential.
Now here's the rest of the news: | | | | | |
| | |  | DOW 30,961.82 | -0.56% | | | | | S&P 3,901.35 | -1.13% | | | | | NASDAQ 11,552.36 | -1.43% | | | | | *As of market close | | | • | Markets trended lower on Thursday, amid a few big pieces of economic data. | | | • | Oil dropped 3.6 percent, to $85.31 per barrel. | | | • | Gold sank 2.1 percent, last going for about $1,672 per ounce. | | | • | Cryptocurrencies trended lower, with Bitcoin at $19,829 at the stock market close. | | | | | | | |
| | | Find the Best Value in Consolidating Industries | | | | When an industry is new, it may result in dozens or even hundreds of companies creating a product or service. As it matures, an industry will tend to consolidate into just a handful of players.
The classic example of this is the automotive industry, where a number of brands either went bankrupt, or were absorbed into what are now known as the "big three." Other industries are consolidating now.
» FULL STORY | | | | |
| | Insider Trading Report: Energy Transfer LP (ET) | | | | Kelcy Warren, Executive Chairman at Energy Transfer LP (ET), recently picked up 2,428,727 shares. The buy increased his holdings by 0.9 percent, and came to a total price of $29.42 million.
The Chairman has been a regular and extensive buyer of shares over the past few years, as have other C-suite executives, including the company CFO back in August. Over the past three years, insiders have almost exclusively been buyers.
» FULL STORY | | | | |
| | Unusual Options Activity: Intel (INTC) | | | | Shares of chipmaker Intel (INTC) have struggled in the past year, with shares down nearly 47 percent. One trader sees the possibility for a further drop in shares in the coming months.
That's based on the March 2023 $20 puts. With 182 days until expiration, 4,227 contracts traded compared to a prior open interest of 217, for a 19-fold rise in volume on the trade. The buyer of the puts paid $0.60 to get in.
» FULL STORY | | | | |
| | • | Railroad Union Reaches Tentative Agreement
Freight railroad unions and railroad management have reached a tentative labor deal that will avert the possibility of a strike that could have started as soon as Thursday. The agreement will provide workers with more time off, and an immediate raise with back pay dating to 2020, among other items. | | | | • | Retail Sales Rise, But May Be Underperforming Inflation
Retail sales rose for the month of August, with a 0.3 percent rise, according to data from the Census Bureau. Given the August inflation data showing an 8.3 percent annualized rate, it's likely that much of the higher spending was due to the higher costs of goods, and not increased consumer demand. | | | | • | China's Yuan Weakens Against US Dollar
The US dollar continues to strengthen against other currencies. It's now broken higher against the Chinese yuan. China tries to keep a loose peg with its currency to the dollar, given the close economic ties between the two countries. China's central bank has also recently sent out signals that it wants to slow this decline against the dollar. | | | | • | Billionaire Sternlicht Warns on Economic Slowdown
Barry Sternlicht, billionaire CEOF of Starwood Capital Group, is warning on an economic slowdown if the Fed doesn't slow the pace of its interest rate hikes. The billionaire believes the Fed is acting too late, and too aggressively, for an economy already showing a number of signs of slowing down. | | | | • | Adobe Makes $20 Billion Offer for Figma
Digital creative technology company Adobe (ADBE) had made a $20 billion offer for Figma, one of its largest rivals. The deal will be half cash and half stock, and will also include restricted stock units to Figma employees. The deal is expected to close sometime in 2023, pending regulatory clearances and shareholder approval. | | |
| | | | TOP | | | HUM | 8.529% | | | | WYNN | 6.451% | | | | NFLX | 5.089% | | | | PARA | 4.95% | | | | RCL | 4.332% | | | | BOTTOM | | | ADBE | 16.982% | | | | ALB | 6.273% | | | | WST | 5.571% | | | | NOW | 4.772% | | | | PSX | 4.733% | | | | |
| | |  | | Tuesday's selloff is a reminder that a sustained rally is likely to require clear evidence that inflation is on a downward trend. With macroeconomic and policy uncertainty elevated, we expect markets to remain volatile in the months ahead. | | - Mark Haefele, CIO of UBS Global Wealth Management, on why markets will continue to remain volatile in the months ahead until inflation levels come down from their multi-decade highs. | |
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