Stocks fall as Moody's bank downgrade adds to August woes

Worries about US banks were revived after Moody's downgraded 10 small and midsize institutions, which came with a warning it could lower credit ratings for some of the nation's biggest lenders. It flagged risks in their commercial real estate portfolios, a reminder that stresses in the sector persist after the banking crisis earlier this year. 

In Europe, bank stocks tumbled after the Italian government said it will put a 40% windfall tax on lenders' profits, raising fears that other countries could do the same. 

Optimism about stocks also took a hit Tuesday when data showed a slump in Chinese imports and exports in July that was far worse than expected. Demand is weak, dimming the prospects for a rebound in the world's second-biggest economy. 

Those discouraging economic signs come as investors wait for the release of the July inflation report on Thursday, looking for a steer on whether the Federal Reserve will put its interest rate hikes on pause again. 

Meanwhile, another batch of earnings reports is rolling in and could shed more light on how corporate America is faring. Results from UPS (UPS), Eli Lilly (LLY), Restaurant Brands (QSR), and Fox Corp (FOXA) are among the highlights.

Are Taylor Swift and Beyoncé to Blame?

In Europe’s battle against inflation, a new villain has emerged: Beyoncé and Taylor Swift! Last month, as Beyoncé kicked off her world tour, fans flocked to Sweden from around the world for the shows, pushing up prices for hotel rooms. 

This could explain some of the reason Sweden’s inflation rate was higher than expected in May according to Michael Grahn, an economist at Danske Bank. Why after a series of interest rate hikes and a surge in the price of essential goods like food and energy — are we seeing Taylor Swift’s latest tour break records and Beyoncé stand accused of boosting the entire nation of Sweden’s inflation rate during her two-night stay in Stockholm this May? 

Let's look into it...

The Federal Reserve, Explained

The Federal Reserve is central to the U.S. economy today, and it’s controlled by just 12 people. Its monetary policies can lower inflation or even spark a recession. 

The central bank says it’s dedicated to achieving its goals set by Congress to maximize employment and maintain price stability, but some of its decisions like raising interest rates are not always popular with Americans. 

WSJ explains how the Fed became the power it is today and why it plays such a major role in the country.

Commercial Real Estate Sentiment vs. Reality

Owen Thomas, Boston Properties CEO says that commercial real estate sentiment is worse than the reality. He also explains the challenges of re-purposing struggling office buildings.

Is The Luxury Goods Bubble About to Burst?

In March 2023 Bernard Arnault, the chairman and CEO of luxury fashion giant LVMH overtook Elon Musk to become the wealthiest person in the world. He is the only European in the list of top 10 richest people in the world. His wealth has skyrocketed with the massive growth in LVMH’s share price. And it's not hard to see why they’re so profitable. It’s easy to make money when you can sell items of clothing for $5,000. While luxury brands build the perception of having the highest quality of goods, they are not usually any different than the products you would buy at a high street store. 

Luxury brands are highly sophisticated marketing machines that employ every psychological trick in the book to make you believe the product they’re selling you is worth the astronomical price tag. In today's video we look at who actually buys these goods, if Rolex watches and Birkin bags are actually good investments, and if the Luxury Goods bubble is about to burst.

Recession Fears, Ukraine War, China Tensions: The Next Big Risk for Markets

Investing is a business of managing risk for the long term. In a year where recession fears abound, a war in Ukraine rages on for a second year, and geopolitical tensions across the globe are boiling under the surface we asked Boaz Weinstein, Ida Liu and David Rubenstein what they think the next risk is for markets. 

Read the story on Bloomberg.com: https://trib.al/n8HK2CD

Global fears over China’s struggling economy

The US and China have begun talks to try to improve relations between the world’s two biggest economies. 

Bilateral trade is worth hundreds of billions of pounds a year and China’s huge spending power is critical to global financial stability. 

But the country is experiencing signs of a new economic downturn. Youth unemployment is rising, exports have been falling and property investment is down. 

Clive Myrie presents BBC News at Ten reporting by China correspondent Stephen McDonell.

The $14 trillion valuations of Digital Subscription Economy - 8x higher than the rest

Did you know the average American now spends over $237 per month on subscription services? 

It's not just Amazon, Netflix, and Spotify... there are subscriptions for all kinds of business industries from food to fashion to education. 

In this video, Patrick explains why the Subscription Economy is 800x More Valuable Than a Traditional Business Model.

Warren Buffett's Warning - The Coming Economic Bubble Burst

Buffett is the Chairman and CEO of Berkshire Hathaway, a multinational conglomerate holding company. Under his guidance, Berkshire Hathaway has grown into a powerhouse, with diverse investments across various industries, including insurance, energy, manufacturing, and more. 

What sets Buffett apart is not just his wealth but also his ability to consistently generate impressive returns on his investments. He has a long history of making accurate predictions and insightful market observations. Buffett's investment philosophy revolves around identifying undervalued companies with strong fundamentals and holding them for the long term, which has earned him immense credibility among investors worldwide. 

Over the years, Buffett has shared his wisdom through annual letters to shareholders and public appearances, where he imparts invaluable insights into the world of finance and investing. His straightforward and down-to-earth communication style, coupled with his exceptional financial acumen, has made him a revered figure in the investment community.

Job losses on Wall Street

Record-breaking profits at investment banks appear to be another relic of the golden age. 

Workers hired to meet roaring demand have been left twiddling their thumbs. Now they are being shown the door.

Read the full story on The Economist HERE (subscription may be required)

Markets Not Buying Into Central Bank Talk

“Markets are not really buying into what all of these major central banks are talking about.” 

Ben Luk, senior multi asset strategist at State Street Global Markets, discusses market sentiment and Federal Reserve policy. He speaks on Bloomberg Television.

Britain’s Mortgage Crisis!

Rising mortgage payments are squeezing the finances of millions of borrowers in Britain, threatening to undermine household spending and the broader economy. 

The dream of a soft landing that would have the Bank of England squeeze out inflation without condemning the country to a recession looks increasingly remote. 

Inflation has been more stubborn than expected and is forcing the central bank to go with a bigger-than-expected rate hike that took the key rate to 5%. 

What does this mean for British housing affordability?

Blueprint for the future monetary system: improving the old, enabling the new

A special chapter of the BIS’ Annual Economic Report 2023 lays out a blueprint for the future monetary system underpinned by central bank digital currency, thus opening up a new era in the joint development of the monetary system and the economy. Read more at https://www.bis.org/publ/arpdf/ar2023e3.htm

The Scam of The Century!

Aside from losing over 1.13 million people, the United States is thought to have lost billions of dollars in pandemic relief fund fraud, according to the most recent Associated Press analysis, published this week. 

The analysis discovered that fraudsters took more than US$280 billion in relief cash, while another $123 billion was lost or misspent. 

“Combined, the loss represents 10 percent of the $4.2 trillion the U.S. government has so far disbursed in aid,” according to the report. 

According to the analysis, this was the worst heist in U.S. history, with criminals stealing billions of dollars in government money intended to stabilize an economy in free fall.

Could digital currencies put banks out of business?

Cryptocurrencies like Bitcoin have been billed as a major disruptor to finance. But digital currencies issued by governments might be even more radical—they may even threaten the future of traditional banking.

Why Tech Layoffs Don’t Reflect the Job Market

The tech sector has cut about 50,000 jobs in November. The recent headlines about tech layoffs don't seem to match broader economic indicators, which show a strong job market and a historically low unemployment rate.

Are We Having 1929 Again? -Warren Buffett

Warren Buffett explains the 1929 market crash and shares his thoughts on how to deal with events of today.

Warren E. Buffett is an American investor, philanthropist, business tycoon, and the chairman & CEO of Berkshire Hathaway. He is considered one of the most successful investors in the world and has a net worth of over 100 billion dollars. Buffett was born in Omaha, Nebraska. He developed an interest in business and investing in his youth and made truly incredible stock market returns over his career.

The Ukraine War’s Impact on Its Tech Sector

Ukraine’s tech sector was growing rapidly before Russia invaded earlier this year. How has Russia’s invasion changed the outlook? Two tech CEOs with Ukrainian workforces join host Zoe Thomas to discuss how they are coping and what they think the future of the sector could be after the fighting ends.

Tesla CEO Elon Musk on Trump, Twitter, Job Cuts, Recession Risks

Tesla Inc. CEO Elon Musk discusses his planned acquisition of Twitter Inc., his view that a US recession is likely, and the outlook for job cuts at Tesla. In an interview with Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum, he also comments on supply constraints and whether he would support Donald Trump in the next US presidential election.

How does raising interest rates control inflation? - The Economist

When central banks raise interest rates, the impact is felt far and wide. Mortgages become more expensive, house prices might fall and unemployment can rise. So why do central banks do it? This film tells you why.