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“You become the sum of your actions.” – Ryan Holiday
The Buzz
Following this week’s tame PPI and CPI reports dampened investors’ worries about inflation, economists are turning their attention to other aspects of the economy, like employment. The Fed’s Austan Goolsbee said that he was growing more concerned about the labor market and that in his opinion, he’s more concerned and that interest rates are already in “very restrictive” territory, which would only be appropriate if the economy were overheating.
Thursday morning, equities gaines on strong sales data. At +1.0% month-on-month growth in U.S. retail sales came in well above consensus forecasts of +0.4%. The biggest component of the sales growth was cars and car parts.
in a bright spot for the labor market, initial jobless claims fell to 227,000, below expectations of 235,000. Although the combination of data is noisy, it all seems to point to lower risk of recession.
source: Bloomberg, WSJ, CNBC
Crypto
As Vice President Harris gains in the polls, the crypto industry is concerned that she will maintain “Biden’s hostile attitude to crypto and continue the crypto crackdown”, according to a post on X by Galaxy’s Alex Thorn. Some in the industry view Harris’ moves to hire top industry advisors as a positive sign regarding her attitude towards crypto. However, others remain skeptical. In a Bloomberg article, anonymous sources reported that, “Harris supports raising the corporate tax rate to 28% from 21% fully in line with Biden’s most recent budget proposal which also calls for taxes on wealthy crypto holders.”
Thorn is also suspect of Harris’ addition to her staff of Brian Deese and Bharat Ramamurti, who were “two key architects of the Biden’ administration’s anti-crypto crusade.” Thorn is referring to last year’s attempt to “quietly” ban bitcoin, ethereum and other cryptocurrencies, a continuation of an earlier initiative to cut off undesirable industries from banking services.
source: Forbes, Bloomberg
Private Equity & Venture Capital
Hadrian’s founder, Chris Power raised $180 million from firms including Andreessen Horowitz, Founders Fund and Lux Capital to expand its business of manufacturing metal parts at high speed. Power wants to build a network of high-tech machine shops, like his California factory, across the country. Power believes that such a strategy is critical for America’s industrial revival. Hadrian, the company, not the Roman emperor (he’s dead), is currently valued at $500 million.
In other news, cybersecurity company Kiteworks is getting a $456 million infusion from tech investors Insight Partners and Sixth Street Partners. Kiteworks CEO said the growth investment values the company at more than $1 billion and marks an exit for private equity firm Bregal Settlements.
source: Forbes, WSJ
China
A host of economic data released Thursday showed China’s economy is struggling to gain momentum despite broad measures enacted by Chinese officials to attempt to head off a worsening economic picture. Beijing’s measures included aggressive steps to boost household income and consumer spending. Worsening growth in the third quarter adds attention to the need for possibly even more stimulus.
source: WSJ, Bloomberg
Compliance
Mid-week, the SEC announced in an enforcement action that it is charging 26 firms for failing to monitor and preserve certain electronic communications. TD, Truist, and a bunch of other firms agreed to pay more than $475 million in fines to regulators as part of a yearslong investigation into traders’ use of off-channel communications platforms such as WhatsApp and iMessage. The CFTC also imposed additional penalties against three of the firms the SEC had fined over similar violations.
source: WSJ
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Disclaimer
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