The Transcript Newsletter

Summary: The major US stock indexes officially bounced back from "tariff derangement syndrome" this week. The economic environment looks a lot calmer, but there has no doubt been a lasting impact. Many businesses still feel uncertainty about trade. Europe is focused on disentangling from the US and has stepped up its defense spending. China now realizes just how much leverage it can get from its control of rare earth metals.

Summary: Retailers reported last week. According to Williams Sonoma, the consumer is "probably a little better off than everybody thinks." Walmart's results suggested that consumer spending is very healthy as well. The world's most valuable company, NVIDIA, reported earnings last week and showed that data center spend on GPUs continues to show explosive growth. Editor’s Note: We have reserved the sections after Macro for our premium subscribers.

Summary: Retailers reported last week. According to Williams Sonoma, the consumer is "probably a little better off than everybody thinks." Walmart's results suggested that consumer spending is very healthy as well. The world's most valuable company, NVIDIA, reported earnings last week and showed that data center spend on GPUs continues to show explosive growth. Editor’s Note: In the spirit of Thanksgiving, this week's newsletter is available to everyone.

Summary: The Fed relieved markets last week by lowering rates by 50bps. Jerome Powell characterized it as a "strong move" and the first step towards getting back to a neutral policy rate. FOMC members expect rates to reach 3.4% by the end of next year, but Powell said that no one really knows what the neutral rate is today. Editor’s Note: We have reserved the sections after Macro for our premium subscribers. If you’re not a premium subscriber already, please consider subscribing.

Summary: Earnings season began last week and there seems to be growing concern that the consumer and labor markets are softening. Reserves from the COVID stimulus are now depleted and even higher-income consumers may be pulling back. The Fed is still focused on inflation, but Jerome Powell said that the balance of risk between inflation and unemployment is starting to keep him up at night. Markets are beginning to expect more rate cuts.

Summary: While inflation is sticky and consumer spending is still resilient, there are signs that growth is slowing and inflation has been stabilizing. Fed policy is basically doing what it's supposed to be. Editor’s Note: We have blocked everything after the Macro section for our premium subscribers. Thank you for your support! Read more of this content on our website.

Summary: Most companies still sound upbeat about the economic environment, but credit card companies are sounding more cautious, which is a noteworthy shift from last quarter. There is some fear creeping into markets. Editor’s Note: This week’s Financials section is for premium subscribers only. Become a premium subscriber to support our work by clicking on the link below. The Transcript is a reader-supported publication. Read more of this content on our website.

Summary: The FOMC met last week and left its policy rate unchanged. Jerome Powell signaled that it will likely be appropriate to begin dialing back policy restraint at some point this year. Although inflation remains above trend, the Fed seems slightly more focused on downside risks to growth from restrictive policy. Editor’s Note: We have blocked everything after the Macro section for our premium subscribers. Become a premium subscriber to support our work by clicking on the link below.

Summary: The strength in the American consumer is still there although the growth rate has fallen from its peak. Labor markets are tight and inflation is falling at a slower pace. Especially with the stock market surging, the Fed does not seem to be in any rush to cut interest rates.

Summary: Companies are feeling positive about the outlook for 2024. Consumers remain resilient. Inflation is down and lower interest rates are anticipated. But the Fed may move slightly slower than markets are hoping. Editor’s Note: This week’s International, Financial, Consumer, Technology, Healthcare, Materials, and Real Estate sections are reserved for premium subscribers. We have also linked most sources of the quotes on the company name for our premium subs.