❎📣 Elon Responds Over Hamas/Israel Misinformation on X
Happy Wednesday all,
The Hamas/Israel conflict is still dominating headlines and markets currently. If you’re going to monitor the situation online, be sure to keep track of it through the lens of credible journalists, as there has been increasing misinformation on other platforms.
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
🐘 Republicans Nominate Steve Scalise for House Speaker over Jim Jordan (WSJ)
🤝 After Hamas Attacks Israel, Biden’s Top Foreign-Policy Goals Hit Turbulence (WSJ)
🇺🇸 Robert F. Kennedy Jr. Shifts to Independent Presidential Bid, a Potential Spoiler in 2024 (WSJ)
📈 Higher Bond Yields Likely to Extend Fed Rate Pause (WSJ)
🛍️ Louis Vuitton Struggling to Lure Chinese Consumers Back to Stores (WSJ)
✈️ Boeing’s 737 MAX Output Falls to Lowest Level in Two Years (WSJ)
🏦 Banks Got $280 Billion Boost From Rising Rates, McKinsey Says (Bloomberg)
🇸🇦 Saudi oil giant Aramco announces pilot project to suck CO2 out of the air, but some scientists are skeptical (CNBC)
The Weekly Brief
1. Europe gives Elon 24h to Respond To Israel-Hamas Misinformation and Violence on X (CNBC)
The European commissioner for the internal market addressed Musk in a letter on Tuesday over groups spreading misinformation and “violent and terrorist content on X.
Breton shared his letter via an X post and tagged Elon.
Failure to comply with the European regulations around illegal content could result in fines worth 6% of a company’s annual revenue.
Elon Musk responded via X swiftly. Here is his response.
2. Profit Warnings to Hit S&P 500 as High Rates Pinch Consumers (Bloomberg)
80% of respondents in a Bloomberg survey said some sectors are likely to caution about earning trends when they report quarterly results.
This is expected to weaken the S&P 500 Index, which is already under pressure after Hamas’ attack on Israel.
Companies in the consumer space, from used-car dealers to retailers, are beginning to see slowing demand.
Shoppers are expected to wind down spending, and U.S. discretionary stocks have fallen for a third straight week.
Investors are concerned that higher rates will start to seriously weigh on the economy and eat into profits that are just recovering.
Nonfarm payrolls actually surged last month, meaning elevated expectations that the Fed may raise rates again before the end of the year.
3. Restaurants Draw Short Bets on Higher Rates, Ozempic Threat (Bloomberg)
Higher interest rates and weight loss drugs are at the top of the list of reasons why short interest is increasing within the restaurant industry.
Traders added $815M to short positions in restaurant stocks over the past 30 days.
Those that saw the largest increases to short positions were McDonald’s, Chipotle, Darden Restaurants (Olive Garden, Red Lobster, etc.), and Starbucks.
Investors expect high interest rates to curb discretionary consumer spending, resulting in the restaurant industry continuing its downward price trend.
Investors also expect profits to take a hit if more consumers take GLP-1 drugs, which are used to treat diabetes and obesity by suppressing diets.
However, some believe that the risk is overblown, saying that satiating hunger is not the only reason people choose to eat out. Convenience, taste, and social connections are all more compelling reasons.
You’ll Find This Interesting
Consumers Are Less Interested in Brands Taking Stances on Sociopolitical Issues, Survey Finds (WSJ)
41% of Americans say businesses, in general, should take stances on current events, down from 48% last year.
Brands such as Bud Light increasingly found themselves caught in the culture war crossfire, as referenced in the study.
Rather than speaking out on issues, respondents said they wanted companies to make a positive impact by:
Providing employees with fair wages and quality healthcare benefits
Avoiding major pay gaps between chief executives and lower-level employees
Operating in an environmentally sustainable way