๐๐ Republicans Turn on McCarthy
Happy Wednesday all,
We hope you enjoy the new format of the Wednesday newsletter! We aim to provide you with more skimmable finance news coverage in a way that is both easy to read and understand. Be sure to check the Youโll Find This Interesting section for an article I thought was intriguing about how consumers are keeping household spending up despite high rates, inflation, and declining savings.
Enjoy this weekโs Hump Days!
- Humphrey, Rickie & Tim
๐ Eye-Catching Headlines
๐ฅ Netflix plans to raise prices after actors strike ends (WSJ)
๐ Russell 2000, benchmark for small-cap, turns negative for the year (CNBC)
๐ Microsoft CEO says Googleโs agreements with Apple unfairly harmed Bing (WSJ)
๐ Student loan bills resume for 40M Americans. How it could shake the economy (CNBC)
๐ณ Credit markets wobble as Fed speak, data fan rate-hike angst (Bloomberg)
โฝ๏ธ FIFA 2030 World Cup to be hosted by Morocco, Spain, and Portugal. Opening in South America (CNBC)
The Weekly Brief
1. Biden signs 45-day funding bill to keep government open (CNBC)
Over the weekend, the Senate voted to pass a last-minute spending bill to avert a government shutdown.
The bill gives the government 45 days of remaining open to allow the House and Senate to finish their funding legislation.
The 71-page bill allocates disaster relief funds but does not include new financial assistance for Ukraine.
The House voted 335 to 91 to pass the bill.
2. Kevin McCarthy ousted as House Speaker in historic vote (Reuters)
For the first time in history, the House removed its leader in a 216 to 210 vote, which included eight Republicans voting alongside Democrats.
Republicans plan to meet on Oct. 10 to discuss a new speaker, with a vote scheduled for Oct. 11.
Republicans have a narrow 221-212 majority, meaning they can only afford to lose no more than five votes if Democrats unite in opposition.
Democrats viewed McCarthy as untrustworthy after he broke a May agreement on spending with Biden.
Adding to this, Representative Nancy Mace voted to remove McCarthy because he broke promises he made to her to help women in the country.
Other Republican leaders such as Steve Scalise and Tom Emmer could be possible candidates to replace McCarthy, though neither has publicly expressed interest.
3. Bill Ackman says economy is starting to slow, and Fed is likely done hiking (CNBC)
Pershing Squareโs Bill Ackman believes the economy has begun to decelerate on the back of aggressive rate hikes.
In the fight against stubbornly high inflation, the Fed has raised interest rates to the highest level since 2001.
Another rate hike is forecasted for this year, and many on Wall St are concerned about a recession as the economy shows the lag effects of consecutive rate hikes.
โHigh mortgage rates, high credit card rates, theyโre starting to really have an impact on the economy,โ Ackman said. โThe economy is still solid, but itโs definitely weakening.โ
Youโll Find This Interesting
Americans are still spending like thereโs no tomorrow (WSJ)
Household spending, the primary driver of the nationโs economic growth, remains strong despite high interest rates, high inflation, declining pandemic savings, and a cooling labor market.
Americans spent 5.8% more in August than a year earlier.
Delta Air Lines reported record revenue in Q2.
Ticketmaster sold over 295M tickets in the first six months of 2023, up 18% YoY.
Economists believe that consumers are writing off the hopes of saving for things theyโd historically save for, such as a house, given the tough housing market.
A general theme that experts are seeing is that consumers are growing increasingly concerned about things such as pandemics, climate change, and health affecting their ability to enjoy experiences later on in life.