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Quote of the Day
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“It is during our darkest moments that we must focus to see the light”
- Aristotle
The Big Idea
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🗣️ Biggest Risks For the U.S. Economy
Three Wall Street veterans weigh in on the potential economic dangers which could strain the U.S. economy in the near future. Investing in todays economy has come with no shortage of risks, warnings signs, recession fears, and geopolitical tensions. To set expectations, Boaz Weinstein, David Rubenstein, and Ida Liu help to explain their views for what may lie ahead.
Boaz Weinstein - Chief investment officer of Saba Capital Management, a hedge fund that looks to profit when volatility is high
David Rubenstein - Billionaire co-founder of private equity firm Carlyle Group Inc.
Ida Liu - Citigroup Inc.’s global head of private banking
Weinstein: There’s a behavioral aspect to markets. There’s a psychology. There’s an emotion. Look at the meme stock craze. The psychology has been too easy. We’ve learned lessons that, “Don’t worry. This selloff is a buying opportunity,“ and I fear that the behavioral aspects could flip and exacerbate a selloff. Retail investors sell when the market falls, when they become fearful like they did during COVID. So that daily liquidity avalanche, it goes down, and there's more selling. That's what I'm worried about.
Rubenstein: The biggest overall concern is a clash between the haves and the have-nots. In the West, it’s going to be between the older people and the younger people. People are living longer, but retirement benefits aren’t going to keep up with what they expect or what they need. And the younger people are going to say, “We don’t want to work that much harder just so you have a better retirement.”
Liu: The ongoing geopolitical concerns that investors have are still on everyone’s mind. What’s going to happen with the US and China? I think that’s the biggest question as we continue to see a lot of the bifurcation and the strained relationships continuing between the two countries, particularly around Taiwan.
David Rubenstein, Boaz Weinstein, and Ida Liu
Source: Bloomberg
Brief Bullets
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Fed Launches New Payment Network: The Fed debuted a new payments system designed to speed up the movement of money among banks across the U.S., the central bank’s first new network in decades
U.K. Inflation Slows: The U.K. inflation rate came in below consensus expectations at 7.9% annually. Economists projected annual rise in headline inflation to come in at 8.2%, following May’s hotter than expected 8.7% reading
High Rates, Low Supply: Home shoppers face high mortgage rates and a shortage of avalible properties, a combination that made purchases less affordable and dented sales in June. Elevated mortgage rates resulting from the Federal Reserve’s actions since early last year are keeping many buyers out of the market and reducing demand. At the same time, the rates are discouraging homeowners from selling, limiting the supply of homes for sale
Market Movement (YTD)
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