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🗞️ Inflation data today, will set in motion Fed rate cut

🗞️ Inflation data today, will set in motion Fed rate cut

Mortgage rates may ease with new bank capital rules

Techonomy Barista
September 11, 2024

We put the ‘lit’ in digital literacy - one story at a time.

The US Federal Reserve building in 2043.

Let’s dive in to today’s news:

Inflation data today, will set in motion Fed rate cut.
TikTok’s nonchalance despite threat of ban. 😎
U.S. and global oil prices dropped to lowest levels. 📉
Nvidia still strong with 32.9% projected CAGR.
Scale-back proposal for bank capital requirements. 🏦

We’re excited to announce we have launched a podcast for our top stories because we heard some of you like to listen on the move, so please give this a try and let us know what you think! 🙂

Markets

Economic Calendar

Economic calendar showing the most important events in the top five economies.
All times are US EST.

1. With inflation data in focus today, Fed set to cut interest rates. 📉

Source: WSJ.

Key Takeaways:

Federal Reserve expected to cut rates by 0.25 percentage points next week.
Traders anticipate further rate cuts throughout 2024 and into 2025.
August inflation data due today, with 0.2% monthly increase forecast.
European Central Bank likely to continue its own rate-cutting campaign.
Consumer sentiment expected to rise slightly this month.

How It Impacts You:

Lower interest rates could mean cheaper mortgages and loans. Time to do those home renovation plans you've been putting off. 🏠
Your savings account might start earning less interest. Looks like that early retirement plan might need a few more years of work. 💼
If inflation continues to cool, your paycheck might stretch a bit further at the grocery store. 🛒

2. TikTok continues U.S. operations despite looming ban threat 🎭

Source: eMarketer

Key Takeaways:

TikTok faces a potential U.S. shutdown by January 19, 2025, unless it divests from Chinese parent company ByteDance.
The company is challenging the law on First Amendment grounds, with oral arguments set for next week in a U.S. appeals court.
Despite the threat, TikTok continues to expand, with over 2,600 job openings and new office space acquisitions in the U.S..
ByteDance is exploring scenarios to sell a majority stake in TikTok's U.S. business without its recommendation algorithm.
TikTok's legal team, led by new global general counsel John Rogovin, is preparing for a prolonged legal battle that could reach the Supreme Court.

What This Could Mean for You:

If you're a TikTok creator, you might want to diversify your social media portfolio. Just in case your corn field dances suddenly become radioactive to U.S. audiences. 💃🌽

3. Oil prices hit 2-year low as China concerns grow.

Credit: Techonomy Barista analysis; Source: MarketWatch.

Key Takeaways:

U.S. and global oil prices dropped to lowest levels in over two years.
China's economic slowdown sparks worry about global demand.
Traders predict U.S. inflation rate to fall to 1.5% by April 2025.
Concerns grow about potential recession in China, Europe, and U.S.
Stock market may react negatively even if August CPI meets expectations.

How It Impacts You:

Lower oil prices could mean cheaper gas at the pump. Time to plan that road trip you've been putting off. 🚗
Your investments might take a hit if stock markets react negatively to economic concerns.

4. Nvidia's reign challenged: 17 chip makers set for 20%+ growth. 📈

Credit: Techonomy Barista analysis; Source: MarketWatch.

Key Takeaways:

17 semiconductor companies expected to achieve over 20% compound annual growth rate (CAGR) in sales from 2024 to 2026.
SolarEdge Technologies leads with projected 45.1% CAGR, followed by Wolfspeed at 39.8% and AMD at 24.1%.
Nvidia still strong with 32.9% projected CAGR, but faces potential growth concerns for 2026.
Overall semiconductor index expected to grow at 17.1% CAGR through 2026.

What This Could Mean for You:

As AI becomes more prevalent, your smart home devices might start outsmarting you – time to brush up on your "please" and "thank you" when asking Alexa for help. 🤖

5. The Fed eases bank capital rules, cuts impact on big banks by half. 🏦

History of changes leading up to the bank capital drop this month.
Source: Yahoo, Techonomy Barista Analysis.

Key Takeaways:

New proposal reduces capital increase for 8 of the biggest banks from 19% to 9% with a 60-day comment period.
Banks with $100-250 billion in assets largely excluded from stricter standards.
Changes aim to balance safety with concerns about restricted lending to avoid disasters like what happened to SVB.
Implementation to begin one year after finalization, with phased approach.

How It Impacts You:

Mortgage rates might not increase as much as initially feared, potentially making home loans more accessible. 🏠
Your bank might be more willing to lend money for various purposes, as they won't need to keep as much capital in reserve.
The stability of large banks could improve, reducing the risk of financial crises that could affect your savings and investments.
Your favorite big bank CEO might be a little less stressed at the next shareholder meeting. Maybe they'll even spring for the good coffee in the lobby. ☕