Hi. I’m Aaron Weinman. Talk of a recession, rough inflation data, and the persistent increase in costs of certain staple goods has got Wall Street’s biggest investors living in fear of an economic nightmare.
The Bureau of Labor Statistics released a bevy of data last week, and it was a mixed bag. While gas prices fell, grocery costs were up by 13.5% in the past year — the largest increase since 1979 — and health insurance costs jumped 24.3%, the largest in US history.
The data leaves investors uncertain over whether the US Federal Reserve can avoid a hard landing or navigate a soft landing, and the plan to shake higher prices out of the system is proving difficult.
Let’s get started.
1. Wall Street investors fear an economic nightmare. And discouraging inflation data means they might be right to brace for such a nightmare.
The nightmare is not simply the economy tipping into a recession. It is much worse than that.
Disappointing data from the BLS could see the economy get stuck. Inflation might come down slightly, but it remains high enough that the cost of important items like food and toiletries remain stubbornly high.
To make matters worse, higher interest rates will swell mortgage rates and credit-card repayments. All of this while wage growth remains stagnant and companies tighten their own purse strings on growth.
Basically, the economy is stuck in a rut.
For more, check out this piece from Insider’s Linette Lopez on Wall Street’s nightmare.
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6. The US Securities and Exchange Commission has charged cloud company VMware with misleading investors. Employees said they are frustrated with leadership’s communications and it is eroding their trust. The development comes as chip giant Broadcom tries to close a $61 billion deal for VMware.
7. Adobe’s chief product officer explained why the company made a $20 billion bid for Figma. The deal, announced last Thursday, shocked many in the design community and sent Adobe’s market value tumbling.
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