Bloomberg - Evening Briefing - Betting on a storm

While many investors and economists have crossed over into the sunny lands of soft landing, the members of Team Recession are legion, and they’re still betting on a storm. One new reason for the pessimism may be that, according to Bloomberg’s latest Markets Live Pulse survey, the US consumer is about to crack. More than half of 526 respondents said that personal consumption—the most important driver of US economic growth—will shrink in early 2024, which would be the first quarterly decline since the onset of the pandemic. Another 21% said the reversal will happen even sooner, in the last quarter of this year, as high borrowing costs eat into household budgets. The finding, of course, is at odds with optimism that’s permeated equity markets for most of the summer as cooling inflation and low unemployment make a hero out of Fed Chair Jerome Powell. Should the US economy stop growing though—a scenario that’s likely if consumer spending contracts significantly—it could mean more downside for stocks, which have already slipped from late-July highs. —Natasha Solo-Lyons

US consumers’ inflation expectations were mostly stable in August, but households grew more concerned about their finances and more pessimistic about the job market, according to a Federal Reserve Bank of New York survey.

Stocks rose ahead of economic data that may help shape Wall Street’s views on how close the Fed is from ending its rate hikes, if it hasn’t stopped already. Bonds were mixed, the dollar fell and Bitcoin briefly dropped below $25,000. Here’s your markets wrap. 

Morocco’s government pledged to help survivors of the earthquake on Friday that killed more than 2,700 people, including financial assistance for the reconstruction of homes and schools. The work ahead includes rebuilding at least 30,000 houses as well as 500 schools, hospitals, roads and other infrastructure, Prime Minister Aziz Akhannouch said in remarks carried by local media.

A pedestrian passes through an archway filled with debris in the Old City of Marrakesh, Morocco. The earthquake killed thousands while dealing a major economic blow to the country of 37 million, which has been a bright spot for investors wary of the region’s other economies. Photographer: Nathan Laine/Bloomberg

A rising share of US workers are worried technology will make their jobs obsolete, driven almost entirely by growing fears among college-educated employees. Some 22% of US workers now fear they could be sidelined by technology, up from 15% two years ago, according to a survey from Gallup.

Apple is extending an agreement to get modem semiconductors from Qualcomm for three more years, a sign that its ambitious effort to design the chips in-house is taking longer than expected. Qualcomm shares surged on the news. Meanwhile, cable giant Charter Communications and Walt Disney reached an agreement ending a blackout of ESPN for millions of pay-TV customers, hours before the sports network’s first broadcast of the new NFL season’s Monday Night Football.

J.M. Smucker agreed to acquire Twinkies maker Hostess Brands for about $5.6 billion, furthering a growing consolidation trend among companies that stock the “shelf-stable” aisles at the heart of supermarkets.

Colombian cocaine output surged to a record last year, with the drug flooding into new markets and fueling violence across the planet. Satellite photos show the amount of land planted with coca, the raw material for making the drug, rose to 230,000 hectares (570,000 acres), in 2022, up 13% from the previous year.

Coca paste  Photographer: Ivan Valencia/Bloomberg

• Bloomberg Opinion: “Last mile” of inflation fight no cakewalk.
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• Tesla and China risk leaving Volkswagen on a road to nowhere.
• US banks to lose $250 billion in office holdings, Kyle Bass says.
• What rising rates and surging insurance prices are doing to real estate.
• Popeyes overhauls its kitchens to win the chicken sandwich wars.
• The best new hotels in London for under $500 a night.

The US Open finals weekend meant big nights for two big winners: Coco Gauff and Novak Djokovic. For finance A-listers, the weekend was almost as big. Icons from Wall Street, Hollywood and corporate America flocked to Flushing Meadows in droves to see the athletes compete. From Steve Schwarzman to Bill Ackman, here’s who showed up. 

Coco Gauff and Novak Djokovic Photographer: Sarah Stier and Clive Brunskill/Getty Images

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