Bloomberg - Evening Briefing - Your Fed pivot payout

The US Federal Reserve just gave its clearest signal yet that rate cuts are coming. So what does that mean for your money? Right after Fed Chair Jerome Powell’s speech, everything from global stocks to corporate bonds surged higher, marking the best Fed day across all asset classes in almost 15 years. Interest rate cuts are generally a positive catalyst for stock prices, especially growth companies whose value comes from their future earnings potential. So-called risk assets, including lower-quality tech stocks and high-yield bonds, should receive a boost. “Assuming this doesn’t mean the Fed is now worried about a recession, it has given investors the green light to keep buying risk assets with both hands,” said Matt Maley, chief market strategist at Miller Tabak + Co. Assets around the world may also benefit, too. —David E. Rovella 

Citigroup will shutter its municipal business, one of the most dramatic moves yet by Chief Executive Officer Jane Fraser as she seeks to squeeze better returns out of the Wall Street giant. The bank decided the business, which has tumbled in the rankings for underwriting state and local debt, is “no longer viable given our commitment to increase the firm’s overall returns,” according to a memo to staff seen by Bloomberg News.

Jane Fraser Photographer: Ting Shen/Bloomberg

Mortgage rates fell below 7% for the first time in four months, bringing some relief to a US housing market long plagued with affordability issues. “Given inflation continues to decelerate and the Federal Reserve Board’s current expectations that they will lower the federal funds target rate next year, we likely will see a gradual thawing of the housing market in the new year,” says Sam Khater, Freddie Mac’s chief economist.

But credit markets face a dramatic repricing in 2024 as higher capital costs slam lower-rated borrowers, according to JPMorgan Asset Management’s Oksana Aronov. Those markets surged this week as traders moved to price in aggressive Fed rate cuts. But Aronov says she doesn’t expect Fed easing until the end of 2024—if at all. “I know this is a crazy notion right now but we think that on balance, there is more of a risk of a hike next year than these aggressive cuts,” she says. The shakeout, Aronov warns, will be focused on companies with fundamentally weak balance sheets. 

Electric vehicle inventories on US dealer lots reached a new high in December. With a 114-day supply, the bloated inventory of EVs is up from a 53-day supply a year ago and compares to 71-days worth of inventory for the overall auto industry. US consumers are apparently growing wary of EVs, balking at high prices and still-spotty charging infrastructure. 

A Tesla SuperCharger station along Highway 50 in Lamar, Colorado Photographer: Rachel Ellis/Bloomberg

The latest crypto hack involved one of the industry’s top names in security: hardware wallet-maker Ledger. The Paris-based startup saw its Ledger Connect Kit software compromised, leading to hundreds of thousands of dollars being drained from users’ wallets early Thursday. Ledger said in a statement that the exploit originated from a phishing attack that targeted a former employee. 

The world’s largest banks are showing zero progress when it comes to making good on their promise to help the world avoid the worst consequences of global warming. According to researchers at BloombergNEF, the ratio of spending on low-carbon infrastructure relative to fossil fuels needs to reach 4 to 1 by 2030. At the end of last year, the so-called energy-supply banking ratio, which includes debt and equity underwriting, was 0.73 to 1—worse than the year before.

Range Rover thefts in the UK have caused insurance premiums to skyrocket. As a result, the SUV’s resale value has been tumbling. Range Rover prices fell 2.8% in November alone, the steepest drop since insurance costs spiked. 

Photographer: Damian Lemański/Bloomberg

• How LNG traders helped trigger an energy crisis in Pakistan. 
• The European Union agrees to open membership talks with Ukraine.
• Vladimir Putin doubles down on war as Republicans block US aid.
• GOP authorizes Biden impeachment inquiry despite lack of evidence.
• Biden forgave billions in student loans, but for Gen Z that’s not enough.
• New poll shows Donald Trump pulling ahead of Biden in Michigan.
• Blackstone is going all-in on Taylor Swift fandom.

Nothing says holidays in the US like ugly sweaters, fruitcakes, candy canes and—especially—Christmas cards. But despite years of warnings that the humble holiday card would be killed off by digital replacements, Americans still send 1.1 billion annually. It’s a tradition the greeting card industry says isn’t going to change. December is one of the most important times of the year for the industry, with holiday cards representing about 20% of the 6.5 billion greeting cards Americans buy each year. Americans are in the process of sending a billion greeting cards this December. Here's how a throwback industry continues to survive the digital age.

Clockwise from top left: a holiday greeting card published by Louis Prang, a master lithographer in Boston; a Christmas card Prang published in 1882; and the first Christmas Card, printed in 1843 for Henry Cole. Photo illustration by 731. Photos: Getty (2), Alamy (1)

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