The summer doldrums are upon us as we head into August and its warm (ok, way too hot) weather. How you spend the season going forward might be in for a change, as blistering temperatures ruin the fun of a traditional beach holiday. Bloomberg columnist Niall Ferguson doesn’t hold back in this article on the future of your vacation. Even if you decide to stay indoors with the air conditioning and unwind with a potboiler, you still need to know a few things to prepare for the coming week. I’ll try to keep it short so you can get back to your book.
The Big Paranoia: Markets have been going gangbusters, with the S&P 500 poised to rise for a fifth straight month. FOMO-humbled investors have been going all in and few traders have bothered to hedge against historically high exposure. Still, there are reasons to be worried. The Fed is looking to engineer a soft landing after a period of inflation and intense rate increases, an effort that’s rarely successful. Plus: September and August tend to be the benchmark’s worst two months of the year.
The Big Surcharge: One of life’s annoyances is having to pay an additional fee when you use a credit card. Visa, the world’s largest payment network, says it ordered merchants in April to cap surcharges at 3%, down from 4%, and has been sending in-person auditors to stores to double-check the fees. Businesses argue that the surcharges are needed to salvage their razor-thin profit margins from bank fees: US merchants shelled out a record $160.7 billion on these so-called swipe fees last year, up 17% from 2021, according to the Nilson Report industry publication. It’s enough to make a person go back to cash, but then we’d lose out on all those reward points.
The Big Risk: Central banks in Latin America helped fuel a 25% rally this year in domestic bonds. Now, as policymakers rush to pivot ahead of the Federal Reserve, Michael Mackenzie takes a deep dive into what's next for what's been the trade of the year. At least one portfolio manager predicts “the road ahead is likely to be uneven and full of bumps.” The Big Data Point: It won’t be until Friday, but all eyes will be on the jobs figures for July. The closely-watched report is projected to show employers boosted payrolls by 200,000, while unemployment held at a historically low 3.6% and hourly pay cooled.
The Big Labor Roundup: The Hollywood strikes are still happening, impacting movie releases and sparking a ripple effect in other industries, such as equipment rental company Herc Holdings. The latest up north is that Canada’s federal government is poised to intervene in a labor dispute to ensure that the country’s busiest port remains open after dockworkers rejected a mediated agreement for the second time this month.The Big Reveal: Apple is slated to report quarterly earnings on Thursday. The tech behemeth’s dream of an all-screen iPhone — with no borders around the display and no cutouts for cameras or sensors — is getting closer to reality with the soon-to-be introduced iPhone 15, writes Mark Gurmon. Be well this week. See you on the other side.
