Good morning. US stock futures dipped in Tuesday morning trading as investors geared up for a holiday-shortened trading week.

"I’ve often said the efficient market hypothesis — EMH — has a lot of truth to it. But the CMH — cost matters hypothesis — is eternally truthful to the last penny"

John Bogle

Top News

Fed exec: Expect rates to stay higher for longer

WHAT: Raphael Bostic, head honcho of the Federal Reserve Bank of Atlanta is all for keeping interest rates comfy and stable well into 2024. ”We’re going to have to keep our rate higher for longer than historically happens because we need to make sure that inflation stays at 2%. We’re going to have to stay restrictive for quite a while” Bostic said in an interview with the Associated Press.

WHY: Though inflation has slowed for the past year, it is showing signs of stickiness at its current level. A recent uptick in gas prices sent inflation incrementally higher in July.

China revises export controls as tensions with US continue

WHAT: China finds itself in a bit of a “trade tango” these days. Having been subject to export controls imposed by the United States, and with growing tensions between itself and Europe, China’s Ministry of Commerce pledged to get “innovative” to strengthen its own export controls in a recently released statement.

WHY: In November 2021, the US blacklisted 12 Chinese firms over their links to the military or alleged involvement in the surveillance of Muslim minorities.

Report: AI unlikely to disrupt financial advisers

WHAT: Morningstar has dropped a bit of wisdom with a paper titled “Artificial Intelligence Won’t Replace Financial Advisers” They’re saying AI can crunch numbers like a champ, but it hasn’t quite nailed the whole “human trust” thing.

WHY: The Morningstar paper used historical precedent and human nature to push back on the notion that AI will replace human workers. It cited the example of “robo-advisers” that were deemed a threat to wealth advisers, highlighting the reluctance of individuals to adopt new technologies that haven’t proved completely reliable.

In Other News

FTC scores victory over deceptive advertising

WHAT: The US Federal Trade Commission (FTC) has dropped the hammer on Turbo Tax software maker Intuit for using some rather “creative” advertising tactics. The Commission said the company misled consumers with deceptive advertisements pitching “free” tax filing products that millions of consumers were unable to use.

WHY: In May 2022, Intuit agreed to pay $141 million in restitution to settle claims by all 50 US states and Washington DC that it tricked millions of customers into buying Turbo Tax products that the company advertised as “free”.

Investment bank slashes recession outlook

WHAT: Goldman Sachs is shuffling its recession odds like a deck of cards at a magic show. The investment banking giant now sees a 15% chance the US will slide into a recession, down from 20% previously, as cooling inflation and a resilient labor market buffer the US economy.

WHY: Goldman’s 15% recession estimate is well below a Bloomberg consensus of 60%. Goldman is also more optimistic than peers on US economic growth, predicting an average 2% pace through the end of 2024.

Biden: Auto workers strike unlikely

WHAT: US President Joe Biden isn’t losing sleep over the possibility that workers at the US’ three largest car manufacturers were likely to go on strike despite a looming contract deadline later this month. “I’m not worried about a strike. I don’t think it’s going to happen” Biden said as he delivered remarks in Philadelphia.

WHY: Late last month, the United Autoworkers union (UAW) said its members voted overwhelmingly in favor of authorizing a strike at the “Detroit Three” automakers if agreement is not reached before the current four-year contract expires in mid-September.

Key Economic Events

• Tuesday - No Major Economic News

• Wednesday - Fed’s Beige Book, Fed’s Logan Speaks

• Thursday - Fed’s Williams Speaks, Fed’s Bowman Speaks

• Friday - Baker Hughes Oil Rig Count, Fed’s Barr Speaks

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