🦶 Is The Fed Crushing Consumer Sentiment?

Good morning. US stock futures moved higher in Monday morning trading as investors braced for key inflation data.

💵 Bank exec: Delayed rates cuts could affect customer sentiment

📝 Our report: Bank of America CEO Brian Moynihan warned that if the Federal Reserve doesn't start cutting interest rates soon, U.S. consumers might lose their pep. "They've told people rates probably aren't going to go up, but if they don't start taking them down relatively soon, you could dispirit the American consumer," Moynihan told CBS in an interview.

 🔑 Key points:

• At the end of July the Fed kept the policy rate in the same 5.25%-5.50% range it has been for more than a year, but signaled that a rate cut could come as soon as September if inflation continued to cool.

• "Once the American consumer really starts going very negative, then it's hard to get them back." Moynihan added.

• Moynihan also noted that he was concerned about a slow down in the US economy, as winning the war on inflation might have the unintended consequences of ushering in a recession.

💡 So what: Brian Moynihan’s warning that delayed rate cuts could negatively impact U.S. consumer sentiment carries significant implications for both the economy and financial markets. If consumers start feeling pessimistic due to high borrowing costs, their spending— a major driver of the U.S. economy—could slow down. This would potentially lead to a broader economic slowdown, reduced corporate earnings, and increased market volatility. Additionally, such a sentiment shift could pressure the Federal Reserve to reconsider its approach, balancing inflation control with the need to sustain consumer confidence and economic growth.

Monday - No Major Economic News

Tuesday - NFIB Optimism Index

Wednesday - Consumer Price Index

Thursday - U.S. Retail Sales

Friday - Consumer Sentiment

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🐭 Disney set to launch new theme park attractions

WHAT: Walt Disney Experiences Chairman Josh D'Amaro unveiled a bold expansion plan at the D23 fan convention, featuring four new cruise ships and six new themed lands, making it clear that Disney is ready to take its theme parks to the next level. Forthcoming plans include a new Disney villains land at Walt Disney World’s Magic Kingdom in Orlando, Florida, a doubling of the size of the Avengers Campus at the Disney California Adventure Park in Anaheim, California, and details about its partnership with Fortnite creator Epic Games.

WHY: The announcements reveal how the company will begin $60 billion in capital investments, nearly doubling spending over the next decade to improve attractions at its 12 parks and increase cruise line capacity.

✈️ Boeing scores major US Air Force contract

WHAT: Boeing announced it's snagged a $2.56 billion contract from the U.S. Air Force to whip up two prototype E-7A Wedgetail aircraft designed to detect aircraft, ships, vehicles, missiles and other incoming projectiles at long ranges. The contract includes lifecycle development, training and support for the U.S. E-7A fleet, the company said in a statement.

WHY: Last month, the U.S. Air Force said it had reached a deal with Boeing for the supply of E-7 Wedgetail airborne warning and control aircraft. It downplayed concerns that the company's internal crisis would harm its ability to supply planes to the Pentagon.

💊 FDA rejects psychedelic drug as PTSD treatment

WHAT: Federal health regulators just passed on approving MDMA as a PTSD therapy, throwing a wrench into the plans of those hoping to get the green light for using mind-bending substances to tackle serious mental health issues. Drugmaker Lykos Therapeutics said the US Food and Drug Administration (FDA) notified the company that its drug “could not be approved based on data submitted to date,” and requested an additional late-stage study. Such studies generally takes several years and millions of dollars to conduct.

WHY: In recent years, MDMA research has been widely publicized by combat veterans, who say the lack of treatments options for the condition has contributed to higher rates of suicide among military personnel. Last month, veterans supporting psychedelic therapy rallied on Capitol Hill in support of the drug.

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