Good morning. US stock futures fell in Tuesday morning trading as several banks had their credit rating downgraded.

"Wealth isn’t primarily determined by investment performance, but by investor behavior"

Nick Murray

Top News

Ratings agency slashes outlook on US banks

WHAT: Moody’s Investor Services is back with a ratings rollercoaster for the banking world! The ratings agency has lowered credit ratings for 10 small and mid-sized US banks and said it may downgrade major lenders as part of a widespread look at mounting pressures on the industry.

WHY: Higher funding costs, potential regulatory capital weaknesses and rising risks tied to commercial real estate loans amid weakening demand for office space were among the strains prompting the review Moody’s said.

NY Fed President: Restrictive rates likely for some time

WHAT: President of the New York Fed John Williams believes now isn’t the time to loosen fed interest rate policy, even as inflation in the US continues to abate. Williams said monetary policy needs to remain “restrictive”, noting that interest rate cuts may be warranted next year if inflation gets to the Fed’s 2% target range.

WHY: The median of Fed officials’ most recent quarterly projections, published in June, showed two more rate increases this year, the first of which was accomplished with July’s rate hike.

PayPal dives head first into crypto market with own token

WHAT: PayPal is jumping into the digital currency dance with its very own stablecoin, PYUSD. The company said users will be able to transfer PYUSD between PayPal and supported external digital wallets, use the token to pay for goods and services, or convert any of PayPal’s supported cryptocurrencies to and from PYUSD.

WHY: PayPal paused work on its stablecoin project at the beginning of the year amid regulatory scrutiny according to reports from Bloomberg at the time.

In Other News

Not so fast Adobe…

 WHAT: European Union (EU) antitrust regulators are suiting up to investigate Adobe’s mega $20 billion bid for cloud-based designer platform Figma. The European Commission said it opened a full-scale investigation into the deal after a preliminary review triggered concerns.

WHY: The deal would remove an important rival, and allow the Photoshop maker to restrict competition in the global market for supply of interactive product design tools, the EU antitrust watchdog said.

Publisher acquired in billion dollar deal

WHAT: After a rollercoaster ride through the book space, Simon and Schuster finally gets its “happily-ever-after” with a twist! Private equity giant KKR is buying the famed publisher in an all-cash deal worth $1.62 billion.

WHY: Simon and Schuster, whose authors include Stephen King, Colleen Hoover and Bob Woodward, is one of the so-called “Big Five” of New York publishing, with others including Penguin Random House, HarperCollins, Hachette Book Group and Macmillan.

Another day, another Meta fine

WHAT: Norway’s data protection agency is putting their foot down and hitting Meta Platforms with a hefty $1 million Norwegian crowns per day fine starting in mid-August. According to the agency, Meta got caught red-handed harvesting users data, such as their physical locations, and targeting advertising at them without their consent.

WHY: Meta said it intends to ask users in the European Union for their consent before allowing businesses to target advertising based on what they view on its services such as Facebook and Instagram.

Key Economic Events

• Tuesday - Philadelphia Fed’s Harker Speaks, US Trade Balance

• Wednesday - No Major Economic News

• Thursday - US CPI Y-o-Y

• Friday - No Major Economic News

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