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- 🥀 Is US Credit Drying Up?
🥀 Is US Credit Drying Up?
Daily Market Briefs
August 01, 2023
Good morning. US stock futures fell in Tuesday morning trading as investors navigate a flood of earnings reports.
| S&P 500 | Dow | Nasdaq |
|---|---|---|
| -0.16% | -0.10% | -0.25% |
"A non-gambler must get out when his stocks fall"
Nicholas Darvas
Top News
US Treasury to borrow big
WHAT: The US Treasury just pulled a financial magic trick that would make Houdini proud! The Treasury revealed it’s planning to borrow a whopping $1.007 trillion in the third quarter — higher than its initial May estimate by $274 billion.
WHY: The Treasury said the anticipated increased borrowing was due to a lower-than-expected cash balance at the beginning of the quarter. If the Treasury borrows the amount it expects, it will be the largest net debt issuance during a third quarter period. The Treasury also announced it expects to borrow $852 billion in debt in the fourth quarter.
Weaker loan demand, tighter credit confront US banks
WHAT: Looks like US banks are getting a bit pickier with their lending. According to the latest Federal Reserve survey, credit standards proved to be tighter and loan demand from businesses and consumers was a bit weaker during the second quarter. The Fed’s quarterly Senior Loan Officer Opinion Survey (SLOOS), also showed that banks expect to further tighten standards over the rest of 2023.
WHY: “The most cited reason for expecting to tighten lending standards were a less favorable or more uncertain economic outlook, an expected deterioration in collateral values, and an expected deterioration in credit quality of commercial real estate and other loans” the Fed said.
We can’t keep on truckin…
WHAT: Revving engines have been turned off and it appears the trucking adventures at Yellow Corp have come to an end as the company announced it was filing for bankruptcy. In an announcement, the Teamsters Union said it received legal notice that Yellow was ceasing operations, with the company’s reported closure putting roughly 30,000 jobs at risk.
WHY: As of late March, Yellow had an outstanding debt of $1.5 billion. Of that, $729.2 million was owed to the federal government. In May, Yellow reported a loss of $54.6 million.
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In Other News
Billion $$ Birkenstock?
WHAT: L Catterton, backed by the luxury fashion legends at LVMH, is gearing up to launch an IPO for footwear manufacturer Birkenstock as early as September. According to individuals familiar with the matter, a public offering could value the German sandal maker at as much as $10 billion.
WHY: Founded nearly 250 years ago, Birkenstock has become a high fashion brand, launching collaborations with luxury names such as Dior, Manolo Blahnik and Valentino.
Crypto platform in SEC crosshairs over fraud allegations
WHAT: Defunct cryptocurrency exchange Terraform Labs and its founder Do Kwon are getting ready to face the music as a US federal judge ruled that they must face fraud allegations brought by the US Securities and Exchange Commission.
WHY: According to the SEC’s complaint, Terraform Labs and Kwon misled investors about the stability of their token, known as UST, and claimed that the token would increase in value. The token however, lost all its value when it slipped below a 1:1 US dollar peg in May 2022.
X…no longer marks the spot
WHAT: In an electrifying twist of events, the “X” that brilliantly illuminated the rooftop of the company formerly known as Twitter has been removed just a few days after it was installed. The San Francisco Department of Building Inspection said they received over 24 complaints about the unpermitted structure.
WHY: The Elon Musk-owned company, which was rebranded as X, had removed the Twitter sign and iconic blue bird logo from the building last week.
Key Economic Events
Tuesday - No Major Economic News
Wednesday - No Major Economic News
Thursday - Initial Jobless Claims (wk end Jul-29)
Friday - Unemployment Rate (Jul)
Notable Briefs
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