Good morning. US stock futures rose in Thursday morning trading as investors analyzed earnings reports while keeping an eye on US debt ceiling negotiations.

"Pundits and gurus master the art of going out on a limb without going out on a limb"

Phillip Tetlock

Top News

Fed officials split on next interest rate move

WHAT: Federal Reserve officials aren’t all singing the same song when it comes to where interest rates should go next. According to the latest minutes from the Federal Open Market Committee meeting, officials were split between a pause on the ongoing rate hikes, or keeping their options open given the economic environment.

WHY: The Fed at its last meeting raised the target range for its benchmark interest rate by 0.25%, to its highest level since September 2007. The move pushed the Fed Funds Rate to a new range of 5%-5.25%

Ratings agency puts US on notice

WHAT: Fitch Ratings just announced that they might soon have to give the US debt rating a bit of a makeover. The ratings agency said it may have to downgrade the US’ AAA credit rating as a result of the political theater taking place around the US debt ceiling.

WHY: Economists project a US default could trigger a recession, with widespread job losses and a surge in borrowing costs.

IMF: US won’t default

WHAT: Kristalina Georgieva, managing director of the International Monetary Fund donned her crystal ball and boldly declared that she had full faith in the US to steer clear of a debt default. “History tells us that the US would wrestle with this notion of default…but come the 11th hour it gets resolved” Georgieva said delivering remarks at an Economic Forum in Qatar.

WHY: The US government could fall behind on its bills next month — and even default on its debt — if Congress doesn’t raise a $31.4 trillion cap on government borrowing, a failure that could trigger economic calamity and panic in global financial markets.

In Other News

We don’t have to stay here…

 WHAT: Sam Altman, CEO of OpenAI — the company behind popular artificial intelligence application ChatGPT — dropped a bombshell by suggesting that if ChatGPT couldn’t comply with the European Union’s AI regulations, it could pack up its virtual bags and bid Europe “adieu” as he delivered remarks at an event in London.

WHY: The EU is working on what could be the first set of rules globally to govern AI. As part of the draft, companies such as OpenAI will have to disclose any copyrighted material used to develop their systems.

Bad for baby!

WHAT: The Federal Trade Commission (FTC) is putting on its detective hat and launching an investigation into whether baby formula makers, including Abbott Laboratories, Perrigo and Nestle engaged in collusion during state bidding contracts.

WHY: According to a document posted on the FTC’s website, the Commission said it is examining whether the companies “engaged in collusion or coordination with market participants regarding the bidding”.

EU gets tough on financial product prices

WHAT: The European Union has unveiled a master plan to slash the fees retail investors cough up to banks and insurers for financial products. The move signals ongoing attempts by the EU to encourage investments to make its capital market deeper and more efficient.

WHY: Only 17% of EU household assets were in the form of stocks and bonds in 2021, well below the US level, as customers prefer to keep their money in a bank.

Key Economic Events

• Thursday - US GDP Annualized Q-o-Q

• Friday - No Major Economic News

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