📈 Who's Sounding The Alarm On Higher Rates?

Good morning. US stock futures fell in Friday morning trading as Wall Street looked ahead to the release of corporate earnings from major U.S. banks.

📈 IMF MD warns of global impact of higher US rates

📝 Our report: IMF head honcho Kristalina Georgieva chimed in on the state of U.S. interest rates, saying it's not exactly party time for the rest of the world, and could become a worry if they continued higher for a long time. "Higher interest rates for the rest of the world is not great news. Higher interest rates make the U.S. more attractive so financial flows come here and that leaves the rest of the world somewhat struggling," Georgieva said as she delivered remarks at an event hosted by the Atlantic Council.

 🔑 Key points:

• US consumer level inflation data for March came in unexpectedly strong, casting further doubt on the Fed’s current forecast of rate cuts at some point later this year.

• The unfavorable price pressure data comes as other reports also pointed to sturdier inflation over the start of the year, challenging the Fed’s most recent projections that penciled in three rate cuts this year.

• Georgieva was quick to note, however, that the U.S. economy had been successful because it was more innovative, opening space for entrepreneurship at a time of accelerating technological change.

💡 So what: Higher US interest rates can lead to capital outflows from developing economies, currency depreciation, increased import costs, inflation, higher debt servicing expenses, reduced investment, and decreased export competitiveness, posing significant challenges for these nations.

Friday - Consumer Sentiment

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🤖 Apple plans entire Mac line overhaul

WHAT: Apple is about to give its Mac lineup a serious makeover to spice up those sluggish computer sales. They're cooking up a new batch of in-house processors that are AI-ready, aiming to give their computers a brainy boost. The company, which released its first Macs with M3 chips five months ago, is already nearing production of the next generation — the M4 processor — according to people with knowledge of the matter.

WHY: The new Macs are underway at a critical time. After peaking in 2022, Mac sales fell 27% in the last fiscal year, which ended in September. In the holiday period, revenue from the computer line was flat. Apple attempted to breathe new life into the Mac business with an M3-focused launch event last October, but those chips didn’t bring major performance improvements over the M2 from the prior year.

🏢 Big bank ponies up bucks for mental health initiative

WHAT: Morgan Stanley is putting its money where its heart is, pledging a cool $20 million over the next five years to its children's mental health initiative. That brings their total commitment to $50 million since they kicked off the program back in 2020. The Morgan Stanley Alliance for Children’s Mental Health funds nonprofit groups that carry out research and programs focused on youth mental health.

WHY: As part of the new pledge, the bank will finance an education center run by the American Academy of Pediatrics, and Sesame Workshop, the nonprofit behind Sesame Street, focused on children in marginalized U.S. communities.

🦾 Amazon CEO says company all-in on AI

WHAT: Looks like Amazon's CEO, Andy Jassy, is diving headfirst into the world of generative AI. In his yearly letter to shareholders, he's calling it the “next big thing” for the company, ranking right up there with Marketplace, Prime, and Amazon Web Services (AWS). “The amount of societal and business benefit from the solutions that will be possible will astound us all,” Jassy wrote in his letter.

WHY: Amazon has kept a relatively low profile when it comes to generative AI compared to the likes of Microsoft and Google which have spent the last year boasting about their AI offerings and debuting new generative AI-powered products and services.

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