The busiest economic week of summer is over: Here’s what we learned

The effect of these last seven days will last for the next several weeks. Politicians and investors retreat to the Hampton or Martha’s Vineyard or wherever they are around Wall Street and Washington DC’s abandoned halls Heat,
Are we in recession? It’s hard to say, but hopefully by September the knowledge we’ve gained during this treacherous week will be fully absorbed, and our understanding of the American economy becomes more clear.

So what are we dealing with here? let’s recap.

  • The Federal Reserve raised interest rates by another 75 basis points. The market had expected this move but it was still a historically large increase. The Fed’s actions raised the rate that banks charge each other for overnight borrowing to 2.25% and . charge up to the range between 2.50%, the highest since December 2018.
  • Key inflation gauges showed prices to remain high. The personal consumption expenditure price index rose 6.8% in June – the biggest 12-month move since January 1982.
  • Consumer spending was higher, which is generally a sign that the economy remains strong. However, this time the reason for the increase in prices is because of the rising prices and not because of the thickening of the purse. Personal consumption expenditure for the month increased by 1.1%, higher than the 0.9% estimate.
  • The economy shrank for the second quarter in a row. GDP contracted at an annual rate of 0.9%. This decline marks a major symbolic limitation to the most used – albeit informal – definition of a recession as two consecutive quarters of negative economic growth.
  • Americans became more pessimistic about the economy. The Conference Board Consumer Confidence Index declined for the third straight month in July. Of the 3,000 respondents, 43% said they think there is a more than 50% chance that the US will fall into recession in the next 12 months, compared with only 13% that in April.
  • Domestic price growth slowed for the second consecutive month. Prices were still strong in May, up 19.7% from the same month last year, according to the S&P Corelogic Case-Shiller National Home Price Index. But the market is cooling off due to higher mortgage rates and inflation concerns. In April, they increased by 20.6%.
  • Congress passed a $280 billion package to boost the domestic chipmaking industry. The bill would increase production of essential computer chips in the US to prevent future supply chain issues and increase competition with China.
  • Senators Chuck Schumer and Joe Manchin reach a $700 billion deal on a comprehensive climate, tax and health care bill. The plan includes $370 billion in energy and climate spending, nearly $300 billion in deficit reduction, subsidies for Affordable Care Act premiums, and tax changes.
  • 170 companies reported second quarter results, including: Microsoft ,msft,, Alphabet ,GOOG,, meta platform ,American Plan,, Apple ,AAPL,And heroine ,AMZN,, results were mixed, Several companies have warned about inflation and slow growth in the future. Nevertheless, the markets managed to end the week and month highs.
That’s a lot to digest. in particular very persistent heat wave,

Unfortunately, we have another data-heavy week before we get a break.

Earnings will continue next week starbucks ,gender,, Uber ,Uber, and Airbnb reporting.

We also expect to release some important economic data: the JOLTs (job openings), the unemployment rate, and the PMI, a leading indicator of US economic activity, are all on our way.

So stay away from swimsuits and SPF for now. Or don’t, and bring the beach to your desk, Vacation is a state of mind isn’t it?

Ducati takes on the world

My CNN colleague Jonathan Hawkins recently had the opportunity to sit down with Claudio Domenicali, CEO of Ducati, in Misano, Italy, where World Ducati Week attracted nearly 80,000 enthusiastic fans and owners over three days.

The Volkswagen-owned company announced on Friday that it brought in record revenue of €542 million ($552 million) in the first half of 2022 and increased operating profit by nearly 15%.

But the Ducati chief described a difficult mix of business conditions that have made it harder to keep up with the increase in demand for the bike.

Domenicali said supply chain issues have been an “absolute nightmare” since the pandemic.

“It’s been a very complicated mix of everything,” he said, noting that the time it takes to get a container from Asia to Europe has doubled, while closures in China made it harder to secure essential parts. It is done.

Yet he insisted on the idea that supply chains should be further localized, taking into account the disadvantages of reversing decades of globalization.

“When you do business for the whole world, you stay more connected,” Domenicali said.

Amidst the uncertainty, the company has an advantage. The cheaper euro, which fell to the US dollar in July for the first time in two decades, benefits exporters such as Ducati, as it makes their goods cheaper for foreign customers.

“It’s a help,” said Domenicali, no problem.

And he said the company, one of Italy’s best-known brands, has not been shaken by the collapse of Prime Minister Mario Draghi’s government. According to Domenicali, Ducati has gotten used to executing its long-term plans without relying on the government.

next

monday: ISM Manufacturing PMI (July).

Tuesday: Jolts (June); Starbucks, Airbnb and Uber report earnings.

Wednesday: ISM Non-Manufacturing PMI (July).

Thursday: Weekly initial jobless claims.

Friday: unemployment rate (June); Berkshire Hathaway reports earnings.

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