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Wall Street Rattled By Recession Fears

Wall Street Rattled By Recession Fears

Your unbiased daily news brief

James Kratch
August 05, 2024

Good Monday morning; we hope you had a great weekend. We have some good news if your name is Walker -- first, middle or last. A pair of Walker Hotels properties in New York are running a BOGO offer in August just for you. Have a great day!

In Today’s Brief

Austin: Rejects Sept. 11 plea deal
Somalia: Terror attack
Hunter Biden: Sentencing date
TikTok: DOJ lawsuit
Aerosmith: No more touring

... and more

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Top Tips

1) Too cool

About that soft landing ...

Rough Friday: The major indexes were hammered to end last week following a disappointing jobs report. The Dow Jones dropped over 600 points (-1.51%, the Nasdaq plummeted over 400 (-2.43%) and the S&P 500 was down 100 (-1.84%). Futures were also headed further downward as of last night.
What it signals: Wall Street is spooked about the possibility of an economic recession. Employers only added 114K jobs in July, falling well short of the 175K that were expected. Manufacturing has also slowed, unemployment is ticking up and there is growing fear the Federal Reserve waited too long to cut interest rates amid inflation.
Big picture: The Fed was widely expected to cut rates in September before the big selloff. If conditions worsen, the central bank could be more aggressive with the size of the cut. An economic downturn could also further shake up an already volatile presidential election season.

2) Turmoil in Bangladesh

Over 90 people died in a new round of violent protests inside the South Asian nation.

Catch up: Student-led demonstrations against a government jobs quota system began last month before becoming violent and leading to calls for Prime Minister Sheikh Hasina to resign. At least 91 people, including 13 police officers, were killed last weekend across several cities with dozens injured. Around 300 have died since the protests began; police and government forces have been accused of opening fire on protesters in some incidents.
Staggering reign: Internet access has been blocked and shoot-on-sight curfews instituted as Hasina, the world's longest-ruling female head of state, strains to stay in power. Bangladesh has experienced democratic backsliding in recent years under the 76-year-old leader; she has been accused of rigging elections for her office, including one earlier this year.
Big picture: The quota system has been dropped, but the movement has not subsided. Hasina said the protesters are "terrorists" and officials claim government forces are demonstrating restraint. The United Nations condemned the violence, but neighboring India has only advised its nationals to avoid travel to the country at this point.

3) Talk out

Former President Donald Trump said he will not participate in ABC's presidential debate next month.

Catch up: Trump and President Joe Biden agreed to two debates back in May -- a CNN-hosted one in late June that submarined Biden's re-election bid and a Sept. 10 date hosted by ABC. But Trump began waffling on the second leg when Vice President Kamala Harris ascended to the top of the Democratic ticket before formally bailing this weekend.
The proposal: Trump claimed the ABC deal was "terminated" because Biden is no longer involved, but challenged Harris to a Fox News-hosted debate with an audience on Sept. 4. The vice president, who officially secured the Democratic nomination last week, indicated she plans to honor the ABC commitment made by Biden.
Big picture: It appears unlikely Harris and Trump will debate at this point. Trump said he will do a town hall with Fox News if Harris does not agree to debate on the network. ABC has not commented, but the expectation is it would conduct a similar event with Harris if Trump does not reconsider. Harris is expected to select a running mate as soon as today; it is not clear if that person will debate Ohio Sen. J.D. Vance on CBS, which was also agreed to before Biden dropped out.

Quick Tips

U.S. News

Secretary of Defense Lloyd Austin revoked a controversial plea deal for three Sept. 11 attack planners in U.S. custody. He also announced he is taking oversight of the cases, relieving a retired general's appointed authority (More)
Maui wildfire victims have reached a $4B settlement deal with the state of Hawaii and six other defendants. Gov. Josh Green said he hopes the deal to resolve all pending lawsuits will be finalized this week, a year after the blazes devastated island communities (More)
A uranium producer has agreed to halt mineral transports through Arizona's Navajo Nation. Energy Fuels and the tribe are disputing whether the company provided advance notice of transport following a handshake deal; tribal law bans uranium transportation on its reservation, but state and federal highways are exempt (More)

World News

At least 32 people died in a terrorist attack on a beach hotel in Mogadishu, the capital city of Somalia. Over 60 people were wounded in an alleged suicide bombing incident; al-Shabab, an al-Qaida affiliate, claimed responsibility (More)
The Phillippines and Germany have agreed to a new defense pact. The Southeastern Asian island nation has sought Western support amid a recent run of hostilities with China in the disputed South China Sea (More)
Ukrainian President Volodymyr Zelensky said his military has begun flying U.S.-made F-16 fighter jets. Ukraine secured the jets from Denmark and The Netherlands following months of lobbying; the Dutch have said their contributions can be used to strike Russian territory (More)

Campaign News

Hunter Biden's sentencing date in his federal gun case is Nov. 13, eight days after the presidential election. President Biden has said he will not pardon his son, who also faces federal tax evasion charges (More)
David Plouffe has joined the Harris campaign as a senior adviser. The longtime Democratic operative was former President Barack Obama's campaign manager in 2008 and later one of his top advisers (More)
Robert F. Kennedy Jr. released a video where he said he placed a dead bear cub in New York's Central Park in 2014. The revelation comes after The New Yorker made a fact-check inquiry with the independent presidential candidate (More | Context)

Business & Markets

The Department of Justice is suing TikTok and parent company ByteDance. DOJ alleges the social media platform repeatedly violated federal laws protecting children's online data and privacy (More)
Coca-Cola will pay $6B in back taxes and interest while it continues to appeal a federal tax court ruling. The Atlanta-based beverage giant said it is confident it will eventually prevail in its dispute with the IRS over its 2007-09 tax returns (More)
Chevron will move its corporate headquarters to Houston from the Bay Area. It will be the first time the oil company will be located outside of California since its 1906 founding; the transition process will take about five years (More)

Entertainment & Sports

Aerosmith announced its retirement from touring after over 50 years and canceled the remainder of its farewell tour. Steven Tyler, the band's lead singer, suffered a severe vocal cord injury last year (More)
Scottie Scheffler won the men's golf gold medal at the Paris Olympics. The world No. 1 player notched a one-shot victory over Great Britain's Tommy Fleetwood; Hideki Matsuyama took the bronze medal for Japan (More)
AMC Theatres' revenue fell over 23% YoY in Q2. A lack of Hollywood blockbusters in the timeframe and some high-profile flops were blamed for the downturn at the world's largest movie theater chain (More)

Quick Hitters

Feel Good: A dog jumped off her owner's boat while taking a ride. The pooch was then miraculously rescued by a dinner cruise over a mile off the coast of Fort Myers Beach in Florida and later reconnected with her family.
New Idea: A startup pairs first-time homebuyers with angel investors, allowing them to secure homes and build equity without high monthly payments. Ownify is up and running in Raleigh, North Carolina, and expects to expand to other markets soon.
Take Note: Early risers tend to get much more respect than those who sleep in. But night owls do better on cognitive tests, according to a new study.
Double Agent: American athletes were not just trying to win medals at the 1960 Rome Olympics. They were also trying to get Soviet athletes to defect.
Life Hack: This one comes from across the pond. You can keep ants out of your house for $5 or less without chemicals.

Watch This

Keep this video in mind the next time you eat out.