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Looking beyond the Fed’s rate decisionThe markets on Tuesday are betting that the Fed will stand pat on interest rates on Wednesday. The higher-for-longer policy would probably deal a blow to prospective home buyers and businesses, and could undermine President Biden’s message of economic growth heading into an election year. Investors will focus on the Fed’s quarterly economic projections. With Brent crude hitting a 10-month high of more than $95 a barrel on Tuesday morning, however, fears on inflation still loom large. Investors on both sides of the Atlantic dumped bonds on Monday, with yields on a 10-year inflation-adjusted Treasury note hitting a 14-year high on fears that the Fed would stay hawkish on interest rates.

Persons: Biden’s, Brent Organizations: Fed, Investors

Other unions are digging in as well. The Writers Guild of America is in the fourth month of its strike against major Hollywood studios, while the actors’ union, known as SAG-AFTRA, is in its second. A Gallup poll published in August found that 67 percent of Americans approve of unions, the fifth straight year such support has exceeded the long-term polling average of 62 percent. Time is running out for Congress to reach a compromise to keep the government running past Oct. 1. The confab is part of an effort to lay groundwork for a meeting between President Biden and President Xi Jinping in San Francisco in November.

Persons: Drew Barrymore, Biden, Donald Trump, Kevin McCarthy, Jake Sullivan, Wang Yi, Xi Jinping Organizations: Guild of America, Hollywood, SAG, Labor Department, Gallup, Republican, Biden, U.S Locations: U.S, California, Malta, Ukraine, Taiwan, San Francisco

Autoworkers put down their toolsThousands of autoworkers walked off the job on Friday morning at three Midwest plants in an unprecedented strike, as the United Automobile Workers and Detroit’s three big carmakers remained miles apart on contract talks. A lengthy strike could dent the Big Three’s profits, analysts say, at a time when the companies are investing heavily in electric vehicles to catch up to Tesla and Chinese rivals. Mary Barra, G.M.’s chief, warned that meeting all or most of the union’s demands could hobble the company’s prospects. “Make no mistake: If we don’t continue to invest, we will lose ground, and it will happen fast,” she said. “Nobody wins in a strike.”

Persons: Autoworkers, autoworkers, Biden, Ford, Mary Barra, ’, “, ” Organizations: United Automobile Workers, General Motors, Dodge, Chrysler Locations: Stellantis, Amsterdam, G.M

The company priced its shares on Wendesday at $51 each, the top end of its range, valuing it at about $54.5 billion. Arm’s I.P.O. SoftBank had initially wished the company would be valued at as much as $70 billion. And it had pitched Arm as a major player in designing chips for artificial intelligence applications, a tech sector that investors have flocked to. But valuations of privately held companies have fallen sharply over the past year, and investors were reportedly concerned about Arm’s so-so financial performance of late.

Persons: SoftBank Organizations: Nasdaq, Wendesday

Artificial intelligence is again in focus this week in Washington, as leading tech executives — including Elon Musk, Mark Zuckerberg, Sundar Pichai, Satya Nadella and Sam Altman — as well as labor leaders and civil society groups meet on Wednesday with lawmakers behind closed doors. The gathering is the first of a series of Schumer’s listening sessions before lawmakers start writing rules. “This is an all-hands-on-deck moment for Congress—we need AI experts, ethicists, labor leaders, civil rights groups, the world of academia, defense and beyond helping us with the work ahead,” he wrote Tuesday on X, the social media platform formerly known as Twitter. Two separate Senate hearings devoted to A.I. It includes an independent office to oversee A.I., licensing and safety standards, and making executives liable for their tech.

Persons: Elon Musk, Mark Zuckerberg, Sundar Pichai, Satya Nadella, Sam Altman —, Chuck Schumer, ”, Richard Blumenthal, Josh Hawley Organizations: Elon, Democratic, Twitter Locations: Washington, New York, Connecticut, Republican, Missouri

game (and the injury-shortened debut of Aaron Rodgers as the New York Jets quarterback) live at home. The early verdict: Disney gave up less than expected — but made concessions that could eventually remake the pay-TV business. Disney will gain more reach for its streaming services, which the company views as a vital part of its future. Charter also agreed to provide ESPN+ (largely a companion to its cable-channel sibling) as part of its sports-focused bundle. More important, when Disney finally introduces a direct-to-consumer version of ESPN that includes streaming of big sports events, the broadband provider can also offer that to its consumers.

Persons: ”, Aaron Rodgers Organizations: Disney, Charter Communications, New York Jets, ESPN

That’s far less than what Instacart fetched in a fund-raising round two years ago. But like Arm, the SoftBank-owned chip designer set to price its own stock offering on Wednesday, Instacart’s shift reflects investor caution as Wall Street slowly warms up to I.P.O.s again. In 2021, the company was valued at a heady $39 billion, as venture capitalists poured money into start-ups, especially those that benefited from stay-at-home pandemic restrictions. But investors had expected it to pursue a valuation as high as $70 billion. (The projected appraisal is higher than the $32 billion that SoftBank paid for Arm in 2016.)

Persons: I.P.O.s Instacart, I.P.O.s Organizations: U.S Locations: I.P.O.s, what’s

Some deal makers wonder whether tennis, which has already confirmed initial talks with Saudi Arabia, will be the fund’s next target. “Of all the important sports around the world, I think tennis is clearly the one with the greatest opportunity for financial growth and the most unrealized value,” Maria Sharapova, the retired tennis star, told DealBook. Despite the popularity of tennis, the sport brings in only 1.3 percent of earnings from global media sports rights. That’s partly because tennis is made up of myriad entities — including the Women’s Tennis Association; the U.S. Tennis Association; and independent tournaments. The independently operated organizations make scheduling tournaments difficult and diminish bargaining power for sponsorship and media deals.

Persons: Novak Djokovic, Coco Gauff, Aryna Sabalenka, ” Maria Sharapova, DealBook Organizations: U.S, Saudi Arabia’s Public Investment Fund, Women’s Tennis Association, U.S . Tennis Association Locations: Saudi Arabia, U.S

Putting a price on celebrityIn buying a majority stake in the powerhouse Hollywood talent agency Creative Artists Agency, François-Henri Pinault showed that high-ticket M.&A. is a game that more than one French luxury billionaire can play. Acquiring CAA — which represents stars including Tom Hanks, Margot Robbie and Pinault’s wife, Salma Hayek Pinault — underscores Pinault’s ambitions, and reinforces the growing importance of celebrity in the luxury sector. Like his archrival, Bernard Arnault of LVMH, Pinault used a series of acquisitions to assemble the luxury empire now known as Kering, starting with Gucci and later adding Saint Laurent, Bottega Veneta, Alexander McQueen and more. The agency will be run separately from Kering; Bryan Lourd, the superagent who represents Scarlett Johansson and Brad Pitt, will become C.E.O.

Persons: Henri Pinault, Tom Hanks, Margot Robbie, Pinault’s, Salma Hayek Pinault, Bernard Arnault, Pinault, Saint, Bottega, Alexander McQueen, —, Bryan Lourd, Scarlett Johansson, Brad Pitt Organizations: Hollywood, Creative Artists Agency, CAA, Gucci, Puma Locations: Bottega Veneta, Kering

In a deal that shows the ever-growing convergence of fashion and fame, François-Henri Pinault, the French billionaire and chief executive of the luxury goods company Kering, said on Thursday that his family office had bought a majority stake in one of Hollywood’s biggest talent agencies, Creative Artists Agency. Mr. Pinault’s family office, Artémis, already has investments that include the auction house Christie’s and a stake in Puma, and like them, CAA will be managed separately from Kering, which owns such brands as Gucci, Saint Laurent and Balenciaga. The announcement comes as talent — actors, singers, filmmakers — has become a uniquely powerful tool in selling products. There is now a growing race among fashion brands to lock in relationships with the next big name. “There’s no separation between fashion and entertainment any more,” said Robert Burke, the eponymous founder of a luxury consultancy, calling the deal a “natural, if unprecedented, evolution.”

Persons: Henri Pinault, Pinault’s, Saint Laurent, Balenciaga, —, “, ”, Robert Burke Organizations: Creative Artists Agency, Mr, Puma, CAA, Gucci Locations: Kering

Apple’s China conundrumShares in Apple, the world’s most valuable public company, suffered their biggest single-day fall in a month on Wednesday following a report that China would extend a ban on iPhones for government workers. China may be making things tougher for Apple. (Some Western governments, including the United States, already bar public employees from using TikTok, the Chinese-owned video platform, and devices made by China’s Huawei.) Apple manufactures most of its hardware in China, and the country accounted for about a fifth of total revenue last year. Apple doesn’t break out iPhone sales in the country, but TechInsights, a market research firm, estimates that in terms of second-quarter shipments, China was a bigger market than the United States.

Persons: China’s Organizations: Apple, Wall Street Journal, Bloomberg, China’s Huawei Locations: China, United States

For the Biden administration, “the only thing they can pretty much do to counteract Saudi cuts is to bring more oil into the market from other countries,” León said. “Iran and Venezuela are the best candidates,” he added, even if it’s politically unpalatable to fully reopen talks with them. Domestic producers of oil from shale won’t fill the void in the short term. The SPAC buying Donald Trump’s social network gets more time for its deal. Shareholders in Digital World Acquisition Corporation voted to give the firm 12 more months to close its merger with Truth Social.

Persons: Biden, ” León, León, ’, Margrethe Vestager, Didier Reynders, Vestager, Donald Trump’s Organizations: European Investment Bank, European Commission, Truth Locations: Iran, Venezuela, States, Washington

The strong labor market is propping up U.S. households. “Real disposable income looks set to reaccelerate in 2024 on the back of continued solid job growth and rising real wages,” Jan Hatzius, Goldman’s chief economist, wrote in a client note. On Friday, the Labor Department reported that wage gains had cooled in August, but real wages, adjusted for inflation, are trending higher. In March, the bank raised its recession odds to 35 percent in the wake of Silicon Valley Bank’s collapse and worries that contagion could hurt other lenders. Poll numbers released on Monday by The Wall Street Journal showed that President Biden’s popularity is still sagging, partly because of his track record on the economy.

Persons: Goldman Sachs, ” Jan Hatzius, Goldman Organizations: Labor Department, Bloomberg, Wall Street Locations: United States, U.S, Bidenomics

As they do every summer, publicly traded companies posted their second-quarter results while Americans were baring their bodies on the beach. But this year, the timing was apt. On several earnings calls in August, chief executives reassured investors that the Ozempic revolution had not left them in the dust, and that they could somehow share in the blazing success of new diabetes and weight loss drugs. “We will continue to study this,” Michael Johnson, the chief executive of the nutritional supplement maker Herbalife, told investors. “And when we see an opportunity to capitalize on it, we will.”In theory, that opportunity — both for making profits and for losing fortunes — could be vast not only for the companies behind these drugs but also for some in completely different industries.

Persons: baring, ”, Dan R, “, ” Michael Johnson, — Locations: Chard

But it was justified in Musk’s mind because of his conviction that Twitter’s management had misled him. At 4:12 p.m. Pacific time, once they had confirmation that the money had transferred, Musk pulled the trigger to close the deal. But when his Twitter email was cut off, it took him a few minutes to get the document into a Gmail message. Hybrid work is winningChief executives aren’t letting up on their push to get workers back to the office. And even Zoom, a symbol of remote work, has ordered some of its employees to work in the office.

Persons: Twitter Elon Musk’s, Wall, Walter Isaacson, Isaacson, “, ”, Musk, Agrawal, Andy Jassy, Amazon’s, “ It’s, Organizations: Elon, Twitter Elon, Twitter, Wall Street, Mr, Meta, Labor Locations: ”

The magic of “badwill”When UBS agreed to buy its archrival, Credit Suisse, for a little over $3 billion this spring at the Swiss government’s behest, analysts and investors said that price represented a steep discount. UBS’s latest financial results reflect just how much of a steal it was. Today, the bank reported a $29 billion profit — yes, you read that right — for the second quarter, the biggest quarterly profit in banking history. But that paper gain belies the challenges that UBS faces as it moves to complete the largest takeover of a bank since the 2008 financial crisis. (It’s also known as “negative goodwill.”) UBS reported that its underlying profit for the quarter was just $1.1 billion.

Persons: “, It’s Organizations: UBS, Credit Suisse

☆ Wall Street Moguls Win Important Backer in Their Fight Over Hedge Fund Sale
▼ + stars: | 2023-08-31 | by ( Lauren Hirsch | More About Lauren Hirsch | ) www.nytimes.com time to read: +1 min

A coterie of high-profile investors, including Bill Ackman of Pershing Square, Boaz Weinstein of Saba Capital Management and Marc Lasry of Avenue Capital Group, is pushing to buy Sculptor Capital, the successor to the storied hedge fund Och-Ziff — even though the fund has already agreed to sell itself to another investment firm. On Thursday, they gained an important supporter. That deal would value the firm’s class A shares at $11.15, around 18 percent more than they were worth the day it was announced. But shares of the hedge fund have fallen significantly over a longer period, dropping 60 percent over the past two years. The consortium’s most recent offer for Sculptor, disclosed on Wednesday, would value it at about $12.76 for each of its class A shares.

Persons: Bill Ackman, Boaz Weinstein, Marc Lasry, Ziff —, Robert Shafir, Sculptor’s Organizations: Pershing, Saba Capital Management, Avenue Capital, Sculptor Capital, Rithm

A stormy forecast for insuranceHurricane Idalia, strengthened to a Category 3 storm on Wednesday morning, packing soaking rains and destructive winds of up to 125 miles per hour, as it lumbers toward the Florida coastline. Such disasters are becoming more common — and more costly — each year, sending insurance costs soaring for homeowners and businesses. Some firms doubt they can continue to cope with such superstorms, while others have limited their business in the state. One of their big complaints: State regulations prevent them from raising prices for customers, they say, forcing them to say no to new policies. Florida’s woes reflect a nationwide problem, one that is expected to intensify as climate change unleashes more extreme weather events.

Persons: Hurricane, Ian Organizations: Carolinas, Insurance, Insurance Information Institute Locations: Florida, Coast, Georgia

C.E.O.s urge Washington to help with asylum seekersAs New York City’s migrant crisis continues to escalate, with more than 100,000 arrivals from the southern U.S. border straining shelters, some of the city’s top business leaders are intervening in a fight over who’s responsible. But recent communications by the Biden administration suggest that such calls won’t be heeded. The letter underscores the increasing urgency of the crisis, which has pitted Mayor Eric Adams against Gov. Adams has said the crisis could cost the city $12 billion over three years, while Hochul has spent $1.5 billion and deployed nearly 2,000 National Guard members so far. The migrant crisis is a business issue.

Persons: Jamie Dimon, JPMorgan Chase, Larry Fink, BlackRock, Jane Fraser, Citigroup —, Biden, won’t, Eric Adams, Kathy Hochul —, Adams, Hochul Organizations: JPMorgan, Citigroup, Gov, Biden, National Guard Locations: Washington, York, U.S, New

Her visit, which will include meetings with business leaders and government officials, including her Chinese counterpart, Wang Wentao, will be closely watched as she looks for common ground on trade, even as she seeks to curtail it. Here is what Ms. Raimondo expects to focus on during her trip, according to The Times’s Ana Swanson, Alan Rappeport and Keith Bradsher. Ms. Raimondo is likely to defend the escalating tech war, which she will argue is meant to protect U.S. national security. (Ms. Raimondo said on Monday that she would neither compromise nor negotiate on that point.) The White House this month announced plans to bar private equity and venture capital firms from making investments in China in quantum computing and advanced semiconductors.

Persons: Raimondo, Gina Raimondo, Wang Wentao, Ana Swanson, Alan Rappeport, Keith Bradsher, Ms Organizations: China, Biden administration’s, U.S Locations: Beijing, China

As valuations for National Basketball Association and National Football League teams have leaped beyond the reach of even some billionaires, pickleball offers, by comparison, a more affordable opportunity. Valuations of pickleball teams reportedly range anywhere from $1 million to $10 million. Pickleball proponents say the sport will eventually develop its own celebrity players. He pointed out that while pingpong has long been played by millions of people in multiple countries, it hasn’t become a commercial success. “I think that pickleball is going to confront some of the same issues,” he said.

Persons: pickleball, ”, Patrick Rishe, St . Louis, it’s, David Levy, Levy, Andre Agassi, John McEnroe, ” Andrew Zimbalist, DealBook, pingpong, hasn’t, “ Organizations: National Basketball Association and National Football League, Washington, Washington University, Turner, Horizon, ESPN, Smith College Locations: St .

Just a month ago, Wall Street was hailing the so-called “magnificent seven” for driving the gains this year in the S&P 500. As MarketWatch notes, four of the seven (Apple, Nvidia, Meta, and Microsoft) have fallen at least 10 percent from their highs in July. Tesla, the worst of the bunch, has tumbled more than 25 percent in that period, putting it in bear territory. On Thursday, alarm bells sounded on both sides of the Atlantic as investors sold government bonds en masse, sending yields to multiyear highs. Adding to the jitters, the renminbi hit a 16-year low against the dollar on Friday, prompting emergency moves to prop up the currency.

Persons: Tesla Organizations: Nvidia, Meta, Microsoft, SpaceX, Elon Musk’s, Nomura Locations: Hong Kong, United States, China

One area looks safe from the dreaded “R” word: the housing market. Goldman predicts home prices will rise even more next year, in part because housing supply is so constrained. Forecasts of a prolonged housing market slump haven’t materialized. Those moves have helped push mortgage rates to a 22-year high. “Home buyers have demonstrated behavior that, in our view, reflects unsustainable adaptations to elevated mortgage rates,” the Goldman Sachs strategists Roger Ashworth and Vinay Viswanathan wrote in a research note.

Persons: Goldman Sachs, Goldman, Bankrate, Roger Ashworth, Vinay Viswanathan Organizations: Fed Locations: U.S

The markets await a new testInflation fears are like a zombie menace stalking the markets this summer. Concerns that the Fed’s battle with rising prices may not be finished have roiled stocks and bonds this month, and investors will be glued to the release of Fed meeting minutes for July at 2 p.m. Eastern on Wednesday for clues on what’s next for rates. Since the last rate-setting meeting in July, economic data has showed that inflation is cooling, but that’s hardly calmed the markets. Tuesday’s strong retail sales data, and hawkish comments from some central bankers, have put the markets on edge. He said on Tuesday that he was seeing “positive signs” that inflation was easing, but warned: “I’m not ready to say that we’re done.”

Persons: Mary Ann Bartels, DealBook, ” Neel Kashkari, “, ” Organizations: Fed, “, Federal, Minneapolis Fed

Shares in Hong Kong and Shanghai closed lower again, but, unlike on Monday, the damage didn’t spread across Asia. China’s economy, the world’s second biggest, is in a prolonged slump. That poses a challenge for global growth. has previously forecast that China would account for 35 percent of global growth this year, but that’s looking less likely. The slowdown is hitting everything from commodities to construction, and some big U.S. companies that operate in China don’t expect a rapid turnaround.

Locations: China, Beijing, Hong Kong, Shanghai, Asia

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