Why are the markets in such a bad mood right now?

Us: Hey, remember how we told you six months ago (and every day since) that the Fed would get more aggressive in its fight against inflation? Well, that’s happening now.

Traders: UGH I HATE YOU, JUST TAKE ALL MY STOCKS AND GET OUT OF MY ROOM.

Here’s the deal: Wall Street is in one of those ~moods~ right now. Shares fell TK.
  • The 100 point bet: Federal Reserve Governor Christopher Waller said that while he expects a three-quarter point interest rate hike to happen later this month, he is not ruling out a full point hike. It’s the kind of thing that might have gotten you laughed out of the room a few months ago, but after Wednesday’s disastrous inflation report, it’s hardly out of the question.
  • According to Bloomberg, Citi analysts went a step further, telling clients that the bank sees an increase of a full percentage point, also known as 100 basis points, as the most likely outcome.
  • Belvedere Blues: JPMorgan Chase kicked off earnings season on a sour note. The bank, which is considered Wall Street’s leader, temporarily halted share buybacks and reported a 28 percent drop in profit from a year earlier. Morgan Stanley also reported disappointing earnings.

Bottom line: At the heart of all this anxiety are fears of a recession. Nobody likes the R-word. But, as we’ve written many times here, not all recessions are the same, and many analysts say that if/when a recession hits, it won’t be a catastrophic downturn like the ones we saw in the spring of 2020 or the late 2000s.

RELATED: America’s public pension funds face serious challenges that threaten the retirement plans of millions of U.S. state and local government employees

Number of the day: $5,000

In the immortal words of LCD Soundsystem: New York, I love you, but you’re ruining me.

Historically, rents in Manhattan have been proverbially ridiculous—this city is home to an entire political party called “The rent is too damn high,” but the average monthly price of an apartment just passed a milestone: $5,000. It is average, sure, but the average price, which is over $4,000 a month, isn’t much easier to swallow. Both figures are up over 25% from the previous year.

The reason for the jump has to do with mortgage rates, which have soared above 5% in recent months, putting off potential buyers who are flush with cash and need a place to call home while they wait for a better financing option.

TRAVEL HASSOS

The debacle of summer air travel has moved into absurd territory.

Earlier this week, Heathrow in London took the highly unusual step of telling airlines that they must stop selling tickets to departing passengers outright until the end of the summer. Which we thought was pretty ridiculous. Then CNN Business’ Chris Isidore wrote about how one airline is dealing with one aspect of Heathrow’s staffing crisis.
Basically, Heathrow doesn’t have enough baggage handling workers and that’s a huge a problem for an international center of its size. Huge backlogs of baggage are reported at baggage claim. The airport said ground handling teams are staffed at 70 percent of pre-pandemic levels, writes my colleague Anna Cuban.

The problem became so serious that Delta decided to take what it called the “creative” step of flying a passenger plane without passengers to transfer about 1,000 lost bags from London to Detroit.

Elsewhere at Heathrow, passengers found themselves in human traffic jams as they struggled to get to their gates or scrambled for airline help after their flights were canceled or delayed. Just the thing you want to start your first vacation in two years with…

It doesn’t help matters, the airlines and the airport are involved in a little blame game about who should have done what to avoid this mess.

Emirates attacked Heathrow management in a statement, calling the situation at the airport “Armageddon” (which, as far as puns go, isn’t the worst, but it might be a bit of an exaggeration). “Through their incompetence and inaction, they are shifting the entire burden – of the cost and the scramble to fix the mess – onto the airlines and passengers,” Emirates said.

To this, Heathrow responded: “For months we have been asking the airlines to help come up with a plan to solve their resource challenges, but no clear plans have been forthcoming and the problem is getting worse every day,” a spokesperson for Anna said.

Bottom line: The blame game means nothing to people who are struggling to get home or wherever, and who paid top dollar for flights that ended up being canceled. At this point, I just want someone in Silicon Valley to introduce teleportation so we can end airlines and airports forever.

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