Week of Sept 9, 2022 Weekly Recap & The Week Ahead
“The stock market is never obvious. It is designed to fool most of the people, most of the time- Jesse Livermore” ― Jesse Livermore
1. Liz Truss to Become Next U.K. Prime Minister, Succeeding Boris Johnson — U.K. Foreign Secretary Liz Truss won the race to lead the ruling Conservative Party and become Britain’s next prime minister, taking the helm of a nation heading into an economic storm. The new prime minister faces a daunting array of challenges. The U.K. economy is spiraling toward recession as inflation ramps up. Ms. Truss has only a narrow base of loyalists within the Conservative Party and polls show limited support for her across the country at-large.
2. U.S. Plans Shift to Annual Covid Shots as New Boosters Roll Out — U.S. health authorities plan to recommend that people get Covid-19 boosters once a year, starting with the new shots now rolling out, a shift from their current practice of issuing new advice every several months.
The annual cadence would be similar to that of flu shots, White House officials said Tuesday, though elderly people and those with weakened immune systems may need more frequent inoculations. To date, health authorities had recommended the extra doses based on the ebbs and flows of the virus’s evolution and new insights into people’s waning immunity. Yet the authorities wound up making recommendations for booster doses to different groups every several months.
3. Fed on Path for Another 0.75-Point Interest-Rate Lift After Powell’s Inflation Pledge — the Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment. St. Louis Fed President James Bullard said in an Aug. 18 interview he was leaning in favor of a 0.75-point rate increase at the coming Fed meeting. “We should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation,” he said. Fed officials have raised rates this year at the fastest clip since the early 1980s, taking their benchmark federal-funds rate from near zero in March to a range between 2.25% and 2.5% in July.
4. ECB Raises Interest Rates by a Historic 0.75 Point as Europe Stares at Recession — the ECB Bank said in a statement that it would increase its key rate to 0.75% from zero—its second hike this year following a 50-basis-point rise in July—and signaled that further rises were likely this year. The increase mirrors recent moves by other major central banks, including the Federal Reserve, which is expected to unveil a third successive 0.75-point rate rise later this month. Canada’s central bank raised its policy rate on Wednesday by 0.75 percentage point to 3.25%, a 14-year high.
Rising borrowing costs will likely increase the risk of a slide into recession for Europe’s currency union, which is wrestling with surging energy costs and sagging confidence among households and businesses, driven by the war in neighboring Ukraine. With governments piling on debt to shield consumers and businesses from the impact of rising prices, a national election in Italy later this month could exacerbate strains in the region’s bond markets.
5. Queen Elizabeth II, Longest-Reigning British Monarch, Dies — Queen Elizabeth II, the longest-reigning monarch in British history and a symbol of stability in an era of sweeping social and political change, has died at age 96. During her seven decades on the throne, the British Empire was dismantled and the U.K.’s role in the world shrank dramatically. Growing pressure for independence in Scotland and arguments for Irish unification threatened to redraw the U.K.’s own borders, and ruptures within her family raised questions about the monarchy’s future role.
But at the end, Queen Elizabeth remained head of state of 14 countries in addition to the U.K., and the leader of a Commonwealth that now includes 54 countries with a combined population of over two billion people. The new monarch is her eldest son, Charles, whose son, William, becomes next in line for the throne.
The week ahead — Economic data from Econoday.com:
