Are We in a New Bull Market?

Business

The Federal Reserve kept its key interest rate at 5%–5.25%. After ten consecutive rate hikes since March 2022, the Fed held the rate for the first time. However, it indicated it would likely raise the rate twice this year.

Falling inflation was a factor in the Fed's decision. The US annual inflation rate dropped to 4% in May, the lowest since March 2021. Core inflation, excluding energy and food, was 5.3%, unchanged since the start of the year due to rising housing costs. House prices are rising despite higher mortgage rates.

The European Central Bank raised interest rates again by a quarter percentage point due to high euro zone inflation. Its deposit facility is 3.5%, the highest since 2001.

Credit Suisse became a subsidiary of UBS after 167 years of independence. After years of scandals and losses, Credit Suisse's market confidence collapsed, prompting the Swiss government's March emergency takeover. The combined company will manage $5 trillion.

Nasdaq bought risk-management and regulatory software provider Adenza for $10.5 billion. Tech companies listed on Nasdaq are famous. It expects the deal to boost its financial compliance services.

For the first time since 1990, the Nikkei stock market index closed above 33,000. SoftBank's stock rose this week amid rumors of a partnership with ChatGPT. A weaker yen has helped the Nikkei and Topix gain 30% and 20%, respectively.

Toyota's AGM saw two proxy votes fail. American and European activist investors opposed Toyoda Akio, the grandson of the carmaker's founder, as chairman. He has been slow to introduce electric vehicles. Another proposal demanded Toyota's climate policy be transparent. Both proposals failed.

The Federal Trade Commission asked a court to stop Microsoft from completing its $69 billion takeover of video-game company Activision Blizzard amid reports that the deal is imminent. In August, the FTC sued to stop the acquisition. Britain's competition regulator announced its intention to block the takeover in April.

Conservatives boycotted Bud Light for months over its association with a transgender activist. Modelo Especial, a lager brewed near Mexico City by Constellation Brands, won in May. Bud Light's market share is 7.3%, down from 10.3% in January.

Financial

A Bull Market is on the Rise

The S&P 500 has risen 20% since its June low, the biggest rally since January 2022.

Investors become more excited as prices rise, which is the opposite of how shoppers behave. People flock to stores on Black Friday to take advantage of sales, but when stocks are on sale, many investors flee.

Taking Down the Worry Wall

All is calm again in the equity market. The $VIX has moved down to 13.83, its lowest weekly close since February 7, 2020.

The debt ceiling has been suspended, bank failure fears have subsided, the Fed is expected to pause, and recession forecasts have been pushed out, tearing down the wall of worry that has stood for over a year.