Five Things You Need to Know to Start Your Day: Americas

Good morning. Stocks are poised for a muted open as focus turns to the Federal Reserve, with clues as to its monetary policy expected at the [View in browser]( [Bloomberg]( Good morning. Stocks are poised for a muted open as focus turns to the Federal Reserve, with clues as to its monetary policy expected at the end of the week. Goldman Sachs is more positive on the outlook for the US economy after last week’s data, though is skeptical of expectations for sales results. And an explosion of financial scams targeting the elderly poses tough questions for America’s banks. Here’s what you need to know — [Morwenna Coniam](. Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Waiting mode Stocks posted small moves after last week’s risk-on rally as t[raders await signs]( on the scope of potential interest-rate cuts from the Fed. Shares in European defense companies tumbled after a report that Germany will [no longer grant]( new requests for aid to Ukraine as the government seeks to rein in spending. The yen rallied against the dollar, which traded at its weakest level since March, and Treasury yields declined as the Fed’s Mary Daly told the FT she has “more confidence” that inflation is under control. Fed in focus The key event this week is likely to be Friday when Fed Chair Jerome Powell is [expected]( to give fresh insights on the course of US monetary policy at the central bank’s annual confab at Jackson Hole, Wyoming. Wall Street is betting Powell will signal rate cuts are coming, but as the debate shifts from  “will they or won’t they?” to “how big will they go?,” [stock traders may be left wanting.]( Economic outlook Goldman at the weekend [trimmed]( the probability of a US recession in the next year to 20% from 25%, citing last week’s retail sales and jobless claims data. If the August jobs report set for release on Sept. 6 “looks reasonably good,” the firm’s economists see scope to cut the recession probability back to 15%. Lofty goals Meanwhile, Goldman says analyst expectations for corporate America’s [sales next year]( are too high given the outlook for a moderating economy and weaker dollar. The bank said it expects S&P 500 sales to rise 4% in 2025, a slowdown from 6% this year, as the median company outside the energy sector is more sensitive to the economy and less international-facing. That compares with an average 5.8% increase in 2025 revenue expected by analysts, according to data compiled by Bloomberg Intelligence. Scamming crisis Financial frauds are exploding across the US as [criminals target the record wealth controlled by elderly Americans](. It’s raising a burning question: How should a bank react if a customer’s behavior abruptly changes and their money starts whooshing out the door in a series of withdrawals, wire transfers and lavish international spending sprees? Today’s Big Take explores the issue of sophisticated scams. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - How the [world sleepwalked into]( into the global Mpox health emergency - A handful of big-name investors are still betting on [more interest rate hikes in JapanÂ]( - A strategy that’s [delivered specialist investors]( huge returns is under scrutiny - Trump, Harris prepare for a turbocharged week of the [presidential race]( - Safety at the Russian-occupied [Zaporizhzhia nuclear power plant]( in Ukraine is deteriorating And finally, here's what Joe’s interested in this morning It's been exactly two weeks since that huge Japan plunge and that big dive in US stocks. And now that whole selloff is just... gone. In the US, stocks have more than erased their losses. Japan is still a little bit down. The whole thing (so far) has been a very strange breed of volatility shock. Kind of like an earthquake without any subsequent tremors. The VIX is now comfortably in the range it had been in for most of the year. Same with implied correlations. Credit spreads remain tight. Whatever that was all about on Aug. 5, one thing that's helped markets has been the US labor data, which has generally been quite benign since then. We got two solid initial jobless claims indicators. Plus the random employment sub-indexes of various surveys (like the [Empire Fed report]( have been fine. Certainly for now, the evidence still seems to be pointing to the basic story that the job market is cooling, but not falling apart. Meanwhile, the market is now strongly assigning odds of just a 25-basis -point cut at the September Fed meeting, with still some shot of a 50. But obviously at this time two weeks ago, people (and market pricing) were all about some kind of emergency action. [Nick Bunker]( research director at the job site Indeed, posted a chart that per Indeed’s listings, there's actually been a slight uptick recently in their wage growth tracker. It'll be hard for anyone to declare the coast is clear on the labor market front until we get the next non-farm payrolls report at the beginning of September. Nonetheless, if the Fed is officially at the point where it can prioritize labor market health (something we are likely to learn more about this week at Jackson Hole), and if the job market is already stabilizing and improving, then it's not hard to see why stocks just took the elevator back up. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. 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