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

Good morning. Investors await retail sales data as the debate on the size of a Fed interest rate cut continues, and Microsoft launches a $60 [View in browser]( [Bloomberg]( Good morning. Investors await retail sales data as the debate on the size of a Fed interest rate cut continues, and Microsoft launches a $60 billion buyback. Here’s what’s moving markets. — [Sam Unsted]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Retail sales Retail sales data is on the slate for later on, providing one of the final slices of data before the Federal Reserve decision tomorrow. The data is “arguably, the most important of today’s releases’’ given the influence it could have on bets about Fed rate cuts, according to Michael Brown, a strategist at Pepperstone. Our colleague Mark Cudmore agrees that this retail sales report is [unexpectedly significant](. US stock futures [are higher]( echoing the move in European indexes, while Treasuries and the dollar are steady. Basis point debate What the Fed will do remains front and center of market minds. A 25-basis-point cut [might disappoint markets]( according to SimCorp’s Melissa Brown, while UBS Asset Management’s Kevin Zhao says [Treasuries could outperform]( if it’s a 50-point cut. Goldman Sachs says record-setting [gold could dip]( if it’s a quarter-point. And John Authers says Fed Chair Jerome Powell has reason to [call the market’s bluff](. Big buyback Microsoft announced a new [$60 billion stock buyback program]( matching the largest repurchase plan the software giant has ever undertaken. It’s also raising its quarterly dividend by 10%. The group has benefited in recent years from the rush to AI plays, infusing its product line with technology from partner OpenAI. Return to office Amazon.com CEO Andy Jassy is moving to streamline the online retail and cloud computing giant by [cutting management layers and ordering employees to return to the office]( five days a week from January. Jassy’s memo to staff called out some debates that have swirled around Amazon in recent years, most specifically that too much deliberation and too many meetings and layers of approval have made it tougher to get things done. Intel win Intel shares are bouncing in premarket trading after it landed a [deal to make a custom chip for Amazon’s AWS division]( potentially providing work for new plants that are under construction and helping the turnaround of the chipmaker. Intel shares have dropped by 58% this year, compounded by the suspension of its dividend, 15,000 job cuts and $10 billion in cost savings announced last month. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - A major [political setback]( for Justin Trudeau. - Hedge funds continue to [beef up in Japan](. - BlackRock is [shaking up]( its private credit business. - Wall Street may be missing a [key risk metric]( for a hotter planet. - Sean ‘Diddy’ Combs was [arrested in New York](. And finally, here's what Joe’s interested in this morning Yesterday out at the Future Proof conference in Huntington Beach, California, Tracy Alloway and I had the privilege of interviewing the famed investor John Rogers of Ariel Investments live on stage. It was a really refreshing discussion. John is an actual stock picker. His portfolio is all mid and small caps, and so it was nice to have a conversation that wasn't just about macro or AI spend or Magnificent Seven valuations and all of the stuff that's come to dominate market commentary. One thing we all know about small caps is that over the years they've been trounced by the larger companies. The Russell 2000 has famously lagged the S&P 500, basically forever. But the advantage of small caps is that, on an individual basis, most people aren't paying attention to them. People might know how the Russell is doing, but the typical stock in the index is probably unknown to most investors, with very little coverage from Wall Street analysts. As such, investors in this space have to put in actual legwork. Learning about specific industries. Getting to know the management teams. Really getting to know the businesses. Modeling out future cash flow scenarios. You know, the stuff that was the hallmark for all investing for years. It occurs to me, it just isn't very useful to talk about the small caps as a group. Yes, there are certain macro conditions whereby a group of them can theoretically outperform. And sometimes they do for a while. But at this level, it's really not about the index. The same could probably go for international or emerging markets investing, in which there are great opportunities, but on an index level, they've underperformed. Anyway, it was great and eye opening talking to John about his various investments in restaurant equipment companies, dental gear makers, and also The Sphere — yes, the one in Vegas. Look for it on the Odd Lots podcast early next week. 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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