Good morning. The Fedâs preferred inflation metric is coming, Chinese stimulus ripples continue and Arm casts an eye on part of Intel. Hereâ [View in browser](
[Bloomberg](
Good morning. The Fedâs preferred inflation metric is coming, Chinese stimulus ripples continue and Arm casts an eye on part of Intel. Hereâs whatâs moving markets. â [Sam Unsted]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. PCE ahead US stock futures are slipping following a rally in the S&P 500 yesterday, while European stocks are up. Treasuries are rising and the dollar has edged higher, with the Federal Reserveâs preferred PCE inflation metric on the slate for later. The data release is expected to show a degree of consumer caution in spending and saving. Most of the action has been in Asia, where the Japanese yen [bounced]( as the ruling LDP chose Shigeru Ishiba â a backer of the Bank of Japanâs efforts to normalize policy â [as its new leader](. China stimulus The run of major stimulus measures in China continued as the central bank [cut the amount of cash]( banks must hold in reserve. The long-awaited measures, which aim to boost economic growth and investor confidence, may have been too much for markets to handle, however, with a [series of glitches and delays]( experienced on the Shanghai stock exchange as equities soared. Still, Chinese stocks are set for their [best week since 2008](. âGoldilocks zoneâ Increased confidence among investors about a soft landing for the US economy has left markets in a [âGoldilocks zone,â]( according to Mark Spitznagel at Universa Investments. This could be in danger of coming to an abrupt end and investors should be wary of second-order impacts like an economic slowdown, he said. [Credit markets are looking attractive]( though following Federal Reserve rate cuts, according to Marathon Asset Managementâs Bruce Richards. Arm-Intel Arm Holdings has been rebuffed by Intel after [inquiring about buying the firmâs product division]( the latest overture made to the struggling chipmaker. Already this week, private equity group Apollo is said to have offered to invest in Intel, while speculation also bubbled up last week about a possible takeover attempt by Qualcomm. Also in the tech and media space, pay-TV companies DirecTV and Dish are said to be [close to a merger]( that could create the biggest firm in the industry by subscribers. Costco spending Big box retailer Costco Wholesaleâs profit [topped expectations]( as it saw an increase in store traffic and benefited from moderating prices driving consumer spending. Its shares have dipped in premarket trading, though, as revenue fell a touch short. Chief Financial Officer Gary Millerchip said shoppers are buying more non-food items as inflation eases, including furnishings and tires, while prices are declining for other items like consumer electronics and appliances. What Weâve Been Reading This is whatâs caught our eye over the past 24 hours. - Bitcoin breaks a [seasonal jinx](.
- Kamala Harris has [razor-thin leads]( in swing states.
- LVMH [snaps up a stake]( in Italian outdoor brand Moncler.
- Seattle is clamping down on its [fentanyl crisis](.
- [Wide-leg jeans]( are sparking shopping spending splurges.
- Berlinâs club scene faces the [end of the party](. And finally, hereâs what Justinaâs interested in this morning A [lot]( has been [said]( about Elm Wealthâs crystal ball [challenge]( where players trade the S&P 500 and 30-year Treasuries with leverage based on the Wall Street Journalâs front page. The idea is to test whether perfect foresight would actually yield stellar trading outcomes. The [answer]( among online players and 118 âyoung adults trained in financeâ was no, partly because they got the market reaction wrong, but also partly because of poor trade sizing, or use of leverage. Five âseasoned and successful macro tradersâ did far better. The game is a simplified exercise, of course, but I thought it was a neat illustration about a few themes you hear often in the investment industry. While playing the game, I often chose to skip the trade because it felt impossible to guess the market reaction not knowing what was already priced in. (You could sort of extrapolate this from the framing of the articles, but not entirely.) This seemed especially true for the equity market, which the gameâs designers noted were harder to get right compared to bonds for most players. (Most of the relevant headlines were about the economy, which struck me as having a more direct impact on long-end bonds than the S&P 500, which would be subject to many other forces.) This underscores why thereâs so much interest in positioning and flows data. Of course, in this case the five pros didnât have that either. But Elm observed that they bet big on high-conviction days and skipped a third of the opportunities. The other takeaway is that making the right bet and trade sizing are different skills. You hear this more often in the context of stock-picking. Itâs part of the idea behind so-called âalpha capture,â which puts portfolios together based on (typically) the best ideas from sell-side analysts or fund managers. Thereâs been plenty of quant research on optimal portfolio construction, which is often now done by software. The five mysterious pros were clearly also better at trade sizing, but some of this in the real world is also down to the constraints of your institutional set-up, like how big youâre allowed to bet on your highest-conviction ideas. You could have great ideas and insights and still end up with an underperforming portfolio. Justina Lee is a cross-asset reporter based in London.  Follow Justina on X [@Justinaknope]( [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 youâll be receiving this newsletter from noreply@news.bloomberg.com. Hereâs how to update your contacts to ensure you continue receiving it: - Gmail: Open an email from Bloomberg, click the three dots in the top right corner, select âMark as important.â
- Outlook: Right-click on Bloombergâs email address and select âAdd to Outlook Contacts.â
- Apple Mail: Open the email, click on Bloombergâs email address, and select âAdd to Contactsâ or âAdd to VIPs.â
- Yahoo Mail: Open an email from Bloomberg, hover over the email address, click âAdd to Contacts.â Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before itâs here, itâs on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals canât find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
[Unsubscribe](
[Bloomberg.com](
[Contact Us]( Bloomberg L.P.
731 Lexington Avenue,
New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](