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

Good morning. Jay Powell could be hawkish this week, Elon Musk makes a successful trip to China and Japan’s yen goes wild during a holiday. [View in browser]( [Bloomberg]( Good morning. Jay Powell could be hawkish this week, Elon Musk makes a successful trip to China and Japan’s yen goes wild during a holiday. Here’s what people are talking about. — [Sofia Horta e Costa]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Tracking Fedspeak It’s Fed decision week and markets will be debating the timing of the central bank’s first interest-rate cut. No change is expected on Wednesday, marking a big shift from a few months ago when [consensus was calling]( for the rate-cut cycle to begin in May. For the latest Big Take, the team at Bloomberg Economics has built a tool that tracks news headlines on Fed speeches and press conferences, scoring them on a scale from ultra-hawkish to super-dovish. At the moment it’s tilting hawkish — and the team thinks the Fed Chair [could endorse the recent upward move in bond yields]( perhaps as soon as this week. Swaps traders now see only one Fed reduction for all of 2024. Futures rise Futures on both the S&P 500 and the Nasdaq 100 are pointing [to a positive open on Wall Street](, while the Treasuries market is also seeing gains. Optimism around the US earnings season is helping offset jitters around the Fed for now, though the corporate calendar is fairly light today: updates are expected from Domino’s Pizza and Paramount Global, whose shares are rising more than 4% in early trading as [it evaluates a possible sale]( and bidders seek to win over [shareholders](. There are no major economic data releases scheduled for today. Tesla’s China wins Shares of Tesla are rising more than 6% in premarket New York trading. That’s after CEO Musk made an unannounced trip to China on Sunday, [leaving the country with two wins]( related to driver-assistance software. The carmaker will partner with Chinese tech giant Baidu for mapping and navigation functions to support what it calls Full-Self Driving (or FSD). Tesla also [passed]( a key data-security and privacy requirement in China, helping ease some of the concerns over bringing FSD to the country. Japan’s wild yen It’s hard to be away from your desk if you trade Japan’s currency. The country’s yen [swung wildly earlier today](, falling to its weakest in 34 years before rebounding strongly — raising speculation authorities may have intervened. A local holiday may have contributed to thin volumes and more volatile market conditions. [Market participants across Asia scrambled to trade]( and make sense of the swings, while Japan’s top currency official said he had [“no comment for now](” when asked whether he intervened in the market. The yen is under pressure from the stark gap between interest rates in the US and Japan. Movers and shakers elsewhere Shares of Dutch medical equipment maker Philips[are soaring after it set asid](e just over $1 billion to settle US claims linked to a recall of sleep apnea devices — much lower than expected. Deutsche Bank shares are sinking after the bank said earmarked as much as $1.4 billion [to pay shareholders]( of a competitor it purchased 14 years ago. Anglo American is [having another good day in London]( as BHP considers an improved bid for the miner. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Speculation around a [China currency devaluation]( is mounting. - McKinsey chief [attempts to boost morale]( at the consultancy. - TikTok’s US-based general counsel [is stepping down](. - Spain’s Pedro Sanchez will continue [as prime minister]( after all. - China’s Xi Jinping [is visiting the EU]( for the first time since 2019. - Apple’s iPad is hit by the EU’s [digital dominance]( crackdown. And finally, here's what Joe’s interested in this morning I just got back this weekend from a week away in Guatemala, which if you haven't been, I would highly recommend. Of course, I couldn't turn off my work brain completely, so the first thing I did while driving away from the airport in Guatemala City was look at what types of cars were being advertised on billboards. I didn't see any BYDs, though I did see an SUV from legacy automaker Changan Auto being sold for roughly $16K. Of course, I saw plenty of used American vehicles on the road (also many Isuzus, which is I brand I hadn't thought about so much lately). Speaking of competition, it's interesting to me that Both Tesla and Apple are both feeling the same heat right now. [Elon recently showed up in China](, where everybody knows that the various local EV makers are coming on incredibly strong. Meanwhile, as Bloomberg's ace [Apple reporter Mark Gurman notes](, the iPhone maker really needs to come out with a genuinely mass, affordable cheap iPhone, as it goes up against various booming Chinese handset makers (not to mention Google and Samsung). [Separately on the new Odd Lots podcast today](, Tracy Alloway and I spoke to [Hiten Samtani](, the founder of ten31 Media about the world ultra-high end real estate in places like Miami, NYC, Aspen, Dubai and elsewhere. At the points that billionaires are paying for premium homes, these price points bear no real relationship to the actual cities where they exist, and instead are more like pieces in a global game of billionaire oneupmanship. In fact, you could argue that the high price points -- units that can go for over $100 million -- actually serve distinct economic purposes. One is simply ego, which is kind of obvious. If it's a big deal to you to splash out more than your rival, then you want a higher price tag. But also expensive real estate serves as a nice wealth sink. If you want to spread $1 billion worth of housing purchases around world (so that you have $1 billion globally distributed across various legal environments) then it's easier to do that with 10 $100 million homes than 1000 $1 million homes). To some extent, I think of crypto the same way, where the higher the price point in some ways makes the asset less expensive. If Bitcoin is trading at $62,000, it's probably not that hard to park $1 million in Bitcoin. On the other hand, were Bitcoin still trading at $6, then it would have been extremely difficult to park $1 million in it without dramatically moving the price, getting all kinds of slippage etc. Thus, ironically, the more expensive the coin, the cheaper -- at least in some sense it is -- to use it as a wealth preservation vehicle (which is supposedly how it gets used) We also talked about the rise of branded real estate development. There's a [Bentley building]( in Sunny Isles, near Miami. There's also a Porsche tower there. In Dubai there's an Armani Building and a Bugatti building, [among others](. A city like NYC already has good real estate brands -- eg. "Park Avenue" -- but maybe if you're not sure so much about what's good in Dubai, then that Bugatti name serves that purpose. It was a really fun chat about the evolution of this world. [Check it out on all the apps](. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. Follow him on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t 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. 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