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

Good morning. Sliding stock futures, gaming out presidential scenarios in bond markets and the rise of “upflation.” Here’s what’s moving mar [View in browser]( [Bloomberg]( Good morning. Sliding stock futures, gaming out presidential scenarios in bond markets and the rise of “upflation.” 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](. Falling futures US stock futures are falling, [tracking declines in European markets](, while US Treasury yields pared some of the rise seen on Monday and the dollar headed higher for a second day. Oil prices are [near a two-month high]( amid escalating tensions in the Middle East and hurricanes in the Atlantic, where Hurricane Beryl has become the [earliest ever Category 5 storm]( in the area. Early nomination Democrats are [considering formally nominating Joe Biden]( as early as mid-July to ensure he is on the presidential ballots, while also stamping out intra-party chatter on whether he should be replaced following last week’s rough debate performance. The criminal trial over Donald Trump’s attempt to overturn the 2020 election, meanwhile, [could be delayed for a year or more]( following the Supreme Court’s ruling that presidents have some immunity in their “official” acts. Trump bond implications Wall Street strategists are [starting to game out]( how a Donald Trump victory in the election in November could play for the bond market. They are urging clients to position for sticky inflation and higher long-term bond yields and to contemplate policies that could lead to more rate cuts. JPMorgan says now is the [time to pocket profits]( from short bets on five-year Treasuries. “Upflation” Big consumer products companies have kept their revenue up in recent years via the practice of “shrinkflation” — raising prices while reducing the size of packages. But consumers will only tolerate that for so long before they start seeking alternatives or trading down to cheaper options. That’s [resulting in “shrinkflation" being replaced by “upflation,”]( an attempt to create new uses for products and then charging more for them. Coming Up… A light economic calendar is topped by the JOLTS labor market report, one of the Federal Reserve’s preferred indicators. A further decline in job opening is predicted. Tesla will report its second-quarter car sales, with analysts expecting another fall. That would be the first back-to-back quarter of declines since 2012 and there’s a feeling that [excuses are running out]( for the electric-vehicle maker. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - The original [hedge fund island]( in Abu Dhabi is running low on space. - Steve Ballmer [is now richer]( than Bill Gates. - [‘Pump-and-dump’ suit]( against Roaring Kitty is dropped within days. - A $2 billion fund driven by [machine learning](. - The strategic push to try to [block the far-right]( in France. And finally, here's what Joe’s interested in this morning Last week I wrote a lot about how the risks to the economy look more two-sided as the labor market slows (based on a whole raft of measures) and inflation measures continue to drift lower. The concern is that the Fed waits too long to cut rates and that the unemployment rate will start gathering sustained upward momentum by the time they have sufficient certainty to move lower. Anyway, the evidence seems to be building that the economy is decelerating. Yesterday we got the latest update of the [Atlanta Fed's GDPnow measure](, and it currently shows that the economy is growing at a 1.7% pace, which is down from the 2.2% reading near the end of June. Meanwhile, [Cameron Dawson]( at [NewEdge]( pointed out in a chart deck yesterday that we recently saw a modest cut in 2024 US GDP estimates. And while a little jag lower might not be a big deal on its own, it's striking to see how it had previously been an almost virtually straight line up since the middle of last year. Also yesterday, we got the latest ISM Manufacturing reading, and it came in light across the board. The headline measure was 48.5 — signaling contraction —  versus the 49.1 that economists had expected. New Orders were sub-50, as was the employment sub-index. One sub-index that was positive was the Prices Paid Component, which came in at 52.1, signaling that the majority of companies are still seeing rising costs. However, there's an important caveat here. As [FundStrat's Tom Lee]( pointed out on a recent episode of the Odd Lots podcast, the historical average for this measure is actually much higher. For the last 50 years, the Prices Paid component is close to 60. So while the prices that companies pay for goods are still going up, they're going up at a slower-than-normal rate — yet another sign that inflation is headed toward the Fed's goal. Follow Bloomberg's Joe Weisenthal on X [@TheStalwart]( [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](. 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