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

Good morning. Tech shares are set for a rebound and the European Central Bank sets rates. Here’s what traders are talking about. — David Goo [View in browser]( [Bloomberg]( Good morning. Tech shares are set for a rebound and the European Central Bank sets rates. Here’s what traders are talking about. — [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Tech rebound Tech stocks were [set for a rebound](from this week’s slump, as a [positive earnings update](from Taiwan Semiconductor Manufacturing Co. restored sentiment toward the sector. Nasdaq 100 futures climbed 0.2%, signaling a partial rebound for the index after concerns over tight US restrictions on chip sales to China drove its worst day since 2022. The dollar was little changed as President Joe Biden[faced intensified calls](to bow out of the 2024 race. Fed outlook Thursday sees a trio of Fed speakers — Austan Goolsbee, Lorie Logan and Mary Daly — in what will be some of the final remarks before the central bank makes its July decision. Jobless claims data is also due, as traders look for clues on the likely outlook for rate cuts. On Thursday, former Fed official Robert Kaplan said he thinks the [central bank will move in September.]( ECB decision Traders are also preparing for a[policy decision from the European Central Bank](. While the bank is expected to keep interest rates steady, markets will watch President Christine Lagarde for signals that further easing is possible in the autumn following June’s cut. Most analysts predict two more quarter-point rate cuts this year — in September and December. UK wages Meanwhile [slowing wage growth in the UK]( kept the prospects of a rate cut from the Bank of England next month just about alive. Traders are now pricing in a 40% chance of a reduction, having scaled back bets to as low as 25% on Wednesday in the wake of slightly stronger inflation data. OPEC+ latest OPEC+ delegates expect the group’s monitoring session next month to be routine, [making no changes to plans for a supply hike starting in the fourth quarter](. The group led by Saudi Arabia and Russia agreed last month to begin gradually restoring roughly 2.2 million barrels a day of halted crude output from October. When prices immediately slumped, officials stressed that a committee due to gather on Aug. 1 could postpone the hike if necessary. The market has since rebounded, with Brent futures trading back near $85 a barrel. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Brookfield puts 36-year-old [rising star on path to CEO.]( - [Ex-Citadel duo’s hedge fund](Ilex in talks to raise $1.5 billion. - Hong Kongers fleeing to UK leave [$3.8 billion trapped behind](. - [Ukraine restarts bondholder talks]( on $20 billion debt overhaul. - Five key takeaways from [Republican Convention]( as Vance steps up And finally, here's what Joe’s interested in this morning You hear all the time about how there's this huge shortage of housing, and that there's an affordability crisis that seems to get worse every year. And for all the awareness of the problem, you don't come across many big ideas for how to address it. In fact, one of the major DC policy efforts these days -- raising interest rates to fight inflation -- may be making the problem even worse. Not only do higher rates make the cost of a mortgage go up, they also make it more costly to develop housing. So if there's a housing shortage today, higher rates are compounding the problem by making it difficult for developers of apartments to complete expensive, multi-year projects. Well, maybe there's a solution out there. On today's Odd Lots podcast, we speak with Jim Millstein, the Co-Chair of Guggenheim Securities, who previously served in the Treasury Department from 2009-2011 running the restructuring of AIG after the Financial Crisis. Anyway, while at Treasury he also really got to know the GSEs (Fannie and Freddie), which had just been put into government receivership. On the podcast, he lays out a plan which he believes can really move the dial in terms of new, affordable housing production. The basic gist is that one of the major bottlenecks for multi-family developers is the aforementioned financing. There's not much of a market for mezzanine construction debt (debt that sits between the equity investment and the normal loan). The market that does exist is very expensive, with developers paying rates in the double digits. In our conversation, he makes the case that under their existing legal authority, and financial capacity, Fannie and Freddie can create a secondary market for this type of mezzanine debt, and that if they did, hundreds of thousands of additional housing units could come onto the market every year, making a serious dent in our ongoing housing shortfall. Again, what's key here is that Fannie and Freddie, by dint of their special arrangement, can do financing at rates close to what the federal government borrows at. And furthermore, they already exist, meaning this wouldn't require some major legislation. And while they're primarily in the business of making a market for mortgages that banks originate, they have theoretical scope to use this capacity in other realms. It's a fascinating conversation. Find it on [Apple](, [Spotify]( or elsewhere, and read about it here. It's an idea that deserves to get more attention from the types of folks who can make something like this happen. 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](. 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