Weekend Wall Street #52- Here Come the Student Loan Payments & Inflation! (9/11-9/15)
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Happy Sunday everyone and welcome back to Weekend Wall Street. The market remained essentially flat after the short week, with energy leading the market. The CPI inflation report this week will be the last big data point on inflation we get before the meeting in a bit over a week.
Let’s take a look at what this week has in store!
On Wednesday we have the CPI inflation report which the market is watching after the recent jump in oil prices. Oil is now ticking at a nine month high after Saudi Arabia and Russia extended their supply cuts. Global oil use reached 103m barrels/day in June, and the Saudis have cut pieces essentially telling us they are trying too squeeze the price of oil with this supply constraint. As for the US, it’s possible we use our strategic oil reserve although I’m not sure that will happen right before the peak of election season.
Goldman Sachs’s released a report this week in which they say that they believe that “taming inflation will not require a recession” and giving the possibility of recession at 15%. This is interesting because the marketwide median consensus still lies at 60% from the other firms. Soft business from China is likely weighing down on the US right now and Barclays also came out and said that they see parts of the US economy being hit soon especially with new catalysts as the holes start to take their full effect and student loan payments restart.
According to BTIG, 82% of student loan borrowers must start repaying next month and the three companies that were targeted by BTIG were Starbucks, Chipotle, and ShakeShack. These companies can be a big short for the next few months as people stop eating there in order to pay their loan payment.