With US markets apparently entirely bent on a “hold your fire” Federal Reserve meeting at 1400 hours on Wednesday, New York time (later tonight for Sydenham) the timid trade overnight on Wall Street suggests the fragile US investor might have a pause technically priced in, but perhaps not emotionally.

One of the plethora of problems giving punters pause (alliteration aside) will be the fulsomely rising oil prices, and here geopolitical strategists are taking their hats off to least favourite President, Russia’s Vladimir Putin.

I mean, just a glance at the Fed Fund futures which have locked in a 98% chance of rates remaining on hold, per the CME FedWatch website, the broader markets were ‘technically positive’ but those wins would provide little emotional comfort for fans of the bull run, YTD.

Via CME

Ahead of The Fed, the Dow Jones Industrial Average came away with a +0.02% blip into the positive, the Tech Heavy Nasdaq Composite was even less emphatic, up +0.01% and the S&P 500 comparatively roared ahead up +0.07%.

On volatility street, the Russell 2000 traded off 0.69%.

We’ve got West Texas Intermediate (WTI) trading over US$91 and Brent Crude creeping toward US$95. So central a role does petrol pump prices play in the States that there is a strong argument that the Fed may need to resume its hand-to-hand combat with inflation in November, at least.

Futures are pricing in a 29% chance of another 25 basis point hike (0.25%) at the November 1 hoedown.

For now, the Fed taking uncertainty out of the rate discussion is one less distraction for the market as it works to generate some momentum on the heels of last week’s ARM Holdings (ARM) IPO and the Maplebear/Instacart (CART) IPO overnight.

But as I write, two things are happening Stateside which can hamper that.

In New York, the US stock market is in the middle of what Bank of America calls the historically worst seasonal stretch of days of the year.

According to Bank of America analysts, the last 10 days of September, (beginning therefore, September 18), is the single worst 10-day run of the entire year for stocks trading on the S&P 500.

Goldman Sachs meanwhile says that from about now – mid-September-ish, into early-October-ish on Wall Street – the intrepid observer will likely discover a time of change, uncertainty and thoroughly unwholesomely typical volatility. And not just because the season is called Fall.

GS says with Q3 quarter coming to a close, companies are finding themselves under the pump to provide investors with a clear state of play and update now on the full year outlook. GS says lots of those updates come in smelling unlike roses.

Add to this, the strange return to unionised stoppages across the US. A veritable conga line of strike actions are genuinely threatening what’s been a pretty resilient US economy.

Finally, there’s the ever looming shadow – although now looming quite a lot – of a total US government shutdown.
 

Instacart and the promise of new blood

Overnight, Instacart’s (CART) initial public offering (IPO) offered a bright spark of freshness in an otherwise dim, dark and dreary time.

US markets snaffled up the tasty new meat and looks like it wants more.  A fresh new boost to a debut-hungry market this week.

The grocery-delivery business is probably America’s first homemade old-school VC-backed startup to get public since mid-Pandemia and its runaway success will hopefully have whet the appetites of otherwise dormant venture capital and late-stage startup backers.

Maplebear, which trades as Instacart, and now (CART), hit heights as high  as 45% in its trading debut overnight, after its shares opened Tuesday on the tech-heavy at US$42 each.

Technically, it was the year’s fourth-biggest US IPO. Emotionally it was Number 1 with a bullet.

After a rotten run for IPOs, CART could crack the glum ceiling as The Fed’s influence wanes fuelling US investors’ taste for risk returns.

Momentum stood with the San-Francisco-based tech-gig-delivery play for its debut, but CART has offered hope there’s momentum as well for a surprise rebound in initial public offerings this year.

CART said late Monday that it sold 22 million shares in the IPO, raising a total of US$660 million, with two-thirds straight into  the company.

But it was no free ride.

After the offering was priced at US$30, CART opened 40% higher and peaked at $42.95 before losing steam. Shares closed at $33.70, giving the company a first-day pop of 12.3% and a market value of $11.2 billion.

Maplebear/Instacart was a circa US$39bn business back in the pandemic-riddled joy of 2021, when working from home and madly ordering stuff on iPhones was de rigeur. These days CART is worth barely 30% of that – and it’s now advertising, not dining, which has become a large chunk of its bread and butter.

Next up is an automatic marketing tech firm called Klaviyo, which according to CNN is targeting a fully diluted valuation of up to US$9 billion in its IPO after securing the proposed share price range  in a filing on Monday.

The Nasdaq-aiming firm said in the SEC filing that its IPO price will fall between US$27 and $29, a few bucks up from the previous range estimation.
 

Elon Watch

Firstly… enjoy cool sci-fi stuff, courtesy of The Empire: We won’t strike back unless absolutely necessary:

Second outrage off the block, Elon’s angered several people by suggesting to Israeli Prime Minister Benjamin Netanyahu that the Tweeters using the social media app formerly called Twitter, (X), may soon have to pay for the pleasure of X-ing.

In a staged meet and greet on X with Netanyahu, arranged so that Elon could try and ease Israel on X’s allegations of anti-Semitism, the world’s richest eccentric billionaire suggested that a pay to play system was the only way to counter X’s infestation of fake accounts and its proliferation of bots.

“We’re moving to having a small monthly payment for use of the system,” Elon said. “We’re actually going to come up with a lower tier pricing. So we just want it to be just a small amount of money… in my view, this is actually the only defence against vast armies of bots.”

OFC, by hiding behind a paywall, X could be culled of a good chunk of its users, which would likewise cull the spend already anxious advertisers might shell out.

Despite his sleepless nights, Musk has so far not managed to diversify X away from its dependence on advertising, which accounts for the greater majority of X’s revenue.

Meanwhile, US federal prosecutors are having a deep dive into some of personal benefits Tesla may have provided Elon Musk since 2017 – longer than previously known – as part of a criminal investigation examining issues including a proposed house for the chief executive.

The kickass US Attorney’s Office for the Southern District of New York which chased Trump for a minute has sought information about transactions between Tesla and other entities connected to the billionaire, people familiar with the investigation said. Prosecutors have referenced the involvement of a grand jury.

The Wall Street Journal said last month that the JOD is investigating Tesla’s use of company resources on a secret project that was described internally as a house for Elon –  “Project 42” – some weird expansive glass building to be constructed near Tesla’s Austin-area factory and headquarters.

The Securities and Exchange Commission has opened a separate civil investigation into the project.

The new, new info suggests that federal prosecutors have a broader interest in the actions of Musk and Tesla than was previously known and that they are pursuing potential criminal charges.

 

Disney Watch

Walt Disney’s plan to spend $US60bn on expanding its theme parks, cruise lines and resorts over the next decade, almost doubling its investment in a division that provides its primary source of profits.

It wasn’t happily received ahead of the Fed decision. Its stock traded about 3.7% lower.

CEO Bob Iger revealed the new push at an investor summit held at Walt Disney World in Orlando.

According to the WSJ, Disney detailed the massive investment on Tuesday morning in a filing with the Securities and Exchange Commission (SEC).

Priority, Disney says,  will be for generating returns in US and international parks and cruises.

Among the exciting possibilities: “Frozen” at Disneyland Resort, while Wakanda from the “Black Panther” franchise could be “brought to life,” the company said.

Disney has more than 1000 acres of land available for development into park space to accommodate the more than 100 million visitors who come to its theme parks across the globe each year. The company plans to roll out more cruise ships and establish a new home port in Singapore.

The announcement underscores a dramatic, ongoing shift in Disney’s business model, which for years relied primarily on income from its traditional cable television business to subsidise costly and risky bets like the 2019 launch of the Disney+ streaming service.
 

Here’s how Wall Street’s bull running markets look year-to-date:

  • Dow Jones Industrial Average: 4.46%

  • S&P 500: 15.99%

  • Nasdaq Composite: 30.99%

  • Russell 2000: 4.15%

  • Bitcoin (BTC-USD): 61.17%

  • Ether (ETH-USD): 36.66%

The Global Economic Calendar

Wednesday, September 20 – Friday September 22

WEDNESDAY

Japan: Imports/Exports – August
China: Loan Prime Rate – September
Eurozone: New Car Registrations – August
Germany: Producer Price Index – August
UK: Inflation Rate, Producer Price Index – August
US: Weekly MBA Mortgage Applications
US: Weekly EIA Crude Oil Inventories
US: FOMC Rate Decision and Economic Projections

THURSDAY

UK: Bank of England Interest Rate Decision
US: Weekly Initial & Continuing Jobless Claims
US: Philadelphia Fed Index – September
US: Existing Home Sales – August
US: Leading Indicators – August
US: Weekly EIA Natural Gas Inventories

FRIDAY

Japan: Inflation Rate – August
Japan: Jibun Bank Flash Manufacturing and Services PMIs – September
UK: Retail Sales – August
Eurozone: HCOB Flash Manufacturing and Services PMIs – September
UK: S&P Global/CHIPS Flash Manufacturing and Services PMIs – September