Group 1 - The Moscow Exchange suspended trading on September 13 without providing a reason for the halt [1] - The Central Bank of Russia lowered the key interest rate by 100 basis points to 17.00% on September 12, which was less than expected despite calls for more aggressive easing due to economic slowdown [1] - The Central Bank's decision reflects a cautious approach to monetary policy, with expectations of maintaining tight conditions until inflation returns to target levels by 2026 [2] Group 2 - The Central Bank projects inflation to decrease to 6.0%-7.0% this year, with a target of 4.0% by 2026, indicating a long-term commitment to tight monetary policy [2] - Recent data shows a decline in inflation indicators, with the overall inflation rate dropping from 8.2% in Q1 2025 to 4.8% in Q2 2025 [2] - The labor market is showing signs of easing, with a decrease in the number of companies reporting staff shortages, although wage growth still exceeds productivity [3] Group 3 - Credit expansion is slowing compared to previous years, with consumer loans contracting while mortgage and corporate loans are experiencing moderate growth [3] - The Central Bank acknowledges that inflation risks remain prevalent, but also considers the risk of deflation due to faster-than-expected cooling of credit and demand [3][4] - The Central Bank emphasizes the importance of fiscal policy in its forecasts, indicating potential adjustments to interest rate paths if fiscal policies change [3][4]

Core Insights - A recent survey by Charles Schwab reveals that despite a decrease in the U.S. inflation rate from a peak of 9.1% in 2022, most individuals remain concerned about rising prices affecting their retirement quality [1][3] Group 1: Survey Findings - The survey conducted in Spring 2024 included 1,000 investors with 401(k) accounts and 100 Generation Z participants, showing that 57% of respondents view inflation as the biggest obstacle to enjoying retirement [3] - Confidence in achieving long-term retirement savings goals has declined, with only 34% believing they can meet their targets, down from 43% in 2024 [3] - Many individuals have adjusted their spending habits to secure 401(k) contributions, with 39% reducing shopping frequency and prioritizing cheaper products, while only 11% have cut back on retirement savings due to economic pressures [3] Group 2: Retirement Funding Concerns - The average amount respondents believe is needed for retirement is approximately $1.6 million, a decrease from $1.8 million in 2024, but still within a reasonable range [3] - A report by the Lifetime Income Alliance indicates that 52% of consumers aged 45 to 75 have less confidence in Social Security compared to five years ago, with 58% worried about future benefits being reduced [4] - Predictions from the Committee for a Responsible Federal Budget suggest that a dual-income couple retiring in early 2033 could receive $18,100 less annually in Social Security benefits compared to the average for those retiring in 2025, representing a 24% reduction [4]

Core Insights - The week was marked by significant market activity ahead of the FOMC meeting, with a focus on US inflation and labor market data [3] - The Consumer Price Index (CPI) report for August met expectations, indicating core inflation at +3.1% YoY and overall inflation at +2.9% YoY, remaining below 3% [4][5] - The CPI report supports the likelihood of an interest rate cut by the Federal Reserve in the upcoming meeting [5] Market Performance - Gold prices remained stable above $3600/oz after an initial breakout on Monday, despite various economic catalysts [6] - The CPI report's indication of steady inflation bolstered expectations for a Fed rate cut, influencing market sentiment [6] - A spike in weekly jobless claims, reaching a four-year high, added pressure on the Fed to consider action, impacting market dynamics [6] - Despite favorable conditions, gold did not experience a significant spike, raising questions about whether rate cut expectations are fully priced in [6]

Core Insights - Inflation pressure in Russia remains high, with significant price increases observed in dairy, juice, and candy products, while basic food items like bread and eggs have maintained stable prices [1] Price Increases - Notable price increases from August 16-23 include carrots rising by 11.4% and the well-known "Village House" brand milk increasing by 18.2% [1] - Over the past year, significant price hikes have been recorded for various branded products: J7 orange juice (+36.4%), carrots (+34.5%), "Village House" milk (+23.8%), "Lame Bear" candy (+22.4%), and "Olayna" sunflower oil (+15%) [1] Price Decreases - Some products have seen price declines, including bananas (-25%), "Matthias" herring (-5.3%), "Akba" black tea (-4.9%), and lower-grade chicken (-1.2%) [1] Stable Prices - The prices of the cheapest white bread and C1 category eggs have remained unchanged [1]

Group 1 - The Senate is expected to confirm Steven Myin as a Fed Governor soon, which could influence Fed meetings and decisions [1] - Market sentiment is optimistic about a rate cut next week and potentially two more cuts by the end of the year [2][3] - There is uncertainty regarding inflation and the strength of the economy, with the next rate cut being highly likely [3][4] Group 2 - Recent employment data shows limited job growth, but does not indicate outright job losses, suggesting stability in the job market [5][7] - There is a noted slowdown in disposable income growth, which may lead to moderated consumption growth in the coming months [6][10] - Concerns about inflation and its impact on real disposable income growth could complicate the Fed's actions and credibility regarding their inflation targets [11][12]

Economic Overview - The U.S. economy is showing signs that it may be ready for an interest rate cut at the upcoming Federal Open Market Committee (FOMC) meeting, driven by milder inflation data and a surge in jobless claims [1][4] - The Consumer Price Index (CPI) for August reported a headline increase of +0.4%, which is slightly above expectations, while the inflation rate remains at +2.9%, indicating persistent high retail prices [2][5] - The Producer Price Index (PPI) fell to -0.1% month over month, suggesting that future CPI figures may also remain mild [3] Labor Market Insights - A significant increase in Initial Jobless Claims, particularly due to a one-time event in Texas, has reinforced expectations for a rate cut by the Fed [4] - The Fed has been data-dependent and has previously observed a stable labor market, but recent downward revisions indicate a loss of 911,000 jobs over the past year [5] Market Reactions - Stock market indexes are reaching record highs, with investors optimistic about potential rate cuts, which could stimulate sectors like housing that have been affected by high mortgage rates [6] - The anticipation of rate cuts is creating a positive sentiment in the market, although there are concerns about the sustainability of this optimism [7] Consumer Impact - Despite the potential for rate cuts, there are warnings that prices may not decrease, which could lead to consumers curbing spending or accumulating debt [8][9] - The gradual introduction of tariffs may further impact prices, posing challenges for consumers in the future [8][9]

Friday, September 12, 2025At the risk of under-selling it, this has been an eventful week. With key inflation data milder than many had expected and jobless claims surging week over week, the U.S. economy looks primed for an interest rate cut at next week’s Federal Open Market Committee (FOMC) meeting next week.Inflation on the retail side yesterday, via the Consumer Price Index (CPI) for August, saw only mild tariff pass-throughs to the consumer. Headline CPI came in at +0.4%, 10 basis points (bps) warmer ...

Core Viewpoint - RH, a luxury home furnishings retailer, has revised its full-year revenue growth forecast downward and reported disappointing Q2 results, leading to an 8% decline in stock price during after-hours trading [2][4] Revenue Analysis - RH's revenue increased by 8% year-over-year to $3.3 billion, with Q2 revenue also rising 8% to $899 million; however, over the past three years, revenue has experienced an average decline of 5% [5][6] - The company's performance is closely tied to the housing market, and ongoing high mortgage rates and sluggish home sales could lead to a decline in demand for luxury furniture, potentially causing revenues to stagnate or drop back to $3.0 billion [6][8] Margin Pressure - In the last twelve months, RH generated $324 million in operating income, resulting in a 9.9% operating margin, with a net income of $84 million, reflecting a modest 2.6% net margin [7] - Tariffs, inflation, and rising freight costs are exerting pressure on margins, which could decline from around 10% to mid-single digits, potentially halving earnings [7][8] Valuation Concerns - RH currently trades at $228 per share, with a high valuation of 58x earnings based on FY 2024 EPS of $3.92; if revenues plateau and margins decrease, earnings could drop to about $2.00–$3.00 per share [8][9] - A potential valuation adjustment could see the stock price fall to the $100–$120 range, representing a 50% decrease from current levels [8][9] Future Outlook - The transition to lower valuations and earnings may take two to four years to manifest, with upcoming Q3 results being crucial for investor sentiment [9] - Despite challenges, RH has strengths such as an affluent customer base, brand advantages, and potential growth opportunities in international markets and new categories [10]

Economic Policy and Interest Rates - The central bank of Russia cut its benchmark interest rate by one percentage point to 17% to support the economy amid slowing growth and increased war spending [1] - The bank previously raised its key rate to 21% to combat inflation but is now retreating due to concerns from business leaders and legislators about the negative impact on economic activity [1][2] Inflation and Economic Growth - Inflation in Russia eased somewhat to 8.2% in July and August, but expectations remain elevated, which may hinder a sustainable slowdown in inflation [2] - Year-over-year economic growth slowed to 1.1% in Q2 from 1.4% in Q1 and 4.5% at the end of the previous year, with a negative 0.6% growth compared to the previous quarter [4] Budget Deficit and Spending - The budget deficit increased to 4.9 trillion rubles ($58 billion) in the January-July period, significantly up from 1.1 trillion rubles the previous year, with spending at 129% of the planned amount [5] - Oil and gas revenues fell by 19% compared to the same period last year, partly due to lower global oil prices [5] Economic Resilience - Despite sanctions and the loss of natural gas sales to Europe, the Russian economy has performed better than expected, with record low unemployment and rising household incomes [6] - Recruitment bonuses have injected cash into poorer regions, and oil shipments have remained steady despite price fluctuations [6] Financing the Deficit - The government is financing its deficit by selling ruble bonds to domestic banks, which are eager to purchase them in anticipation of falling interest rates [7]

Market Overview - Trading on Wall Street was mixed as markets approach the end of a record-setting week [1] - S&P 500 futures were flat, Dow Jones Industrial Average futures decreased by 0.2%, and Nasdaq futures increased by 0.1% [1] Federal Reserve Interest Rate Decision - Markets are anticipating a potential interest rate cut by the Federal Reserve next week, which could stimulate the economy [1] - The Federal Reserve has been cautious about cutting interest rates throughout 2025 due to concerns that tariffs imposed by President Donald Trump could worsen inflation [1] - Lower interest rates may lead to increased inflation risks [1]