5 Things You Need to Know to Start Your Day

Good morning. Ken Griffin says the peace dividend is over, Apple risks a hefty tax bill and US fighters fire upon a weapons depot in Syria. [View in browser]( [Bloomberg]( Good morning. Ken Griffin says the peace dividend is over, Apple risks a hefty tax bill and US fighters fire upon a weapons depot in Syria. Here’s what’s moving markets.  —[David Goodman]( Peace dividend gone Citadel founder Ken Griffin said the world is facing unrest and structural changes that are pushing it toward de-globalization and [causing higher baseline inflation that may last “for decades.”]( “The peace dividend is clearly at the end of the road,” Griffin said at the Bloomberg New Economy Forum on Thursday in Singapore, referencing the Russia-Ukraine and Israel-Hamas wars. “We are likely to see higher real rates and we’re likely to see higher nominal rates.” Apple tax setback Apple [risks having to pay a €13 billion ($14 billion) tax bill]( to Ireland after an adviser to the European Union’s top court said the iPhone maker’s victory in an earlier challenge should be thrown out. Advocate General Giovanni Pitruzzella of the EU Court of Justice in an advisory opinion on Thursday said Apple’s win in a lower EU court should be re-examined because it was riddled with legal mistakes. The top EU tribunal is set to issue its binding ruling in the landmark state-aid dispute in the coming months and follows such advice in the majority of cases. US strike US fighters [fired upon a weapons depot](in Syria used by Iran’s Islamic Revolutionary Guard Corps, Defense Secretary Lloyd Austin said, adding that the “self-defense strike” was in retaliation for attacks on American forces in Iraq and Syria. Meanwhile, Israel said about 50,000 Palestinians fled to southern Gaza as the army pushed deeper into Hamas strongholds in the north of the territory. The Israeli military said it’s been enacting limited pauses in the offensive to allow Gazans to escape the north and aid to arrive. Stocks fizzle The rally in [stocks sputtered on Thursday]( as Europe’s Stoxx 600 index slipped 0.3% and US equity futures traded flat. Oil hovered near a three-month low after plunging almost 7% over the previous two sessions. Yields on 10-year Treasuries held below 4.5%. Coming up… It’s another heavy day for central bank speakers. Federal Reserve Chair Jerome Powell and a number of his colleagues are set to make appearances today, while European Central Bank President Christine Lagarde is also due to talk. The US also reports initial jobless claims data this morning. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - More from the [New Economy Forum](, including Hilary Clinton on China. - BOE’s Huw Pill says there’s[no need for more hikes](to tame inflation. - Morgan Stanley’s wealth management arm [draws Fed scrutiny](. - China’s [consumer deflation returns]( as recovery remains fragile. - US veterans got a mortgage break. Now they’re [losing their homes](. - London rental demand falls as tenants [struggle to meet costs.]( - Prince’s[iconic ruffled shirt]( is among items up for online auction. And finally, here's what Joe’s interested in this morning Probably one of the most tired things to say in any discourse is something along the lines of "Blah blah blah... now here comes the hard part." It's constant. The easy part is always in the rear view mirror. The easy money has always been made. Now comes the hard part. You've heard it all before a million times. This has been particularly prevalent in discussions about inflation. After we got from 9% YoY CPI to around 4%, everyone started talking about how that last mile would be "the hard part" So... it's interesting that in a new note out yesterday, Goldman's economists lead by Jan Hatzius declared that "The Hard Part Is Over." As the team sees it, there is more disinflation in store in 2024, the Fed is done hiking rates, and the odds of an imminent recession are only 15%. In the note, the team lays out three reasons why "the last mile of disinflation" will not be particularly hard. The first is that there's more improvement in store simply core goods. If you measure supply chain stress by supplier delivery times, there's been quite a bit of normalization that will show up in prices on a lag. Secondly, there's still a ways to go for rent growth to fall in their view. This is a widely held perspective, given the softness we're seeing in private sector measures of rents across the country. And then finally, the labor market is showing clear signs of softening, or coming into balance, based on a number of metrics, including the rate of job openings, and the deceleration of nominal wages. What's interesting to note here too is that while a lot of the focus is obviously on the Fed and the US, Goldman sees the same story playing out virtually everywhere right now, as normalization occurs across a range of measures in a range of countries. BTW. Something interesting to think about is that right as more and more people are convinced that the Fed hiking cycle is over, and that inflation will not persist, we've got this easing of financial conditions. Rates are coming down. Stocks have been rallying again. And of course, this always raises the conundrum of whether the optimism will perversely reignite the economy and work cross-purposes to the Fed. To that end, I think this note from Neil Dutta of Renaissance Macro Research [on LinkedIn]( was interesting and worth checking out. While it may be true that at the margin, loosening financial conditions are inflationary, there's more to the world than just financial conditions. And the fact of the matter is the unemployment rate has been rising over the last several months from a low of 3.4% in April to 3.9% as of the most recent reading. This isn't necessarily a harbinger of recession. But you also can't just ignore it or not see it as a risk factor. So financial conditions are one thing, but actual macro conditions also matter. In other words, the employment side of the mandate which was seen as "met" in 2022 and the first half of the year is looking a little less certain again over the last few months. And the trajectory there will likely play into the Fed's thinking. Follow Bloomberg's Joe Weisenthal on Twitter [@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. 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](. 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