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

Good morning. Bond traders pare their bets on Fed rate cuts, the debate on a soft landing and Apple scraps its electric vehicle. Here’s what [View in browser]( [Bloomberg]( Good morning. Bond traders pare their bets on Fed rate cuts, the debate on a soft landing and Apple scraps its electric vehicle. Here’s what’s moving markets. — [Sam Unsted]( Fed bets converge Bond traders no longer predict the Federal Reserve [will cut interest rates by more than 75 basis points this year](, with the view now finally in line with what the central bank itself has indicated as the likeliest outcome. That closes a gap that has been narrowing since the start of the year between what traders forecast for rate cuts this year and the pushback against those bets by central banks. That’s [unraveling]( what was supposed to be the big bond trade of 2024 — the yield curve returning to a traditional upward slope. Soft landing debate [US equity futures are lower]( heading into Wednesday’s session, led by tech stocks, with traders focused on GDP and inflation data coming later. Meanwhile, the chief executive of Goldman Sachs said that softer consumer spending [calls into question the view that the US economy will see a soft landing](. David Solomon, speaking at a UBS conference, said that while the world is “set up for a soft landing,” he thinks the outlook is a “little bit more uncertain than that.” Speaker flood There’s another slew of Federal Reserve officials speaking today for further views on the rate outlook following that convergence in expectations between markets and the central bank. Raphael Bostic, Susan Collins and John Williams are all up to bat. They’ll follow the comments made by Michelle Bowman yesterday, who stuck to the line that inflation will continue on its downward trajectory with rates where they are now, [but that it is too soon to start cutting](. Apple’s scrapped car Apple shares are slightly lower in premarket trading, in line with some weakness in other tech stocks and with the group said to be set to [scrap its decade-long effort to build an electric car](. Apple is said to have made that disclosure internally this week to the 2,000 employees who had been working on the project. The hope for Apple now is that other big bets it has made on generative AI and mixed-reality headsets [will compensate for abandoning a business]( which could have generated billions in revenue. Separately, Apple [met with the Justice Department last week]( in a bid to avoid an antitrust suit. Coming Up… Along with the continuing slew of economic data, earnings are on the slate today from film and media group Paramount Global, software giant Salesforce, computer maker HP and energy drink firm Monster Beverage. In premarket trading, [online auctions firm EBay is rising]( after an upbeat forecast for growth this year, while [online dating firm Bumble has dropped]( after it said it will cut jobs and will overhaul its app to revive growth. And [Beyond Meat has surged]( after its earnings topped estimates and it said it would realign its plant-based meat alternatives portfolio to focus on profitability. JPMorgan CEO Jamie Dimon said problems in commercial real estate will be contained to “pockets” of the sector as long as the US avoids a recession. Do you agree, or do you consider it a risk for US banks or broader financial system? Fill out Bloomberg's latest MLIV Pulse [survey](. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Michigan primary results on [the Daybreak podcast](. - China taking steps to [shrink quant models]( blamed for turmoil. - [Flawed valuations]( threatening the private credit boom. - The wealth you need to [join the 1%](. - Google’s [“terrible bind”]( after pulling part of AI product Gemini. - Fading [piano dreams]( in China. - The new [hard-charging, no nonsense dealmaker]( at Citigroup. And finally, here's what Joe’s interested in this morning There are some pretty wild charts in the markets these days. Part of me thinks the wildest one is Meta (formerly Facebook) which is up over 5X from its lows in 2022. How often does a true tech megacap grow this fast at this stage of its maturity? Meanwhile the chart of Bitcoin is wild in its own way. Up until a few months ago, it still had that classic look of a bubble that had burst. And the thing is, bubbles can't unburst. That's just physics. And yet, here we are, less than 10% away from all-time highs. Again, this is a very different kind of chart and different kind of asset than the Meta one. For one, Bitcoin is a more clearly speculative asset. And it obviously trades much differently. It doesn't tend to just go up over time, but rather explode higher in short periods of time and then fall and then just explode higher again. And then rinse/repeat. And now it's in an explode higher period. Each one of those spikes looks like a bubble peaking and the type of level that you wouldn't expect to see again for a long time. Anyway, we're in an unburst phase. With Bitcoin (and other cryptos) surging, I've been wondering whether that will have any consumption effect. And... maybe? Actually probably it's just the general rally in risk assets, but for the first time in awhile, it looks like the price of Rolexes has stopped going down. Here's a chart from [WatchCharts.com](. Rolex prices peaked with everything back in early 2022. And then just marched lower all through the last two years. Maybe signs that they're finding a floor. Now not everything comes back to the Fed. But while we're here. Obviously the risk rally makes imminent Fed cuts less likely. And if the risk rally starts to have more of a consumption effect, then that would seem doubly so. Follow Bloomberg's Joe Weisenthal 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. 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