Hello from Washington, where Israel’s sudden vulnerability after a devastating attack by Hamas militants is reverberating, including in US politics.The big fail: One riddle is how Israeli intelligence apparently didn’t anticipate the operation — which was cheered by Iran — and why. It turns out that Hamas has a veto over diplomacy between the US, Saudi Arabia and Israel, Bloomberg Opinion’s Andreas Kluth writes.
The big race: Congressional Republicans, who have helped place a de-facto hold on further US aid to Ukraine, may provide some clarity this week with a vote for a new Speaker of the House after far-right dissidents ousted Kevin McCarthy. Former President Donald Trump is backing Representative Jim Jordan, the firebrand lawmaker who has helped champion a “burn-it-all-down approach.” The internal race is supposed to culminate in a vote on Wednesday. Trump was in Iowa over the weekend, strengthening his campaign as he seeks to lock in the 2024 GOP nomination early.
The big boom: From the White House, President Joe Biden has been touting his economic programs as he seeks reelection, including incentives to boost investment in US-based manufacturing. That “Made in USA” revival is spurring a boom for little-known companies that are building the new factories, data centers and warehouses. Take Texas-based Sterling Infrastructure: its market value jumped 506% in the past four years. Once you get stuff onto store shelves, rising theft is a big concern for retailers across the US. Those include Target Corp., but there’s more to the story than crime.
The big fakeout: That’s what the S&P 500 may be headed for. What was supposed to be the greatest stock market comeback ever may end up as an epic fizzle. Almost a year after the S&P bottomed, more than 180 of its stocks are already trading lower than they were 12 months ago. With the Federal Reserve making it clear that interest rates will be higher for longer, some market watchers are flatly advising investors to pull back from US stocks.
The big mismatch: Child care is a constant topic for Americans, specifically how to break the cycle of spiraling costs driven by enormous demand and a lack of supply. The expiration of $24 billion in federal funding for providers is focusing minds even more and has left millions of parents worried about losing access to a service they depend on. Republican presidential candidates are debating the options, showing they’re aware of the topic’s importance. Not that it’s a new debate: Richard Nixon vetoed a bill that would have established a national daycare system under pressure from conservatives.
The big merger: Exxon Mobil’s proposed takeover of independent oil and gas producer Pioneer Natural Resources — its bid to become the dominant US producer of shale oil — would be the world’s biggest deal of the year. That prospect and the political volatility surrounding gasoline prices are enough to prompt what’s likely to be tough antitrust scrutiny in Washington, where Biden has singled out Exxon’s record profits in the past.
The big numbers: Look for a week of bank earnings, including from JPMorgan Chase, Wells Fargo and Citigroup, which usually come with commentary about the economy and global risks. Monthly US consumer price index data drops on Thursday, providing a key data point ahead of the next Fed meeting at the end of the month.
ICYM our Big Take: Remember all those periodic warnings about an overindebted United States? Well, corporate America is ignoring the message and is piling on debt, even after 11 interest-rate increases pumped up borrowing costs. It’s helping keep the job market strong, but will there be a nasty reckoning — and for which sectors of the economy? Bloomberg’s Olivia Raimonde parses the arguments here.