IN THIS ISSUE:
1. Banking Sector Shows Resilience, Adds to Market Gains
2. Inflation eased to a three-year low
3. The Future of Transportation is Today: Tesla Unveils the Cybercab and Robovan
4. Special from Bridges to Business: Impactathon
For Keyword and Term Definitions, see the end of the newsletter.
Market Update
Banking Sector Shows Resilience, Adds to Market Gains
Although not without slight fluctuations, S&P 500, DJIA, and NASDAQ Composite indexes finished strong. The past few days came with especially bright sentiments on Wall Street about the sustainability of the economy’s growth. In the banking sector, the resilience of which is vital for macroeconomic strength, JPMorgan Chase, the largest American bank, reported quarterly results. Albeit the quarterly profit has taken a hit, primarily due to rising credit-card loan losses, the sector continues to show resilience: lending profits exceeded expectations in the third quarter and consumer spending remains robust, indicating a potential “soft landing*” for the economy. In addition, overall customer spending at Chase—possibly indicative of broader American consumer behavior—continues to be strong, albeit with signs of caution. Much of the profit gains stemmed from investment banking and trading divisions of the bank, supported by warming M&A** environment and continued resilience in both equity and debt capital markets.
Market data: finance.google.com
Economy
Inflation eased to a three-year low
U.S. inflation has eased to a three-year low, with the consumer price index rising 2.4% year-over-year in September, slightly above the 2.3% forecast by economists. While core prices, which exclude food and energy, increased by 3.3%, these figures reflect ongoing challenges as many Americans continue to face high costs for essentials like groceries and housing. Despite the decline in inflation, the core inflation numbers show that, for example, food prices are still on a bumpy road to get lower.
This latest report adds to the mixed economic signals that have led to cautious optimism among Federal Reserve officials. While many on Wall Street anticipate potential interest rate cuts in upcoming meetings, recent labor market data suggests a stronger-than-expected economy, leading to a reevaluation of the pace of those cuts. Additionally, jobless claims rose to their highest level in over a year, reflecting possible repercussions from Hurricane Helene, which underscores the volatility in economic indicators. As the Fed prepares for next meetings, the balance between addressing inflation and fostering economic growth remains a central concern.
Technology
The Future of Transportation is Today: Tesla Unveils the Cybercab and Robovan
Tesla’s unveiling of the Robotaxi, dubbed the “Cybercab,” on October 10th, 2024, is a pivotal moment for both the company and the broader market, making headlines and moving stock prices this week. The futuristic vehicle, without a steering wheel and pedals, highlights Tesla’s bold push towards full autonomy and deeper integration of AI in transportation. This launch signals Tesla’s confidence in achieving unsupervised full self-driving (FSD), a significant leap in technology that could upend the ride-hailing industry. Although competitors like Waymo and GM’s Cruise have already deployed autonomous vehicles, Tesla’s edge comes from its ability to collect extensive data from millions of vehicles and its cost-efficient technology, which could undercut rivals.
This major news comes at a critical time for Tesla, as the company has seen declining market share and stock prices, with Elon Musk emphasizing that autonomy is central to Tesla’s future. Alongside the Cybercab, Tesla introduced the Robovan, expanding its autonomous vehicle lineup. However, regulatory approval will be necessary for full deployment on public roads, with initial trials set for Texas and California. As investors closely monitor these developments, the success of Tesla’s autonomous vehicles could redefine the company’s future and transform the transportation industry.
Special from Bridges to Business
Impactathon: Information Session
On October 17 (Thursday), sign up for the B2B Zoom Info Session to learn how to turn your business ideas into action, while solving problems, making friends, building teams, and pitching solutions. Author, entrepreneur, attorney and much beloved friend to Soka, Neetal Parekh, will be on hand with B2B director Mary Patrick Kavnaugh, and former Impactathoners to give you more details about what to expect at this exciting event, which will be held on November 1-3. Everyone is welcome to participate: build confidence, expand your network, and get a chance to fund your ideas with seed investments. Research Neetal Parekh on LinkedIn or her company website and arrive early on Zoom to ask her any questions.
Keyword and Term Definitions
*Soft landing: A soft landing refers to a gradual and controlled economic slowdown, avoiding recession while allowing for sustainable growth adjustments.
**M&A (Mergers and Acquisitions): the process in which companies join together (merger) or one company buys another (acquisition) to grow or improve their business.
***Equity capital markets (ECM) involve the issuance and trading of equity securities, while debt capital markets (DCM) focus on the issuance and trading of debt securities, such as bonds and loans, to raise capital for companies and governments.
Soka Business Review is created in collaboration between Bridges to Business and Soka Finance Society. Special thanks to Hoa Tran Yamamoto (’26) for contribution of the Technology column.
