Weekly Market Update - 16 October 2023

China Tensions

President Xi Jinping’s first meeting with US congressional leaders in eight years was infused with tension, as the Chinese leader was confronted over his nation’s failure to condemn Hamas’ incursion into Israel. Meantime, executives at one of China’s largest copper trading houses have lost contact with the company’s founder and believe he has been detained by police for questioning, according to people familiar with the matter.

Source: Bloomberg

Bad Loans

The biggest US banks are poised to write off more bad loans than they have since the early days of the pandemic as higher-for-longer interest rates and a potential economic downturn put borrowers in a bind. JPMorgan, Citigroup and Wells Fargo, which report third-quarter results Friday, will join BofA — which reports Tuesday — in posting roughly $5.3 billion in combined third-quarter net charge-offs, the highest for the group since the second quarter of 2020.

Source: Bloomberg

Birkenflop

Sandal-maker (and Barbie icon) Birkenstock sank 13% after a $1.48 billion IPO. That could cool what had been a fledgling rebound in listings. The German company’s debut is the worst first-day showing for a US listing of $1 billion or more in over two years. Out of more than 300 US IPOs of that size in the past century, only 13 have fared worse, the last of those being AppLovin, which closed 18.5% below its IPO price in April 2021.

Source: Bloomberg