Goldman Sachs expects Nvidia ’beat and raise,’ lifts price target to $240
BlackRock was late to get into the $3 trillion per year private credit industry. The Wall Street Journal reported that BlackRock is now trying to recover hundreds of millions of dollars after falling victim to what they called a “breathtaking” fraud. Specifically, lenders accused Bankim Brahmbhatt, the owner of little-known telecom-services companies Broadband Telecom and Bridgevoice, of fabricating accounts receivable that were supposed to be used as loan collateral. Lenders filed a lawsuit in August and said Brahmbhatt’s companies owe them more than $500 million. Between a default rate of over 9%, the Tricolor and First Brand bankruptcy liquidations, and now this latest lending fiasco, private credit may stop expanding, since there are an increasing number of these credit fiascos disrupting the industry.
The big news this week was Wednesday’s Federal Open Market Committee (FOMC) meeting, which cut key interest rates 0.25% in a 10 to 2 vote. The Fed announced that it is winding down their three- and half-year campaign to shrink its $6.6 trillion balance sheet on December 1st. A minority of FOMC officials want the Fed to cut key interest rates at its December FOMC meeting, while a majority did not think another cut is necessary. New FOMC member Stephen Miran voted to ease by 0.5%, while FOMC member Jeffrey Schmid voted for no key interest rate cut.
Fed Chairman Jerome Powell said that there were “strongly differing views” on what to do at the next FOMC meeting. Since the Fed is “flying blind” with a lack of pertinent economic data, the FOMC is just being cautious. Treasury yields rose after what was perceived to be a hawkish FOMC stance on additional key interest rate cuts, but I expect market rates to resume declining and force the Fed to cut again at its December FOMC meeting.
The days preceding the Asia-Pacific Economic Cooperation (APEC) conference in South Korea allowed the Trump Administration to announce more trade deals, which helped to remove market uncertainty and stimulate financial markets. President Trump said that he had an “amazing meeting” with President Xi on Thursday. China’s rare earth export restrictions were lifted for 1 year in exchange for the Trump Administration not imposing additional tariffs. China and the U.S. also agreed to meet every year to discuss trade and tariffs. President Trump also agreed to visit President Xi in China next year. So, the net result is that the dialogue between China and the U.S. has apparently improved after not meeting with President Xi for six years.