Good morning investors! The Fed meets with some big items on the agenda: An important rate decision and forecast of what’s ahead, combined with a healthy dose of political intrigue uncommon for central bank policymakers.
Today we cover:
Retail sales jump
Gemini hits the sky
Ether gets a new price target
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📊 Economy and News
US Retail Sales Jump 0.6% in August, Beating Forecasts Amid Economic Resilience
U.S. retail sales surged 0.6% in August, exceeding expectations, driven by purchases of goods and dining out, the Commerce Department reported.
This marks the third consecutive month of strong gains, despite higher prices and a softening labor market.
Key sectors like clothing (up 1.0%), online sales (up 2.0%), and restaurants (up 0.7%) saw notable increases, though furniture sales dipped 0.3%. Core retail sales, excluding autos, gasoline, and building materials, rose 0.7%.
Despite the robust data, the Federal Reserve is expected to cut interest rates to support the weakening labor market, with economists cautioning against aggressive cuts due to economic resilience. The Atlanta Fed raised its Q3 GDP growth estimate to 3.4% from 3.1%.
Global hits:
Swiss economy minister signs Mercosur agreement in Brazil.
UK house prices to rise more slowly than expected, helping first-time buyers.
Canada’s annual inflation rises less than expected in August at 1.9%.
NHL players will take the ice at the 2026 Milan Olympic Games after not participating since the 2014 Sochi Games.
Consumers unhappy? U.S. consumers are facing increased financial strain due to inflation and higher interest rates, with the national FICO score dropping slightly by about 2 points, according to a Fair Isaac Corporation (FICO) report.
Gen Z adults are particularly affected, with record-high student loan delinquencies, as over 10% of the 21 million monitored customers fell behind on payments.
Despite some banks reporting stable consumer financial health, the cooling job market and declining credit scores, especially among those scoring between 600 and 749, signal potential risks to future credit health, even as the average FICO score of 715 remains near historic highs.
Also check: US appeals court rejects Trump bid to oust Fed’s Lisa Cook. Elsewhere, Trump administration to consider new auto parts tariffs. Lastly, US housing market to remain stuck in a rut as high rates choke demand, according to a Reuters poll.
Furthermore, Bessent sees trade deal likely with China before November deadline on reciprocal tariffs. It was also revealed that the upcoming framework agreement for TikTok will include new investors and existing investors in ByteDance. Also, Oracle will continue its deal with the platform.
Reminder: The average rate on the 30-year fixed mortgage dropped 12 basis points from Monday to 6.13%.
Eli Lilly to build $5 billion Virginia facility to boost production of targeted cancer drugs, other treatments.
🦆 Bessent thinks Trump’s push to scrap quarterly company reports will be a win for investors; however, according to our poll yesterday, about 70% think that such a move can be bad for the industry.
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Disclaimer: This is a paid advertisement for Pacaso’s Regulation A offering. Please read the offering circular at invest.pacaso.com. Reserving the ticker symbol is not a guarantee that the company will go public. Listing on the Nasdaq is subject to approvals.
📈 Stocks
S&P 500 6,606.76 (-0.13%)
DJIA 45,757.90 (-0.27%)
NASDAQ 22,333.96 (-0.066%)
BRENT CRUDE 68.43 (+1.67%)
* Prices as of Sep 17th, 12:20 AM UTC
Google’s Gemini Surges Past ChatGPT in App Store Rankings as OpenAI Enhances Teen Safety Features
Google’s Gemini app has claimed the top spot among free apps in Apple’s App Store, overtaking OpenAI’s ChatGPT, which sparked the generative AI boom nearly three years ago.
Gemini’s rise is fueled by recent updates, including the viral Nano Banana photo editing tool, which helped attract 13 million new users in just four days, bringing its total to 23 million since launch.
Google reported 500 million images uploaded to the app, with peak traffic prompting temporary usage limits over the weekend. Alphabet’s market cap surpassed $3 trillion, reflecting strong investor confidence in Google’s AI advancements.
Meanwhile, OpenAI is launching a dedicated ChatGPT experience for teens under 18 by month’s end, featuring parental controls to block graphic content and manage usage.
This move follows scrutiny from the Federal Trade Commission, which is probing the safety of AI chatbots for children. OpenAI is also developing technology to better predict user age and will default to the teen-friendly experience when age is uncertain.
Which AI tool do you prefer?
Exciting: YouTube said it has paid out over $100 billion to creators, artists and media companies since 2021. The number of YouTube channels making more than $100,000 from TV screens jumped 45% year over year, the company said.
Microsoft, Nvidia, Google plan multibillion-dollar investments in AI infrastructure in UK.
Alphabet-owned Waymo obtained a permit to start testing its robotaxis at San Francisco International Airport.
Look here: Webtoon shares jump 39% on deal to create digital comics platform for Disney's Marvel and Star Wars. In other news, Netskope lifted its share price range for its upcoming IPO to between $17 and $19, valuing the cybersecurity firm at $7.3 billion at the top end. The new range is up from the $15 to $17 planned pricing the company revealed earlier this month.
🔐 Crypto
Bitcoin $116.933, (+1.2%)
Ether $4,412 (+1.32%)
Solana $238 (+1.70%)
Total market cap $4.05 T (+1.37%)
* Prices as of Sep 17th, 12:20 AM UTC
Ethereum Faces $2,200 Drop Risk, Citigroup Warns
Ethereum, currently trading above $4,400, faces a potential drop to $2,200 by year-end, according to Citigroup’s bearish outlook. The bank cites limited value capture from Layer-2 networks, where only 30% of activity boosts ETH’s valuation, alongside weaker brand recognition compared to Bitcoin. This could increase volatility and drag prices lower.
However, a bullish scenario sees ETH reaching $6,400 if Ethereum ETFs attract more capital, tokenization grows, and stablecoin activity rises. Citigroup’s base case predicts ETH at $4,300 by Q4, influenced by macroeconomic trends like Federal Reserve policies.
Trader Daan Crypto notes that holding above $4,100 is crucial for bullish momentum. A break above $5,000 could trigger a new expansion phase, but ETH remains in a volatile “choppy phase” for now.
💵 Personal Finance
Strategies to Reduce Capital Gains Tax on Home Sales
President Donald Trump is considering eliminating capital gains taxes on home sales to boost the housing market, a move requiring Congressional approval.
Currently, single filers face taxes on profits exceeding $250,000, and married couples on profits over $500,000, with rates of 0%, 15%, or 20% based on income, plus a potential 3.8% surcharge.
Who Pays Capital Gains Taxes
Most home sellers avoid these taxes due to high thresholds, but about 34% of single filers and 10% of married couples may exceed them. Older homeowners with long-held properties are most affected.
How to Lower Your Tax Bill
To reduce capital gains taxes, increase your home’s “cost basis” by including capital improvements like renovations, not routine maintenance.
Keep detailed records of improvements to lower your tax liability when selling.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.