Today's Scoop:

Hey friends - Make sure to catch up with our Weekly Scoop, and don’t miss our Explained about the rising worker revolution.

Here’s what you need to know today…

1. Most economists think we’ll avoid a recession.

2. Rents are finally coming down in the most expensive cities.

3. Worker strikes keep escalating.

S&P 500: 4,373.63
1Mo: -2% | 1Yr: +19% | 5Yr: +58%

The market moved higher today as investors gained optimism about the economy.

Most economists think we'll be able to avoid a recession. In a recent quarterly survey of economists by The Wall Street Journal, the average probability of recession dropped below 50% for the first time in over a year. Most economists expect strong economic growth through the end of the year and believe that policymakers have finished raising interest rates to make borrowing more expensive.

Rents have finally started to drop in some of America's priciest cities, including New York and Miami. After months of steadily climbing prices, New York's median new lease rent dropped to $4,350 last month, down 1.1% from the record high in July. In Miami, there has been a significant dip in the median rents for luxury apartments and homes, falling far below the recent record highs from pandemic relocations. Vacancies in both cities are also up, suggesting that renter demand is starting to wane.

Worker strikes keep escalating. Negotiations have broken down between Hollywood studios and the 150,000 actors’ union, casting doubt on the industry’s ability to salvage the 2023 television and film release schedules. The Hollywood strikes started in May, with film and television workers seeking not only wage increases but also protections against Artificial Intelligence. In positive news, 75,000 healthcare employees of Kaiser Permanente have reached a tentative deal with the company for better pay and solutions for staffing shortages. It’s been a crucial year for the labor movement.

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• Ford boosts wages for EV workers

• Wendy’s shifts more lettuce farming indoors over climate risks 

• JPMorgan Chase benefits big from higher interest rates [🤓]

• Citigroup shakes up its business model and boosts profit [🤓]

• Dollar General brings back its old CEO to revive sales

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How do bank business models work?

Wall Street bank business models can be opaque and confusing. They mainly earn revenue from lending, managing investments, executing trades, and brokering corporate deals.

The traditional banking business model entails taking deposits, paying some interest to the depositor, and lending that money to someone else at some higher interest rate. Banks profit from the spread between the rate they pay the depositor and what they earn from their loans.

Investment banking isn't actually the investing arm of the bank. Investment banks assist companies with large transactions, earning fees for their advice. In the same way that a real estate broker earns a commission for helping sell your house. Investment banks earn a hefty commission for helping you value and sell your company to other companies or the public (IPO).

The investing arm of the bank is called asset or wealth management. These divisions earn fees to oversee clients’ money, provide advice, and invest on their behalf.

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