Summer discontent is spilling into the fall

UAW President Shawn Fain marches with UAW members through downtown Detroit after a rally in support of United Auto Workers members as they strike the Big Three auto makers on September 15, 2023 in Detroit, Michigan.

Bill Pugliano | Getty Images

This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

What you need to know today

Nasty September
Japan outperformed other major markets in Asia-Pacific on Monday. The benchmark Nikkei 225 index rebounded about 0.9% off the three-week low it closed at Friday after a bruising week of central bank meetings that also knocked 4.2% off the S&P 500. U.S. stocks retreated Friday in a fourth straight day of losses for the three major benchmark indexes. On Monday, the Hang Seng Index was down more than 1% weighed down by the Chinese property sector after Evergrande said over the weekend that it would delay a debt restructuring meeting due Monday.

Will they, won’t they?
The clock is ticking, again. U.S. lawmakers over the weekend were not optimistic on a budget resolution that would keep the government funded for the remainder of the fiscal year. Current spending laws are due to expire on Sept. 30. That means if Congress does not reach an agreement before 12:01 a.m. on Oct. 1, the government will shut down. House Republicans on Thursday sent the chamber into recess, delaying further developments in the negotiations.

$100 an oil barrel next?
Russia imposed an indefinite ban on the export of diesel and gasoline to most countries, a move that risks disrupting fuel supplies ahead of winter and threatens to exacerbate global shortages. The ban, which came into immediate effect and applies to all countries apart from four former Soviet states, does not have an end date. The countries exempt from the ban include Belarus, Kazakhstan, Armenia and Kyrgyzstan, all of which are members of the Moscow-led Eurasian Economic Union.

European triple dilemma
European central banks are now balancing between slowing growth, still too high inflation and the delayed impact of unprecedented rate hikes. Throw in another spanner: rising oil prices. But September marked a change in tone, as some central banks put the brakes on interest rate hikes after nearly two years, while others appeared to be at the brink of peak rates. This has turned market attention to how long rates will be held at current levels, amid strains on economic growth.

[PRO] The oversold and the overbought on the S&P500
Investors on Wall Street are contending with the latest forward guidance from the Federal Reserve, which has helped underpin an overall losing week for major indexes. CNBC screened FactSet data to examine what equities traders are betting on, or fleeing, as macroeconomic uncertainty continues.

The bottom line

Labor strikes have returned with a vengeance in the U.S. in a summer of discontent.

Hollywood writers and producers reached a tentative deal that would end a strike that is nearing 150 days, though there still isn’t any for actors.

Talks between the Writers Guild of America and the Alliance of Motion Picture and Television Producers only resumed last week after months of starts and stops. A major sticking point was language over the use of artificial intelligence.

And it’s not just them.

About $5.2 billion in cargo was stuck off West Coast ports in June at the height of the ”slow and go” pace of the International Longshore and Warehouse Union workforce as a result of unresolved issues in negotiations with port management.

Even U.S. President Joe Biden is looking to check out the fuss in Michigan this week, after the United Auto Workers boss Shawn Fain invited him to join the striking autoworkers.

Biden’s hastily arranged trip is happening only 24 hours before a former — and a prospective — election foe, former President Donald Trump is also scheduled to arrive in the state to show his own solidarity with the autoworkers.

Both are eager to court voters, especially since a new NBC poll found Biden and Trump were basically deadlocked in a hypothetical rematch more than a year before the general election. 

Workers are getting desperate after decades of rising income inequality.

Some 362,000 workers have gone on strike so far in 2023, compared with 36,600 over the same period two years ago, according to data by Johnnie Kallas, a Ph.D. candidate at Cornell University’s School of Industrial and Labor Relations, and the project director of the ILR Labor Action Tracker.

This desperation may start impacting the U.S. economy if the series of labor-management conflicts persist.

Desperation and inequality may well be the unknown wild cards.

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