🔥 US companies are on fire

What’s going on here?

On Thursday, the European Central Bank (ECB) reduced its key interest rate for the third time this year, surprising pretty much no one.

What does this mean?

A central bank’s work is never done: after wrestling inflation back under control, the ECB is now tangling with a sluggish economy. You’d think with eurozone inflation dipping below the 2% target for the first time in three years, there'd be signs of a more steady economic ship. But it’s not that simple. The ECB's latest rate cut comes in response to generally weaker consumer activity, plus a manufacturing slowdown in Germany and proposed spending cuts in France. To its credit, the ECB’s careful, quarter-percentage-point pacing shows its commitment to maintaining low and stable inflation, without putting pressure on the fragile economic recovery.

Why should I care?

For you personally: The waiting game.

The ECB's gradual interest rate cuts are shrinking borrowing costs, making loans and mortgage rates cheaper across Europe. If you're around the bloc and considering taking out a new loan or refinancing an existing one, now might be a good time to explore your options. But be wary: if economic indicators improve, rates might pop back up sooner than you expect.

The bigger picture: Europe, heal thyself.

Sure, lower interest rates should support economic growth (by making borrowing less costly) and spur investment. But there’s a lot that could still go wrong, like new trade tariffs or rising geopolitical tensions. Either way, Europe’s fragile on a few fronts: for one, high labor costs put it at a competitive disadvantage versus other regions. And sure, rate cuts help. But the ECB’s arguing that the entire bloc needs ambitious reforms to boost its productivity, competitiveness, and resilience.

What’s going on here?

Alternative asset manager Blackstone announced better-than-expected third-quarter earnings on Thursday, thanks to a new record.

What does this mean?

Blackstone now has assets worth $1.1 trillion in its pocket – its fattest stash ever. That’s partly thanks to investors handing over $41 billion in crisp new bills to look after, maybe spurred on by the more rosy market outlook now that US interest rates have started to fall. And this time, more money has meant, uh, fewer problems. See, Blackstone makes bank by charging fees on the assets under its management, so that record high resulted in more revenue and profit last quarter. That meant Blackstone’s third-quarter profit was 27% higher than analysts predicted.

Why should I care?

For markets: Making room for more.

Investors have been buzzing about Blackstone’s recent spending spree, including a $16 billion purchase of Australian data center developer AirTrunk and an $8.4 billion deal with Vista Equity Partners to buy work management platform Smartsheet. The reason for the aggressive expansion is straightforward enough: by being the biggest cheese in the fast-growing universe of alternative investments, Blackstone hopes to keep competitors at bay and profit growing.

For you personally: You’re not so different from the pros.

The investors giving billions to Blackstone last quarter are walking hand in hand with data from investment manager BlackRock (no relation). ’Rock showed investors piled into alternatives – think real estate, private debt, and other long-term, hard-to-trade assets – last quarter. And those alternatives are ’Stone’s whole business, so no wonder it came up smiling. What’s more, it all stacks up with what you’ve been thinking: the recent Modern Investor Pulse showed around 20% of retail investors are considering investing in alternatives right now.