What we’re reading (8/6)
“How Palantir Won Over Washington—And Pushed Its Stock Up 600%” (Wall Street Journal). “The blind run into AI is one of a series of decisions by Palantir that have positioned the company today as a power player in the Trump administration, an integral tool for national security and the most expensive stock in the S&P 500. On Monday, it reported its best-ever earnings with more than $1 billion in revenue in the second quarter, 53% growth in earnings from U.S. government contracts and total booked contracts valued at $2.3 billion.”
“The Militarization Of Silicon Valley” (New York Times). “[W]eapons and defense start-ups are taking off. Andreessen Horowitz, a venture capital firm, said in 2023 that it would invest $500 million in defense technology and other companies that would help America ‘move forward.’ Y Combinator, the start-up incubator known for hatching companies like Airbnb and DoorDash, funded its first defense start-up in August 2024. Venture capital investment in defense-related companies surged 33 percent last year to $31 billion, according to McKinsey.”
“Healthcare Stocks Have Been Beaten Up. The Case For Buying Now.” (Barron’s). “[D]arn, don’t their valuations look attractive. The broader healthcare ETF is trading at just over 16 times expected aggregate earrings for the coming 12 months, 27% lower than the S&P 500’s just over 22 times. That’s a particularly steep discount, about double the average over the past decade.”
“Tokenised Trading Creates Structural Risks” (Financial Times). “A new generation of blockchain-based platforms is offering synthetic access to financial assets under the banner of decentralisation and financial inclusion, including fractional equities, indices, and yield-bearing tokens. Their promise is seductive: instant settlement, global access, and freedom from intermediaries. But behind the sleek interfaces and technical rhetoric lies a structural reality that regulators, institutions, and the public can no longer afford to ignore. These systems do not decentralise power in any meaningful governance sense. They decentralise accountability, dispersing legal obligations across a network of offshore entities, unaudited smart contracts, and user-facing wrappers that obscure the true nature of the risk.”
“Fed's Daly: Fed Will Likely Need To Lower Rates In Coming Months As Job Market Has Slowed” (Yahoo! Finance). “San Francisco Federal Reserve president Mary Daly said Wednesday that the Federal Reserve will likely need to lower rates in the coming months, noting that while tariffs will boost inflation in the near term, the job market has slowed. ‘The labor market has softened. And I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard,’ Daly said in a speech in Alaska. ‘All this means that we will likely need to adjust policy in the coming months.’”
