What we’re reading (6/19)
“The Fed Waits Out The Tariff Economy” (Wall Street Journal). “Federal Reserve Chair Jerome Powell projected confidence when he insisted the central bank was in a good position to handle whatever the economy does next—all while repeatedly acknowledging the Fed has little idea what’s actually coming…’We haven’t been through a situation like this, and I think we have to be humble about our ability to forecast it,’ Powell said. Inflation has eased recently, but tariff effects loom. The job market shows hints of softness, though unemployment remains low at 4.2%.”
“Profits Of Doom: Why Investors Seem To Shrug Off War” (DealBook). “Stocks tumble when geopolitical crises erupt — and then rebound as investors’ appetite for risk returns. This happened in April 2024, when Israel and Iran last traded strikes and set off fears of wider regional conflict. At the time, the S&P 500 fell by as much as 3.1 percent over five trading sessions, according to data from LPL Research, a market analytics firm. Fourteen trading sessions later, the benchmark index fully recovered. The S&P 500 later set record after record. That was no anomaly. LPL Financial analyzed 25 major geopolitical episodes, dating back to Japan’s 1941 attack on Pearl Harbor. ‘Total drawdowns around these events have been fairly limited,’ Jeff Buchbinder, LPL’s chief equity strategist, wrote in a research note on Monday.”
“Fidelity Fund Bets On Midcaps Saying Worst Of Tariffs Is Over” (Bloomberg). “Financial markets have seen the worst of Donald Trump’s tariff threats, helping make midcap stocks an attractive buy as the outlook improves, according to a Fidelity International money manager”
“Profit Pressure: Why COOs And CFOs Are Bracing For A Tough 2025” (Institutional Investor). “Polling…revealed the majority (68%) of CFOs and COOs [of asset managers] believe industry profits will decrease by as much as 20% at the end of 2025 in relation to the year prior. Another 8% believe the decrease will exceed 20%, reflecting possible growing concern among financial and operational leaders about near-term profitability across industries.”
“Is Washington Open To Railroad Mergers? This Regulator Isn’t Saying No.” (Semafor). “For weeks, railroad executives have played footsie in public, touting the benefits of mergers that would turn regional players into coast-to-coast juggernauts. Investors, too, have caught the bug, bidding up shares of smaller carriers most likely to be acquired. But their enthusiasm hinges on one question: Will the industry’s regulator be on board? Try him. Patrick Fuchs, the 37-year-old chairman of obscure and quaintly named Surface Transportation Board, has signalled what colleagues and industry players are interpreting as an openness to consolidation, or at least a clean break from the reflexive antipathy of his predecessor to deals.”
What we’re reading (6/15)
“‘Why Am I Doing This?’ These Investors Are Locking In Stock Gains While They Can.” (Wall Street Journal). “Overall, individual investors are still buying stocks more than they are selling. But a rally-chasing shopping spree cooled significantly in May, and analysts say they have observed signs of investors selling shares to pocket gains. Retail traders bought $23 billion worth of equities in May, according to a JPMorgan Chase report, down roughly $17 billion from the month prior. Last week, individual investors sold a net $400 million worth of individual stocks, the bank’s analysts found.”
“Wall Street Is Making Some Seriously Weird Trades” (CNN Business). “Wall Street traders hunting for profits might find that the most lucrative investments are in the peculiar market for precious metals. Gold, silver and platinum prices have surged this year as investors have piled into precious metals in search of places to hide from trade war uncertainty. President Donald Trump’s chaotic tariff plan has rocked markets, and investors have tried to minimize risk by putting some money in safe haven assets. While gold is historically considered a haven, demand for havens has spilled over into its wonky cousins like silver and platinum.”
“What If Stocks Don’t Go Up In The Long Run?” (A Wealth of Common Sense). “My baseline assumption is that human beings will strive to earn more money and better their station in life. Corporations will innovate and look for ways to increase profits. The economy will grow. Bad things will happen but the long run will see progress.”
“GenAI As An International Lawyer: A Case Study With The Jessup International Law Moot Court” (Damien Charlotin and Niccolò Ridi). “his paper investigates the capacity of Generative Artificial Intelligence, specifically Large Language Models, to craft compelling international legal arguments. We tested the performance of two popular models, Gemini 2.0 and GPT4o, in the Jessup International Law Moot Court Competition, generating ten complete written memorials with minimal human intervention. With the organisers' blessing, these AI-generated memorials were anonymously added to the pool of submissions and evaluated by judges, who remained unaware of their origins, providing a unique benchmark against humanproduced work. Our results demonstrate that LLM-generated memorials consistently achieve average to superior scores, with some submissions receiving exceptional praise and near-perfect ratings. However, a detailed analysis of judges' qualitative feedback reveals persistent shortcomings of LLMs, notably factual inaccuracies, hallucinated citations, and superficial legal analysis.”
“‘It Makes Sense To Be On Hold’: Why Wall Street Strategists Think Fed Rate Cuts Aren’t Coming Anytime Soon” (Finance! Yahoo). “‘The Fed is on hold until we get a little more clarity about not only the magnitude of the tariffs and the breadth of the tariffs, but what effect they all have on inflation and what effect the tariffs and other policies, including the budget bill, will have on growth and employment,’ Mester said.”
What we’re reading (6/13)
“The Frenzied Pursuit Of Wall Street’s Low-Profile All-Stars” (Wall Street Journal). “Billionaire Steve Cohen doesn’t like losing out on superstars. In December, the New York Mets owner made headlines for paying $765 million to sign phenom outfielder Juan Soto, beating out the New York Yankees and the Boston Red Sox. Around the same time, Cohen and his investment firm Point72 were facing off against rival hedge-fund giants to poach a young stock picker who had become one of Wall Street’s hottest free agents.”
“Is Meta Really Spending $15 Billion To Hire A 28-Year-Old?” (Business Insider). “You probably don't know who Alexandr Wang is. But that's going to change: The 28-year-old is about to become known as the guy Mark Zuckerberg spent $15 billion on.”
“Reserving Judgment On The Gold Rally” (Financial Times). “Sure, it’s easy to dismiss the change in rank as a function of so-called ‘maths’. Both gold and the euro started the year with reserve shares not a million miles from one another, and after a 30 per cent rally the shiny metal came out top. However, part of the explanation for gold’s price surge lies at the feet of the central banks themselves. For the third year in a row, they’ve accounted for more than a fifth of total gold demand.”
“The Case For Rate Cuts Is Growing” (Wall Street Journal). “The Fed doesn’t have to act when it meets next week. There is less urgency than last September when rates were a full percentage point higher and rising unemployment carried a whiff of recession. Tariff effects might become more pronounced in coming months. But in their outlook and rhetoric, Fed officials need to acknowledge risks are shifting. And they can also pat themselves on the back, because the economy is actually unfolding much as they expected when they began easing nine months ago.”
“‘Unintended Consequences’ Of Section 899 Could Spark Foreign Investment Retreat” (Institutional Investor). “Speaking just a month ago at the SEC’s International Institute for Securities Market Growth and Development in Washington, Commissioner Hester Peirce addressed both how best to maintain this dominance and why the number of public companies listed on U.S. exchanges continues to fall…But recent government actions are spooking investors and asset managers — posing a potential threat to the robustness of the capital markets. Even as tariffs remain a threat to the economy, Section 899 of the One Big Beautiful Bill Act — passed by the House but not yet the Senate — is adding a whole new headache. Referred to as a ‘revenge tax’ or ‘retaliation tax,’ the proposal is designed to punish certain countries whose tax policies the U.S. government considers unfair.”
What we’re reading (6/11)
“Bonds Rally, Stocks Slip After Inflation Data” (Wall Street Journal). “Bond investors liked the latest read on inflation. Government bonds staged a big rally after the latest monthly report on consumer prices, dragging the yield on 10-year Treasury notes down to 4.413% in recent trading, from 4.472% the prior session.”
“Chime Prices IPO At $27 Per Share, Valuing Fintech Company At $11.6 billion Ahead Of Nasdaq Debut” (CNBC). “The offering comes after a years-long freeze in the fintech IPO pipeline, as rising interest rates and valuation resets kept many late-stage companies on the sidelines. The market has started to loosen. Trading platform eToro jumped 29% in its Nasdaq debut last month, and crypto company Circle popped after hitting the market last week.”
“Oil Prices Tick Up On Worries Of Escalating US-Iran Tension” (Reuters). “Oil prices edged higher on Thursday to their highest in more than two months, after U.S. President Donald Trump said U.S. personnel were being moved out of the Middle East, which raised fear that escalating tensions with Iran could disrupt supply.”
“Google Buyouts Could Point To More Tech Layoffs, As Sector Faces Heavy Job Losses” (Investopedia). “Google extended buyout offers to more employees this week, marking the latest move by Big Tech firms to lower headcounts. It may not be the last, as companies face pressure to reduce spending amid an uncertain economic environment, while also investing in AI infrastructure. Tech has seen an exodus in 2025. The sector has announced nearly 75,000 job cuts in 2025 as of the end of May, according to a report last week from Challenger, Gray & Christmas, up from about 55,000 cuts in the same period in 2024.”
“A Big Shake-Up At Amazon Finally Brings Whole Foods Into The Fold” (Business Insider). “The plan includes a new leadership team and a change that will bring Whole Foods corporate staff under Amazon's employee programs, including performance reviews and pay structure. The changes will happen over the next 12 months, but won't affect Whole Foods frontline warehouse and in-store workers, according to the memo, a copy of which was obtained by Business Insider.”
What we’re reading (6/10)
“World Bank Sees U.S. Growth Rate Halving As Tariffs Slow Global Economy” (Wall Street Journal). “Economic growth in the U.S. might halve this year as a result of President Trump’s tariff policies, while the global economy is set to suffer a more modest, but still significant, slowdown, the World Bank said Tuesday. The Washington, D.C.-based development bank said it expects the world’s largest economy to grow by just 1.4% in 2025, a sharp deceleration from the 2.8% expansion recorded in 2024. In its January report on the outlook for the global economy, the World Bank forecast a 2.3% increase in U.S. gross domestic product.”
“o3 pro” (Marginal Revolution). “It is very, very good. Hallucinates far less than other models. Can solve economics problems that o3 cannot. It can be slow, but that is what we have Twitter scrolling for, right? While we are waiting for o3 pro to answer a query we can read about…o3 pro.”
“Moody’s Flags Risks From Retail Investors’ Push Into Private Credit” (Reuters). “The rapid growth in retail investors, who put their money into private markets, could create liquidity and asset quality risks, Moody's Ratings warned on Tuesday, highlighting potential vulnerabilities within the private credit sector. The rush to court ‘Main Street’ investors is transforming the traditionally institutional world of private credit, with asset managers launching new funds tailored to retail demand.”
“Traders Boost Bets On Just One 2025 Fed Cut Ahead Of CPI Data” (Yahoo! Finance). “Traders are increasingly betting that the Federal Reserve will cut interest rates only once this year amid signs of resilient growth and sticky inflation. Wednesday brings US consumer-price data for May, which is forecast to show a pickup that may reinforce the Fed’s wait-and-see stance toward further easing as it assesses the impact of tariffs. The central bank is widely projected to hold rates steady next week, and futures and options tracking expectations for its policy path show traders are moving to unwind the rate-cut premium built into the months ahead.”
“How Far Should Apple Go To Catch Up On A.I.?” (DealBook). “Should Apple open up its wallet? Apple’s annual developers conference has usually been a must-watch event for what it revealed about the iPhone giant’s plans. But this year’s event has been more notable for what it didn’t focus on: advancements in artificial intelligence tools. For skeptics, it only underscores Apple’s weakness in the fast-growing technology, and raises the question of whether the company needs to follow rivals like Meta and make a splashy purchase to keep up.”
What we’re reading (6/9)
“A Bond Market Meltdown Might Be Inevitable” (The Hill). “Over the past five years, both the budget and trade deficits have deteriorated sharply. Budget deficits have exceeded 5 percent of GDP since 2020 and projections indicate deficits will remain elevated, raising concerns about fiscal sustainability. Critically, government borrowing costs have risen sharply since 2022. Historian Niall Ferguson has suggested that America’s superpower status may be threatened as the U.S. government now spends more on interest payments than on defense. “
“The Canned-Food Aisle Is Getting Squeezed By Rising Steel Tariffs” (Wall Street Journal). “The Trump administration’s new 50% duty on imported steel could increase store prices for items in steel cans by 9% to 15%, according to the Consumer Brands Association, a trade group whose members include Campbell’s, Hormel Foods and Del Monte Foods. At that rate, the price of a can of vegetables costing $2 could increase by 18 cents to 30 cents. ‘The American consumer is going to pay more for their cans,’ said Dan Dietrich, vice president for strategy at Trivium Packaging.”
“We’re Secretly Winning The War On Cancer” (Vox). “The age-adjusted death rate in the US for cancer has declined by about a third since 1991, meaning people of a given age have about a third lower risk of dying from cancer than people ofthe same age more than three decades ago. That adds up to over 4 million fewer cancer deaths over thattime period. Thanks to breakthroughs in treatments like autologous stem-cell harvesting and CAR-T therapy…cancer isn’t the death sentence it once was.”
“The Illusion Of Thinking: Understanding The Strengths And Limitations Of Reasoning Models Via The Lens Of Problem Complexity” (Apple Machine Learning Research). “By comparing LRMs with their standard LLM counterparts under equivalent inference compute, we identify three performance regimes: (1) low- complexity tasks where standard models surprisingly outperform LRMs, (2) medium-complexity tasks where additional thinking in LRMs demonstrates advantage, and (3) high-complexity tasks where both models experience complete collapse. We found that LRMs have limitations in exact computation: they fail to use explicit algorithms and reason inconsistently across puzzles. We also investigate the reasoning traces in more depth, studying the patterns of explored solutions and analyzing the models’ computational behavior, shedding light on their strengths, limitations, and ultimately raising crucial questions about their true reasoning capabilities.”
“Why Apple’s Stock Suddenly Dropped A Few Minutes Into Its WWDC Keynote” (Business Insider). “About six minutes into the presentation, Apple's stock abruptly fell more than 2.5%, from roughly $206 to below $201. That's the equivalent of about $75 billion in market value. Just seconds earlier, Apple software chief Craig Federighi was on stage recapping the Apple Intelligence features the company had already rolled out in recent months, such as Genmoji, smart replies, photo cleanup tools. Then he pivoted to Siri. That's when things got awkward.”
What we’re reading (6/8)
“A Fresh Inflation Reading Greets A Stock Market Back Near All-Time Highs: What To Know This Week” (Yahoo! Finance). “Updates on consumer and wholesale inflation for the month of May will headline the week ahead. The first reading of the University of Michigan's consumer sentiment survey for the month is also due for release at the end of the week.”
“The Missing Engineers” (Bloomberg). “Swedish battery startup Northvolt AB’s bankruptcy filing was preceded by a number of debilitating events: failing to fulfill its contracts with customers; pleas to investors for more cash; ghosting its creditors. But its downfall began with a problem many companies are facing today. There was a severe, years-long struggle to find enough workers with the right skills…A shortage of skilled workers, especially engineers, is a growing problem in developed countries.”
“The Future Of AI Will Be Governed By Protocols No One Has Agreed On Yet” (Business Insider). “With the boom in personal computing came USB, a standard for transferring data between devices. With the rise of the internet came IP addresses, numerical labels that identify every device online. With the advent of email came SMTP, a framework for routing email across the internet. These are protocols — the invisible scaffolding of the digital realm — and with every technological shift, new ones emerge to govern how things communicate, interact, and operate. As the world enters an era shaped by AI, it will need to draw up new ones. But AI goes beyond the usual parameters of screens and code. It forces developers to rethink fundamental questions about how technological systems interact across the virtual and physical worlds.”
“How To Invest When Everything Yields The Same” (Wall Street Journal). “Here’s an investment puzzle: Treasurys, stocks, cash and corporate bonds all yield about the same. Either risky assets are less rewarding than usual or safe assets are less safe than usual. Or, perhaps, both.”
“Junk Bond Sales Surge As Companies Try To Beat Fresh Tariff Uncertainty” (Financial Times). “US companies with risky credit ratings are rushing to sell junk bonds ahead of an expected resurgence of trade tensions in July that could depress demand for corporate debt. Companies with weaker credit ratings tapped the high-yield bond market for $32bn in May, the most since October, according to data from JPMorgan. Junk bond sales in the first week of June already have surpassed April’s $8.6bn total. Bankers and investors say they expect a steady flow of new debt sales during the rest of the month and into July while demand remains high and market uncertainty stays relatively low.”
What we’re reading (6/7)
“The U.S. Economy Is Headed Toward An Uncomfortable Summer” (Wall Street Journal). “The U.S. economy, which weathered false recession alarms in 2023 and 2024, is entering another uncomfortable summer. Job growth held steady in May, with the economy adding 139,000 jobs. The unemployment rate has stayed in a tight range, between 4% and 4.2%, over the past year. But there are cracks beneath the surface. Businesses are warning that constantly shifting trade policies are interfering with their ability to plan for the future, leading to hiring and investment freezes.”
“What Today’s New College Graduates Are Up Against” (Vox). “Numbers from the first quarter of 2025 from the New York Federal Reserve show that the unemployment rate for recent college graduates reached 5.8 percent, up from 4.8 percent in January. Companies have also pulled back on hiring. Last fall, employers expected to increase college-graduate hiring by 7.3 percent, according to a survey led by the National Association of Colleges and Employers. Now they’re projecting just a 0.6 percent increase, with about 11 percent of companies planning to hire fewer new grads than before.”
“Trump Presses Fed Chief Powell To Cut Interest Rate By Full Point Despite Strong Jobs Report” (CNBC). “President Donald Trump urged Federal Reserve Chairman Jerome Powell to slash interest rates by a full percentage point despite a better-than-expected jobs report Friday. Trump, who regularly badgers Powell to lower rates, argued for the steep cut even as he maintained that the U.S. economy is ‘doing great.’ ‘Go for a full point, Rocket Fuel!’ Trump wrote in a Truth Social post.”
“The Rich Compensation For Being The C.E.O.” (New York Times). “‘Compensation actually paid’ is one of two major ways of accounting for chief executive pay required under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It emphasizes the annual changes in the value of an executive’s current and potential stock holdings and reveals the staggering gains of executives, often company founders, who have been granted substantial stakes in their enterprises.”
“Britain Prepares To Go All-In On Nuclear Power — After Years Of Dither” (Politico). “The government is expected to unveil, after months of delay, the winner of a multi-billion pound contract to build next-generation small modular reactors (SMRs), known as ‘mini nukes.’ A long-awaited financial decision on the mega nuclear plant Sizewell C in Suffolk is on its way. Meanwhile, U.K. officials are discussing buying up nuclear sites from private ownership to bring the industry under greater state control.”
What we’re reading (6/5)
“Economists Raise Questions About Quality Of U.S. Inflation Data” (Wall Street Journal). “Some economists are beginning to question the accuracy of recent U.S. inflation data after the federal government said staffing shortages hampered its ability to conduct a massive monthly survey. The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices. In last month’s inflation report, which examined prices in April, government statisticians had to use a less precise method for guessing price changes more extensively than they did in the past.”
“Citadel Securities’ Esposito Says US Deficit Is A ‘Ticking Time Bomb’” (Reuters). “The U.S. government's growing debt pile is a ‘ticking time bomb’ and how the Trump administration reacts to this crisis is going to be "super important", Citadel Securities President Jim Esposito said on Thursday. Several other leaders of the financial services industry have issued similar warnings about the current U.S. deficit in recent weeks. Earlier in June, JPMorgan Chase CEO Jamie Dimon said the U.S. national debt is a ‘big deal’ that could create a "tough time" for the bond market that causes spreads to widen.”
“Lululemon Shares Tumble 23% As It Cuts Full-Year Earnings Guidance, Citing ‘Dynamic Macroenvironment’” (CNBC). “Lululemon’s report comes after a string of retailers reduced or withdrew their guidance and said they would hike prices because of uncertainty surrounding President Donald Trump’s tariff regime. Retailers including Abercrombie & Fitch and Macy’s slashed their profit outlooks, while others, including American Eagle Outfitters pulled their full-year guidance altogether.”
“Circle Stock Soars Over 160% After IPO As Stablecoin Giant Makes Market Debut” (Yahoo! Finance). “Circle stock (CRCL) exploded higher in its first day of trading on Thursday, rising as much as 200% at session highs after the stablecoin issuer made its long-anticipated public market debut. At market close, shares settled at $83.23, up 168% from their IPO price of $31.”
“Can AI Master Econometrics? Evidence From Econometrics AI Agent On Expert-Level Tasks” (Qiang Chen, et al.). “Can AI effectively perform complex econometric analysis traditionally requiring human expertise? This paper evaluates an agentic AI's capability to master econometrics, focusing on empirical analysis performance. We develop an ``Econometrics AI Agent'' built on the open-source MetaGPT framework. This agent exhibits outstanding performance in: (1) planning econometric tasks strategically, (2) generating and executing code, (3) employing error-based reflection for improved robustness, and (4) allowing iterative refinement through multi-round conversations. We construct two datasets from academic coursework materials and published research papers to evaluate performance against real-world challenges. Comparative testing shows our domain-specialized agent significantly outperforms both benchmark large language models (LLMs) and general-purpose AI agents.”
What we’re reading (6/3)
“Dollar’s Correlation With Treasury Yields Breaks Down” (Financial Times). “The close relationship between US government bond yields and the dollar has broken down as investors cool on American assets in response to President Donald Trump’s volatile policymaking. Government borrowing costs and the value of the currency have tended to move in step with each other in recent years, with higher yields typically signalling a strong economy and attracting inflows of foreign capital. But since Trump’s ‘liberation day’ tariffs were announced in early April, the 10-year yield has risen from 4.16 per cent to 4.42 per cent, while the dollar has dropped 4.7 per cent against a basket of currencies. This month, the correlation between the two has fallen to its lowest level in nearly three years.”
“Wall Street Is Sounding The Alarm On U.S. Debt. This Time, It’s Worth Listening.” (Wall Street Journal). “Sounding the alarm about a debt crisis has been great for companies shilling gold coins and fishy financial products but has made smart, sincere people look silly when nothing happened—financial markets’ equivalent of Y2K. So why are several suddenly worried? Because the math is getting daunting with interest on the debt blowing past $1 trillion annually and Washington acting recklessly. Even people who have issued past warnings deserve a second (or third, or fourth) hearing.”
“A.I. Killed The Math Brain” (New York Times). “Computer science has consistently been one of the top majors in the United States for the last decade. But with the ability to task A.I. to code, startups and tech giants alike are hiring fewer and fewer entry-level computer scientists. Reports suggest that at major A.I. companies, the hiring rate for software engineering jobs has fallen over the course of 2024 from a high of about 3,000 per month to near zero. If enrollments in computer science degrees dry up as jobs disappear, the whole pipeline from education to employment could crash. It’s not so surprising that chatbots might threaten technical jobs before writing ones. They are very good at predicting the answers to a lot of standard questions on exams and problem sets. And a lot of quantitative work is done using that very simple kind of code.”
“More Laws, More Growth? Evidence From US States” (Ash, et al., Journal of Political Economy). “This paper analyzes the conditions under which more legislation contributes to economic growth. In the context of US states, we apply natural language processing tools to measure legislative flows for the years 1965–2012. We implement a novel shift-share design for text data, where the instrument for legislation is leave-one-out legal topic flows interacted with pretreatment legal topic shares. We find that at the margin, higher legislative output causes more economic growth. Consistent with more complete laws reducing ex post holdup, we find that the effect is driven by the use of contingent clauses, is largest in sectors with high relationship-specific investments, and is increasing with local economic uncertainty.”
“Fed Loosens The Shackles On Wells Fargo Nearly A Decade After Fake Accounts Scandal” (Yahoo! Finance). “The Federal Reserve is loosening a major restriction on Wells Fargo (WFC) that was put in place following a fake accounts scandal nearly a decade ago, and the fourth-largest US bank will no longer have to operate under a $1.95 trillion asset cap.”
What we’re reading (6/2)
“Companies Rely On Delaware Courts. Lawyers Reap Huge Fees There.” (DealBook). “Delaware’s decades-long pitch to corporate America is simple: It offers predictable judges, light-touch politics and fast decisions. But a new study making the rounds in boardrooms — and loudly promoted by the prominent venture capitalist Bill Gurley — finds reasons for Corporate America to reconsider its reliance on courts in the First State…[t]he study, by the well-known Stanford law professor Joseph Grundfest tallied every shareholder case since 2000 in which lawyers won fee “multipliers” of 7 times (“septuples”) or 10 times (“decuples”) their normal hourly rate from big corporations. Here’s what it found: Delaware produced 21 septuples and 14 decuples, almost matching the entire federal system on septuples and nearly triple on decuples.”
“How Moderna Went From Pandemic Hero To Vaccine Victim” (Wall Street Journal). “In the latest setback for Moderna, the Food and Drug Administration on Friday approved its next-generation Covid shot for a narrower population of patients than the company intended. The approval grants use of the vaccine only in older adults and people aged 12 to 64 with health risks.”
“L.A. Sound Stages: The New Dead Mall?” (The Ankler). “One well-known director recently told me that the last time they worked on the 15-stage Fox lot, their production was the only one active that day. And FilmLA’s recent sound stage report was bleak: Average stage occupancy plunged to 63 percent in 2024, down six points even from a strike-ridden 2023. Compare that to 2016, when stages hummed along at 96 percent occupancy level, or the we-all-agree-it-was-a-bubble Peak TV year of 2022 when levels bounced back up to 90 percent during the post-pandemic recovery.”
“This Startup Is Offering Mortgages For 401(k)s” (Semafor). “Al-Asaad’s solution is that favorite of financial tools: leverage. His startup, Basic Capital, will lend customers $4 for every $1 they contribute to their retirement accounts. Instead of investing mostly in stocks, Basic’s retirement accounts mostly hold loans, whose interest payments can ideally cover customers’ own borrowing costs. It is, essentially, a mortgage on your 401(k).”
“For Some Recent Graduates, The A.I. Job Apocalypse May Already Be Here” (New York Times). “This month, millions of young people will graduate from college and look for work in industries that have little use for their skills, view them as expensive and expendable, and are rapidly phasing out their jobs in favor of artificial intelligence. That is the troubling conclusion of my conversations over the past several months with economists, corporate executives and young job-seekers, many of whom pointed to an emerging crisis for entry-level workers that appears to be fueled, at least in part, by rapid advances in A.I. capabilities.”
May performance review
Prime Portfolio: +0.46%
Select Portfolio: +5.67%
SPY ETF: +5.18%
Bogleheads: +4.09%
June picks available now
The new Prime and Select picks for June are available starting now, based on a model run put through today (May 31). As a note, I will be measuring the performance on these picks from the first trading day of the month, Monday, June 2, 2025 (at the mid-spread open price) through the last trading day of the month, Monday, June 30, 2025 (at the mid-spread closing price).
What we’re reading (5/30)
“Trump Says Steel, Aluminum Tariffs Will Double To 50%” (Wall Street Journal). “President Trump said he would double tariffs on imported steel, a move he said would bolster the domestic industry and protect U.S. jobs. Trump announced the higher duties at a rally near Pittsburgh promoting a $14 billion deal between Tokyo-based Nippon Steel and U.S. Steel, which the president said would ensure U.S. control over the storied steelmaker.”
“Why Is Medtronic Spinning Off Its Diabetes Business?” (Dealbreaker). “Medtronic’s decision to spin out its diabetes division into a separate entity marks a major shift — one that allows the medical device giant to shed a lower-margin, consumer-facing business, while also giving the diabetes business an opportunity to refine its focus in a competitive market. Last week, Medtronic announced the intent to separate its diabetes business into a new standalone company. The new company, which remains unnamed, is expected to launch within 18 months.”
“Ninety Years Ago” (Scott Sumner). “In late July 1933, President Roosevelt enacted one of the most destructive economic policies in all of American history. The President’s Re-employment Agreement mandated an immediate 20% rise in hourly nominal wages. The stock market crashed. This action aborted a promising economic recovery that had raised industrial production by 57% between March and July 1933. By May of 1935, industrial production was actually lower than on the day the wage policy was enacted. Almost exactly 90 years ago, on May 27, 1935, the Supreme Court saved FDR from his folly. The entire NIRA was ruled unconstitutional, including its wage-fixing provisions. Industrial production almost immediately began rising rapidly, and FDR won a historic landslide victory in the November 1936 election.”
“UnitedHealth’s Collapse Reveals The Flaw At The Heart Of Medicare Advantage” (CNBC). “The company faces three federal investigations, looking at allegations of civil and criminal fraud and antitrust violations. The Wall Street Journal reported in February, for instance, that the DOJ is investigating whether UnitedHealth made its clinician employees record questionable diagnoses that make Medicare Advantage patients appear sicker than they are. This practice, known as ‘upcoding,’ triggered extra federal payments. (UnitedHealth told the Journal it stands ‘by the integrity of our Medicare Advantage program.’)”
“Summer Rentals In The Hamptons Are Down 30%” (CNBC). “Summer rentals in the Hamptons are down 30% from the same period in previous years, according to Judi Desiderio of William Raveis Real Estate. Brokers who focus on ultra-high-end rentals are seeing an even bigger drop and say their rental business is down between 50% and 75%. Some renters may be holding out for better deals or waiting to book, but brokers privately say there are other factors at play.”
What we’re reading (5/27)
“Stock Market Today: Dow, S&P 500, Nasdaq Soar As Trump Pauses EU Tariff Hikes For Fast-Tracked Talks” (Yahoo! Finance). “US stocks surged on Tuesday, buoyed by improved prospects for a US-EU trade agreement after President Trump delayed the implementation of 50% tariffs on imports from the European Union.”
“Consumer Confidence For May Was Much Stronger Than Expected On Optimism For Trade Deals” (CNBC). “Consumer optimism got a much-needed boost in May on hopes for trade peace between the U.S. and China, according to a survey Tuesday. The Conference Board’s Consumer Confidence Index leaped to 98.0, a 12.3-point increase from April and much better than the Dow Jones consensus estimate for 86.0.”
“Nvidia To Report Q1 Earnings As Middle East Deals, Export Control Reprieve Boost Stock” (Yahoo! Finance). “Nvidia (NVDA) will report its fiscal first quarter results after the bell on Wednesday in the most-anticipated earnings announcement of the season. Nvidia stock has fluctuated wildly since the start of the year as the company has dealt with setbacks ranging from the Trump administration's ban on shipments of its H20 chips bound for China to concerns related to expected semiconductor tariffs.”
“Rural Internet Is Still So Bad, Some States Are Turning To Outer Space” (Wall Street Journal). “From Maine to Nevada, states are starting to help some of the 24 million Americans who lack reliable broadband pay for satellite internet, rather than focusing such aid primarily on fiber connectivity as they have in the past. Fiber-optic cables provide the most reliable internet service and the most durable infrastructure, but are costly to install. For remote addresses, the cost of laying fiber to a single home can potentially top six figures.”
“The Rise And Fall Of Plastic Perks” (Business Insider). “[I]f our next downturn follows more historic patterns, credit card reward users may find themselves in a more tenuous spot. In the face of increased economic uncertainty, some airline rewards are already jacking up annual fees and limiting where perks can be used. In the event things really go south, the benefits will likely become less generous — the consumers who signed up to get blockbuster points deals might find card companies changing their perks. For the subset of consumers who use these rewards to bolster a lifestyle they might not otherwise be able to swing, that could be a real shock.”
What we’re reading (5/26)
“Investors Pile Into ETFs At Record Pace Despite Market Turmoil” (Wall Street Journal). “Investors have plowed a record $437 billion into U.S. ETFs so far this year, unfazed by the wildest markets since Covid. And if inflows maintain the current pace—historically, they accelerate in the summer and fall months—it will mark the second straight record year for U.S. ETF flows.”
“The Myth Of The Single Market” (Silicon Continent). “The IMF puts the hidden cost of trading goods inside the EU at the equivalent of a 45% tariff. For services the figure climbs to 110%, higher than Trump’s “Liberation day” tariffs on Chinese imports—measures many saw as a near-embargo.”
“At Amazon, Some Coders Say Their Jobs Have Begun To Resemble Warehouse Work” (New York Times). “Since at least the industrial revolution, workers have worried that machines would replace them. But when technology transformed auto-making, meatpacking and even secretarial work, the response typically wasn’t to slash jobs and reduce the number of workers. It was to “degrade” the jobs, breaking them into simpler tasks to be performed over and over at a rapid clip. Small shops of skilled mechanics gave way to hundreds of workers spread across an assembly line. The personal secretary gave way to pools of typists and data-entry clerks. The workers “complained of speed-up, work intensification, and work degradation,” as the labor historian Jason Resnikoff described it. Something similar appears to be happening with artificial intelligence in one of the fields where it has been most widely adopted: coding.”
“These Are The College Majors With The Lowest Unemployment Rates — And Philosophy Ranks Higher Than Computer Science” (Entrepreneur). “According to the Federal Reserve Bank of New York, the college majors with the lowest unemployment rates for the calendar year 2023 were nutrition sciences, construction services, and animal/plant sciences. Each of these majors had unemployment rates of 1% or lower among college graduates ages 22 to 27. Art history had an unemployment rate of 3% and philosophy of 3.2%…Meanwhile, college majors in computer science, chemistry, and physics had much higher unemployment rates of 6% or higher post-graduation. Computer science and computer engineering students had unemployment rates of 6.1% and 7.5%, respectively[.]”
“Fed To take In Stride Another Month Of Tame Inflation” (Bloomberg). “The Federal Reserve may take comfort that tariffs have yet to materially boost official inflation readings, but policymakers will continue to suggest interest rates are on hold until they better understand the coming impact of US trade policy.”
June picks available soon
I’ll be publishing the Prime and Select picks for the month of May before Monday, June 2 (the first trading day of the month). As always, SPC’s performance measurement for the month of May, as well as SPC’s cumulative performance, will assume the sale of the May picks at the closing price (at the mid-point of the closing bid and ask prices) on the last trading day of the month (Friday, May 30). Performance tracking for the month of June will assume the June picks are bought at the open price (at the mid-point of the opening bid and ask prices) on the first trading day of the month (Monday, June 2).
What we’re reading (5/25)
“Junkiest Junk Is Offering A Warning Sign For Debt” (Bloomberg). “For much of the year, money managers have embraced optimism and snatched up corporate bonds, sending valuations to ever more expensive levels. Now, Wall Street titans are saying it’s time to focus on how bad things can get.”
“Fed To Take In Stride Another Month Of Tame Inflation” (Bloomberg). “The Federal Reserve may take comfort that tariffs have yet to materially boost official inflation readings, but policymakers will continue to suggest interest rates are on hold until they better understand the coming impact of US trade policy.”
“The Fed Economist Accused Of Espionage For Beijing” (Wall Street Journal). “John Rogers was visiting Shanghai in May 2013, attending a business forum as a Federal Reserve economist, when he first received an email from an alleged Chinese intelligence agent. The man described himself as a Chinese graduate student who was interested in learning about the Fed. Rogers says he refused the man’s offer to pay him. But they stayed in touch, and later, the man invited Rogers to visit China again, all expenses paid. This time, Rogers made the trip, setting off a chain of events that led to espionage charges against him in the U.S.—and exposed new details about China’s alleged efforts to recruit informants inside U.S. government institutions.”
“Crypto Investor Charged With Kidnapping And Torturing Man For Weeks” (New York Times). “A 37-year-old cryptocurrency investor was charged on Saturday with kidnapping a man and beating, shocking and torturing him for weeks inside a luxury townhouse in downtown Manhattan, all in a scheme to get the man’s Bitcoin password, the authorities said.”
“The Prince, His Money Manager And The Corruption Scandal Rocking Monaco” (Wall street Journal). “Tucked one street behind Monte Carlo’s historic harbor, which is famously dotted with champagne bars and anchored by the storied casino that was the backdrop to multiple James Bond films, the Monaco police station may be the most unglamorous building in one of the world’s most glamorous settings…But over two days this February, in the police captain’s office with a window facing up the rocky slope toward the palace, a dapper 68-year-old suspect in a corruption scandal rattled one of Europe’s most storied royal families and shook the foundations of a tiny country built on polished appearances, ironclad confidentiality and tightly choreographed power.”
What we’re reading (5/23)
“Stock Market Today: Dow, S&P 500, Nasdaq Fall As Trump Tariff Threats Roar Back, US Deficit Anxiety Deepens” (Yahoo! Finance). “US stocks fell on Friday to register weekly losses as investors assessed President Trump's latest tariff threats and the potential impact of his massive tax bill on the deficit and the economy. The Dow Jones Industrial Average sank 0.6%. The S&P 500 also fell roughly 0.7%. The tech-heavy Nasdaq Composite backed off about 1%.”
“StubHub’s CEO Isn’t Delusional. That’s Why He Hasn’t IPO’d Yet.” (Wall Street Journal). “After spending more than three years trying to take StubHub public, Baker has to regroup. In addition to plotting how to time the listing amid tariff turmoil, he must also contend with a new executive order from the Trump administration that attempts to limit ticket scalping and fees. StubHub’s core business involves collecting fees on tickets to concerts, sports and other events resold at a markup. Baker’s plan for growth would put his company in a head-to-head battle with industry giant Ticketmaster.”
“Boeing Strikes Deal To Avoid Criminal Responsibility For 737 Max Crashes” (New York Times). “Boeing reached a deal with the Justice Department on Friday that would spare the company from taking criminal responsibility for a pair of deadly 737 Max crashes in 2018 and 2019. Under the deal, which was staunchly opposed by many families of the victims of the fatal crashes, Boeing would admit to obstructing federal oversight, pay a fine, contribute to a fund for the families and invest in safety and quality programs.”
“The Real Problem With The FAA” (The Atlantic). “Air-traffic control is not inherently a governmental function. Keeping planes safely separated is a complex but purely operational process that follows well-established rules. Like running an airline or manufacturing a commercial aircraft, air-traffic control can be performed by a nongovernmental entity as long as it is overseen by safety regulators—which perform a function that is inherently governmental. The most compelling evidence of this is that most developed countries have now “corporatized” their ATC provider.”
“United Airlines Reaches ‘Industry-Leading’ Labor Deal With Flight Attendants, Union Says.” (CNBC). “United Airlines reached an “industry-leading” tentative labor deal for its 28,000 flight attendants, their union said Friday. The deal includes ‘40% of total economic improvements’ in the first year and retroactive pay, a signing bonus, and quality of life improvements, like better scheduling and on-call time, the Association of Flight Attendants-CWA said.”
What we’re reading (5/22)
“Antitrust Cops Say BlackRock, Other Fund Giants May Have Hurt Coal Competition” (Wall Street Journal). “Large institutional investors who own shares in rival companies risk violating antitrust laws if they use their influence to affect how those businesses compete, U.S. antitrust enforcers argued Thursday for the first time. The Justice Department and Federal Trade Commission made those views public by submitting a brief in a case filed last year by Texas Attorney General Ken Paxton and other Republicans against BlackRock, State Street and Vanguard Group. The federal government’s filing, known as a statement of interest, says the asset managers’ holdings of multiple companies in the coal industry—known as common ownership—could violate competition laws.”
“Jamie Dimon Says The US Is Still At Risk Of A Fate Worse Than Recession” (Business Insider). “‘I think there's a chance you'll have stagflation,’ Dimon said, adding that he’s not predicting such a scenario necessarily but that he wants to be prepared. ‘I think global fiscal deficits are inflationary. I think the remilitarization of the world is inflationary. The restructuring of trade is inflationary,’ he said, adding that the sharp decline in oil prices could be a deflationary offset.”
“Japan’s Core Inflation Climbs To 3.5%, Highest In More Than 2 Years” (CNBC). “Japan’s core inflation accelerated to 3.5% in April, government data showed Friday, bolstered in part by surging rice prices, as the central bank considers pausing its rate hike posture to assess the impact of U.S. tariffs. The core inflation figure, which strips out prices for fresh food, was higher than expectations of 3.4%, according to economists polled by Reuters, rising from 3.2% in the previous month and marking the highest level since January 2023.”
“What Makes An Asset ‘Safe’?” (Joachim Klement). “[T]he lack of ingrained investor base helps to explain why European supranational bonds trade at higher yields than German or Dutch government bonds, even though the European bonds are guaranteed by all EU member states, not just one, which should make them safer. And it is this psychological disconnect that makes these supranational bonds the safe asset for banks and funds, while national government bonds are the safe asset for private investors.”
“An Ode To The Penny” (Wall Street Journal). “After a lifespan nearly as long as the nation itself, America’s one-cent coin will begin to fade from the money supply. The U.S. Mint has ordered its last batch of the blanks used to mint the coins, and the Treasury expects to stop putting them into circulation early next year. The penny’s reputation has shifted over more than two centuries. At times a symbol of thriftiness, practicality and even luck, the penny more recently has come to symbolize wasteful government spending.”