What we’re reading (7/24)
“Fed Chair Powell Pushes Back On Trump Criticism During Extraordinary Visit At Central Bank” (NBC News). “President Donald Trump used a rare visit to the Federal Reserve on Thursday to renew his pressure on Fed Chair Jerome Powell, telling reporters that costs to renovate the Fed’s buildings were exorbitant. Powell shook his head at times during the president’s remarks. Wearing a hard hat while surrounded by the ongoing renovations that have become the subject of Republicans’ scrutiny, the president said the construction cost had ballooned to ‘about $3.1 billion.’ Powell shook his head, saying, ‘I haven’t heard that.’”
“Intel To Lay Off 15% Of Workers, Cancel Billions In Projects In Bid For Rebound” (Wall Street Journal). “The chip-making giant said Thursday it would refocus its strategy on the highly competitive market for AI chips, regaining market share in personal-computer processors and developing its advanced 14A technology to sell to large customers.”
“If Active Investing Is The Loser’s Game, What’s The Winner’s Game?” (Morningstar). “A sound investment strategy should be grounded in peer-reviewed academic research, not opinions or anecdotes. The overwhelming evidence is that markets are highly, though not perfectly, efficient. This means that most information is already reflected in prices, making it extremely difficult for active managers to consistently outperform after costs. As a result, the most effective approach is to avoid strategies that rely on security selection or market-timing and instead focus on systematic, transparent, and replicable strategies, such as using index funds or quantitative factor-based approaches.”
“Elon Musk Warns Of Potentially ‘Rough’ Times Ahead” (New York Times). “Shares in Tesla are sinking in premarket trading on Thursday after the electric vehicle maker reported its worst quarterly revenue drop in over a decade, and after Elon Musk warned on a call with analysts of the potential for ‘a few rough quarters’ ahead.”
“Why Ground Beef Prices Are Hitting Record-Highs In The U.S.” (Time). “For many Americans, the cost of ground beef is starting to weigh down their weekly shopping baskets. Ground beef prices rose by 10.3% in June, when compared to the same time last year, surpassing $6 per pound. The price of steak rose by 12.4% within this period.”
What we’re reading (7/23)
“Google Revenue Soars On AI Boom, And Investors Eye Spending Surge” (Wall Street Journal). “Google’s parent company reported a 14% jump in year-over-year revenue, driven by growth in its cloud and search divisions that was tempered by heavy spending on artificial intelligence. The parent company, Alphabet, had record sales of $96.4 billion in the second quarter but also said capital expenditure expectations for the year would increase by 13% to about $85 billion. That compares with $52.5 billion in 2024.”
“Bank Earnings Are Sending A Message: The Economy Isn’t That Bad” (Barron’s). “Quarterly report cards from the largest, most systemically important U.S. banks brought investors and consumers welcome news this past week. The message: The economy is faring better than it feels. Consumers, for one thing, are generally staying on top of their debt. JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo all said their relatively low rates of consumer delinquencies, as well as debt they have written off as unrecoverable, were either about the same or looking better than a year ago.”
“New Analysis Suggests PE Funds Are More Volatile Than We Think” (Institutional Investor). “[Dan] Rasmussen, with the assistance of Harvard College student Julia Grinstead, looked at 10 of the largest and most liquid private funds traded in London, a list that includes ‘marquee brand-name firms and even includes funds-of-funds that own diversified holdings.’ They concluded that the market volatility is roughly 1.5 times the market average and that these funds are trading at a significant discount to their internally reported NAVs.”
“Chipotle Stock Plunges After Company Reports Second Straight Sales Decline, Cuts Guidance” (Yahoo! Finance). “Chipotle (CMG) on Wednesday reported another quarter of negative sales growth, sending shares sharply lower in extended trading as the company navigates an uncertain consumer environment and its new leadership deals with the most challenging backdrop for the chain in years.”
“The Sea Slug Defying Biological Orthodoxy” (The Atlantic). “This particular slug starts life a brownish color with a few red dots. Then it begins to eat from the hairlike strands of the green algae Vaucheria litorea: It uses specialized teeth to puncture the alga’s wall, and then it slurps out its cells like one might slurp bubble tea, each bright-green cellular boba moving up the algal straw. The next part remains partially unexplained by science. The slug digests the rest of the cell but keeps the chloroplasts—the plant organelles responsible for photosynthesis—and distributes these green orbs through its branched gut. Somehow, the slug is able to run the chloroplasts itself and, after sucking up enough of them, turns a brilliant green. It appears to get all the food it needs for the rest of its life by way of photosynthesis, transforming light, water, and air into sugar, like a leaf…[t]he algae and the slug may have managed some kind of gene transfer, and over time, produced a new way of living, thanks not to slow, stepwise evolution—the random mutation within a body—but by the wholesale transfer of a piece of code. A biological skill leaked out of one creature into another.”
What we’re reading (7/22)
“The Fed Must Be Independent” (Ben Bernanke, Janet Yellen). “But an overwhelming amount of evidence, drawn from the experiences of both the United States and other countries, has shown that keeping politics out of monetary policy decisions leads to better economic outcomes. A particularly clear lesson of history is that when central banks are forced to finance government deficits — by keeping interest rates excessively low, to cite one possibility — the result is inevitably higher inflation and economic damage.”
“Kohl’s And Opendoor Headline A New Class Of Meme Stocks” (Wall Street Journal). “Individual investors are once again loading up on a group of unloved stocks and taking to social media to defend them from the haters and the short sellers. Meet the cast of the meme-stock craze, season two.”
“Bullish Retail Traders Are The Biggest Force Behind The Stock Market’s Latest Rally To All-Time Highs” (Business Insider). “Retail traders have been on a dip-buying frenzy since President Donald Trump announced his tariffs in April. Analysts at Barclays estimated that retail traders ploughed around $50 billion into global stocks in the last month. Stock-buying among institutional investors has paled by comparison, with hedge fund re-risking remaining "modest" and their long positions in US stocks remaining below the long-term median, the bank said on Tuesday.”
“Make Your Own Luck: Mid-Year Outlook For 2025” (KKR). “As we look ahead at KKR, we remain positive. To be sure, we expect more market drawdowns than in the past, but our ‘Glass Still Half Full’ thinking is that attractive financial conditions, a global easing cycle, ongoing productivity gains, and lack of net issuance—coupled with some incredibly powerful investment themes—will continue to drive this cycle both further and longer than many think.”
“Texas Instruments Plunges After Forecast Fuels Tariff Fears” (Bloomberg). “Though the company issued a third-quarter forecast that beat most estimates, the outlook was more guarded than some investors had anticipated. The stock fell further during a conference call, when executives struggled to win over analysts who said the company’s tone had become increasingly negative. The main concern is whether tariffs and trade disputes will hurt a sales resurgence that’s still in the early stages.”
What we’re reading (7/21)
“Mortgage Rates Move Higher Again” (Yahoo! Finance). “Mortgage rates increased for the second straight week. The average rate on a 30-year fixed mortgage was 6.75% through Wednesday, up from 6.68% the week prior, according to Freddie Mac data. The average 15-year fixed mortgage rate was 5.92%, up from 5.86% last week.”
“Block’s Stock Pops On Addition To S&P 500” (CNBC). “The stock rose following the announcement late Friday as investors sought to get in ahead of index fund managers, who will need to buy shares to mimic the changes. Square’s $48 billion market cap at Monday’s close places it well above the median S&P 500 constituent, though shares are still down 8% this year. Passive funds are expected to purchase roughly 101 million shares of Block due to its inclusion, equivalent to about 11 days of average trading volume, according to a note from Stephens.”
“The $130 Billion Train That Couldn’t” (Spectator). “In neither the short-term nor the mid-term is there a way of providing the promised San Francisco to Los Angeles service in 2 hours and 40 minutes. Instead, the plan is now for the train to work in a “blended” fashion, mixing with conventional and freight trains in parts of the San Francisco and Los Angeles metropolitan areas. To say the least, a line running from the Central Valley hubs of Bakersfield, Fresno and Merced hardly seems a romantic return to the rails of the past.”
“Stop Pretending You Know What AI Does To The Economy” (Noahpinion). “In other words, Americans are very primed with AI pessimism. Even the smartest among them tend to jump at any shred of evidence that AI is killing jobs, or turning society into a feudal hellscape, or any number of other negative effects. But each time this happened so far, when we look closely at the evidence — or just waited for the results to come in — the panic turned out to be a false alarm. AI has not yet had a detectably negative effect on the job market, which remains just about as strong as it has ever been in the country’s history[.]”
“How China Curbed Its Oil Addiction—And Blunted A U.S. Pressure Point” (Wall Street Journal). “China’s thirst for oil drove global demand for decades. Now a government campaign to curb that addiction is nearing a milestone, with national consumption expected to peak by 2027, then begin to fall. Chinese officials have long worried that the U.S. and its allies could hamstring the nation’s economy by choking off its supply of foreign oil. So China has poured hundreds of billions of dollars into weaning itself off the imported stuff by reviving domestic production and swiftly building the world’s leading electric-vehicle industry.”
What we’re reading (7/20)
“Dow, S&P 500, Nasdaq Futures Tread Water Ahead Of Tech Earnings As Tariff Deadline Looms” (Yahoo! Finance). “US stock futures were flat in Sunday evening trading, as markets entered a critical week defined by megacap earnings and continued risk around President Trump's looming tariffs. S&P 500, Nasdaq 100, and Dow Jones Industrial Average futures all hovered around the baseline, reflecting a cautious tone after last week’s record-setting rally in growth names. The Nasdaq advanced 1.5% last week, while the S&P 500 added 0.6%. The Dow lagged, finishing slightly negative.”
“Debt Reckoning” (Harper’s Magazine). “The financial system is much safer now because all parties use the safest-possible collateral. But how safe can such a collective dependency be? If everyone has promised their Treasuries away, and Treasury prices fall, then everyone suddenly needs more. This could spark a spiral, the kind we maybe saw glimpses of after Liberation Day and that seems, at best, difficult and expensive to stop. ‘We’ve rebuilt our entire financial system’s regulatory environment after the financial crisis, and a fundamental linchpin in that whole system is that the Treasury market functions well,’ [NYU Stern Professor Jeffrey] Meli told me. ‘If it doesn’t function well, this system that we built is on a house of cards.’”
“Firing Powell Would Shatter The Economy’s Inflation Defenses” (Wall Street Journal). “The Fed would no longer be an independent check on the government, but just another part of that government with inflation subordinated to other priorities, such as the cost of the national debt. What would happen then? Markets wouldn’t like it, though predictions of a crash look overwrought. Stocks have hit records while discounting some possibility of Trump removing Powell. The lag between monetary policy and inflation is long and variable. The real consequences of a subservient Fed would show up gradually, once inflation pressures emerge and the Fed, fearful of crossing the president, fails to act.”
“Delta Air Lines Is Using AI To Set The Maximum Price You’re Willing To Pay” (The Verge). “While personalized pricing isn’t unique to Delta, the airline has been particularly candid about embracing it. During that November call, Hauenstein said the AI ticketing system is ‘a full reengineering of how we price and how we will be pricing in the future,’ and described the rollout as ‘a multiyear, multi-step process.’ Hauenstein acknowledged that Delta was excited about the initial revenue results it saw in testing, but noted the shift to AI-determined pricing could ‘be very dangerous, if it’s not controlled and it’s not done correctly.’”
“Industrial Colossus: China Vs 1950s America” (Cogitations). “Chinese industrial policy maximalist Lu Feng argues that China today resembles the United States on the eve of World War I. But the analogy is faulty. China’s industrial strength—and its broader economic trajectory—is much closer to the United States of the 1950s.”
What we’re reading (7/19)
“After Stock Market’s Torrid Run, Earnings Misses Face Punishment” (Bloomberg). “The second-quarter earnings season is off to a ripping start, with consumer strength powering resilient corporate profits. In the stock market, however, the reaction has been fairly quiet, an ominous sign that much of the good news is priced in — and investors are punishing disappointments.”
“The Stock Market Bargain That’s Right Under Your Nose” (Wall Street Journal). “Will small stocks stink forever? Little companies are supposed to earn higher returns over time than big ones, but that hasn’t been the case for more than a decade. Since the beginning of 2014, the S&P 500 has grown at an average of 13.2% annually; the Russell 2000 index of small stocks has gained just 7.2%. Many people seem to be throwing in the towel. So far this year, investors have pulled $12 billion out of exchange-traded funds investing in small U.S. stocks, according to FactSet. Meanwhile, investors added $149.6 billion to ETFs that track large U.S. companies. Money always chases performance, and big stocks have all the momentum—burnished by the artificial-intelligence boom. But what if AI turns out to be a bust, it fails to meet expectations or the biggest stocks end up stagnating? Then investors who didn’t give up on smaller stocks will be rewarded.”
“Is America Breaking The Global Economy?” (Foreign Affairs). “[F]orecasters have struggled to predict where the U.S. economy will ultimately end up. But two main visions bookend a dispersed and unstable set of individual projections. In the first, the United States is on a bumpy journey that will culminate in an economic restructuring resembling the ones that took place under U.S. President Ronald Reagan and British Prime Minister Margaret Thatcher, where it will emerge with less debt and a more efficient private sector and where it will trade in a fairer international system. In the second scenario, the country is slowly slipping into the stagflation and, as happened under U.S. President Jimmy Carter, could end up in a deep recession, perhaps with pronounced financial instability.”
“What Flint Teaches About the Chances Of Rust Belt Renewal In Trump 2.0” (Politico). “Policies designed to stimulate economic growth will fail to revitalize cities like Flint unless they are accompanied by efforts to repair the social and environmental damage that previous failed policies left behind.”
“The Epic Battle for AI Talent—With Exploding Offers, Secret Deals And Tears” (Wall Street Journal). “Hundreds of employees at one of Silicon Valley’s hottest AI startups gathered in their offices last Friday expecting a celebratory announcement. For months, OpenAI had been talking to Windsurf about buying it for $3 billion, and now it seemed like the rank-and-file were finally getting confirmation that the deal was about to become official. Windsurf’s marketing team even began filming the all-hands meeting for promotional material. Instead, they learned that Windsurf’s chief executive, Varun Mohan, had left the company to join Google, taking with him a small group of artificial-intelligence researchers and engineers. After hearing the news, some of the staff began to cry.”
What we’re reading (7/17)
“Federal Reserve’s Waller Says Central Bank Should Cut Rates At Next Meeting” (Associated Press). “Christopher Waller, a member of the Fed's governing board, said in a speech in New York City that the economy is showing signs of weakening, with consumer spending slowing and job gains cooling. The Fed should reduce borrowing costs to shore up spending and growth before the job market weakens further, Waller said.”
“Powell Defends $2.5 Billion Fed Renovation In Letter To White House” (Yahoo! Finance). “Jerome Powell offered his first detailed defense of a $2.5 billion renovation of the Federal Reserve's headquarters, arguing in a Thursday letter to White House budget director Russell Vought that ‘we take seriously the responsibility to be good stewards of public resources.’ It was a point-by-point response to a July 10 letter Powell received from Vought that raised a number of concerns about cost overruns and certain design elements, while warning that ‘the president is extremely troubled by your management of the Federal Reserve system.’”
“OpenAI Unveils Agent That Can Make Spreadsheets And PowerPoints” (Wall Street Journal). “OpenAI rolled out its latest entry in the red-hot area of independently operating AI bots, an agent that lets users automate tasks like online shopping and create spreadsheets and PowerPoint presentations. ChatGPT agent, as the bot is called, runs on a new AI model created to power the capability, the San Francisco-based company said. It works just as OpenAI’s ‘Operator’ agent does, by accessing the internet through its own browser and can click, scroll and type just as a person would.”
“House Passes First Major Regulation For Crypto Industry” (Washington Post). “The Genius Act, which passed with bipartisan support, 308-122, following the Senate’s approval in June, is now ready to be signed into law by President Donald Trump, who endorsed the bill and has pledged to pursue a more lenient regulatory environment for crypto while also promoting his own crypto ventures.”
“Netflix Notches A Record Quarter And Signals More Growth Ahead” (Business Insider). “The streaming giant's revenue rose 15.9% year over year to $11.08 billion, and earnings grew 47% to $7.19 per share. Analysts surveyed by Bloomberg expected quarterly revenue of $11.06 billion and earnings of $7.09 per share. The company also raised its revenue forecast for 2025 to $44.8 billion to $45.2 billion, in part because of its momentum growing subscribers and its advertising business.”
What we’re reading (7/16)
“Trump Says ‘Not Planning’ Fire Fed Chair Powell After Reports Suggest Powell Ouster Coming ‘Soon’” (Yahoo! Finance). “President Trump on Wednesday tempered reports from earlier in the day that suggested he planned to fire Federal Reserve Chair Jerome Powell imminently, the latest twist in the ongoing saga regarding Trump's displeasure with the central bank head.”
“Wall Street CEOs Stress Fed Independence Amid Powell Attacks” (Bloomberg). “Bank of America Corp.’s Chief Executive Officer Brian Moynihan and Goldman Sachs Group Inc.’s David Solomon joined JPMorgan Chase & Co.’s CEO Jamie Dimon in stressing the importance of the Fed’s autonomy. Moynihan said in an interview with Bloomberg TV on Wednesday that the Fed was ‘set up to be independent.’”
“The Market’s Been Wrong On The Fed For Three Straight Years — This Deutsche Bank Strategist Says It’s Now Looking Like Four.” (MarketWatch). “Henry Allen, macro strategist at Deutsche Bank, warns ‘inflation risks are still being underestimated, with a remarkable complacency across key assets…[t]his is particularly so when you consider that the 2021-23 inflation spike wasn’t anticipated at all in advance. And it’s already the 4th year in a row (so far) that markets have overestimated how dovish the Fed are going to be,’ said Allen, in a note to clients on Wednesday.”
“Why Tariffs Won’t Kill Corporate Earnings” (Axios). “The second-quarter earnings season kicks off Tuesday with some of the major banks set to report. While tariffs are likely to come up through this cycle, it's not the main focus for investors…Wall Street has moved on from the trade war. The question is whether consumer spending effects that show up this earnings cycle will force investors to reckon with the real-world impact of the levies.”
“United Airlines Issues New 2025 Forecast As CEO Says ‘World Is Less Uncertain’” (CNBC). “United Airlines’ second-quarter earnings beat estimates, and its CEO said travel demand is picking up after a rocky start to 2025. Travel demand, particularly from more price-sensitive customers for domestic flights, had come in weaker than airline executives expected at the start of the year, sending airfares lower. ‘The world is less uncertain today than it was during the first six months of 2025 and that gives us confidence about a strong finish to the year,’ CEO Scott Kirby said.”
What we’re reading (7/15)
“June Inflation Data Reaffirms Fed Pause As Tariff Uncertainty Grows” (Yahoo! Finance). “June’s Consumer Price Index (CPI) report likely gives the Federal Reserve room to continue its wait-and-see approach to cutting rates amid uncertainty over how President Trump's tariffs will impact inflation. On a ‘core’ basis, which excludes volatile food and energy costs, CPI increased 0.2% from the previous month, slightly lower than economists' expectations but ahead of May's 0.1% gain. Following the report, investors were placing a 97% probability on the Fed holding rates steady at its July meeting, up from 93% on Monday, according to the CME FedWatch Tool. Meanwhile, the chance of a September rate cut dropped sharply after the release, falling below 60% initially and inching closer to 50% as markets digested the data.”
“JPMorgan’s Dimon Warns Against ‘Playing Around With The Fed’ As Powell Pressure Mounts” (Yahoo! Finance). “JPMorgan Chase (JPM) CEO Jamie Dimon said Tuesday that the independence of the Federal Reserve is ‘absolutely critical’ for Jerome Powell and whoever succeeds him as chairman of the central bank. "Playing around with the Fed can often have adverse consequences," Dimon told reporters after JPMorgan reported its first quarter earnings, adding that it can produce ‘the absolute opposite of what may be hoping for.’”
“Trump Executive Order To Help Open Up 401(k)s To Private Markets” (Wall Street Journal). “President Trump is expected to sign an executive order in the coming days designed to help make private-market investments more available to U.S. retirement plans, according to people familiar with the matter. The order would instruct the Labor Department and the Securities and Exchange Commission to provide guidance to employers and plan administrators on including investments like private assets in 401(k) plans, the people said. The details of the order aren’t yet final and are still subject to review, the people said.”
“A Case For Concluding That Over 90% Of Shareholders Reject DEI” (RealClear Markets). “[A]pply a healthy dose of skepticism the next time you see a headline proclaiming that over 90% of shareholders support DEI because an anti-DEI proposal was defeated by that margin. The bottom line is that no corrupted voting regime should convince you that the true owners of corporations think it’s a good idea to discriminate on the basis of race and sex in the name of DEI or to use shareholders’ money to promote gender mutilation surgery in minors. That’s just plain common sense.”
“Why Is Manufacturing Productivity Growth So Low?” (Enghin Atalay, et al.). “We examine the recent slow growth in manufacturing productivity. We show that nearly all measured TFP [total factor productivity] growth since 1987—and its post-2000s decline—comes from a few computer-related industries. We argue conventional measures understate manufacturing productivity growth by failing to fully capture quality improvements. We compare consumer to producer and import price indices. In industries with rapid technological change, consumer price indices indicate less inflation, suggesting mismeasurement in standard industry deflators. Using an input-output framework, we estimate that TFP growth is understated by 1.7 percentage points in durable manufacturing, 0.4 percentage points in nondurable manufacturing, with no mismeasurement in nonmanufacturing industries.”
What we’re reading (7/14)
“Financial Stocks Rise Ahead Of Busy Week For Earnings, Inflation Data” (Wall Street Journal). “U.S. financial stocks inched higher Monday, raising expectations that banks’ quarterly earnings and a key measure on consumer prices will signal that economic conditions remain strong. Wells Fargo shares climbed 1.1%, JPMorgan Chase rose 0.6% and BlackRock increased 0.9%. All three financial firms are among those due to report second-quarter results on Tuesday, when investors will also receive a June reading on the U.S. Bureau of Labor Statistics’s monthly consumer-price index.”
“Private Equity Now Owns More Than 40 Minor League Baseball Teams, And The Number Keeps Growing” (Defector). “Diamond Baseball Holdings, a company backed by the private equity firm Silver Lake, has acquired 45 Minor League Baseball teams since its creation in late 2021. They own teams from coast to coast, in cities big and small. This means one company now owns more than 35 percent of all MiLB teams. And it shows no sign of slowing down.”
“Little Videos Are Cooking Our Brains” (Vox). “We’ve known for a while thatthe rise of AI would flood the internet with slop. Slop is already remarkably popular on YouTube, where nearly half ofthe 10 most popular channels contain AI-generated content. There are even virtual personalities powered by AI earning millions on YouTube. These platforms know that making content easier to produce will lead to more content, which leads to more engagement, which leads to more ads, which ultimately leads to a less enriching, more addictive internet. That’s why YouTube is pushing Veo 3 to its creators, and why, as oflast month, TikTok and Open AI have pushed out similar tools. This wouldn’t be such a concern if you wanted to seek out awful AI-generated videos. Instead, the slop finds you unwittingly and drowns you in anxiety.”
“Vanguard Goes Big On Crypto, Thanks To The Index-Fund Boom It Unleashed” (Bloomberg). “Vanguard Group Inc. executives, channeling the logic of the venerable Jack Bogle, have made their opinions on crypto clear. Yet thanks to the cold logic of index investing, the $10 trillion money-management giant is now the biggest backer of Strategy, the software firm that famously reinvented itself as a proxy for Bitcoin and became a poster child for the industry’s ambitions. Vanguard owns more than 20 million shares, nearly 8%, of all of Strategy’s (MSTR) outstanding Class A common stock, and likely surpassed Capital Group Cos. for the no. 1 spot sometime in the fourth quarter, according to data compiled by Bloomberg based on regulatory filings. The dozens of Vanguard mutual funds and ETFs that hold the stakes track everything from small- and mid-cap benchmarks to momentum, value and growth gauges, among others.”
“Pulte’s Social Media Posts Become Must-Follow For Stock Traders” (Bloomberg). “[T]raders are being forced to pay attention to an unlikely official: Federal Housing Finance Agency head Bill Pulte. Stocks have swung wildly on Pulte’s comments as he opines on everything from credit score pricing, to cryptocurrencies as mortgage assets, and even the job security of Federal Reserve Chair Jerome Powell. Sometimes preceded by cryptic teasers, his online comments have fueled the worst one-day drop in half a decade for credit-score provider Fair Isaac Corp. (FICO), multiple slumps in credit bureau stocks and even a brief drip in the entire S&P 500 Index on Friday. His market moving ability has ‘thrust a normally obscure government official into the forefront of business news,’ said Steve Sosnick, chief strategist at Interactive Brokers.”
What we’re reading (7/13)
“Nvidia’s Jensen Huang Says AI Could Lead To Job Losses ‘If The World Runs Out Of Ideas’” (CNN Business). “‘If the world runs out of ideas, then productivity gains translates to job loss,’ said Nvidia CEO Jensen Huang in an interview with CNN’s Fareed Zakaria when asked about comments made by fellow tech leader Dario Amodei, who suggested AI will cause mass employment disruptions. Amodei, the head of Anthropic, warned last month that the technology could cause a dramatic spike in unemployment in the very near future. He told Axios that AI could eliminate half of entry-level, white-collar jobs and spike unemployment to as much as 20% in the next five years.”
“Steel Is Booming In Arkansas — So Why Are So Many People Still Struggling To Get By?” (NBC News). “For Mississippi County, Arkansas, the booming steel industry is an economic lifeline. In the last decade, billions of dollars have flowed in to expand mills or open new ones, and it’s often hailed as the top steel-producing county in the country. Last year, a $3 billion mill came online, employing hundreds, the largest private investment in Arkansas history…[b]ut for many residents in this county of roughly 38,000, the promise of the steel boom is still out of reach. In the shadow of the new steel plants, a quarter of residents live in poverty, more than double the national average.”
“The Gray Area At The Center Of Microsoft’s Battle With OpenAI” (Business Insider). “In this case, Microsoft had access to frequent updates of the core model at the time, but not the voice technology OpenAI built on top of it. Microsoft found out about the demo, and pressured OpenAI executives, including then-technology boss Mira Murati, to get access to the code so Microsoft could do its own announcement, the people said. The company did not want to appear flat-footed to investors, to whom the company has to justify its $13 billion investment in OpenAI, they said. The example illustrates the ongoing complexity of Microsoft's relationship with OpenAI, and why access to the AI startup's technology is a core issue as the companies renegotiate their agreement.”
“Jamie Dimon Says Private Credit Is Dangerous—And He Wants JPMorgan To Get In On It” (Wall Street Journal). “Jamie Dimon says Wall Street’s hottest trend is a recipe for a financial crisis, but he’s investing billions to get in on it anyway. His plan: swoop in strategically and profit if there’s a meltdown.”
“Crypto Companies Race To Secure Banking Foothold In US” (Financial Times). “Cryptocurrency companies are racing to expand into traditional banking in the US, as they seek to capitalise on a friendlier regulatory environment under President Donald Trump and become more embedded in the financial system. Crypto payments group Ripple, stablecoin company Circle and custodian BitGo have applied for national trust bank charters that will allow them to offer some banking services, while crypto exchange Kraken plans to launch bank cards in the next month. ‘It’s a natural convergence,’ Arjun Sethi, co-chief executive of Kraken, told the Financial Times, adding the company plans to launch debit and credit cards by roughly the end of the month.”
What we’re reading (7/12)
“Economists See Lower Recession Risk And Stronger Job Growth: WSJ Survey” (Wall Street Journal). “The economic fallout from President Trump’s policies may prove less dire than feared. Economists expect stronger growth and job creation, lower risk of recession and cooler inflation than they did three months ago, according to The Wall Street Journal’s quarterly survey of professional forecasters. The reason: The Journal’s previous survey was conducted at the height of the president’s threats to impose eye-watering tariffs on America’s biggest trading partners. He paused some of the tariffs shortly thereafter. Whether the improved mood lasts remains to be seen.”
“The Big Picture” (Briefing.com). “The second-quarter earnings reporting period is upon us, and, well, what a difference a quarter makes. Heading into the first-quarter earnings reporting period in mid-April, the world was awash in growth concerns linked to the D.O.G.E. cost-cutting campaign in the U.S., President Trump's reciprocal tariff announcements, and a cold trade war with China. There was ample concern that companies would either be slashing their full-year guidance or pulling their full-year guidance, citing a lack of visibility. There was some of that, but it wasn't the universal message. As it turned out, the first quarter results were much better than expected, and the guidance, which many companies still gave, was much better than feared.”
“Unsold Homes Surge Nationwide As Housing Market Stalls” (Newsweek). “Thousands of unsold homes are piling up in the U.S. housing market as Americans— facing climbing prices, historically high mortgage rates and growing economic uncertainty—buy fewer homes, according to the latest figures. This year was supposed to bring a rebound of the U.S. housing market, experts said in 2024. Instead, the market has come to a standstill as buyers retreat to the sidelines but prices refuse to budge.”
“Macro Hedge Funds Diverge Sharply Amid Tariff Turbulence” (Institutional Investor). “Macro hedge funds posted wildly different results in the first six months of the year, a volatile period marked by President Trump’s on-again, off-again tariffs. These are the managers who make investment bets in various markets based on their takes on economic and political developments. For example, Bridgewater Associates reported a 17 percent gain in its flagship Pure Alpha fund in the first half of the year, according to someone who has seen the results. All Weather — its beta fund — picked up 8 percent for the period, and the Asia Total Return fund rose 18 percent…Robert Citrone’s Discovery Capital Management, meanwhile, posted a 2.5 percent increase in June, bringing its total gain for the first half to 12.5 percent. Discovery is a combination macro and fundamental global equities fund.”
“The First In 30 Years: Scientists Discover New Class Of Antibiotics” (SciTechDaily). “It has been nearly thirty years since a new class of antibiotics reached the market, but that could soon change. Researchers at McMaster University have made a breakthrough that could help turn the tide against drug-resistant bacteria. Led by scientist Gerry Wright, the team has discovered a powerful new molecule called lariocidin. This promising candidate shows the ability to fight some of the toughest, most drug-resistant bacteria known to science. Their groundbreaking findings were published in the journal Nature.”
What we’re reading (7/12)
“Google To Pay $2.4 Billion In Deal To License Tech Of Coding Startup, Hire CEO” (Wall Street Journal). “Google has agreed to pay about $2.4 billion in a deal to license the technology of AI coding startup Windsurf and hire its CEO and some of its employees, according to people familiar with the matter. The deal comes after talks for OpenAI to acquire Windsurf stalled, the people said.”
“Build Baby Build” (Paul Krugman). “Right now, maybe the moral is that between California’s anti-NIMBY reforms and NYC’s congestion charge, we’re seeing some real policy improvements in our coastal cities. At the same time, the frustrations experienced in Austin are a reminder of why agglomeration adds value. Cities: They’re a good thing.”
“Treasury Posts Unexpected Surplus In June As Tariff Receipts Surge” (CNBC). “The U.S. government posted a surplus in June as tariffs gave an extra bump to a sharp increase in receipts, the Treasury Department said Friday. With government red ink swelling throughout the year, last month saw a surplus of just over $27 billion, following a $316 billion deficit in May. That brought the fiscal year-to-date deficit to $1.34 trillion, up 5% from a year ago. However, with calendar adjustment, the deficit actually edged lower by 1%. There are three months left in the current fiscal year, which ends Sept. 30.”
“Walgreens Shareholders Approve $10 Billion Private Equity Buyout” (Yahoo! Finance). “Walgreens shareholders will receive $11.45 per share from Sycamore Partners per the terms of the deal first announced in March, the companies said Friday. They could also receive as much as an additional $3 per share from the future monetization of Walgreens' debt and equity interests in its VillageMD clinic business.”
“Hospital M&A Has Hit The Brakes — But Activity Could Pick Up In The Second Half Of 2025” (Dealbreaker). “There were only five hospital M&A transactions during the first quarter of 2025 — compared to the first quarters of 2024 and 2023, which had 20 and 15 deals, respectively. This slump is due mainly to the Trump administration’s flurry of new policies and the resulting widespread economic uncertainty.”
What we’re reading (7/10)
“Trump Threatens 35% Tariff On Some Canadian Goods” (Wall Street Journal). “The U.S. will put a 35% tariff on imports from Canada effective Aug. 1, President Trump announced on Thursday evening. But an exemption for goods that comply with the nations’ free-trade agreement, the U.S.-Mexico-Canada Agreement, would still apply, a White House official said, stressing that could change. Trump previously applied 25% tariffs to non-USMCA goods and the new rate, announced in a letter to Canadian Prime Minister Mark Carney and posted on social media, would mean that number rises to 35%, the official said. The U.S. and Canada had been involved in talks to lower tariffs ahead of a self-imposed July 21 deadline.”
“Stock Market Today: Dow, S&P 500, Nasdaq Futures Fall After Trump Threatens 35% Canada Tariff, Higher Blanket Rates” (Yahoo! Finance). “US stock futures fell late Thursday after President Trump threatened Canada with a 35% tariff on its imports to the US and floated higher blanket levies.”
“A New Twist On An Old Bet With Buffett” (Financial Times). “Comparing a portfolio of North American [private equity] buyouts to the S&P 500 has important consequences, as private equity enters wealth management and seeks to access pension plans. In fact, I’d argue that this match-up could help shed light on one of the thorniest, most contentious debates in finance today. I imagine we know what Warren thinks — high fees and extra expenses will doom private equity investors. A lot of outside factors could have impacted the result of our first bet (I wrote about it here), but that’s unlikely to happen with this comparison. This bet is much closer to faithfully representing Warren’s initial premise: that intelligent professionals with strong economic incentives to perform still cannot overcome the high fees they charge.”
“The Consulting Crash Is Coming” (The Free Press). “[T]iming the market is not my thing,’ Peter Thiel told me a few days ago. ‘But if the consulting business was a stock, I’d be shorting it right now.’”
“Archaeologists Just Pulled Pieces Of The Lighthouse Of Alexandria Out Of The Mediterranean Sea” (ati). “A French-led team of researchers has lifted 22 massive stone blocks out of the Mediterranean Sea that were once part of the legendary Lighthouse of Alexandria, one of the Seven Wonders of the Ancient World. These recovery efforts on Egypt’s northern coast are part of an ongoing project that aims to digitally recreate the entire lighthouse by scanning and analyzing its ruins. This project is now coming to fruition 30 years after the initial discovery of the lighthouse’s remains by archaeologist Jean-Yves Empereur in 1995.”
What we’re reading (7/9)
“This Early-Warning Indicator Is Telling The Stock Market That A Recession Is More Likely” (MarketWatch). “There’s a significantly elevated chance that a U.S. recession will begin within the next 12 months. The odds are roughly one in five, in fact, based on the unusually wide spread between the Conference Board’s Consumer Confidence Index (CCI) and the University of Michigan’s Consumer Sentiment Index (UMI). Though you may regard a one-in-five chance as unlikely, you should know that the risk now is abnormally high.”
“Why It’s Not Too Late To Add International Exposure” (Morningstar). “After spending most of the past 10-15 years wandering in the wilderness, international stocks have finally found their footing this year. For the year to date through July 2, 2025, the Morningstar Global Markets ex-US Index has gained 18.1%, compared with 6.4% for the Morningstar US Market Index.”
“How Nvidia Became The World’s First $4 Trillion Company” (Wall Street Journal). “Nvidia, based in Santa Clara, Calif., designs the chips, known as graphics processing units, or GPUs, that power the AI industry. The rally in Nvidia’s shares caps a remarkable run and comes barely two years after the company notched a $1 trillion closing valuation for the first time. The AI chip maker, which closed at $162.88 a share and just shy of the $4 trillion mark, is now worth as much as the 214 smallest companies in the S&P 500 combined, according to Dow Jones Market Data.”
“Trump Tariffs Live Updates: Trump Blasts Brazil With 50% Tariff, Puts Copper Tariff At 50% In Effect August 1” (Yahoo! Finance). “The highlight of his letter barrage late Wednesday was his announcement of a coming 50% tariff on goods from Brazil in a letter sent to its president, Luiz Inácio Lula da Silva. Trump cited the country's treatment of former President Jair Bolsonaro, who is on trial in Brazil’s Supreme Court on charges that he plotted a coup in 2022.”
“Brazil Assets Plunge After Trump Hikes Tariff Rate to 50%” (Bloomberg). “Donald Trump’s threat to impose 50% tariffs on Brazilian goods sent the country’s currency plunging as the US leader sharply escalated a dispute with Latin America’s largest nation and leftist leader Luiz Inacio Lula da Silva.”
June performance review
Prime Portfolio: +1.81%
Select Portfolio: +3.93%
SPY ETF: +5.43%
Bogleheads: +4.64%
What we’re reading (7/7)
“ETFs Are Eating The World. The Right—And Wrong—Ways To Invest.” (Barron’s). “Firms are now packaging just about everything in the funds, including Bitcoin and other cryptocurrencies, leveraged bets on individual stocks like Nvidia, and even bonds that would pay out sharply if a natural catastrophe strikes.”
“Cathie Wood’s Ark Files For New ETFs To Limit Losses In Flagship Fund” (Reuters). “Cathie Wood's Ark Investment Management has filed proposals for four new exchange-traded funds that aim to cushion potential losses in its flagship ARK Innovation fund. These ETFs mark Ark's entry into the buffer ETF market, where funds use options to limit losses while capping gains. The strategy, already used by companies such as BlackRock, Allianz and Innovator, has gained popularity among investors seeking protection in volatile markets.”
“Stocks Drop After Trump Unveils Higher Tariffs On Trading Partners” (Wall Street Journal). “President Trump‘s barrage of new tariffs drove stocks lower on Monday and moved trade tensions back to the forefront on Wall Street. Trump took to his Truth Social platform Monday afternoon to announce the U.S. would impose 25% tariffs on goods from Japan and South Korea. He later revealed that other nations, including Laos and Malaysia, would face higher levies. With each post, the major stock indexes fell further. Oil prices and bond yields rose, reflecting concerns that heavier tariffs would lead to higher inflation.”
“Stock Market Today: Dow, S&P 500, Nasdaq Futures Fall As Trump Ramps Up Tariff Threats Ahead Of August Deadline” (Yahoo! Finance). “US stock futures fell as President Trump threatened stiff tariffs on imports from more than a dozen countries and delayed the return of sweeping April levies.”
“The Declining Dollar Faces More Headwinds After Posting Worst First-Half Return In 52 Years” (CNBC). “Fresh off its worst performance since Richard Nixon was president, the U.S. dollar faces a variety of headwinds heading into the second half of the year that could have important investing implications. The greenback tumbled 10.7% against its global peers through June, making it the worst first half since 1973, back when Nixon broke the Bretton Woods gold standard. At its bottom, the currency hit its lowest point since February 2022.”
What we’re reading (7/6)
“Gold Edges Lower As Investors Track US Trade Policy And Dollar” (Bloomberg). “Gold fell as traders sought to track shifts in US trade policy, with bullion edging lower as President Donald Trump signaled an additional 10% tariff would apply to countries aligned with the BRICS group of nations.”
“The Force-Feeding Of AI On An Unwilling Public” (The Honest Broker). “Before proceeding let me ask a simple question: Has there ever been a major innovation that helped society, but only 8% of the public would pay for it? That’s never happened before in human history. Everybody wanted electricity in their homes. Everybody wanted a radio. Everybody wanted a phone. Everybody wanted a refrigerator. Everybody wanted a TV set. Everybody wanted the Internet. They wanted it. They paid for it. They enjoyed it. AI isn’t like that. People distrust it or even hate it—and more so with each passing month. So the purveyors must bundle it into current offerings, and force usage that way.”
“What The Rise Of “Buy Now, Pay Later” Services Tells Us About The Economy” (Vox). “US consumers, especially Gen Z and millennial ones, have been embracing “buy now, pay later” services like Klarna and Afterpay with gusto the last few years. It’s not hard to see the attraction: Unlike a credit card, most BNPL plans don’t carry interest, and they generally don’t impact your credit score (though that is now changing).”
“Oil Drops As Larger OPEC+ Supply Increase Raises Glut Concerns” (Bloomberg). “Oil extended declines after OPEC+ agreed to a bigger-than-expected production increase next month, raising concerns about oversupply just as US tariffs fan fears about the demand outlook.”
“Think Work-Life Balance Is Overrated? You’re Hired!” (Wall Street Journal). “In the tougher environment, many applicants find that managers are taking a harder line. They’re not just reining in flexible schedules, remote work and perks that became staples of the previously tight job market. They’re warning prospective and new employees to get ready for the grind—and they’re not afraid to say it out loud.”
What we’re reading (7/5)
“Meme Stocks And YOLO Bets Are Back And Fueling the Market’s Rally” (Wall Street Journal). “Forget the Magnificent Seven. Investors are now learning to love the Unprofitable 858. Meme stocks and money-losing companies are now back in favor, and underpinning a rally that has lifted the market to records. Of the 14 companies in the Russell 3000 index that have more than tripled since April 8, when the market bottomed out, 10 don’t generate any profits, according to analysts at Bespoke Investment Group. And through late June, the 858 Russell 3000 stocks with no earnings have since posted average gains of 36%, outperforming their profitable peers.”
“US Fiscal Folly Could Create Big, Beautiful Debt Spiral” (Joachim Klement). “The U.S. tax and spending bill passed on July 3 is expected to add more than $3 trillion to the country’s deficit over the next decade. If the current debt trajectory continues unabated, it could set off a slow motion debt spiral that could endanger the Federal Reserve’s independence. The sobering long-term debt projections of the Congressional Budget Office may actually understate the likely impact on U.S. debt-to-GDP levels of President Donald Trump’s ‘One Big Beautiful Bill.’”
“Homeowners Who Gambled On Lower Rates Are Paying The Price” (Wall Street Journal). “Millions of Americans bought homes in recent years with mortgage rates at 6.5% or higher, often betting they could refinance to a lower rate within a year or two. Now, with little hope of a rate cut in July after a solid jobs report on Thursday, many of these owners face the predicament of paying those higher costs for longer than they expected.”
“The ‘We’re Still Dancing’ Quote Of Our Time” (Financial Times). “Look, yes, the systemic dangers posed by popular bogeymen like private credit are possibly overstated (for now at least). Banks are historically the main locus of systemic financial risk, given the multitude of vital functions they fulfil. Investment managers really are built differently, and applying the same bank-centric “too big to fail” regulatory framework to them always seemed a bit weird. However, arguing that ‘non-bank financial institutions don’t pose systemic risk to our markets’ is plainly ludicrous.”
“OPEC+ To Boost Oil Production By 548,000 Barrels Per Day In August” (Associated Press). “Eight members of the OPEC+ alliance of oil exporting countries say they will boost production by 548,000 barrels per day in August in a move that could further reduce gas prices this year. The group that includes Saudi Arabia and Russia made the decision at a virtual meeting Saturday. They cited a ‘steady global economic outlook’ and low oil inventories.”
July picks available now
The new Prime and Select picks for July are available starting now, based on a model run put through today (June 29). As a note, I will be measuring the performance on these picks from the first trading day of the month, Tuesday, July 1, 2025 (at the mid-spread open price) through the last trading day of the month, Thursday, July 31, 2025 (at the mid-spread closing price).