A daily market update from Fundstrat — what you need to know ahead of opening bell

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“The talent of success is nothing more than doing what you can do well and doing well whatever you do without thought of fame.” — Henry Wadsworth Longfellow

Overnight

SpaceX wins $843 million NASA contract to bring the International Space Station out of orbit when its lifespan ends in a few years Fortune

SpaceX tender offer would value Elon Musk’s space company at $210 billion, report says MW

Startup that says it can help EVs charge faster raises $375 million WSJ

BP halts hiring, slows renewables roll-out to win over investors RT

U.S. Supreme Court rejects plan to shield Sacklers in Purdue bankruptcy FT

The new money-laundering network fueling the fentanyl crisis FT

SCOTUS curbs SEC’s enforcement powers WSJ

Bankers say 2024 M&A is just good when ‘it should’ve been great’ BBG

UBS shakes up wealth business to align more closely with investment bank FT

Bank of England says better risk management needed in private equity RT

Walgreens could shutter over 2K stores as sales plunge amid stubborn inflation NYP

Bankrupt Sam Ash picks Mexican merchant Gonher as buyer for assets WSJ

As Chinese stocks struggle, owning boring ones has paid dividends WSJ

Iceland’s debut gender bond sets template for other governments BBG

Bill Gates on his climate investments: the early winners and long shots WSJ

Treasury-market liquidity is back in focus; market participants not in sync over whether a bigger problem lies ahead MW

Is Micron weighing on Nvidia and other chip stocks? Barron’s

A $167 billion question: is an AI stock bubble looming? MW

Protests continue in major cities and towns in Kenya, even after President William Ruto withdraws the unpopular finance bill that triggered the deadly demonstrations YF

Donald Ray Horton, whose company built 1 of 7 U.S. homes last year, dies at 74 WSJ

NFL ordered to pay $4.7 billion in Sunday Ticket case WSJ

Gaming out the scenarios of life WSJ

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

As expected, May PCE showed inflation rose 2.6% in May from a year ago, pointing to weakening inflation pressures. As we’ve said before, the Fed’s data dependence seems to be increasingly offside, and we expect odds of a cut to rise in the coming weeks.

More in the Macro Minute, linked here.

TECHNICAL

Upticks Additions

• FormFactor – FORM0.17%
• Deckers Outdoor Corp. – DECK2.22%

Upticks Deletions

• Netflix – NFLX0.98% 
• Western Digital Corp. – WDC1.52%

Click HERE for the video.

CRYPTO

In our latest video, we discuss what OPEC can teach us about the current crypto market, potential tailwinds from less miner selling, our view on aggregate demand for BTC, and why we think ETH ETF flows will surprise investors to the upside.

Click HERE for more.

First News

A Punishing Climate. South Africa risks forfeiting $9.3 billion in international funding if it delays shutting down five of its most polluting coal-fired power plants, thus violating a climate-finance agreement. This sum represents loans and grants promised by wealthy nations in 2021 as part of the Just Energy Transition Partnership (JETP). A study commissioned by South Africa’s environment minister cautions that JETP partners, including the U.S. U.K., and the E.U., are unlikely to accept any backtracking on decarbonization commitments.

Also in South Africa, in a desperate bid to curb poaching, researchers plan to implant the horns of a score of rhinos with radioactive chips. Poaching is a persistent threat to the country’s significant rhino population, with the radioactive chips designed to make the horns toxic if consumed by humans (in the form of medicinal powders) and easier to detect during border checks, potentially disrupting the illegal trade. Researchers assure that the low-level radioactivity poses no harm to the rhinos themselves. Poachers often target South African rhinos for their horns, which are valued in some traditional medicine practices. Semafor

Speaking of potentially radioactive, Washington state is considering implementing a fee on home deliveries as it grapples with the anticipated decline in gas-tax revenue due to increasing electric vehicle adoption. The state’s mandate for all new vehicles to be zero-emission by 2035 is expected to reduce gas-tax income by $300 million, bringing it below $1 billion annually. To address the impending shortfall, Washington is looking at delivery-tax models from other states. Colorado’s 27-cent per order fee, for instance, generated $78 million in its first year. Minnesota is set to introduce a 50-cent fee per delivery this year. Washington’s proposed 30-cent fee could potentially raise between $45 million and $112 million in 2026, helping to offset the declining gas tax revenue. E&E News

India Ink. Private equity firms are making a comeback in India, attracted by recent regulatory reforms that have eased investment processes. This renewed interest comes as foreign capital seeks alternative markets, with many investors redirecting funds from China into what they see as a more favorable business environment.. This isn’t the first time India has courted Western investment, but the country’s initial opening to foreign capital in the early 2000s resulted in punishing losses for many investors. As an executive from Blackstone, now India’s largest commercial property owner, told Bloomberg, “We were learning” during that period. Reuters

And speaking of private equity, the days when that sub-industry looked like geniuses by borrowing to buy companies and riding a broadly rising market to big profits seem to be over.Case in point: Goldman Sachs has hired a former Honeywell executive to actually improve the companies it owns.

Just 6% of buyout returns between 2005 and 2021 came from boosting profitability, with the rest a combination of leverage, top-line growth, more leverage, generally higher stock prices, and the maximum amount of leverage possible.

These days, companies like Advent have dozens of operations executives working to improve their portfolio companies, including along the AI axis. It’s an industry-wide trend. In addition to its Honeywell hire, Goldman has former executives from Coca-Cola, Intel, and HP on staff. Sports investor Redbird has hired former soccer stars, Kim Kardashian’s retail-focused firm hired the Apple Store chief, and the former head of Amazon’s grocery business working on TPG’s companies. Semafor

Skeletons as a Group. Speaking of hiring, should one need something written – and well – one would want to employ a professional writer, and it seems that this cohort comes with its own suite of not-so-closeted skeletal issues. The Czech Institute of Egyptology houses 221 Old Kingdom skeletons from nearly 200 tombs, with 102 being male. Since 2009, the institute had been conducting group studies on these remains to uncover environmental and lifestyle details of the ancient Egyptians. A particular study focused on 69 adult male skeletons, aiming to distinguish scribes from the general population. The findings revealed that scribes differed in less than 4% of the examined skeletal traits. However, these differences were significant and specific to their occupation; to wit: 1. degenerative issues in the temporomandibular joint (jaw to skull), 2. wear in the right collar bone, 3. deterioration of the right thumb, 4. spinal problems, especially in the upper region. Unsurprisingly, this pattern of musculoskeletal issues bears a striking resemblance to the ergonomic-related problems faced by many modern-day office workers.

Just a hop and a skip away from the Czech Republic, in Hungary, studies of the graves of medieval warriors have provided conclusive evidence of the effects professional archery has (via increased muscle use) on the skeletons of its practitioners, specifically on the collarbones and bones of the upper arm – at the bony attachment sites for the pecs, delts, and lats, suggesting greater use of the muscles involved in archery – as well as the lower arm bones. In short, professional writers are officially the archers of today, with the pen being at least as mighty as the arrow – although, naturally, still mightier than the sword. Ars Technica