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

“The essence of the independent mind lies not in what it thinks, but in how it thinks.” ― Christopher Hitchens, Letters to a Young Contrarian

Overnight

Former President Donald Trump accepted his third GOP nomination for president at the Republican National Convention last night WSJ

Flights around the world were grounded today after a global computer outage attributable at least partly to cybersecurity firm CrowdStrike hit airlines and businesses CNN

Embraer deliveries rise 88% in second quarter, order backlog at 7-year high RT

Biden forgives $1.2 billion in student loans in latest relief BBG

ECB keeps rates steady, pausing divergence with Fed WSJ

Xi’s big economic meeting shows party bracing for slower growth BBG

Netflix delivered its best non-holiday quarter since the onset of the pandemic NVR

Meta explores stake in Ray-Ban maker EssilorLuxottica, which is buying Supreme FTWSJ

Warner Bros Discovery drafts break-up plan FT

Sam Altman’s $3.7 billion fusion startup leaves scientists puzzled BBG

OpenAI has talked to Broadcom about developing new AI chip TI

ChatGPT maker OpenAI goes smaller and cheaper with new AI tech WSJ

Mistral AI releases multilingual model for the masses MAI

Goldman Sachs opens up an investment strategy once reserved for the wealthy WSJ

A travel boom, aided by the strong U.S. dollar, is fueling American home purchases abroad MG

Mortgage rates drop to lowest level since March; buyers aren’t biting Barron’s

Get ready to pay more for less-reliable electricity WSJ

Big U.S. bond managers steer clear of long-dated government debt RT

U.K. financial regulator tells banks to go easier on politicians WSJ

Biden gives Iran another sanctions break WSJ

China investors’ newest craze: Saudi stocks WSJ

Meet the traders making money off the Trump shooting and Biden’s stumbles WSJ    

Publicis raises guidance after revenue growth beats expectations WSJ

Shamrock buys a basket of film, TV and music rights from Vine WSJ

Is the worst over for New York offices? WSJ

Blackstone’s Gray expects ‘new cycle’ for real estate market BBG

Hong Kongers fleeing to U.K. leave $3.8 billion trapped behind BBG

Eli Lilly’s stock consolidates as investors eye obesity-drug competition MW

JPMorgan acquires loan linked to 777 Partners, the troubled PE firm Barron’s

America’s next great wine destination? Northern Virginia WSJ

How billionaires die NY

Heirs finally get an answer from IRS about money in inherited retirement accounts WSJ

Bob Newhart, dean of the deadpan delivery, dies at 94 HR

Lou Dobbs, conservative cable news anchor, dies at 78 WSJ

Forever’s gonna start on mile 1: nine miles of solid diamonds may lurk beneath Mercury’s surface LS

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

As we stated earlier this week, we believe this is the “Summer of Small-caps”, with a sizable rally underway that will exceed the Oct to Dec ’23 gain (for IWM 0.43% ) of +27%. This rally, we believe, could be +40% over the next 10 weeks.

The primary driver, in our view, was an astonishingly low June CPI (+0.06% Core CPI MoM), which gave the green light for Small-caps to rally.

Click HERE for more.

TECHNICAL

Super Granny-Shot Technicals

Amazon Inc (AMZN 0.05%  – $183.75)

A сuccessful breakout above 2021 highs has helped to keep AMZN in good shape, technically speaking.

Two weeks of consolidation post breakout to new all-time highs makes this attractive to buy dips on, with ample support near former April-May highs at $180-185.

Barring a move back lower under $178 on a weekly close, minor consolidation makes AMZN attractive from a risk-reward standpoint.

A rally back to $212 looks possible initially, and would require a weekly close back under $166 to avoid this stock.

Click HERE for more.

CRYPTO

Prospective ETF issuers have submitted their final documents to the SEC, which are expected to be approved by Monday. BlackRock has set its fee at 0.25% for its spot Ethereum ETF, with a waiver reducing it to 0.12% for the first year or up to $2.5 billion in assets. Other firms, including 21Shares, Bitwise, Grayscale, Invesco Galaxy, VanEck, and Franklin Templeton, have announced fees ranging from 0.19% to 0.25%, with various temporary waivers. Grayscale has set a notably higher fee at 2.5% (10 times more expensive than its competitors) for its Ethereum Trust but aligned its mini trust fee at 0.25%. The SEC has approved 19b-4 forms for eight spot Ethereum ETFs, with trading expected to begin on Tuesday.

According to Bloomberg, State Street is exploring ways to settle payments on the blockchain, potentially creating its own stablecoin and deposit token. These initiatives, still under wraps, align with its recent efforts to integrate digital assets into its traditional financial operations. The company is also evaluating participation in digital-cash consortia and exploring settlement options through its investment in the blockchain payment startup Fnality. This move comes as other traditional financial firms like PayPal, Visa, Mastercard, and JPMorgan Chase explore similar blockchain-based payment solutions. State Street, already providing services for crypto ETFs, is focusing on tokenizing assets and recently partnered with Galaxy Asset Management to develop digital assets ETFs. While there is no indication of which chain they would look to build on, this further cements stablecoins as one of the killer use cases for crypto rails.

Click HERE for more.

First News

It’s the Thought that Counts. At Institutional Investor, keeper of Wall Street’s version of the Tonys for financial analysts, the winner in one important category this year is… absent.

The rented hall is being cleaned out and the chairs put away for the event formerly featuring the letters E.S.G. Institutional Investor has officially dropped the label from its annual analyst rank.

Yet private investors are increasingly incorporating ESG principles, by whatever name, into their investments and launching dedicated ESG funds. This trend contrasts sharply with the outflows seen in ESG mutual funds.

Of course, private capital investments often directly fund companies, allowing them – empowering would be the word of choice in the ESG universe – to implement their visions. In contrast, stock market investments typically involve buying shares from existing shareholders, with little direct benefit to the companies themselves.

^{Data: Preqin; Chart: Axios Visuals}

U.S. ESG stock market funds saw $13.2 billion in outflows in 2023 and $8.8 billion in outflows in Q1 2024, while U.S. alternative asset ESG funds boast $27 billion raised in 2023, with $17 billion raised in just the first four months of 2024. European firms raised $98 billion for ESG funds over 16 months.

The key trend is that ESG funds are more prevalent among European and institutional investors than American and retail investors, with ESG funds representing 21% of all alternative capital raised as of April 2024. European limited partners make up 44% of impact investors and 43% of climate investors, while North American LPs account for 33% of impact investors and 41% of climate investors.

Climate-focused funds have also recently outpaced impact funds in both number and volume of capital raised. The bottom line is that, despite political challenges facing public-company ESG strategies, private investment in ESG projects continues to grow.

In the meantime, The 2024 U.S. presidential election marks the first in which EVs are playing a central role. Donald Trump has vowed to terminate EV mandates immediately if elected, and recently gained a surprising ally in this stance – Elon Musk, of we-need-to-accelerate-the-transition-to-electric-vehicles-to-save-the-planet fame. Despite Tesla being his most valuable asset, Musk has pledged up to $180 million to Trump’s campaign.

EVs have become a contentious issue, intertwining climate policy, labor concerns, and anxieties about China’s global influence. One could say that they’ve emerged as a focal point in America’s cultural divide. Supporters view EVs as key to a low-carbon future and domestic manufacturing growth. Critics perceive them as benefiting China while threatening traditional American industries like oil and auto manufacturing, pushed by overzealous coastal regulators.

The November election presents voters with dramatically different visions for the energy transition. Biden and Trump’s contrasting stances on EVs effectively put the future of electric transportation on the ballot, making this a pivotal moment in the debate over America’s energy and transportation future. Axios, Bloomberg, Semafor

A Weed for the Munchies. Duckweed, a freshwater aquatic plant, is emerging as a promising protein source for human and animal consumption alike. Under optimal conditions, duckweed boasts a remarkable 45% protein content. Its productivity is exceptional, with a single hectare capable of yielding 10-18 tons of protein annually. This far surpasses soybean production, which generates only 0.6-1.2 tons of protein per hectare in the same timeframe.

It’s the rapid growth rate of duckweed that is particularly noteworthy, with its biomass potentially doubling in under 48 hours. Researchers are focusing on developing efficient methods to extract rubisco, the primary enzyme found in duckweed leaves. Rubisco is not only the main protein in duckweed but also the most abundant protein on Earth, making it a valuable target for extraction, utilization (and potentially colonizing Mars). The Conversation