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

“It’s not about winning and losing; it’s about… thriving on a challenge. It’s about embracing the pain… and not being afraid.” — Summer Sanders

Overnight

The S&P 500 and Nasdaq were lower Wednesday as the rebound falters Barron’s

Unwinding of yen ‘carry trade’ still threatens markets, say analysts FT

Berkshire Hathaway plays the yen-carry trade – the right way Barron’s

The ‘short volatility’ trade has finally blown up; why investors probably aren’t waiting to pile back in WM

What market upheaval? Companies are selling debt just fine WSJ

Tropical Storm Debby made its second U.S. landfall early today near Bulls Bay, South Carolina, ~20 miles northeast of Charleston CNN

British brokerage TP ICAP favors New York listing for data unit BBG

Steven Mnuchin says it’s time to kill the new Treasury bond he created BBG

Franklin Templeton’s Martin Currie Japan Equity fund fails value assessment, with action needed across other funds IW

Regulators probing big banks’ handling of Zelle scams WSJ

Credit-card autopay can benefit consumers (a little) WSJ

Zillow’s mortgage push has some critics crying foul TI

The insurance industry is winning a fight to kill new protections for retirement savers WSJ

‘August is just the beginning.’ Mortgage rates have already fallen MW

ABN Amro CEO grilled over missing explanation for his departure BBG

Trump’s plan for U.S. Bitcoin stockpile alarms forfeiture experts BBG

Disney’s blockbusters can’t smooth parks’ rough ride WSJ

Novo Nordisk’s Wegovy sales disappoint WSJ

BlackRock names James Raby as new compliance chief WSJ

The business world’s favorite laptop has barely changed in 30 years WSJ

Boeing and NASA tussle over plan to bring Starliner astronauts home WSJ

CrowdStrike faces a potential tsunami of lawsuits and only the fine print may save it Wired

Bangladesh’s interim government, led by caretaker premier Nobel Peace Prize laureate Muhammad Yunus, to be sworn in today RT

Nigeria clamps down on unusual but increasing presence of pro-Russia support Semafor

Ukraine’s army surprises Russia with move across border WSJ

Two and a half years later, U.S. skaters get gold in oddest Olympic medal ceremony ever WSJ

The U.N. contribution to Hamas WSJ

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

Bottoms are a process, but the tailwinds are growing as more former Fed officials urge the Fed to become forward looking.

More in today’s Macro Minute Video, linked HERE.

TECHNICAL

The stabilization so far this week looks to be a work in progress, but following two early superb-breadth days, U.S. markets finished back lower on Wednesday, after having pushed nearly 200 SPX points higher off the lows. Overall, we feel that lows are likely in place for now, given the abnormally high VIX, the huge negative imbalance of volume into declining vs. advancing stocks, and increasing evidence of pervasive negative sentiment. It remains important to realize that, despite the harsh 10%+ decline off the peaks from mid-July, the Equal-weighted SPX and QQQ both suffered barely any damage and remain lower by less than 3% off all-time highs. U.S. Dollar and U.S. Treasury yields have both bounced early this week, but should be ready to turn back lower, and it’s expected that SPX has either bottomed this week or will bottom by next week before turning back higher in short order to rally into September. Bottom line, the risk/reward favors a return to growth and a Technology bounce after the recent pullback to support. However, make no mistake: some technical work is needed to surpass the current downtrend from mid-July, and we expect this to give way as U.S. indices work back higher into the back half of August and into September.

Click HERE for more.

CRYPTO

Ethena, a stablecoin protocol leveraging crypto basis trades, has added support for USDe on Solana. Until now, USDe has only been available on Ethereum Mainnet, but with the help of Layer Zero, USDe on Solana should expand its adoption to a new cohort of blockchain users. Ethena has also added SOL 7.53% as a backing asset, marking the third backing option behind Ethereum and Bitcoin. Since adding Bitcoin as a backing asset, USDe supply has grown by over $1 billion, and Ethena hopes its Solana integration will have a similar effect on its scaling efforts. USDe supply has steadily increased since launching eight months ago, reaching 3.1 billion and becoming the fourth largest stablecoin, only lagging long-standing competitors Tether, Circle, and Maker.

Grayscale has announced the creation of the Grayscale Bittensor Trust and the Grayscale Sui Trust. The two new trusts will respectively focus on singular assets, with The Bittensor Trust solely investing in TAO 6.14% , the utility token of the Bittensor network, and the Sui Trust investing in SUI 4.67% , the gas token of the Sui Network, a high-performance L1. Grayscale believes Bittensor is at the center of the growth of decentralized AI, whereas Sui is redefining smart contract platforms. The new trusts are open for daily subscriptions to accredited investors and operate like most of Grayscale’s existing trusts. TAO 6.14% has been one of the strongest tokens following this weekend’s drawdown, gaining 16.55% thus far this week, and SUI 4.67% is one of the top gainers today following the news.

Click HERE for more.

First News

AI Cuts Paper, Work. The other month, a smart woman said “I don’t want AI to do my writing for me so I could have more time to run my schedule and curate my Instagram feed. I want AI to run my schedule and curate my Instagram, so I could have more time to write.”

Sweetspot, an AI-powered government contracting startup, has secured $2.2 million in its initial seed funding round led by 1984 Ventures, marking a significant milestone for the five-person startup that emerged from the Y Combinator accelerator program last year to make the often complex and daunting $759 billion world of government contracts accessible to a wider range of businesses.

Sweetspot launched around a year ago with a search engine that scours federal contract databases. Since then, the company has expanded its capabilities and now also covers state and local contracts. Additionally, Sweetspot has developed software to assist companies throughout the entire federal procurement process, from applying to tracking their progress. Its customer base includes Elon Musk’s AI startup Groq, defense-tech company Vannevar Labs, security firm Strider Labs, and logistics provider Flexport.

The vision is to create a “TurboTax for government contracts,” making the complex and daunting procurement landscape more accessible to a wide range of businesses, from general contractors to web developers. The goal is to help companies more easily find and fulfill government contracts by having AI make previously hidden and untapped data much more accessible, i.e. democratized.

Sweetspot is currently in a race with another Y Combinator startup, GovDash, which was founded in 2022 and has secured more substantial funding. The DNA is right: two of GovDash’s founders, while undergrads at Boston University, teamed up to create an app called Hang, to make it easy to schedule hangouts with friends. Now one of the founders sees companies now having one place where their business development data flows easily and seamlessly, with an AI agent at its core to automate tedious workflows.

This is precisely the approach of the smart woman quoted above: taking on the labyrinthine systems and mountains of paperwork that make finding and bidding for U.S. federal contracts a prohibitively laborious process. It’s something that could be a sizable win for the C-suite, as they can get out more proposals, at a higher-quality level, in a fraction of the time, putting all the associated workflows on autopilot.

It’s also something that’s in the air – an approach we’ve written about before – which is why GovDash’s competition is growing, and quickly. The startup competes with Govly, whose platform lets companies assess, search, and analyze government contracting requirements across disparate sources. Another rival, Hazel, aims to use AI to automate government-contracting discovery, drafting, and compliance.

If only there were an AI to cut through the labyrinthine workings of the stock market… Well, let’s keep this between us, shall we, dear reader? This tech already exists. It’s called Fundstrat and its AI (as in Analog Intelligence) is run by… people. Semafor, TechCrunch