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

“The truth about the world… is that anything is possible. Had you not seen it all from birth and thereby bled it of its strangeness it would appear to you for what it is, a hat trick in a medicine show.” — Cormac McCarthy

Overnight

Gene editing breakthrough promises to boost fight against disease (FT)

Merck didn’t publicize the results of a key cancer trial (Barron’s)

Big banks can withstand disaster scenario as balance sheets grow ‘riskier,’ Fed says (Barron’s)

Amazon’s market value crosses $2tn for the first time (FT)

Micron stock slumps despite strong earnings (Barron’s)

Companies will have to disclose spending on worker pay for the first time (WSJ)

Sri Lanka reaches deal with creditor nations over $5.8bn of debt (FT)

Bulgaria and Romania fail economic tests to join euro (FT)

Japanese yen falls to weakest level since 1986 (FT)

Australian dollar jumps after inflation accelerates (FT)

Oil-rich Abu Dhabi wants to be an AI leader; aligning with the U.S. is just the start (CNN)

Morgan Stanley wealth advisors are about to get an OpenAI-powered assistant to do their grunt work (CNBC)

Nomura hands British banker record $12mn pay award (FT)

NYSE trading glitch costs Interactive Brokers $48mn (FT)

FCA pressed to block Shein’s London IPO over labor practices (IW)

Trucking experts project spinoff of FedEx’s freight business (WSJ)

SEC’s Gary Gensler on his agenda: ‘If the courts adjust, we adjust’ (FT)

Companies slash borrowing costs on $400bn of U.S. junk loans, benefiting from equivalent of two Fed rate cuts as demand for debt booms (FT)

Switzerland sticks to bank capital schedule in blow to UBS (BBG)

Activist investor Jana Partners to push cybersecurity firm Rapid7 to sell itself (WSJ)

KKR bids to take control of corporate PR firm from WPP (FT)

Hot indie studio A24 scores $3.5bn valuation after Josh Kushner infusion (FT)

YouTube in talks with record labels over AI music deal (FT)

Some Bed Bath & Beyond board members worried secrets were passed to Ryan Cohen before his $60 million gain (WSJ)

CEO in major health-advertising fraud gets 7.5-year prison sentence (WSJ)

Incora’s 2022 capital raise to be ruled illegal in bankruptcy ccourt (WSJ)

Amazon is launching a website section devoted to cheap items shipped from China – a rival to Temu (TI)

U.S. recovers Monet painting, Paris apartment from 1MDB fugitive Jho Low (WSJ)

Bolivia’s president says country facing coup as soldiers seize central square (RT)

Ex-Honduran president gets 45 years in prison in drug case (WSJ)

Is Brazil’s central bank disparaging Lula on social media? (BR)

America’s drinking water is under attack, with links back to China, Russia, Iran (CNBC)

The North Koreans sneaking into American coding jobs (Sherwood)

King Taliban’s mines (FT)

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

The incoming data this week – from Case-Shiller home prices, Target price announcements, McDonald’s $5 value meal – all point to weakening inflation pressures, which we expect will be confirmed by this Friday’s May PCE. But 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 today’s Macro Minute video, linked here.

TECHNICAL

Catch Mark Newton on Fox Business with Charles Payne, today at 2:00 pm ET.

The trend in Equities should be close to finding a bottom and turning back higher to new highs into July, after just a minor three-day pullback in Technology. Broader market performance has proven impressive in the last week and should be a driving reason for stock indices continuing to push higher in the month of July. DXY and TNX look close to breaking down, and likely trend lower into September. Overall, despite Tuesday’s resumption in Technology strength while the broader stock market showed more weakness, we expect to see sectors like Healthcare, Financials, Consumer Discretionary, and Industrials build on recent strength to rally in July. SPX and QQQ trends remain bullish and supportive of a push higher to near 5700 in SPX, and it’s thought that mid-July could prove to be more important than mid-June. 

Click HERE for more.

CRYPTO

The Blast Foundation initiated the first phase of its airdrop program, with 17 billion BLAST tokens available for claiming today. Of the 17 billion tokens, 7 billion are allocated for Blast Point holders, 7 billion for Blast Gold holders, and 3 billion for the Blur Foundation. The total supply of Blast is 100 billion tokens, with 50% of the supply earmarked for the community, 25.5% for core contributors, 16.5% for investors, and the remaining 8% maintained by the Blast Foundation. Blast has quickly become the 6th largest on-chain economy, accumulating over $2 billion in TVL in less than 100 days. It remains to be seen how sticky that TVL is and whether users were mainly airdrop farming. BLAST N/A% claims went live at 10 AM EST this morning, opening at $0.024 and currently trading at $0.021, implying an FDV of approximately $2.1 billion.

Bybit Card, a Mastercard-issued debit card that allows users to leverage their Bybit crypto balances for payments and cash withdrawals, can now be added to Apple Pay. The Bybit Card supports payments using eight different crypto assets, including USDC, Tether, Bitcoin, and Ethereum. Apple Pay is one of the most used payment services globally, with an estimated 640 million users worldwide and accounting for 12.6% of all online consumer payments in 2023. The integration gives Bybit users an easy way to off-ramp digital assets and spend in the real world while integrating crypto into their daily lives. Crypto companies continue to try and bridge the gap between the two sectors and find ways for people to operate on blockchain rails without noticing any differences compared to traditional infrastructure.

Click HERE for more.

First News

Traduttore, Traditore. Recently, DeepL, a German AI-driven language translation startup, has seen its workforce balloon nearly seven times in three years. This growth comes as the company strives to maintain its competitive edge against major tech giants, investing heavily in hiring using its funding rounds.

Recently valued at $2 billion after a $300 million fundraise, DeepL bills itself as being at the forefront of AI translation technology and has just announced an expansion into 165 new markets across Asia, Africa, Europe, and the Americas for its business-focused translation product.

DeepL also faces stiff competition from tech behemoths like Apple, Amazon, Google, Microsoft, and Meta, all of which are investing in similar technologies. The incumbents have an advantage in the consumer market, with potential for integrating real-time translation into devices like phones, earbuds, and smart speakers, but Katharina Wilhelm from Index Ventures, which led DeepL’s recent investment round, highlights the company’s value in the enterprise sector. While consumers appreciate DeepL, businesses and professionals are more likely to pay for its services due to the critical nature of accuracy and security in translations.

DeepL’s client roster includes notable names such as Nikkei, Deutsche Bahn, and Zendesk, underscoring its growing presence in the business translation market.

We all have multiple past lives, and one such life in the rearview mirror of the person writing this happens to be that of a professional translator, with millions of words of annual and research reports – not to mention more literary fare – translated into English. What DeepL produces when translating texts of multiple genres from and into multiple languages is still more raw than one would expect, especially considering that Google Translate, which successfully used machine learning (ML) – what AI used to be called back when there was no hype surrounding it – a decade ago to consistently produce texts that were no worse than what DeepL, which is competing with the Google of today, is offering.

DeepL allocates up to 100 of its approximately 1,000 employees to research, focusing on enhancing and expanding their machine-translation capabilities. In the meantime, DeepL CEO Jarek Kutylowski declined to say whether big tech companies have approached the company about partnering or acquiring its technology.

Index Ventures is aiming for DeepL to become a major player rather than an acquisition target, and says that it would not have invested in something seen as a near-term acquisition by a big platform. Rather, Index looks at it as a ‘generational company’ where the goal is long-term growth.

Kutylowski explained that, as current top-tier translation models are too large for on-device processing and require cloud access, the technological limitation means that real-time translation on hardware devices remains a future prospect. At the same time, DeepL has no plans to build its own hardware device.

Instead of pursuing the consumer market, DeepL has strategically focused on enterprise clients. The company secures seven-figure contracts with large corporations, including international law firms and organizations needing diplomatic translations.

Kutylowski illustrated this with an example of a major Japanese automaker that relies on DeepL to bridge communication between its Japan-based R&D and US-based commercial operations. “Communication between those parts of the business are extremely important, and so much can go wrong if it doesn’t work out,” he emphasized. Given the current state of DeepL’s product, it would be a grave oversight not to have those commercial translations overseen by humans before they go to the clients.

And yet, undaunted, DeepL is expanding into literary translation. Kutylowski says proudly, “We have a shelf of books in our office that have been translated using DeepL. There’s even a machine-learning neural-network book.” Semafor