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

“No man ever steps in the same river twice. For it’s not the same river and he’s not the same man.” — Heraclitus

Overnight

As indices surge, S&P 500 reaches another record Barron’s

Macron government resigns as France’s paralysis deepens ahead of Olympics WSJ

Americans paying much more for homes in swing states since 2020 election MG

Fresh tariffs could see interest rates stay higher for even longer, IMF warns WSJ

Study: Coronavirus aid lowered borrowing costs, credit quality BB

BlackRock CEO says answer to U.S. debt problem is deregulation Fortune

How Wall Street keeps absorbing America’s borrowing binge WSJ

Family offices snub hedge funds for quant bets, Citi banker says BBG

Yield-hungry wealth management clients are becoming a headache for big banks WSJ

Blue Owl to buy Atalaya in deeper push into private credit BBG

Bill Ackman tells investors his ‘notoriety’ will boost new fund FT

HSBC appoints CFO Georges Elhedery as new CEO FT

Real-estate meltdown strains even the safest office bonds WSJ

Morgan Stanley traders, bankers top estimates as wealth unit lags BBG

Amazon’s Prime Day is a ‘major cause of injuries’ for workers, Senate probe finds WSJ

Digital-payment service Zelle remains dominant over checks, says BofA MW

Deutsche Bank flouted international accounting rules, says watchdog FT

Kraft Heinz names new North America CMO amid moves to support long-term growth WSJ

Intel venture arm’s China tech stakes raises alarm in Washington FT

Water group founded by China’s richest person demands apology from HK watchdog FT

Chinese tycoon who angered Beijing found guilty of fraud in New York WSJ

Elon Musk says he will move X and SpaceX headquarters out of California WSJ

Tesla goes on robotaxi hiring spree months after chaotic mass firings BBG

Former Goldman banker pleads not guilty to charges of bribing Ghanaian officials WSJ

Sen. Bob Menendez found guilty of corruption charges WSJ

Ozy Media and CEO Carlos Watson, former Goldman Sachs banker and MSNBC anchor, convicted of fraud WSJ

Bankrupt former parent of Parler fails to stop lawsuit Against backer Mercer WSJ

Turkey unveils corporate tax overhaul FT

Yandex founder, one of only two prominent Russian businessmen to condemn Moscow’s invasion of Ukraine, to build AI business in Europe after Russia exit FT

Ex-Tesla and -OpenAI, Andrej Karpathy aims to apply AI assistants to education, starting with a course on how to train your own AI TC

Russia’s Kaspersky to shut down stateside operations, lay off employees after U.S. government ban TC

Chinese website stealthily sells Trump fist-pumping t-shirts with ‘Comrade Jianguo’, a mocking/affectionate reference to the man whose presidency, many in China believe, benefited Beijing because it hurt Washington Semafor

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

• Look for the July Quarterly rebalance of our Granny Shots today:
• Updating 5 Super and 5 Sleeper Grannies
• Updating 5 Super and 5 Sleeper SMID Grannies.

• For our Large-Cap Granny Shots Portfolio:
  The additions:  AMGN -2.61% , CL -3.17% , EMR -0.99% , IR -0.75% , LDOS -2.38% , SPGI -1.72% , VRTX -3.28% , WMB 1.08%
  The deletions: CMG 0.46% , COP 2.70% , CRM 1.52% , DECK -0.48% , EOG -1.11% , FANG 2.86% , MPC -1.13% , NOW 3.05% , ODFL -6.15% , PSX -2.05%
• For our SMID Granny Shots Portfolio …

To download the slide deck for our Granny Shots Webinar, please click HERE.

TECHNICAL

Small and mid-cap indices have been outperforming Large-caps in recent days. MDY -0.56% , the SPDR Mid-cap Series ETF, just pushed back to new all-time highs, while the Russell 2000 ETF by Ishares (IWM -0.01% ) remains shy of its initial target near 2021 peaks at $244.

This mean reversion looks healthy for the U.S. Stock market, as bond yield and the U.S. Dollar have been falling, and Technology looks to be taking a much-needed breather.

Given Tech’s outperformance for multiple months while the broader market underperformed, some catch-up by the broader market is encouraging and is seen as healthy, technically speaking.

Click HERE for more.

CRYPTO

In our latest video, we discuss the implications of this past weekend’s events, the market’s reaction to Gox coins moving on-chain, and the encouraging flow metrics we are observing.

Click HERE for more.

First News

‘AI’ Must Be for ‘African Innovation’. According to a new report by GSMA, a global industry body representing mobile operators, the value of Africa’s artificial-intelligence market could be $400 billion or 2.5% of the global AI market, which thereby has a valuation of ~$16 trillion. Per the report, AI could improve efficiency, particularly in agriculture, to such a sci-fi extent that its use might add $2.9 trillion to Africa’s cumulative GDP by 2030. The single greatest obstacle that must be overcome to improve the continent’s digital infrastructure, says GSMA, is the lack of additional investment funds flowing into data-center construction and improved electricity distribution.

Speaking more broadly, however, investors in African startups are increasingly confident of a return to more dealmaking, as the causes of a nigh two-year pullback by global capital seem to be evaporating like droplets from a flash shower disappearing from the surface of a banana leaf in the hot African sun.

Investments in African startups totaled just $780 million in 1H24, down 60% from the same period last year, according to Africa: The Big Deal, which tracks funding data. Last year, African startups raised $2.3 billion from equity deals, which was itself less than half of the figure for the year before – and with a simultaneous halving of the number of investors participating in deals, reported pan-African investor Partech.

And yet there are signs of macroeconomic stability in Africa’s top destinations for venture capital investment – particularly in Nigeria, whose central bank has intervened to stem inflation and currency devaluation. Some investors believe that this, along with the prospect of rate cuts by the U.S. Fed, could boost optimism in the funding ecosystem.

The last couple of years have provided African tech hubs with lessons on the need to better structure investments, to minimize the potential for startup closures and misdeeds. Investors say there’s much more optimism in July 2024 than a year ago, with investment capital returning to a much healthier ecosystem in which companies are making real money with real users and a lot less hype.

Before this funding crunch, African tech benefited from an influx of capital from Western investors who took advantage of low interest rates that made borrowing to invest appealing. After a year and half of increases up to last July, a return to low(er) rates, could engender a revival of investment in African startups. Semafor

Suborning Digitally. Bank of America reports that the interbank digital-payment service Zelle remains the heavily preferred way to pay (more popular than checks) among its customers. In the meantime, apparently ~$1.3 billion was paid in bribes to public officials in Nigeria last year, a survey by the government’s statistics agency and the UN’s drug and crimes office found. In a baldfaced testament to the normalization of low-level corruption in certain many societies – and in a boon for the people and institutions that make a living researching such things – astonishingly, some of the payments were made via bank transfer.

‘Get ‘er done’

More than a quarter of the 33,000 Nigerians responding to the survey paid at least one bribe to a public official between November 2022 and October 2023; 70% paid in the offices of public officials or on the street and 5% in the homes of public officials – with the average amount of grease for the wheels tipping the scales of injustice at ~$15.

Speaking of remittances and Africa, in a rare deal, Nala – a remittance startup facilitating funds transfers from the U.S., E.U. and U.K. now expanding its portfolio through a new B2B payments platform – has raised $40 million in equity in one of the largest Series A transactions in Africa. TechCrunch, MW