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

“It is every man’s obligation to put back into the world at least the equivalent of what he takes out of it.” ― Albert Einstein

Overnight

Futures dip as focus moves to tech earnings RT

VP Kamala Harris has the support of enough Democratic delegates to win the party’s nomination for president AP

Top financial watchdog says shadow bank vulnerabilities yet to be fixed FT

Bank of Canada looks set to deliver back-to-back rate cuts WSJ

BOE wants banks to use long-term repos amid liquidity drain BBG

Date of meeting between Biden and Israeli PM Netanyahu, in D.C. to speak before Congress, remains fluid as Biden recovers from Covid-19 NBC

Ukraine’s foreign minister visits Beijing for first time since start of war RFE

Ukraine strikes deal to restructure $20bn of debt FT

Mysterious Russia-linked buyers amass LNG ‘dark fleet’ FT

Delta passengers slammed by more than 4,400 cancellations since Friday CNN

Insurers’ losses from global IT outage could reach billions FT

General Motors suspends work on autonomous vehicle FT

Google reverses decision to end ad trackers in Chrome TI

Warner Bros. Discovery seeks to retain its NBA rights deal TI

Porsche warns on profits as flooding hits aluminum supplier FT

Brad Jacobs’s QXO raises $620 million, adds Kushner to board WSJ

EVs are cheaper than ever, but can car buyers be won over? WSJ

With 70K EVs, ~50 charging stations, Ethiopia rushes into ban on import of gas, diesel cars ROW

Cash dries up for locals fighting climate change WSJ

Reddit teams up with the NFL, NBA to boost revenue TI

The 401(k) rollover mistake that costs retirement savers billions WSJ

Wiz and Google end $23 billion deal talks TI

Mattel releases the first blind Barbie to “further inclusivity in dolls”: “Great for our community” TI

Andy Murray, the only man to win Olympic tennis singles gold twice, to retire after Paris Olympics BBC

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

We discuss the importance of macro data this week, highlighting how many parts of the economy are in recession and would benefit from Fed cuts.

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

TECHNICAL

U.S. Equity indices look to have bottomed following Monday’s 1% rally to multi-day highs in SPX and QQQ, led by strength in Technology. Small- and mid-Caps could outperform in the weeks ahead, while other Defensive groups like Utilities and REITS have begun to show more evidence of turning higher. Overall, given that Semiconductor stocks managed to regain more than 50% of last Friday’s losses, this snapback in Tech is seen as a good sign. SPX likely pushes higher to test and exceed 5669, the all-time high from last Tuesday, while QQQ should surpass its intraday peak from 7/10 of just over 503.50.

Click HERE for more.

CRYPTO

The NYSE Arca has received approval to list and trade spot Ethereum ETFs from Grayscale and Bitwise, according to recent SEC filings. Despite this, issuers must wait for SEC registration statements to become effective, expected on Monday, with trading likely starting Tuesday. The SEC approved 19b-4 forms in May as part of a two-step process. The Cboe exchange, where many Ethereum ETFs will trade, announced that trading for the Fidelity, Franklin, Invesco Galaxy, VanEck, and 21Shares Core Ethereum ETFs will also begin on Tuesday.

Ondo Finance and the Noble blockchain have launched Ondo Dollar Yield (USDY 0.02% ) on Cosmos. USDY is a yield-bearing stablecoin product, fully backed by short-term U.S. Treasuries and U.S. bank demand deposits. Now on more than 90 application-specific Cosmos blockchains, USDY provides global (non-U.S.) individual and institutional investors access to yield, with over $300 million locked in value across multiple chains. Helix, an upcoming derivatives exchange on Injective, will integrate USDY as a spot asset and collateral pairing with the perpetual markets on their platform. This will allow their users to trade on-chain while yielding via USDY for the first time. USDY has a market capitalization of over $220 million, placing it in the top 15 stablecoins by market cap, according to Defillama.

Hong Kong will launch the first Bitcoin futures inverse product in Asia, the CSOP Bitcoin Future Daily Inverse Product. CSOP Asset Management, the leading asset manager in China, will provide investors with a way to earn profit from declines in the price of Bitcoin. This tool offers an alternative to shorting or buying put options on Bitcoin directly. The inverse ETF by CSOP, with HSBC as the trustee, charges a 1.99% annual fee and aims to attract $50-100 million in assets under management in 1-2 years. BITI in the U.S. has over $70 million under management so far. This represents another milestone for Bitcoin adoption in Asia.

Click HERE for more.

First News

Culture Trumps Finance. In a recent note to clients, Goldman Sachs said that U.S. trade policy under a second Donald Trump presidency would be so multivariate and unorthodox that it could not be effectively modeled. While it’s easy to make, the assumption, that forecastable volatility and its downstream economic impact would be comparable to Trump’s first term, but the bank’s economists said that “sizing the potential uncertainty increase… is empirically impossible” due to the scope of Trump’s trade proposals –  notably, including a 10% tariff on all US imports from China. UBS projects a 2.5-percentage-point hit to Chinese growth from Trump’s proposals, and Wells Fargo says U.S. GDP could decline as a result.

Some countries don’t care much for GDP declines if that’s the price they have to pay to rid themselves from the scourge of overtourism. Europe as a whole received 709 million visitors in 2023, and in some countries, particularly Spain, “the patience of locals has snapped”. Tens of thousands have protested there recently, despite the fact that tourism accounts for 12% of Spanish GDP. Locals have had enough of being priced out of homes, noise and disorder, and  the Disneyfication of their medieval cities. Some municipalities are fighting back against the siege, mandating limits on tour-group sizes and bans on public drinking. Venice introduced a €5 ($5.50) daily fee for visiting during peak times, and actually raised more money than anticipated.

Many of those tourists now overrunning Southern Europe come from the U.S., and many of them like to travel in style, dressing the part while they’re at it. Whether they realize it or not, a significant percentage of their threads can likely be traced back to one company – Authentic Brands, which has bought up the intellectual property of Brooks Brothers, Barneys New York, Aeropostale, Forever 21, Nine West, Reebok, Champion, Sports Illustrated et al for small change, overhauling them and extracting whatever value is left in the name, mostly through licensing. The business, which owns 50 brands, is worth $17 billion. It’s also the third-largest licensor of intellectual property, behind only Walt Disney and Meredith Corp, and is doing very well. Juicy Couture sales are up 60% since 2021, Nine West retail sales are up 42% since acquisition, and Reebok sales are up to $5 billion from $3.7 billion at purchase. Semafor, Semafor, Bloomberg

Ultra-Thin Chips, Big-Boy Pants. As China seeks to play an increasingly prominent role on the world stage – what with simultaneously hosting the Ukrainian foreign minister for talks on ways to stop Russia’s aggression and China’s possible role in them, and a group of Palestinian Arab factions attempting to form a united front – a group of researchers at Chinese universities claim they’ve achieved a concrete result, producing an ultra-thin semiconductor that could lead to the creation of faster and more energy-efficient microchips. First published in the journal Science, the findings could be a significant milestone in global semiconductor development and China’s own efforts to bypass U.S. restrictions on the country’s industry. Relatedly, Nvidia announced that it was working on a version of its flagship AI chips for the Chinese market that would be in line with U.S. restrictions, which Washington may yet tighten further. Semafor