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

“I don’t think you should be vulnerable every day, but there are moments where you’ve got to share your soul and conscience with people and show them who you are, and not be afraid of it.” — Howard Schultz

Overnight

Inflation slipped to 2.9% in July, lower than expected WSJ

Treasury yields slide as producer-prices increase is less than expected CNBC

Crude rally stalls after IEA forecasts oil surplus FT

S&P 500 up 1.5% as tame inflation data fuels Treasury rally, market comeback CNBC

Investors return to bonds as recession fears stalk markets FT

China’s bond market is sending a signal policymakers can’t ignore FT

Mars reaches deal for Cheez-It and Eggo maker Kellanova WSJ

Blackstone sells 3,000 homes worth £405mn to UK’s biggest pension fund FT

Steward Health to sell physicians network to private-equity-backed Rural Healthcare WSJ

Paramount to close TV studio amid restructuring WSJ

Elliott prepares to launch proxy fight at Southwest Airlines WSJ

Lockheed Martin, General Dynamics aim to tackle rocket-motor shortage WSJ

Digital-health company Ro launches GLP-1 insurance-coverage checker to help patients navigate costs CNBC

Home Depot’s patient investors wait out high rates WSJ

Avon Products files for bankruptcy to deal with talc lawsuits WSJ

Bank of America urges bankers to sound alarm on overwork WSJ

Wall Street’s trash contains buried treasure WSJ

Why Wall Street thinks Brian Niccol can revive Starbucks, end Howard Schultz era CNBC

Brussels slaps down its internal market commissioner over ‘harmful content’ letter to Elon Musk FT

Can Sweden deliver its much hyped green-energy boom? FT

UAW hits Musk, Trump with federal labor charges over union-busting comments CNBC

Tilray to acquire craft beer brands from Molson Coors WSJ

Murdoch family battle highlights Nevada’s secret trust boom CNBC

Hipgnosis sues Barry Manilow over bonus payments FT

The $22 billion plan to turn a defunct airport into a small city WSJ

Large Canada phone firms must open fiber-optic networks to smaller rivals WSJ

India withdraws controversial broadcast bill proposed to regulate independent news content creators on social media platforms as OTT broadcasters IE

Turkey’s Instagram spat shows the limits of global content governance FT

Crypto magnate buys SpaceX mission for private polar spaceflight expedition CNBC

Iran lashes out at Europeans over call for restraint in attacking Israel FT

Russia withdraws some forces from Ukraine in response to Kursk invasion WSJ

Russian navy trained to target sites inside Europe with nuclear-capable missiles FT

Ukrainian forces seek to hold Russian positions after capturing hundreds of troops FT

Johannesburg mayor quits after turbulent 15 months in charge FT

Athens residents evacuated as wildfires spread near capital FT

Urban birds carry drug-resistant bacteria, research shows FT

Australian farmers seek to tap tiny underground bits of fungus to pull carbon dioxide out of the air, stash it underground NYT

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

While bottoms are a “process,” the good July Core CPI tilts “risk-on” at least until Jackson Hole (8/22-8/24).

Click HERE for more.

TECHNICAL

As Mark Newton is on break, there will be no new reports or videos this week.

Click HERE for more.

CRYPTO

MKR surged, driven by the ETH rally and Grayscale’s MKR trust launch, reinforcing its position as our preferred ETH-adjacent alt ahead of MKR End Game. HNT also performed well, benefiting from its “network of networks” transition and new offloading partnerships. Despite doubling in value, it may be too early to take profits. The market now turns to tomorrow’s CPI print, with Monday’s inflation expectations and Tuesday’s PPI indicating a likely continuation of disinflationary trends.

Click HERE for more.

First News

Transparently Profitable. The U.K. is mulling a bill to regulate the ESG-rating agencies that evaluate the environmental, social and governance performance of companies. The potential crackdown on the sustainable-ratings industry by the office of the Chancellor of the Exchequer (the equivalent of the Treasury Secretary in the U.S.) – a mostly unregulated sector that has broad influence over trillions of pounds’ worth of investments (the equivalent of, well… trillions of U.S. dollars of investments) – is part of a global drive to increase transparency far and wide and “unleash Britain’s potential”.

Chancellor Rachel Reeves’ idea is to raise Britain’s growth performance – in this case, by bringing U.K. legislation on ESG-rating agencies into line with that of other leading economies, including the E.U.’s.

At present there is little oversight of how organizations create ESG criteria and rate other companies against them – and yet, the ratings influence which stocks and bonds make it into the investment funds marketed as ‘sustainable’. One thing that concerns Reeves is that opaque criteria used by the agencies could lead, say, to unwarranted divestment from U.K. defense companies – just when, post-Brexit, they need all the support they can get. To avoid new burdens on business, the U.K. regime will mirror international recommendations and the system being created by the E.U.

As always, the note to strike is one that sits comfortably between necessary clarity and overregulation. On the one hand, it’s necessary to separate ratings groups’ data services from their consultancy divisions, require more disclosure of methodological details, and, of course, mandate formal registration with authorities. Clarity is crucial, particularly in light of recent UK requirements for fund-sustainability disclosures.

At the same time, it’s equally necessary to distinguish between ESG ratings, which are subjective opinions that often vary, and ESG data, which comprises objective facts used to calculate ratings. For example, restricting the flow of ESG data, which covers rapidly evolving topics, could adversely impact investors.

Stateside, one aspect of ESG that seems to be more than an opinion is the fact that companies which help their customers use resources more efficiently and waste less – your rental-equipment providers, spare-parts distributors, repair & maintenance shops, and companies that offer recycling and material-recovery; even firms that make software for designing more efficient manufacturing processes — have seen their share-price growth outstrip the market average, per Goldman Sachs research. These “circularity enablers” benefit on both ends: one, from both the rise of efficiency-mandating ESG policies, and two, the rising costs of raw materials. They also often have ARR-generating long-term service contracts with clients – good for stable, high-margin revenue streams. Some of the stars in this space are General Electric; the French water, waste, and energy management company Veolia; and the U.S. water infrastructure company Xylem. FT, Semafor