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

“If you can’t fly, then run; if you can’t run, then walk; if you can’t walk, then crawl – but whatever you do, you have to keep moving forward.” — Martin Luther King Jr.

Overnight

Fed’s Susan Collins warns against ‘self- fulfilling’ pessimism on U.S. economy FT

U.S. home sales edged up in July, prices still near record highs WSJ

FDA gives Moderna, as well as Pfizer and its partner BioNTech, the green light to roll out their new COVID vaccines WSJ

U.S. regulators close probe of GM’s Cruise self-driving system WSJ

Indian PM Modi met Ukraine’s Zelensky for talks in Kyiv in recognition of the fact that he cannot remain a passive bystander Semafor

Grenada became the world’s first country to use a natural-disaster clause to suspend debt repayments weeks after being devastated by a hurricane Semafor

PG&E races to stem growing fires ignited by its power lines WSJ

The green economy has a hunger for copper – and people are stealing, fighting, and dying to feed it Wired

Review 1,500+ climate policies in 41 countries finds just 63 actually worked to reduce greenhouse gas emissions WSJ

Cash dries up for locals fighting climate change WSJ

Single-issue climate policies less effective than a mixed approach, landmark report finds Semafor

Young workers worry Social Security will run out of funding in their lifetime – but they should have time to prepare CNBC

Labor disputes threaten ‘earthquake’ disruption in U.S. supply chains FT

Peloton shares soar 40% as turnaround plan takes hold, losses shrink CNBC

Snowflake shares sink 13% on decelerating product revenue growth CNBC

Amazon must face D.C.’s antitrust lawsuit, appeals court rules CNBC

Nestlé CEO Mark Schneider to step down FT

Canadian rail shutdown leaves billions in U.S. trade stranded, with economic impact to grow day by day CNBC               

Business groups press Canadian officials to bring end to railroad stoppage WSJ

Engine shortages have grounded airlines ; this company has the formula to fix that WSJ

The U.S. sports league that just scrapped the draft and made everyone a free agent WSJ

U.S. law firms offer staff $50,000 for referrals as talent wars rage FT

The trouble with deepfakes: liar’s dividend FT

Slack AI could be tricked into leaking login details and more TR

A $5B German scandal is driving green firms out of business Semafor

The latest Netflix competitor is… Chick-Fil-A, offering ‘family-friendly’ shows; Fox, History Channel veteran is in charge of programming TR

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

Real rates are 3X higher than at 2023 Jackson Hole – 1 of 3 reasons we expect markets to ultimately view Fed Chair Powell’s comments dovishly. This leads to risk-on post-speech.

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TECHNICAL

The U.S. equity rally over the last nine of 11 days has been constructive enough to think a move back to new highs can happen into September ahead of any seasonal Fall correction. The Equal-weighted SPX has already pushed back to new all-time high territory, coinciding with the breakdown in the U.S. Dollar and Treasury yields. Furthermore, market breadth remains constructive and sentiment is not yet bullish enough to mark a larger market peak. Cycles show strength into mid-September in both Equities and Treasuries before a selloff takes hold, and sectors like Financials and Consumer Discretionary have been instrumental in serving as a tailwind for equity gains at a time when Technology has been a bit wobbly. Overall, unless Technology starts to roll over in bigger fashion or the economy starts to weaken at a much faster rate, it looks right to stay bullish past Labor Day and expect that any weakness into the Jackson Hole meeting likely proves short-lived.

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CRYPTO

In our latest video, we explain why the recent order book imbalance appears to have cleared, discuss the potential for a ‘Trump premium’ to be priced back into markets soon, and highlight why BTC miners with HPC capacity present an attractive near-term risk/reward opportunity.

Click HERE for more.

First News

The Manual Doesn’t Exist. Generative AI models are being employed for a diverse range of purposes, from academic assistance and writing support to fact-checking and explicit conversations. While millions interact with AI daily, our understanding of how these chatbots are actually being put to work has been limited – until recently. Now, a study analyzing 200,000 prompts submitted to WildChat, an AI similar to ChatGPT, is opening a window onto usage patterns. Queries from students asking for help accounted for 16% of the interactions. Seven percent of users were trying to circumvent the AI’s restrictions on adult content. The research also uncovered various other applications: users asked for personal advice, requested help in planning their Dungeons & Dragons adventures, and used the AI as a sounding board for their ideas. “As a cheap source of second opinions, it’s incredible,” one academic said.

Who knows, AI may even have played a role in the writing and/or editing of what you’re reading this very minute. The only people who know are me and Claude. I’m not telling, and good luck trying to get Claude to talk. Semafor

“Please, sir, I want some more.” A new study by Charles Schwab says that most Americans would think of themselves as wealthy at a net worth of $2.5 million – up appreciably from $2.2 million just two years ago. And yet our countrymen reported needing an average net worth of $778,000 to feel ‘financially comfortable’, down appreciably from $1 million last year, though the figure scales upward with age. (The average Gen Z respondent said they would be financially comfortable at $406,000.) The average American seems to believe that s/he would need $1.46 million saved up to retire with confidence – up a whopping 53% compared to the $951,000 proffered in 2020. Schwab did not calculate the level at which Americans would feel like their own personal financial goals were reached.

And so, we have more pragmatic/modest goals for ‘feeling okay’, the suggestion of unattainability vis-à-vis the paradise of someday retirement, and a slight uptick in the even loftier/farther off goals for ‘state of wealth one day’, denoting ‘possibly never’ – as, in the minds of Americans, it would take twice the amount of an acceptable nest egg to feel ‘wealthy’. Given that the average American aged 45-54 (more or less the latest stage of the retirement-planning game at which a drastic, spirited last-ditch attempt at change could still lead to a commensurately different outcome) boasts an average of just $254,720 in retirement savings, it seems that most people are resigned to never retiring, eking out a penurious existence reminiscent of that of the denizens of workhouses from Charles Dickens novels or Jack London’s non-fiction. Quartz, Edward Jones

More Filling, Less Taste. Teams of academic researchers have grown substantially over the past few decades, doubling from an average of 1.8 authors per paper in 1970 to 3.6 authors per paper in 2004, and then continuing to grow from 3.99 to 6.25 (+ 57%, p < 0.0001) following a linear trend (r2 = 0.99), with an average relative increase of 2.28% per year over the last two decades, bringing us to the present day. This inflation has contributed to a bit of a logjam for early-career academics, according to a new study: for every one-person increase in the average team size for a given academic field, the new PhD’s working in that field are 24% less likely to hold a tenure-track job and 11% more likely to eventually leave science.

This smacks of a social-media-like effect: any person posting anything has theoretical exposure to a tremendous number of eyeballs (read: recognition as an author on a paper) – thousands to millions could see your cat picture or rant of the week – yet the concomitant reality is that very few of these have true reach that could lead to any meaningful degree of influence (read: tenure-track job). Teamwork is clearly crucial to many, if not most, scientific discoveries, yet the structure of the academic job market disincentivizes the very processes that ostensibly make for good science. Science, Springer