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

“The most difficult thing in any negotiation… is making sure that you strip it of the emotion and deal with the facts.” — Howard Baker

Overnight

Oil hits 2-week high after Libya says it will shut down crude exports FT

Corn hits near four-year low on farmer selling, bumper crop forecasts LM

As the Dow rose to a record close, the S&P 500 fell 0.3% Barron’s

TSX posts record high on rotation into commodity-linked shares RT

Edgar Bronfman drops bid for Paramount, paving way for Skydance deal WSJ

The disconcerting signal behind China’s epic bond rally WSJ

Bank of Israel to keep rates on hold, in contrast to expected Fed, ECB cuts RT

The IPO market gets cold feet WSJ

Venture group G Squared raises $1bn to invest in discounted start-up shares FT

IBM shuts China R&D operations in latest retreat by U.S. companies WSJ

SocGen’s Slawomir Krupa struggles to turn tide as investors snub lackluster reset FT

Why Nippon Steel’s $15 billion takeover of U.S. Steel is in peril NYT

The rich also cry: low-income consumers continue to struggle, yet cracks begin to show for higher-income ones, too MW

Australia’s Zip in talks with Apple for U.S. buy-now-pay-later integration WSJ

KKR bank sale will gauge India’s fee-paying power RT

U.S. election complicates investors’ hunt for infrastructure deals FT

Ikea launches secondhand marketplace to compete with eBay FT

Temu parent PDD’s stock suffering a record plunge after revenue misses forecasts MS

Private-equity ownership is coming to the NFL WSJ

Eli Lilly to sell new Zepbound option for about half price of injection pens WSJ

Elliott Investment critiques Southwest leadership, overdue changes WSJ

Big-bank CEOs like to wield influence – except in presidential politics WSJ

Red Lobster taps former P.F. Chang’s head as CEO in bankruptcy exit plan RT

Canada to impose 100% tariff on Chinese EVs, including Teslas RT

Intel will be forced to find a plan B RT

Can a closed nuclear power plant from the ’70s be brought back to life? WSJ

Starbucks’ new CEO has a big carbon footprint WSJ

Uber fined in Netherlands for sending drivers’ data to the U.S. RT

Top defense contractors set to rake in record cash after orders soar FT

The DoJ subpoenas chip-equipment maker Applied Materials for information relating to the company’s application for federal grants BBG

China’s AI engineers are secretly accessing banned Nvidia chips WSJ

Australian employees now have the right to ignore work emails, calls after hours RT

Houston legend Mattress Mack has had it with the city’s big utility WSJ

Betting big on women’s soccer: first stadium built for professional women’s team CNBC

Struggling to unlock your phone? You might have lost your fingerprints Wired

America’s most boring job on brink of extinction: inside the desperate campaign to get Gen Z to become accountants BI

The office therapist will see you now WSJ

U.S. national parks receive record-high gift of $100M AP

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

The Dallas Fed Regional Survey shows August activity as incrementally better. Moreover, special questions highlight the discernible impact from Hurricane Beryl, contradicting the BLS report, suggesting little impact from the hurricane on the July jobs report.

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

TECHNICAL

Monday’s fractional weakness looked to be dominated by Technology, as six of 11 sectors were positive on the day, and market breadth, along with volume into advancing vs declining issues, was positive. Despite some market participants feeling that Monday could have been the start of a correction for stocks, the S&P 500 failed to undercut last Friday’s lows and remains within 1% of all-time highs. Furthermore, Equal-weighted S&P 500 continued to show excellent strength following its recent move back to all-time-high territory, and outperformed SPX, finishing roughly flat on the day.

Click HERE for more.

CRYPTO

The U.S. Trustee overseeing the FTX bankruptcy filed a complaint outlining ten issues with the bankruptcy estate’s reorganization plan. Some of the larger points included legal exemptions for many involved in the bankruptcy, unequal reimbursement among creditors, and the refusal of the estate to remove the costs related to a data breach of one of its service providers. The Trustee argues that creditors should not bear the cost of an internal data breach and that smaller creditors receiving a smaller percentage of claims compared to larger creditors is unfair given the estate has enough funds to pay everyone the same higher percentage. Additionally, a representative from one of the largest creditor groups filed a complaint, arguing that creditors should have the option to receive in-kind distributions to avoid large taxable events. The objections come after 95% of creditors who submitted votes voted in favor of the reorganization plan. No other complaints against the reorganization plan can be submitted before the case confirmation hearing on October 7th, where the judge will decide whether the plan is feasible or not. If approved, funds can be distributed to creditors shortly after.

Telegram founder and CEO Pavel Durov was arrested on Saturday in France by the National Anti-Fraud Office. Durov was placed in French custody ahead of a possible indictment for charges related to failing to censor criminal activity on the Telegram app. The French magistrate has until Wednesday to decide on whether or not to press charges against Durov. TON 162.56% , the native token of Telegram’s blockchain network, fell over 11% on Saturday following the news and has continued to sell off amid uncertainty, currently trading at $5.58. Telegram has released a statement saying Durov has nothing to hide and that Telegram abides by all European laws, including the Digital Services Act. The statement also pointed out that Durov should not be held responsible for any abuse of the platform by its users. The Twitter account for the TON Network affirmed its support for Durov and said that the TON team remains focused and fully operational.

Click HERE for more.

First News

Give or Take a Trillion. A new pair of analyses from the Penn Wharton Budget Model gave marks to the economic proposals of ex-President Donald Trump and Vice President Harris, finding that Trump’s proposals could add ~ $4-6 trillion to the deficit over a decade, depending on economic effects. For Harris, that sum ranged between $1.2 trillion and $2 trillion. Wharton

“The Business of America is Business.” The Chamber of Commerce outlined its tax priorities as Congress prepares to deal with expiring parts of the GOP tax law in 2025. High on the list of priorities are goals such as keeping the 21% corporate tax rate (some Republicans have toyed with the idea of increasing it), restoring immediate expensing for R&D spending, and preserving the 20% passthrough deduction for certain business income. CoC

Dawning of the Age of Austerity, Part II. The costs of entitlement programs are a problem for (the) future (generations). Social Security and especially Medicare, Medicaid, not to mention other government health programs, are, collectively, the primary source of future cost increases.

^{Source: Dylan Matthews}

A little less than half of the problem stems from population aging, which is intractable. Now, immigration can help, but only so much, as most immigrants are already some of the way toward retirement as they arrive. A bit more than half of the problem is projected healthcare cost growth. Dylan Matthews has five suggestions for what to do about the debt:

First: use tax hikes or spending cuts to offset any new spending or tax cuts…

Second, take growth seriously…expanded green cards for immigrants with science and engineering degrees seems like a no-brainer…funding for scientific research boosts productivity…

Third: the coming tax fight in 2025 should be used to raise revenue, not just avoid losing it…Taking the debt at all seriously means that whoever’s in office next year needs to pay for whatever part of the Trump cuts they want to keep…

Fourth: Social Security should be addressed, not punted…Democrats will push to pay for the program by raising taxes on high earners; Republicans will push for benefit cuts. Either way, the gap needs to be filled…

Fifth and finally, Congress needs to work to ensure that per-person health spending stays roughly constant.

Matthews is careful not to touch the third rail: spending less government money on healthcare. Prices are traditionally a function of demand, at least in part, and when you stop putting money into a service industry, prices tend to go down. (This is why the cost of college is finally decreasing. It’s not that colleges have become more efficient; it’s just that they’re no longer able to charge sky-high prices as demand shrinks.)

The same dynamic could work for healthcare. Medicare and other government health programs have finally begun to aggressively negotiate the prices of pharmaceuticals. The government could also choose to spend less on healthcare – by cutting benefits for these programs and by reducing the tax exclusion for employer-provided health insurance. Doing that would save the government money directly and indirectly – by causing healthcare costs to fall.

The reason the topic is so sensitive is that nobody wants their health benefits cut, especially with age. Also: the 11% of Americans who work in the healthcare industry are not looking forward to rounds of layoffs or wage cuts, no matter how noble the reasons. Still, relative to GDP, America’s healthcare costs twice as much as other rich countries’, despite achieving more or less similar results. NoahPinion