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

“You need a lot of different types of people to make the world better. ~Joe Louis

Overnight

Meta bans Russian state media networks BBC

White House’s Brainard Says Milestone Reached in Inflation Fight WSJ

Amazon mandating return to five days in office AX

US retailer holiday hiring set to be lower than last year RT

Hedge funds switch to buying banks, insurance and trading firms, says Goldman Sachs RT

Icahn Enterprises Says Suit Linked to Short-Seller Report Dismissed WSJ

Microsoft approves new $60 billion share buyback program, dividend increase RT 

BP to Sell U.S. Onshore Wind Energy Business WSJ

Vista, Blackstone nearing $8-billion deal to buy Smartsheet, sources say RT

Apollo pushes into high-grade debt business long dominated by banks FT

UAW fight with Stellantis escalates as union files unfair labor charges over factory commitments AP

Rupert Murdoch’s ‘Succession’ court battle begins BBC

Typhoon Yagi costs Vietnam $1.6 bln, may lower growth, planning ministry estimates RT

Larry Ellison becomes world’s second-richest man, dethroning Jeff Bezos as Oracle stock surges CNBC

At least two die as wildfires hit Portugal, Europe sends help RTMajor flooding hits Africa and Europe SEM

Chart of the Day

MORNING INSIGHT

Good morning!

The Fed’s anticipated rate cuts this Wednesday, at a time with no recession, is a positive for stocks looking three and six months out. But we still need to be mindful that this positive action is taking place in the midst of the challenging eight-week period ahead of Election Day.

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TECHNICAL

• Short-term bullish trend ongoing which should reach ST- resistance early next week.
• 12-month rally into this week’s probable Rate cut is strongest since at least 1987.
• Copper looks to be trying to bottom out after a difficult slide since May.

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CRYPTO

The crypto market moved lower yesterday, with  BTC 4.00% ,   ETH 2.53% , and # SOL all falling. Crypto flows turned net positive last week, with over $400 million in inflows into spot BTC ETFs. The largest influx occurred on Friday, when BTC ETFs saw over $260 million in USD inflows. On the other hand, ETH ETFs continued to experience net outflows, though the pace has slowed since their initial post-launch drop, with just under $13 million in outflows last week. Notably, the Coinbase premium/discount, a reliable indicator of US spot demand, has moved into a discount for the first time in several days yesterday morning, indicating a possible stall in capital inflows.

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First News

Fab news. Monday was sort of a good news-bad news day for Intel investors, though investors appear to have focused on the good news. The iconic semiconductor company has long been one of the few remaining integrated chipmakers in the industry (with both design and manufacturing capabilities.) Yesterday, it announced plans to spin off its foundry (chip fabrication) operations into a separate entity. One of the reasons why many semiconductor companies – including behemoths like Nvidia – have gone fabless is that fabrication facilities are enormously risky and expensive. Intel’s foundry operations had reportedly cost the company $25 billion of the last two years. The plan would enable the newly formed chip manufacturer to seek out independent or outside funding, though it was unclear whether there were any plans to have the new entity go public. 

More good news: Intel announced plans to work with Amazon to develop custom AI chips, expanding an existing relationship in which Intel supplies processors to power Amazon’s AWS servers. Most of the Amazon AI chips will be made at a new plant that is currently being built in Ohio and funded in part by a U.S. government CHIPS grant. 

Speaking of government grants, the White House also announced yesterday that Intel would be awarded up to another $3 billion to expand the company’s involvement in Secure Enclave, a project that aims to provide a secure source of advanced chips for the U.S. military.

In not-so-good news, however, Reuters reported that Intel had lost out on the contract to provide processors to run Sony’s next-generation gaming console, Playstation 6. Sony reportedly made the decision in 2022 after disagreements over price could not be resolved. Anonymous sources involved in negotiating the deal estimated that it could have been worth as much as $30 billion to Intel. Instead, AMD will reportedly provide the processing power for the PS6 when it comes out – current industry scuttlebutt has 2026 as the earliest possible release date. (Sony’s current latest-and-greatest, the PS5, is also powered by custom-designed AMD chips.) (RT, CNBC, NYT)

Secure spending. The U.S. breathed a collective sigh of relief that President Donald Trump had survived another apparent assassination attempt over the weekend. Questions have re-emerged about the Secret Service’s protection, particularly because the agency had pledged to provide his detail with additional resources after the first attempt on his life: Trump was unhurt, but how did the alleged gunman get so close in the first place? 

Yet amidst questions about what went wrong – or at least could have been done better – to safeguard President Trump, it is worth looking at how high-profile executives with significant means but without access to the resources of the Secret Service – stay safe. Elon Musk, who has emerged an ally of Trump’s this campaign season, reportedly has personal security that rivals Trump’s. He has his own private security company, Foundation Security. In 2023, Tesla separately paid $2.3 million to help ensure his safety. His security is so dedicated that a team reportedly even accompanies him to the restroom. 

The cost of Musk’s security does not seem outside the norm, however. Nvidia CEO Jensen Huang’s security cost his company $2.4 million, and Amazon in 2023 paid $1.6 million for Jeff Bezos’s security. Alphabet paid $6.8 million to help ensure that its CEO, Sundar Pichai, stays safe. The outliers appear to be Meta, which spent $23.4 million in 2023 on personal security for Mark Zuckerberg. On the end of the spectrum, Berkshire Hathaway disclosed just $313,000 in security expenses for Warren Buffet. (FOR, NYT)