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

“Ambition drives you on, ability certainly helps, but the fickle finger of fate and luck are great things.” – Fergus Henderson

Overnight

Exploding pagers injure hundreds of Hezbollah members WSJ

Google scores rare legal win as 1.49bn euro fine scrapped BBC

Brexit deal impact in UK is worsening, warn economists BBC

Disaster averted in Red Sea as burning tanker saved after attack BBC

Lobbying efforts against China tariffs are growing in some Western countries SEM

Longshoremen at key US ports threatening to strike over automation and pay AP

Weekly mortgage demand surges 14% higher CNBC

August retail sales beat BAR

UK inflation holds steady in August, matching expectations CNBC

Biden administration extends review period for Nippon Steel acquisition of U.S. Steel NYT

BlackRock and Microsoft plan $30bn fund to invest in AI infrastructure FT

Cigna demands FTC retraction in escalating drug-price fight WSJ

SEC charges FTX auditor with misconduct FT

Alaska-Hawaiian merger clears DOT review, but airlines must preserve miles, routes CNBC

Instagram will force millions of teens into protected accounts CNN

Banking Deal Oversight Expected to Get a Major Revamp NYT

Ohio GOP Gov. DeWine says ‘at least 33’ bomb threats prompt Springfield to begin daily school sweeps CNBC

Houston-area pipeline fire prompts evacuations, shelter-in-place orders for thousands CNBC

Kremlin-backed influence campaign aims to denigrate Harris, Microsoft finds SEM

Antibiotic-resistance deaths to surge from 2025-2050, study says RT

Chart of the Day

MORNING INSIGHT

Good morning!

There will undoubtedly be substantial market reaction to the FOMC rate decision and post-meeting press conference (2:30pm ET). But we want our clients to largely ignore this noise (“market reaction”) and even the noise for the next few weeks.

Click HERE for more.

TECHNICAL

• Short-term bullish trend likely faces brief resistance before upside breakout.
• Post-Expiration performance in September tends to be sub-par but not always in Election years.
• Cycle composite makes the case for an SPX rally into mid-October ahead of a slide.

Click HERE for more.

CRYPTO

The latest data has brought us closer to a soft landing. We’re keeping an eye on the persistent decline in ETH/BTC — specifically several key indicators we’re watching to anticipate a potential bottom in the ratio.

Click HERE for more.

First News

Returning winds of change. For those romanticizing the clipper-ship days of yore, last week marked a milestone in the revival of wind-powered shipping: on September 10, the Anemos arrived in New York City after departing from Le Havre, France on August 19. The ship, carrying a 1,000-ton cargo of cognac, wine, and champagne (bien sûr), was propelled almost entirely by a system of automated cloth sails. 

Of course, the Anemos boasted some modern upgrades: in addition to the backup diesel engines on board, it also incorporates carbon-fiber masts, which are lighter, yet strong enough to incorporate sails that are twice as large as those used in the 19th century.  The Anemos, the first of eight ships planned of this design, also features a computerized rigging and navigation system that incorporates satellite weather data to maximize the benefits of wind propulsion. Much of the technology incorporated in this ship was developed in previous America’s Cup races. (The next America’s Cup challenge begins October 12, 2024 in Barcelona.) 

Earlier in the year, another sail-related experiment also achieved successful results. A cargo liner equipped with automated metal “sails” completed a six-month trial run. The MV Pyxis Ocean, with a much larger capacity of almost 81,000 tons, was retrofitted with the so-called WindWings technology. Between August 2023 and March 2024, demonstrating a 32% reduction of energy consumption per nautical mile. 

In other old-timey maritime news, Harland & Wolff, the British shipbuilder that built the Titanic, filed for bankruptcy protection on Monday – the second time it has done so in the last five years. The shipbuilder, which continues to run the Belfast shipyard where the ill-fated luxury liner was manufactured, hopes to restructure and continue operations. Its Belfast facility is currently tasked with helping to construct warships for the UK Royal Navy.

Another page on security. Most will have heard about the thousands of pagers simultaneously exploding across Lebanon in what was apparently an orchestrated attack on members of the Hezbollah terrorist group (see above). Recently, Hezbollah had reportedly decided to go low-tech, ordering members to switch to pagers due to concerns that smartphones were too easy for their enemies to track. 

But it isn’t just terrorists who still use pagers. In the smartphone era, as many as 90% of U.S. hospitals continue to use pagers as a primary method of communicating with physicians during emergencies. They are also still frequently issued to other first responders such as firefighters and paramedics, and also to nuclear-plant engineers. 

Pagers certainly have obvious disadvantages over smartphones. However, they are considered better for privacy, partly due to the limited types and quantities of data they can handle. Pagers are also durable and rarely run out of power. Perhaps most importantly, pagers also generally get superior coverage, at a level comparable to FM radio signals, and they work even when cellular networks are down. 

The prevailing (but as yet unconfirmed) theory is that the perpetrators of the attack on Hezbollah tampered with the pagers – a Taiwanese-branded model made under license by a Hungarian company – before they entered Lebanon, inserting a small quantity of explosive and a remote-detonation switch inside. If so, this would be classified as a “supply chain attack” exploiting security vulnerabilities at vendors – though unusual as it targeted hardware rather than software. The issue of supply chain attacks arose last week after a Congressional report found risks associated with the cranes used to load and unload cargo at U.S. ports – specifically cranes made by China’s ZPMC. Investigators were alarmed to find that at times, some of the cranes can come installed with cellular modems installed without the knowledge of port owners, potentially providing Chinese intelligence with the means to monitor, disrupt, and/or attack port operations. ZPMC denied installing the modems, though it’s unclear whether an admission would have been more or less unsettling. (HT, WSJ, SL)