July 14, 2023

📰 News Organizations

• Elon Musk Launches New Company, xAI. Elon Musk, CEO of Tesla and SpaceX, and owner of Twitter, announced the debut of a new AI company, xAI, with the goal to “understand the true nature of the universe.” According to the company’s website, Musk, and his team will share more information in a live Twitter Spaces chat on Friday.
  

• Google’s Bard AI Chatbot Adds More Languages to Take On ChatGPT. Alphabet's generative-AI chatbot, Bard, will now support conversations in 43 additional languages and be available across multiple regions in Europe and Brazil, significantly increasing its reach and potential user base.
  

• Exxon to Buy Denbury in $4.9 Billion Deal. The deal gives Exxon a leg up on building out the asset base it will need to attract potential customers for its nascent business capturing carbon as a service for so-called hard-to-decarbonize industries such as cement and steel. Exxon has said it would spend $7 billion through 2027 beefing up its low-carbon business, which it began in 2021.

• PepsiCo Exceeds Earnings Expectations and Raises Outlook. PepsiCo's strong performance led to adjusted earnings per share of $2.09, surpassing expectations, prompting the company to raise its full-year outlook for 2023, projecting 10% organic revenue growth and a 12% increase in core constant currency earnings.

• Delta Reports Record Revenue Fueled by Travel Boom. Delta Airlines recorded a net income of $1.83 billion in the second quarter, attributing its success to a travel boom, with expectations of continued demand in the current quarter that could exceed analysts' projections, potentially earning $2.20 to $2.50 per share.
  

• Ripple Wins Case Against the SEC. Ripple's XRP token surged on Thursday after a judge in the Southern District of New York ruled that it’s “not necessarily a security on its face.” The news gave hope to crypto investors, who breathed a sigh of relief that other altcoins may not be considered securities after all. The majority of the crypto tokens got a boost after the news.

🐦 Twitter

• Growth rate in cost to build a home and pace that builders are raising prices now reverting to pre-2020 norms. Source.
  
  

• Investment grade credit spreads are at 52-week lows, consistent with loosening financial conditions and/or a growing/accelerating economy. Source.
  
  

• Microsoft confirms more job cuts on top of 10,000 layoffs announced in January. Source.
  
  

• Ongoing equity rally has propelled many US/global segments to 20+% gains from 2022’s lows, bringing some indices to within single-digit %s from prior highs (S&P 500 Value has hit new all-time high yesterday), but U.S. regional banks still 45% below peak. Source.
  
  

• No change after the CPI report: market still expecting the Fed to hike rates another 25 bps when it meets again in 2 weeks (92% probability of a hike to 5.25-5.50%) followed by a pause for the remainder of the year. Source.
  

📓 Online Publications

• SEC Files Lawsuit Against Celsius and Ex-CEO Alex Mashinsky. The SEC accused Celsius and Mashinsky of raising billions through fraudulent and unregistered sales of “crypto asset securities,” repeatedly lying to investors about Celsius’s financial standing, and manipulating the price of CEL, the company’s native token.
  

• Telegram Merchants Gain Access to In-App Crypto Payments for First Time. Wallet, which is built on The Open Network (TON) blockchain, already allows crypto transfers between users in chats. Now it's letting merchants integrate cryptocurrency into the bots they use to accept payments, it said in an emailed announcement on Thursday.

• Aave Could Launch Stablecoin On Ethereum Within Days. The community behind Aave is rallying behind a governance proposal to launch its GHO stablecoin on the Ethereum mainnet. The proposal has met quorum and received unanimous support from token holders. Assuming it passes, Aave v3 users will soon be able to mint GHO against their Ether deposits at an annual interest rate of 1.5%, with users that stake the AAVE token receiving a 30% discount.

• Polygon Proposes Upgrading MATIC Into a Multipurpose Token. Once approved, MATIC’s upgrade to a multipurpose token will result in its renaming to POL and can be used to validate multiple chains. According to the announcement, POL’s utility will span all the Polygon protocols, which includes Polygon PoS, zkEVM and Supernets.
  

• MetaMask Developer Consensys To Launch Linea zkEVM. Linea uses zero-knowledge (ZK) cryptography to offer cheaper and faster blockchain transactions; ConsenSys says fee rates, known as gas prices, will be 15 times less on Linea than Ethereum. Meanwhile, ConsenSys says it does not currently have plans for a Linea token.

🎧 Podcasts

• US Junk Bond Market Shrinks as Rising Rates Put Off Borrowers. Rising interest rates are causing the US junk bond market to shrink, with a 13 percent contraction from its peak in 2021. Companies are less inclined to borrow due to higher rates, resulting in reduced new issuances and upgrades to investment-grade status. Source(3:38)
  

• OpenAI Hit With a Lawsuit. OpenAI is being sued by anonymous plaintiffs for allegedly breaching privacy laws by scraping a massive amount of online content without consent, including personal information. The lawsuit seeks three billion dollars in potential damages and represents a significant number of individuals affected by OpenAI's actions. Source(52:40)

• Shopify Shares the Costs of Meetings. Shopify introduces a new calendar feature that calculates the cost of meetings based on salaries, aiming to reduce unnecessary meetings and boost productivity. The company has already eliminated recurring meetings involving more than two people and expects to save 322,000 hours of meeting time this year. Source(23:15)
  
  

• Fed Likely to Maintain Inflation-Focused Approach. The Fed is likely to sustain its accommodative stance driven by inflation concerns, but a rate cut may be considered in 2024 if the economy faces recessionary risks. Excessive rate increases could adversely impact labor and industrial output, emphasizing the importance of a measured approach. Source(20:46)
  
  

• Bankruptcy Filings Decreased Over Time. The claim that bankruptcy rates are skyrocketing is not true. Jason Hartman compared recent bankruptcy filing statistics to previous years, including pre-COVID and 2016. The numbers show that bankruptcy filings have actually decreased over time. In the first quarter of 2022, there were 400,000 new filings, compared to over 800,000 in 2016. Source(2:42)