July 25, 2023

📰 News Organizations

• Bank Stocks Rise After Last Week's Earnings Rally. Bank stocks rose Monday, resuming an earnings-fueled rally from last week. The KBW Nasdaq Bank Index and the KBW Nasdaq Regional Banking Index were each up about 2% in Monday afternoon trading. Both recorded their best weekly performance in more than a year on Friday after a number of bigger regional banks said deposits stabilized in the second quarter.
  

• Elon Musk Officially Rebrands Twitter to ‘X.’ Twitter owner Elon Musk officially changed the company’s famous bird logo to an “X” on Monday as part of a sweeping rebrand. As of Monday, the domain X.com directs users to Twitter’s homepage, though Twitter.com also remains live. The transition from Twitter to X reflects Musk’s vision to turn the platform into what he has called an “everything app.”

• AMC Stock Skyrockets on Revised Stock-Conversion Settlement Plan. The judge rejected the settlement after determining the holders of common stock could not release AMC from potential claims that belong to holders of preferred shares. Many meme investors who own AMC’s common shares opposed the transactions out of concerns that their shares could be diluted.

• Johnson & Johnson to Reduce Kenvue Stake by 80% through Exchange Offer. Johnson & Johnson plans to decrease its Kenvue stake by at least 80% via an exchange offer, allowing shareholders to swap their shares for Kenvue's common stock at a 7% discount, with a share lockup period waiver.

• Spotify Raises Premium Subscription Prices in the U.S. Spotify announced it will increase the price of its Premium subscription offerings in the U.S. by as much as $2, which translates to a 20% increase for some plans, citing market landscape changes and aiming to provide continued value to fans and artists.
  

• Russia Defies Sanctions by Selling Oil Above Price Cap. It is the first time that the price for its flagship Urals grade of oil has breached the $60-a-barrel limit since the U.S. and its allies introduced the novel sanctions policy last December. A sign that the Kremlin has succeeded, at least in part, in adjusting to the restrictions.

🐦 Twitter

• This week, the Nasdaq will undergo a “special rebalance.” A handful of tech stocks have been so hot this year that they’ve carried the market. The top 10 Nasdaq stocks currently reflect a record 62% of the ENTIRE index. After the rebalance, it will fall to 50%. Source.
  

• July S&P Global U.S. Manufacturing PMI at 49 vs. 46.2 est. & 46.3 prior; Services PMI at 52 vs. 53 est. & 53.2 prior…sustained rise in new export orders for services helped support upturn as domestic demand lost momentum; elevated price pressures still led by services. Source.
  

• Student loan payment resumption in October will reduce consumer spending by more than $100 Billion per year according to research from Oxford Economics. Source.
  

• The relative performance of the healthcare sector versus the S&P 500 has been in a 30-year upward channel. At market peaks, these stocks often reach attractive valuations and then excel in performance during economic crises. The healthcare sector is poised to be among the primary beneficiaries of technological advancements like AI. Source.
  

• Google’s Bard has expanded to Europe and Brazil, taking the AI bot’s availability to over 59 new countries and 40 languages, raising the stakes in its competition against OpenAI’s ChatGPT and others. Source.

📓 Online Publications

• U.S. Foreclosures on the Rise as Pandemic Pause Lifts. In June, ATTOM data revealed an increase in distressed properties and foreclosure filings, attributed to the end of the foreclosure activity pause during the COVID-19 pandemic. Borrowers who were previously protected are now facing foreclosure.

• Amazon Invests $120 Million in Global High-Speed Internet Project. Amazon's Project Kuiper advances with the construction of a satellite processing facility at the Kennedy Space Center, backed by a $120 million investment, aimed at establishing a vast network of over 3,200 low-earth orbit satellites to provide high-speed internet worldwide.
  

• Spotify Wants To Add AI Emotion To Your Listening Experience. The music streaming company is seeking a patent for a system that can train and execute "text-to-speech synthesis." The technology takes a passage of text and converts it into audio, aiming to make it sound natural and convey the meaning of the text.

• Airbnb Predicts Return On Investment. The company is attempting to patent a system that predicts the "expected value of user conversion." This system gathers data on individual users' activity, such as account history, same-day site activity, frequency of views, and past bookings, and aggregates it in real time within a set window of time.
  

• People Underestimate The Potential For Deflation In A Credit Crunch. As commercial real estate loans get marked for higher interest rates this year, they will default. This will cause Banks to take large losses. When large losses are taken they can’t loan out money and are forced to freeze up credit. Banks struggle to justify loan creation when faced with steep losses.

🎧 Podcasts

• US Junk Loan Market Hit With Flurry Of Credit Rating Downgrades. The US junk loan market has been hit by the biggest credit downgrade since 2020, according to an analysis by JPMorgan. These loans typically have floating rates that move with interest rates. Companies and equity backers loaded up on this type of debt during the pandemic because interest rates were super low. Now they are struggling to pay the lenders. Source(0:59)
  

• AI Will Lead To More Efficient Organizations And Increase Margins. Jason Calacanis thinks that public companies are undervalued in some cases because of AI and the amount they're going to get done with less. Meanwhile, Dharmesh Shah believes that AI opens up new opportunities for smaller software companies to offer innovative products and services, making it an excellent time for entrepreneurs to explore AI's potential. Source(58:08)
  

• Earnings Avalanche and Fed Anticipation. Over 160 S&P 500 companies, a third of the index, are poised to release their earnings reports, including Meta, Alphabet, and Microsoft, McDonald's, Coca-Cola, and ExxonMobil. Additionally, market attention is focused on the Federal Reserve's final rate hike of the current cycle, as Jerome Powell's guidance could impact stock performance. Source(22:53)