Puck News | August 26th, 2024

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GOOD MORNING

Here's everything you need to know this week: After last week ended with Fed Chair Jay Powell all but confirming a September rate cut, expect to wake up Monday morning to see Wall Street doing one of those slow-motion champagne fights you see in the movies as we all remember just how addicted we are to cheap money. When J-Pow uttered, “The time has come for policy to adjust,” from Jackson Hole,  investors translated it as, “Buy more stonks!” So get out there and go nuts. 

1. Nvidia Nvidia Nvidia

Now that we can all stop hyper-focusing on the Fed, we can spend our time obsessing over Nvidia’s earnings and the chipmaker’s role as the backbone of the AI boom and the star of the “Magnificent 7.” Get ready to feel yourself acting like Jim Cramer until Wednesday afternoon as you murmur “Nvidia, Nvidia” to yourself like a sad mantra. But with tech stocks riding high again on more AI hype, the chipmaker needs to deliver another blockbuster quarter to justify the sky-high valuations of heavyweights like Microsoft, Amazon, and Alphabet. So give into the madness, it’s only a few days, and then you get a three-day weekend to get your sanity back.

2. Israel and Hezbollah Exchange Rocket Strikes

One thing that might cut through trader’s rate-cut delirium this week is increasing regional violence in the Middle East. On Sunday, Israel launched a massive airstrike into Lebanon, hitting 40 Hezbollah targets with around 100 fighter jets. The strikes came after Israel detected Hezbollah prepping for a missile and rocket barrage on northern and central Israel, even potentially targeting Mossad HQ. Hezbollah responded by firing over 200 projectiles at Israel, including rockets and drones, claiming they hit deep within Israeli territory. Israel, however, disagrees. As the situation escalates, it might be worth keeping an eye on how European markets react.

3. Telegram CEO Lands In Paris Jail

Pavel Durov just found out that landing a private jet in Paris doesn’t guarantee a smooth arrival. The Russian-born billionaire behind Telegram was arrested at Le Bourget airport upon landing on Saturday. French authorities are reportedly investigating Telegram’s role in potential criminal activities due to its lack of moderation and cooperation with police. Like a deleted private Telegram chat, details are scarce, with French officials and Telegram staying silent, but it’s clear Durov, who also holds French and UAE citizenship, is in serious eau chaude. A possible indictment is looming, and the tech mogul might not be flying private again for a while.

4. Stranded in Space? Thanks, Boeing

In a twist absolutely no one saw coming, Boeing’s Starliner capsule that was supposed to bring the astronauts it brought to the ISS back from space is now heading back to Earth without said astronauts. NASA announced Saturday that Butch Wilmore and Suni Williams, who rode up in Starliner in June, will now hitch a ride back from Elon Musk and his SpaceX Dragon instead. The plan was for Starliner to bring them home after about nine days, but propulsion issues have kept the capsule grounded. This is another (and now galactic) facepalm for Boeing, which was supposed to be the future of crewed spaceflight but is now ceding the field to SpaceX, which is also about to let private citizens take a stroll in space on Tuesday, testing out new spacesuits in what’s easily one of the company’s riskiest PR stunts yet. Once that’s over, we assume SpaceX will fully focus on going to get Wilmore and Williams who are now slated to stay on the ISS until February. Oof.

Political and Market Sentiment

The September rate cut might already be visible in political coffers. After making history as her party’s official nominee last week, Kamala Harris is now also making bank. The Harris-Walz campaign announced on Sunday that it’s raked in a whopping $540 million so far. Ever since Joe Biden decided to pass the torch and back Harris on July 21, Democratic donors have been tripping over themselves to open their wallets. Last week’s Democratic National Convention in Chicago was basically a cash machine for the campaign, collecting stacks from a raucous week. Meanwhile, Trump, ever the fundraiser, has been left in the dust. His campaign pulled in $138.7 million in July, which is less than what Harris took in during her first week on the top of the ticket. With $327 million in the bank, Trump might want to start worrying… or ask Elon for more.

Global Markets Overview

Europe: The pan-European STOXX 600 popped 1.31%, riding the wave of optimism that the Fed and ECB might finally cut rates next month. Germany’s DAX surged 1.70%, France’s CAC 40 jumped 1.71%, and Italy’s FTSE MIB rose 1.83%, while the UK’s FTSE 100 barely budged with a 0.20% gain. And new data showed that the Paris Olympics hype gave eurozone business activity a much-needed boost in August. Thanks, Raygun!

Asia: Japan’s markets saw modest gains with the Nikkei 225 up 0.8% and TOPIX inching up 0.2%. BoJ Governor Ueda stuck to his guns on normalizing monetary policy, buoyed by July’s rising core inflation as he chases that 2% target. Over in China, stocks slipped as traders hit pause ahead of Powell’s Jackson Hole speech and a quiet economic calendar. The Shanghai Composite and CSI 300 dropped, while Hong Kong’s Hang Seng managed a slight uptick. China’s central bank kept lending rates steady, choosing to protect bank margins over fresh stimulus.

The Week Ahead

Come on guys, we’ve been over this: the week is all about spending your rate cut money on Nvidia. But if you want to bother with a secondary plotline, maybe keep one eye on the bond market as it reacts to J-Pow’s sweet talk while also reckoning with last week’s historically massive BLS revision that saw 818,000 phantom jobs disappear from the economy like dark magic. That data glitch sent bond yields tumbling, which might be setting the table for a nice bounce this week.

Let’s Dive Into More Details Below…

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BREAKING NEWS
This concept also carries some serious baggage, particularly regarding Sam Bankman-Fried (SBF). The fuzzy-haired founder of FTX, now serving 25 years in federal prison for defrauding customers and investors, used stolen funds from his crypto exchange to direct two FTX executives to evade contribution limits. They funneled over $100 million in political donations to Democrats and Republicans before the 2022 U.S. midterm elections.

SBF's antics aren't scaring today's Blockchain companies because, according to a report by Public Citizen, these companies have supplied 48% of the $248 million of corporate money donated to influence federal elections this cycle.

Did SBF walk so these blockchain companies could run?

WHAT HAPPENED
On the fronts of the sources of data (OpenSecrets.org), Public Citizen (PC) is a well-known, non-partisan consumer advocacy organization founded in 1971, with a membership of 500,000+ across the USA. Their core mission to "defend democracy, resist corporate power, and fight to ensure that government works for the people – not big corporations" is an honorable and much-needed one, given the general state of things. As a bonus, it prides itself on its independence, refusing government and corporate funding to maintain its ability to critique powerful entities without political bias. It allows it to act as an uncompromising watchdog, addressing issues of corporate influence in politics regardless of party affiliations.

Now, for Public Citizen's findings, there is plenty to unpack, most notably PC's opening point, stating, "In 2024, crypto corporations have poured over $119 million directly into influencing federal elections, primarily into a non-partisan super PAC dedicated to electing pro-crypto candidates and defeating crypto skeptics." Nearly half, 48% of all corporate money contributed during this year's elections ($248 million so far) came from crypto backers.

To bring that point even more home, PC references Koch Industries (annual revenues exceed $125 billion, with Charles Koch's net worth estimated to be around $64.9 billion, making him the 23rd richest person in the world) and how they are a distant second place in 2024 when it comes to corporate donations. They have contributed $25 million to its Koch-controlled Americans for Prosperity Action and $3.25 million toward electing Republicans to Congress.

We're sure SBF saw that number and mumbled something like, "That's all?" then hurriedly rushed back to League of Legends or Storybook Brawl.

Over the past three election cycles, crypto and blockchain corporations have contributed $129 million, accounting for 15% of all known corporate contributions since the 2010 Citizens United ruling. We are probably noticing it most now because 92% of this crypto spending occurred in 2024 alone, signaling to many in the political industry that something is happening here, especially when you consider they are barely trailing behind the fossil fuel industry at $176 million over 14 years.

Who is getting the cash, you ask? According to a monthly filing with the Federal Election Commission, despite the name sounding like an energy drink marketed towards retirement homes, it is Fairshake, the largest super PAC of this election cycle. Overall, they have generated nearly $203 million for the 2023-2024 period, surpassing the Make America Great Again super PAC, with Coinbase and Ripple leading the crypto-bros back with over $119 million into the 2024 elections. According to Public Citizen's report, 53% or $107.9 million is coming directly from crypto corporations ready to moon from the PAC's activities.

The remaining funds largely originate from billionaire crypto executives and venture capitalists, including substantial contributions from the founders of Andreessen Horowitz, the Winklevoss twins, and Coinbase CEO Brian Armstrong.

CONTINUE READING ➔

1. Fed Chair Powell Hints at Upcoming Rate Cuts

Federal Reserve Chairman Jerome Powell confirmed that interest rate cuts are likely in the near future, sparking a significant rally on Wall Street. Investors are now debating the size and pace of these cuts, which could have wide-reaching effects on the economy and stock market.

2. Nvidia Set to Report Earnings Amid AI Frenzy

Nvidia is poised to release its Q2 earnings report, which will be a key test for the AI sector. The company's growth has been driven by surging demand for AI chips, and investors are eager to see whether Nvidia can maintain its momentum or face a slowdown in the AI boom.

3. Kroger and Albertsons Merger Faces Scrutiny from US Government

The largest grocery merger in U.S. history between Kroger and Albertsons is set to face antitrust scrutiny. Regulators are concerned about the deal’s potential impact on competition, with the companies arguing that it will help them compete against larger rivals like Costco.

4. RealPage Faces Antitrust Lawsuit for Price-Fixing

RealPage is facing a significant antitrust lawsuit filed by the Department of Justice and several states, accusing the real estate software company of coordinating with landlords to artificially inflate rents. This case could have far-reaching implications for the real estate industry.

5. Microsoft Hosts Cybersecurity Summit to Prevent Future Outages

Microsoft is convening a meeting with CrowdStrike and other cybersecurity experts in response to recent system outages. The tech giant aims to improve the resilience of its software and prevent future security lapses, a critical issue for industries relying on cloud-based infrastructure.

6. Canada’s Rail Workers Ordered Back to Work Amid Labor Dispute

An arbitrator in Canada has ordered railway workers back to work following a labor dispute that disrupted freight services. The decision has wide implications for North American supply chains, as the affected railroads are major transportation hubs for goods across the continent.

7. Amazon Labeled as Joint Employer for Third-Party Drivers

The National Labor Relations Board ruled that Amazon is considered a joint employer for its third-party delivery drivers in California. This decision could affect Amazon's responsibilities regarding wages, working conditions, and labor disputes for a large portion of its workforce.

8. Walmart Issues Apple Juice Recall Over Arsenic Levels

Walmart is recalling nearly 10,000 cases of its Great Value apple juice after elevated levels of arsenic were detected. The recall affects multiple states, and consumers have been urged to return the product for a refund.

9. Elon Musk’s X Moves Headquarters from San Francisco to Texas

Elon Musk’s social media company X is moving its headquarters from San Francisco to Texas. The decision comes amid concerns over crime and unfavorable tax policies in California, with city officials reacting indifferently to the company’s departure.

10. AI Coaching Programs on the Rise Despite Privacy Concerns

Artificial intelligence-powered coaching programs are growing in popularity due to their accessibility and low cost. However, concerns over data privacy and the quality of advice from non-human sources may slow adoption in certain industries.

CONTINUE READING ➔

Today's insights are courtesy of Puck, Smart, Engaging Journalism Owned and Operated by the Journalists Themselves

Learn More Now ➔