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⚖️ TikTok on Trial — Ban or Buyout?

+ Rate Cuts — 25 Or 50?

Good afternoon! Chipotle’s stepping into the future with Autocado, the undeniably cool robot that peels, cores, and slices avocados in just 26 seconds—because, let’s be honest, no one wants to deal with 130 million pounds of avocados annually by hand . While the human crew is busy rolling burritos, this bot is all about making guac faster and saving workers from the dreaded avocado hand-cramp.

But then there’s also the Augmented Makeline—a way-less-cool name for a robot that assembles burrito bowls and salads (which make up 65% of digital orders). Sure, it’s efficient, but it could’ve used a snazzier name. Despite that, Chipotle’s $100 million robot investment is aimed at boosting efficiency and cutting labor costs, joining the automation trend led by McDonald’s and Sweetgreen.

MARKETS

  • Tuesday was all about waiting on the Fed, as stocks barely budged with investors bracing for the big interest rate cut announcement. The S&P 500 flirted with record highs before closing up a minuscule 0.03%, while the Dow dipped 0.2%. The Nasdaq managed a small win, ticking up 0.2%.

  • Traders are split on the size of the cut, with odds of a 50-basis-point reduction hovering around 55%. As the Fed tries to juggle cooling inflation and a still-solid job market, everyone’s on edge for Fed Chair Jerome Powell’s post-meeting remarks, hoping to glean some insight into what’s next.

STOCKS
Winners & Losers

What’s up 📈

  • AppLovin ($APP) gained 6.36% following a UBS upgrade to buy from neutral. The bank cited opportunities in gaming and e-commerce as potential catalysts.

  • Enphase Energy ($ENPH) climbed 6.31% after the solar tech firm launched a new home battery product and energy management software.

  • Hewlett Packard Enterprise ($HPE) rose 5.63% after Bank of America upgraded the stock to a buy rating from neutral, citing a compelling valuation and positive catalysts, including new CFO cost-cutting initiatives and a cyclical recovery across servers, storage, and networking.

  • Airbnb ($ABNB) increased 3.89% after Bernstein SocGen Research reiterated their Buy rating, arguing that pessimism around the company is overdone. The analysts noted potential revenue growth above 10%.

  • Intel ($INTC) advanced 2.68% after announcing plans to separate its foundry business and securing up to $3 billion in CHIPS Act funding from the Biden administration.

  • Li Auto ($LI) surged 12.28%.

  • Estée Lauder ($EL) rose 3.49%.

What’s down 📉

  • Trump Media ($DJT) dropped 6.60% after a judge ruled that the company breached an agreement with an investor, requiring the sponsor to be granted a larger share of stock.

  • Polestar ($PSNY) slid 5.52% after resolving previous compliance issues with Nasdaq's minimum bid price rule by maintaining a price over $1.00 for at least 10 days.

  • Accenture ($ACN) fell 4.82% after a Bloomberg report, citing sources, revealed that the company will move the bulk of its promotions to June from December.

  • Novo Nordisk ($NVO) declined 3.58% due to pressure from U.S. Senator Bernie Sanders’ statement that generic drugmakers could sell copycat versions of its diabetes drug Ozempic for less than $100 a month. Concerns over potential generic competition have raised investor worries.

  • Ast Spacemobile ($ASTS) dropped 6.17%.

  • Atlassian ($TEAM) fell 5.65%.

TECH
TikTok on Trial — Ban or Buyout?

TikTok just entered the legal ring, kicking off a battle in a D.C. appeals court that could decide whether the app sticks around in our daily scrolls—or faces a forced sale to a U.S. company.

But TikTok’s not going down without a fight. The app’s lawyers argued that banning it violates the First Amendment rights of 170 million Americans who love nothing more than endless dance challenges and skincare hacks. The judges, however, weren’t totally buying it, especially given national security concerns. The U.S. government’s worried that ByteDance’s ties to China could turn TikTok into a spy tool or disinformation factory. (Yikes!)

First Amendment vs. National Security—Who You Got?

The Justice Department says it’s not trying to curb free speech but instead protect Americans from China’s potential influence. According to the DOJ, some of TikTok’s algorithm is still cooked up in China, meaning the government there could, theoretically, tap into U.S. data or mess with what content gets pushed to our For You pages.

TikTok, meanwhile, insists there’s no proof that China’s been snooping on U.S. users. They’ve already spent $2 billion to wall off data on Oracle’s U.S.-based servers. Plus, they argue there are less extreme options than a full-on ban—like keeping their algorithm transparent (as if anyone really understands how that thing works). But the judges didn’t seem sold on that idea, with one comparing it to past rulings that blocked foreign-owned businesses for national security reasons.

Of course, TikTok’s not just fighting the legal system—they’re battling the court of public opinion too. The app's become a cultural cornerstone, especially for Gen Z, who are very attached to their dopamine hits in the form of viral memes and 15-second clips. Any move to ban it could spark a full-blown social media revolt, which lawmakers are definitely keeping in mind as elections loom.

What’s Next for TikTok?

The clock is ticking for TikTok, with a decision expected by December. If they lose? They’re ready to take it all the way to the Supreme Court—after all, their U.S. operations are at stake. Meanwhile, in the court of public opinion, TikTok’s gaining ground: only 32% of Americans now support a ban, down from 50% last year.

So, will TikTok survive the legal showdown? Or will we be stuck with YouTube Shorts and Reels (aka TikTok’s less-cool cousins)?

NEWS
Market Movements

ECONOMY
Rate Cuts — 25 Or 50?

The Federal Reserve is gearing up to give borrowing costs a chop, but how much of a trim will it be? Chair Jerome Powell and his colleagues are facing a tough decision at their meeting this week, as they weigh a quarter-point cut (their go-to move) or a more dramatic half-point slash. The big idea here is to cool inflation while keeping employment healthy. But, spoiler alert: it’s complicated.

Recent economic data shows inflation has eased, but the labor market is losing steam too—unemployment ticked up to 4.2% in August, while job growth slowed to a monthly average of 116,000 from 212,000 just last December. So, what’s a central bank to do? Some experts, like former Fed adviser William English, argue that a bigger 50 basis point cut could act as a safeguard for economic growth. On the other hand, a smaller 25 basis point cut would show confidence that things are stable enough for gradual moves.

Shifting Expectations and Powell's Next Move

A few weeks ago, most investors bet on a quarter-point reduction. Then, some more aggressive forecasts started floating around, nudging predictions towards a 50-point cut. A key reason for the flip? Worries that cutting too little, too slowly, could leave the Fed playing catch-up, especially if the job market sours faster than expected.

Fed officials are keeping their cards close to the chest, with Powell possibly facing the first dissenting vote in years. That split reflects honest uncertainty, not a heated debate—more of a "no one knows for sure" kind of moment. Powell will also share economic projections after the meeting, which might offer clues on how fast or slow the Fed plans to act in the months ahead.

Risky Business: How Much is Too Much?

As much as the Fed wants to get ahead of inflation, they’re also wary of going too far, too fast. Powell & Co. are trying to avoid a scenario where they cut rates aggressively, only to stoke risky investments and—oh, hello—higher inflation. Former Dallas Fed President Robert Kaplan thinks a half-point cut makes sense, given the current economic conditions. But he also notes that even after a couple of cuts, rates would still be relatively high.

So, while the market holds its breath, the Fed is figuring out how to hit that sweet spot—cooling inflation without dragging the economy into a downward spiral. Either way, Powell’s decision is set to move markets.

Calendar
On The Horizon

Tomorrow

Get ready: Tomorrow, the Fed’s about to make its move with what’s expected to be the first rate cut since March 2020.

The journey here? Not exactly smooth sailing. At the beginning of the year, Wall Street was betting on six rate cuts (seems a bit ambitious in hindsight). But those dreams evaporated fast once inflation didn’t pack up and leave in Q1.

Now, with inflation easing up, the focus has shifted to jobs. The labor market’s been cooling off, and back in August, the market freaked out, worried the Fed waited too long to cut rates and stave off a recession.

So, will the Fed slash rates by 25 or 50 basis points? (Feel free to place your bets.) How the market reacts is still anyone’s guess, but one thing’s for sure—this rollercoaster’s nearing the final drop.

Before Market Open:

  • General Mills ($GIS) is the quiet hero behind your pantry staples, from cereal to snacks. As a consumer staples giant, it’s the kind of stock that tends to weather economic storms without much drama. Investors looking for a safe harbor have taken note—shares are up a modest 12% in 2024, with some recent tailwinds as fears over lower consumer spending push people toward reliable names.It’s not the most thrilling stock, but a healthy dividend, rock-solid balance sheet, and household name status make it a solid pick. Analysts expect $1.05 EPS and $4.79 billion in revenue this quarter.

NEWS
The Daily Rundown

  • 💼 Murdoch Family’s Secret Succession Battle: Rupert Murdoch is trying to change the rules of his family trust to make his eldest son, Lachlan, the sole beneficiary, sparking a legal showdown. Currently, the trust gives equal stakes to all four children, but Murdoch fears that a shift in control could alter his media empire’s ideological leanings.

  • 🐦 Suspect in Trump Assassination Attempt Faces Federal Charges: The man accused of trying to shoot former President Donald Trump on his golf course has been charged with federal gun crimes. Court documents reveal the suspect was near Trump’s Florida course for nearly 12 hours before being noticed.

  • 📱 Apple Releases iOS 18: iPhone users, iOS 18 is here! While the much-hyped AI features are still on the way, the new update lets you customize your home screen, add text effects to your messages, and—finally—include Android users in group chats without ruining the vibe (though they'll still show up as green bubbles).

  • 🦛 Baby Hippo Moo Deng Becomes Viral Sensation: A pygmy hippo named Moo Deng has become an online star, with millions of views on TikTok and X. The two-month-old from Thailand has captured the internet’s attention with her adorable antics, helping raise awareness for the endangered species.

  • 🌊 Floods and Typhoons Devastate Parts of Europe and Asia: Severe flooding has caused deaths and evacuations across Central and Eastern Europe, while Shanghai experienced its largest typhoon since 1949. In the US, North Carolina endured historic rainfall as a powerful storm hit.

  • 🎤 Jane’s Addiction Cancels Tour After Onstage Fight: Rock band Jane’s Addiction abruptly canceled the rest of its tour following an onstage altercation between members.

  • 🎶 Tito Jackson of Jackson 5 Passes Away at 70: Tito Jackson, a member of the Jackson 5 and brother to pop legends Michael and Janet Jackson, has died at age 70.

RESOURCES
The Federal Reserve Resource

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