• Stocks: All three major indexes ended the day on a high note, propelled by big gains for Big Tech. Six of the Magnificent Seven rose, with Apple climbing 4.01% to a new all-time high.
• Economy: After yesterday’s cool CPI reading, wholesale inflation came in lower than expected this morning, with PPI getting a helping hand from falling energy prices. The double whammy of good news prompted New York Fed President John Williams to crow that “inflation has peaked,” while National Economic Council Director Kevin Hassett said, “There’s no excuse for raising rates right now.”

M&A

Adobe Stock

Will PayPal accept the unsolicited $53 billion Venmo payment it just received?

That’s how much private equity firm Advent International and privately owned fintech platform Stripe offered to buy the payment platform for, pushing shares of PayPal 17.2% higher today.

The deets: Advent and Stripe are reportedly offering $60.50 per share, according to the Wall Street Journal, or a 28% premium above where shares of PayPal closed yesterday. If the deal goes through, Stripe and Advent would hold equal stakes.

Taking over PayPal would help Stripe—already a dominant player in the B2B payment business—break into the consumer market. PayPal, which owns Venmo, processes roughly $2 trillion in payment volumes per year and boasts roughly 439 million accounts, compared to Stripe’s 250 million accounts, according to the WSJ.

PayPal’s perilous position

PayPal was one of the big winners to emerge from the pandemic, becoming a favorite for investors playing the boom in online shopping. But interest rates rose in 2022, contributing to a harsh course-correction for many high-flying tech stocks. PayPal couldn’t quite stick the landing, thanks to stagnating user growth and fierce competition in the payment space.

Shares have meandered lower ever since, and were down 19% this year through yesterday’s close. Most analysts are lukewarm about its future: According to the WSJ, the consensus rating among analysts covering PayPal is a “Hold,” and its median price target is $47 per share.

However, one notable PayPal bull is famed Big Short investor Michael Burry, who said today’s $53 billion offer is “simply too low.” “PayPal is one of the cheapest quality businesses in the portfolio,” he wrote, before stating that he’s not selling his stake in the company after today’s pop.

The fintechs are consolidating: Last week, the WSJ reported that US banks were looking into buying Fiserv’s debit-card network in an effort to avoid federal debit-card fee caps.

Soon it might not matter if you use PayPal, Venmo, Zelle, or something else entirely: You may see different logos, but behind the curtain, there might be fewer companies operating all those payment platforms.—LB

      

Sponsored By EnergyX

Eni, Italy’s largest oil producer, just signed a strategic agreement to invest up to $225m in EnergyX’s lithium project in Chile. The project is expected to generate $1.3b in annual revenue at forecasted market prices.

It’s just one piece of EnergyX’s portfolio, holding up to 15m+ tons of untapped lithium.

Until tomorrow, you can share in that growth as an early-stage shareholder.

EnergyX’s patented tech recovers up to 3x more lithium than traditional methods, 500x faster. When combined with their resource portfolio, the road to commercial-scale production is clear.

Lithium demand is projected to grow 5x by 2040, so the timing couldn’t be better.

General Motors and POSCO invested. Now it’s your turn. Become an early-stage EnergyX shareholder before tomorrow night.

Stocks

🟢 What’s up

• Alibaba gained 4.78% and Apple popped 4.01% on news that Alibaba’s Qwen AI model will power Apple Intelligence features in China.
• Lionsgate Studios surged 5.04% amid reports that the company is exploring a sale and has attracted interest from France’s Bolloré Group.
• BlackRock rose 6.63% after beating earnings expectations and becoming the first investment firm to surpass $15 trillion in assets under management.
• Bank of New York Mellon gained 5.12% on second-quarter earnings and revenue that topped Wall Street estimates.
• Aehr Test Systems skyrocketed 21.91% after beating earnings and revenue expectations.
• Morgan Stanley climbed 0.39% after a 69% surge in equities trading drove record second-quarter revenue and profit.

🔴 What’s down

• Micron fell 8.02% as Chinese chipmaker ChangXin Memory Technologies moved closer to an IPO, raising competition concerns.
• Progressive dropped 9.43% after June net income declined 31% from a year earlier.
• Elevance Health slipped 9.27% as concerns over its Medicaid business overshadowed a revenue beat and higher full-year guidance.
• Water treatment company Pentair tumbled 15% after preliminary second-quarter results missed Wall Street expectations.
• Johnson & Johnson declined 2.69% as weaker sales of blockbuster drug Stelara outweighed a higher full-year outlook.
• Celcuity tumbled 17.6% as the company pushed the launch of its newly approved breast cancer therapy into the third quarter.
• SpaceX fell 0.6% to briefly dip below its IPO price before closing back above that key threshold.

Stock of the day

Lucid's wild whiplash

Adobe Stock

Love Island may have ended, but fans can tune in to a similar drama: Lucid’s wild Casa Amor-style switch-up.

Shares of the EV maker plunged as much as 40% intraday yesterday before closing down 16%, after reports surfaced that Lucid was considering either going private or filing for Chapter 11 bankruptcy protection.

The reports were in concert with the broader industry: EVs have been under pressure ever since the Trump administration eliminated the $7,500 federal tax credit for new EV purchases. And Lucid has its own challenges: The company isn’t expected to become cash-flow positive until 2029. Lucid recently missed Wall Street’s delivery expectations, and it announced plans to lay off 18% of its workforce to cut costs.

But the stock rebounded 28.79% today after Lucid called yesterday’s reports “completely false.”

“The company has sufficient liquidity to carry its operations well into next year, as recently published in its last quarterly filings, and it has not formed any special Board committee to explore the scenarios reported,” Lucid said in a statement.

The balance sheet appears to back that up: Wall Street expects Lucid to burn about $2.8 billion over the next 12 months, while the company ended March with roughly $3.2 billion of liquidity and raised another $1 billion in April. That said, it will eventually need to raise more capital to reach profitability.

Yesterday’s reports may have been false, but they showed just how quickly the market is willing to believe the worst. Investors now turn their attention to next month’s earnings—and whether Lucid will give them something more tangible to trade on.—SY

Economy

Morning Brew Inc.

How much is enough to retire? About $1.2 million, according to 1,500 investors surveyed in March and April by asset manager Schroders. But here’s the rub: Only 30% of those polled think they’ll even reach the $1 million mark before they call it quits.

This retirement readiness gap looks even uglier if you look at what folks actually expect to have saved up. More than half (51%) plan to have less than $500,000; 24% say they’ll fall below $250,000.

Many blame this shortfall on rising prices: 55% of pollees said socking away 10% of their paychecks for their golden years was impossible due to competing expenses. Meanwhile, 27% of folks have curbed their contributions, with 70% doing so in the past two years. Plus, 27% have borrowed money from their retirement funds.

All told, 69% say retirement is simply out of reach for their entire generation, period.

The widening wealth divide

These dashed retirement hopes and dreams are just another symptom of the K-shaped economy, which keeps cranking out AI millionaires at the top and causing panic attacks over the grocery bill at the bottom. Yet the economy has kept chugging along as wealthy folks’ swelling portfolios have them dropping cash on everything from superyachts to tickets into space.

Economists have dubbed the phenomenon of rising asset prices coinciding with rising spending the “wealth effect,” and it’s driven about one-third of the increase in consumer expenditures since the Covid-19 pandemic. One rule of thumb is that every $1.00 uptick in a household’s stock portfolio ends up boosting their spending by $0.05. Multiply that by the many millions minted for investors in Anthropic, Micron, and other tech companies, and it becomes clear why the economy seems fine but is hiding some serious cracks underneath.

JPMorgan Chase CEO Jamie Dimon says this widening divide between the haves and have-nots has sparked a fresh wave of “anti-rich” resentment, and he doesn’t blame people for being ticked off.

“If you were the average citizen here and you say, ‘These wealthy people are getting unbelievably wealthy, and this segment’s been left behind,’ that’s kind of annoying.”

Yes, being unable to retire is kind of annoying.—JD

      

News

• Meet OpenAI’s first hardware product.
• JPMorgan, BlackRock, and Goldman Sachs are jumping onto the tokenization bandwagon.
• The US has granted the United Arab Emirates access to coveted AI chips as a reward for supporting the US during its war with Iran.
• China’s economy just saw its slowest quarter since 2022.
• ‘Duh’ of the day: Researchers at Stanford found that Polymarket traders may be manipulating crypto wagers.
• Treasury Secretary Scott Bessent unveiled a controversial new $1 gold coin with President Trump’s face on it.

Calendar

Earnings announcements: The earnings bonanza has begun, with updates from TSMC, UnitedHealth, General Electric, Netflix, Abbott, Intuitive Surgical, Prologis, State Street, United Airlines, ConAgra Brands, Cintas, and Alcoa.

Economic reports: We’ve also got a boatload of reports worth watching, including the US July NAHB housing market index, New York Fed services business activity, Philadelphia Fed business outlook, June retail sales, pending home sales, May business inventories, and the usual weekly initial jobless claims.

recs

🐦 Today is the 20th anniversary of Twitter X. Take a look back at two decades of political movements and knee-jerk meme reactions that shaped the internet as we know it.

🏆 These 33 stocks are cheap, top analyst picks—and worth buying before the rest of the market catches on.

😵‍💫 Between trade wars and real wars, it feels like the crises just keep coming. Here’s how to invest in a world gone topsy-turvy.

🏗️ Memory stocks soared thanks to their position as a bottleneck for the AI trade—and the industrials sector may be next. Here are nine unexpected stocks that could benefit from the datacenter boom.

💰 If you’ve lost money on prediction markets, you’re far from alone—but some traders are making bank. Meet the pro gamblers who meet on a secret Discord server to plan their next win.

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