🐂 Bit and rally

Markets

Yesterday, the stock market experienced a significant uptick, with the S&P 500 breaking a five-day losing streak, thanks to a series of impressive earnings reports from various technology companies. Notably, Spotify, the dominant player in the music streaming industry, saw its stock price soar by over 10% following the announcement of its first quarterly profit in more than a year.

What Can the Fed Do About the Deficit? Nothing

Federal Reserve officials are emphasizing that the surging long-term bond yields significantly impact their economic outlook and interest-rate decisions. They acknowledge that the increasing federal deficit plays a role in driving up yields. However, they avoid suggesting that political leaders should take action to address the deficit.

Fed Chair Jerome Powell, in response to a question after a recent speech, made it clear that they refrain from commenting on fiscal policy. He did acknowledge the fiscal path is unsustainable but stopped short of advocating for specific fiscal measures.

Powell's caution is understandable, but it's also selective in contrast to his active commentary on fiscal policy in 2020 when pandemic-related lockdowns led to a severe economic downturn.

Big Tech

Almost all the states are suing meta

If you're finding that Facebook's customer support isn't responding to your repeated complaints regarding issues in local Buy Nothing groups, it's likely because they have their hands full. Meta, Facebook's parent company, is currently dealing with a set of lawsuits filed by a bipartisan group of 42 state attorneys general. These legal actions allege that the social media giant knowingly harmed teenagers and children.

A majority of the states, including Colorado, South Carolina, and Minnesota, have jointly filed a federal lawsuit against Meta. This lawsuit accuses Meta of deliberately targeting young individuals with addictive algorithms on Facebook and Instagram while downplaying the psychological harm caused by its apps. In addition to this federal lawsuit, attorneys general in the District of Columbia, Mississippi, Oklahoma, and five other states have filed separate but similar state lawsuits against Meta. Florida has taken an independent federal legal action due to its preference for handling matters its own way.

Meta's response to these lawsuits is not one of anger but disappointment. The company's spokesperson mentioned their commitment to providing teenagers with safe and positive online experiences but argued that lawsuits may not be the most productive means of addressing these concerns.

One of the key issues highlighted by these legal actions is the potential negative impact of constant scrolling on apps like Instagram on the mental health of young people. Reports and warnings over the past few years have suggested that such activities could be detrimental. Leaked slides from an internal Meta study revealed that teenage girls believed Instagram was negatively affecting their body image. In May, the US Surgeon General issued a public advisory stating that social media poses a significant risk to children's health.

In the broader context, while it's clear that teenagers are grappling with a growing mental health crisis, experts still have differing opinions on the relationship between the use of social media and overall well-being.

It's worth noting that Meta isn't the sole target in this legal battle. Some of the states involved in the lawsuits against Meta are also investigating TikTok for similar issues. In recent developments, Utah has followed the lead of Arkansas and Indiana by filing a lawsuit against the company, citing concerns about children's mental health.

International

UN will halt aid to Gaza today if it doesn’t get more fuel.

Hospitals in the besieged territory are facing overwhelming challenges and are on the verge of ceasing to function, according to the World Health Organization. These facilities are running out of fuel for generators, leading to dire conditions. Doctors have reported operating under the light of mobile phones and performing procedures without anesthesia due to shortages of medical supplies and severe overcrowding. The situation is further exacerbated by the fact that many uninjured individuals are seeking shelter in hospitals. Israel has allowed most forms of aid to enter Gaza but has refrained from permitting fuel supplies, citing concerns that Hamas would divert it for powering rockets and tunnels. UN Secretary-General António Guterres has mentioned "clear violations of international humanitarian law" in Gaza without specifically naming Israel or Hamas.

Finance

Bitcoin says i’m back

Bitcoin is currently experiencing a remarkable surge, reminiscent of the enthusiasm seen in Sigma Alpha Epsilon fraternity members before a noon kickoff. The cryptocurrency briefly exceeded $35,000 on Tuesday, marking its first such high since May 2022 and a year-to-date increase of over 100%. Crypto investors who had weathered a challenging period are now eagerly anticipating the potential arrival of a long-awaited bitcoin Exchange-Traded Fund (ETF) on mainstream brokerage platforms.

A federal appeals court has officially communicated to the Securities and Exchange Commission (SEC) that its rationale for rejecting Grayscale Investments's proposal for a bitcoin ETF was flawed. Additionally, there were glimpses of a presumed ticker for a BlackRock spot bitcoin ETF on a financial clearing house's website. These ETFs have the potential to boost demand for bitcoin by enabling investors to gain direct exposure to the cryptocurrency without actually owning it.

This resurgence in the cryptocurrency market comes after a difficult year, which began as an industry downturn and escalated into a Category 5 storm of setbacks. Exchanges have been grappling with regulatory lawsuits, the collapse of the TerraUSD stablecoin, and the arrest of its founder in May, which sent shockwaves throughout the crypto sector. The industry has also faced accusations of facilitating the financing of terrorism. All of this has occurred against the backdrop of the fraud trial of SBF (Sam Bankman-Fried), who is accused of mishandling customer funds at his collapsed crypto exchange, FTX.

In a twist of irony, bitcoin's recent surge is attributed to the growing acceptance of cryptocurrencies by the mainstream financial sector, despite the fact that bitcoin was originally conceived as a means to circumvent traditional financial institutions.

Sports

The Sphere is balling out

Just a few weeks after the successful launch of the Sphere immersive entertainment venue in Las Vegas, the company responsible for this $2.3 billion venture is making a different kind of debut tonight at Madison Square Garden.

Madison Square Garden Sports, the parent company of the New York Knicks, recently revealed that Sphere Entertainment, a subsidiary of MSG Sports, will serve as the jersey sponsor for the NBA team during the 2023–2024 season. Notably, this move amounts to free advertising for James Dolan, who happens to own all three entities.

Sponsorship patches have proven to be a lucrative business within the NBA. The top three patch sponsorship deals, involving the Golden State Warriors, the Los Angeles Lakers, and the Brooklyn Nets, generated a total of $100 million in revenue last year. As teams enter the eighth year of the patch program, they are exploring innovative and unconventional sponsorship arrangements:

1. The Charlotte Hornets have partnered with Feastables, the snack company associated with social media influencer MrBeast, marking the NBA's first jersey sponsorship with a social media influencer.

2. The Washington Wizards, previously without a jersey sponsor since 2021, have entered into an agreement with the stock-trading app Robinhood, establishing a connection between the team and the finance sector.

3. The Miami Heat will have owner Micky Arison's Carnival Cruise Line as their sponsor.

These creative jersey sponsorships reflect the evolving landscape of sports marketing within the NBA.