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Markets

Yesterday, the stock market experienced an upswing primarily driven by a surge in the technology sector. Furthermore, an article in The Wall Street Journal suggesting that the Federal Reserve is unlikely to implement an interest rate hike during its upcoming meeting also contributed to the positive sentiment. Tesla, in particular, saw a significant increase in its stock price after Morgan Stanley released a prediction stating that the car manufacturer's supercomputer technology could potentially add $500 billion to its overall market value. We'll delve further into the developments surrounding Elon Musk shortly.

U.S. Incomes Fall for Third Straight Year

Rising inflation, coupled with pandemic disruptions, effectively wiped out household income gains in 2022, marking the third consecutive year in which Americans witnessed their living standards diminish due to increasing prices.

The Census Bureau's latest report revealed that Americans' median household income, adjusted for inflation, dropped to $74,580 in 2022, reflecting a 2.3% decline from the 2021 estimate of $76,330. This figure has now plummeted by 4.7% since its peak in 2019.

These statistics provide further insight into the economic difficulties households have faced since the onset of the Covid-19 pandemic in early 2020. Last summer, inflation reached a four-decade high due to pandemic-related disruptions in supply chains and increased energy prices driven by the Ukraine conflict.

However, there is optimism that the situation may improve this year. Earnings and inflation trends have shown signs of improvement, thanks to a robust job market and moderating price hikes, according to Bill Adams, the chief economist at Comerica Bank.

Adams stated, "Looking at the present and the future, there are better prospects for wages to recover some of the ground lost in the past couple of years."

Starting in December 2022, wage growth for the average worker outpaced inflation, with inflation-adjusted wages increasing by approximately 3% in July, as reported by data from the Atlanta Fed Wage Tracker and the Labor Department.

Entertainment

Elon Musk’s biography

If you're considering picking up a copy later, I wish you a peaceful reading experience. However, if you're not keen on delving into a 688-page biography about an enigmatic entrepreneur for $35, here's a glimpse of what Walter Isaacson discusses in his book about Elon Musk.

Musk's Childhood and Personal Life: Isaacson delves into Musk's upbringing and personal life, highlighting the challenging relationship with his emotionally and physically abusive father, which serves as a significant motivator for Musk. Additionally, the biography reveals that Musk has three children with Grimes, bringing his total known offspring count to 11. They had kept their third child, a boy named Techno Mechanicus, a secret.

His Relationship with Another Tech Titan: A portion of the book focuses on Musk's interactions with Bill Gates, including a meeting at a Tesla factory. The encounter took a sour turn when Musk criticized Gates, a notable philanthropist, for his views on philanthropy, and questioned his shorting of Tesla stock. Grimes characterized their dynamic as a "d*ck-measuring contest."

The Extent of Musk's Influence and Power through Tesla, SpaceX, Starlink, and X: While it's not surprising that Musk's groundbreaking companies feature prominently in his biography, the book sheds light on what Musk genuinely believes about them.

• Musk described Tesla as the company doing the most to combat climate change, even when challenged by Gates about the feasibility of battery-powered semitrucks.

• He founded SpaceX with the explicit goal of making humanity a multiplanetary species, going so far as to host meetings about future governance on Mars.

• Musk created Starlink, which gained attention for its role in Ukraine's conflict with Russia, with a focus on generating profit while working toward interplanetary goals.

• His commitment to the transformation of Twitter (now X) was so profound that he arranged for moving vans to transfer the company's servers from one data center to another on Christmas Eve.

For more CEO biographies, keep an eye out for Michael Lewis's "Going Infinite," set to be released on October 3, which follows Sam Bankman-Fried and the decline of FTX.

Food

Smucker bets on Twinkies in the snack race

J.M. Smucker, the jelly company, made an announcement yesterday about its acquisition of Hostess Brands, the maker of plastic-wrapped cakes, for a substantial $5.6 billion. That's quite a sum for a company known for its Twinkies.

Expected to be finalized by the end of January, this deal values Hostess at approximately $2 billion more than its market worth. If you're wondering whether Smucker should reconsider such a significant investment in a company that has filed for bankruptcy twice, think again. The snack industry is currently thriving, with a remarkable 11% growth reported last year, according to Circana Group. Smucker aims to tap into this flourishing market.

Hostess has experienced a remarkable 50% increase in revenue between 2019 and 2022. In comparison, industry giants Hershey and Mondelez International, the owner of Oreos and Ritz, among other brands, saw sales grow by 30% and 22%, respectively.

For Smucker, sugary delights like Twinkies, Ho Hos, and Ding Dongs could prove to be particularly lucrative. CEO Mark Smucker noted that "indulgent" snacks have outpaced healthy ones in growth, with a 20% higher rate over the last three years.

Taking a broader view, the snacks industry is undergoing consolidation, with Mars and Unilever recently making acquisitions in the snack sector. Additionally, Kellogg's board of directors made a significant move by creating a new company called Kellanova to house its chips and treats, further highlighting the popularity of quick and convenient snacks.

Politics

Kim Jong un goes to Russia

While your friends might have been sipping Aperol on the Amalfi Coast this summer, Kim Jong Un had different plans – he embarked on a 20-hour train journey from Pyongyang to Vladivostok in the Russian Far East. This marks his first international trip since before the pandemic, and he's set to meet with Russian President Vladimir Putin to discuss cooperation between their two heavily sanctioned nations.

Here's what's reportedly on the agenda:

1. North Korea is considering supplying ammunition to bolster Russia's military capabilities in the ongoing conflict with Ukraine, as well as sending additional workers to fill gaps in civilian labor.

2. In return, Russia could provide North Korea with much-needed hard currency, food, and technological expertise.

Kim Jong Un is known for his idiosyncratic travel preferences, avoiding the jet-setter lifestyle in favor of rail travel. While his armored train may not break any speed records at a modest 37 mph, it offers unique amenities:

• The train's 20+ carriages include a medical station, Kim's personal Mercedes limousine, and even a karaoke room.

• Russian officials who traveled with Kim Jong Il, the previous North Korean leader, on similar journeys, remembered lavish menus featuring airlifted live lobsters, French wine, and even donkey meat.

However, sanctions may complicate luxury imports, especially given the United States' warning to North Korea that it will "pay a price" if it supplies munitions to Russia.

Sports

Charter customers got to watch a Monday Night Football thriller

Disney and Charter, a cable company with approximately 15 million Spectrum subscribers, had been in a negotiation standoff regarding the distribution of Disney channels like ESPN and ABC. However, they recently managed to strike a deal just in time: the agreement was reached mere hours before the New York Jets, sans Aaron Rodgers, faced off against the Bills in an unforgettable game, broadcasted on ESPN.

While this dispute had the potential to become a significant turning point for cable television, the finalized deal appears to be quite conventional. Under the agreement, Charter will pay Disney higher fees for the inclusion of its channels and will also gain the ability to offer its customers access to Disney+ and ESPN+ streaming services.