Bloomberg - Evening Briefing - Meme stocks are back

Investors are fascinated with meme stocks again. The hunt is on as bargain seekers rifle through lower-quality names in search of easy money. But in the process, they’re potentially raising a red flag for the S&P 500 Index. When some of the most heavily-shorted stocks in the market rise, like meme shares are doing now, investors should prepare for weakness in the broader market, warns Jonathan Krinsky at BTIG. “It’s a double-edged sword when we start seeing some of the lower quality names rally,” he wrote in a note to clients. The stock market finished higher on Tuesday ahead of a report that’s expected to show a further slowdown in US inflation. In the run-up to the consumer price index release, the S&P 500 extended its advance beyond the 4,400 mark while the Dow Jones Industrial Average added almost 1%. “If economic data keeps tilting towards a soft landing,” said Jason Draho of UBS Global Wealth Management, “the markets are increasingly likely to price in that outcome, with investors reallocating to risk assets.” —David E. Rovella

The US Federal Reserve has been working to cool a red-hot US economy, and falling inflation may reflect that effort. But a big worry of Team Recession has always been that things would go too far. Now, things outside the central bank’s control could show just how far is too far. As part of their price for raising the federal debt limit, House Republicans forced the Biden administration to drop its pandemic moratorium on student loan payments. Now, almost 27 million borrowers with a total of $1.1 trillion in debt will need to resume paying starting Oct. 1. On top of that, the Supreme Court threw out Biden’s plan to forgive up to $20,000 per qualified borrower. For large number of American consumers, belts will tighten this fall—and the effect on the economy may be significant.

Everyone can stop all the hand-wringing over the “over-concentration” of the Nasdaq 100, Jonathan Levin writes in Bloomberg Opinion. The index provider is doing something about it, as expected, in a sign that the system is working as intended after all.

Nike Canada and Dynasty Gold are being investigated by a Canadian government agency for allegedly using forced Uyghur labor in their supply chains and operations. The probes were announced Tuesday by Sheri Meyerhoffer, who heads an agency set up by Prime Minister Justin Trudeau’s government in 2019 to examine human rights complaints about Canadian garment, mining, and oil and gas companies working abroad. 

Saudi Aramco, the world’s largest oil company, has become an unlikely beneficiary of funds earmarked for sustainable investments thanks to a complex web of financial structures it used to raise money from its pipelines. 

Saudi Aramco headquarters in Dhahran, Saudi Arabia Photographer: Mohammed Al-Nemer/Bloomberg

Apple’s effort to pull some of its eggs out of China’s basket is showing signs of success. Tata Group, India’s largest conglomerate, is said to be close to an agreement to acquire an Apple supplier’s factory as soon as August, marking the first time a local company would move into the assembly of iPhones. A takeover of the Wistron Corp. factory in southern Karnataka state, potentially valued at more than $600 million, would cap about a year of negotiations.

Microsoft changed the course of its $69 billion bid for Activision Blizzard in minutes Tuesday, winning an unprecedented reconsideration from a UK regulator that had blocked the largest gaming deal ever, less than an hour after securing a green light from a US judge.

Florida Governor and 2024 GOP presidential contender Ron DeSantis quietly rejected hundreds of millions of dollars in federal energy funding, as the Biden administration touts the benefits of its marquee climate law on the campaign trail in battleground states. The funding, totaling about $377 million, included piles of cash for energy-efficiency rebates and electrification as part of the Inflation Reduction Act, as well as money from the bipartisan infrastructure legislation that became law in 2021.

• Poisoned cough syrup killed kids. Authorities cut their probe short.
• Nearly 40% of US attack submarines out of commission for repairs.
• This short seller is living in fear of the Feds.
• There’s so much milk that US farmers are dumping it in the sewer.
• Trump asks judge he appointed to delay secret files trial indefinitely.
• Miami’s mayor doubles wealth, buys a boat with his side-gig cash.
• Why switching from an iPhone to an Android is hell on earth.

Barbenheimer. Seriously, it’s a thing. There’s now plenty of evidence out there that people everywhere are making plans to see two of the most-anticipated (and diametrically opposite) movies of the summer on the same day. A UK cinema chain says that as of Tuesday, 19% of people who booked tickets to see Christopher Nolan’s Oppenheimer also bought tickets for Greta Gerwig’s Barbie. Welcome to 2023.

Margot Robbie as Barbie and Cillian Murphy as J. Robert Oppenheimer. Source (from left): Warner Bros.; Universal Pictures

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