Good morning. US stock futures rose in Tuesday morning trading as investors digested the latest earnings reports from big box retailers.

"The real key to making money in stocks is not to get scared out of them"

Peter Lynch

Top News

Banks hit with another ratings downgrade

WHAT: The credit rating rollercoaster is back in town folks! Just a few weeks after Moody’s Investor Services cut the credit ratings for a slew of bank stocks, S&P Global Ratings is dimming the outlook lights for more US banks. The company lowered the grades for 8 small and medium-sized banks, citing various pressures making it tough for lenders.

WHY: A spree of Federal Reserve interest rate hikes is squeezing many small and mid-size banks that for years paid little to attract customer deposits that fund loans and other assets on their balance sheets.

China levies fine on US firm

WHAT: China isn’t messing around! Mintz Group, an American research firm, just got hit with a $1.5 million fine from the Chinese government. According to the Beijing Municipal Bureau of Statistics, Mintz Group illegally engaged in “foreign-related statistical investigation activities without obtaining approval”

WHY: China’s government has tightened its grip over the economy and society, including by launching data security crackdowns and expanding restrictions on what information can be moved abroad.

High fliers!

WHAT: American Airlines pilots are getting a pay boost that’s soaring higher than a hot air balloon on a summer day! Their union, the Allied Pilots Association, announced that 73% of pilots voted in favor of a new contract that will raise their pay by 41% over the next four years.

WHY: Airline unions are enjoying leverage to get big pay raises because a boom in travel is lifting airline revenue. American earned $1.3 billion in the second quarter alone, helped by strong ticket sales and a drop in the price of jet fuel.

In Other News

YouTube makes music with AI

 WHAT: Hold on to your headphones folks, because YouTube is cooking up something musical with a side of AI innovation! The streaming platform announced that, in partnership with Universal Music Group, they’re launching an incubator to work with artistes and musicians to explore the use of artificial intelligence in music.

WHY: With the launch of ChatGPT last year, AI technology has been adopted in a range of industries and use-cases, even as lawmakers explore legislation to deal with copyright infringement and spam.

Private Equity firm closes in on Subway deal

WHAT: The restaurant ownership game is getting a bit saucy. According to reports from the Wall Street Journal, private equity firm Roark Capital — which also owns Arby’s and Buffalo Wild Wings — is nearing a deal to buy sandwich chain Subway in a deal worth an estimated $9.6 billion.

WHY: Subway, which has about 37,000 restaurants worldwide, was founded in 1965 by Fred DeLuca and family friend Peter Buck. The company has been owned by the founding families since its first outlet opened in Bridgeport, Connecticut.

No copyright allowed!

WHAT: Well it looks like robot artist might need to rethink their career plans! A US court in Washington D.C ruled that a work of art created by artificial intelligence without any human input cannot be copyrighted under US law.

WHY: The fast-growing field of generative AI has raised novel intellectual property issues. Several pending lawsuits have also been filed over the use of copyrighted works to train generative AI without permission.

Key Economic Events

• Tuesday - Fed’s Goolsbee Gives Welcome Remarks

• Wednesday - No Major Economic News

• Thursday - Initial Jobless Claims (wk end 19-Aug)

• Friday - U. Of. Mich. Sentiment

Notable Briefs

• Here are Warren Buffett’s rules for successful investing!

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• Thinking about home renovations? Here are 7 reasons why you should do it!

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