Good morning. US stock futures moved lower in Wednesday morning trading as Wall Street tried to mitigate losses for the month.

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Top News

US banks face new regulatory rules

WHAT: It ain’t easy being a mid-sized bank in the US these days! US regulators unveiled their latest proposals to boost oversight of mid-sized lenders that requires them to prepare better for potential failures. As part of a new set of sweeping proposals, regulators said banks with as little as $100 billion in assets will be required to issue enough long term debt to cover any capital losses in the event of a crisis.

WHY: The rapid failures of Silicon Valley Bank and Signature Bank back in March spotlighted hurdles for mid-sized lenders. The new proposals would bring oversight more in line with the scrutiny of Wall Street’s largest lenders.

UK group calls for tougher rules on AI

WHAT: A bunch of UK lawmakers are giving a shout-out to the government for some artificial intelligence (AI) rule rebooting! The group is calling for tougher rules on AI systems that are trained off the work of artists, writers and other content creators.

WHY: In July, a trade group representing the UK music industry called for a record keeping system that would allow for the tracing of all the music used to train AI applications.

Steel takeover negotiations continue…

WHAT: US Steel seems to be the belle of the ball! In a recent note to its stockholders, the company said it has entered into confidentiality agreements with “numerous third parties” and is currently reviewing multiple proposals ranging from partial acquisition to an entire buyout.

WHY: Earlier this month, steel giant Esmark scraped its bid for US Steel, leaving Arcelor-Mittal as the only known potential challenger to Cleveland-Cliffs.

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In Other News

A Billi on the way…

WHAT: OpenAI — most famous for its ChatGPT chatbot — seems to be hitting the jackpot with its artificial intelligence offering, as a report by The Information says the company is on track to hit $1 billion in revenue over the next 12 months. The report added that the Microsoft-backed company is generating roughly $80 million per month in revenue, compared to just $28 million for the entire year last year.

WHY: ChatGPT, known for producing prose or poetry on command, has gained widespread attention in Silicon Valley as investors see generative AI as the next big growth area for tech companies.

US consumer confidence dips

WHAT: Americans aren’t feeling as peachy financially as they did at the start of summer. According to the latest data from the Conference Board, the US Consumer Confidence Index tumbled to 106.1 in August, from 114 in July. Analysts were expecting a reading of 116.

WHY: Consumer spending accounts for around 70% of US economic activity, so economists and investors pay close attention to their mood to gauge how it may affect the broader economy.

Where’s the beef?

WHAT: Hold the pickles, hold the lettuce, but give us more beef! A US judge just gave a thumbs-down to Burger King’s attempt to flip away a lawsuit claiming their Whopper sandwich was more bun than beef. Customers in a proposed lawsuit accused the King of portraying burgers with ingredients that “overflow the bun” making it appear that the burgers are 35% larger and contain more than double the meat that the chain serves.

WHY: Burger King, a unit of Restaurant Brands International, countered that it wasn’t required to deliver burgers that look “exactly like the picture”, but the judge said it was up to jurors to “tell us what reasonable people think”

Key Economic Events

• Wednesday - GDP Annualized Q-o-Q

• Thursday - Initial Jobless Claims (wk end Aug-26)

• Friday - Unemployment Rate (Aug)

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