🏬 Are US Businesses Running Out Of Steam?

Good morning. US stock futures were mostly positive in Thursday morning trading as technology shares looked to rebound from their worst session since 2022.

🏢 US businesses report tepid growth, softening labor market

📝Our report: U.S. economic activity saw slight to modest growth from late May to early July, with firms bracing for slower times ahead. The U.S. central bank's latest temperature check on the health of the economy also showed that inflation pressures increased at a modest pace with most Fed districts reporting input costs were beginning to stabilize.

🔑Key points:

• "Economic activity maintained a slight to modest pace of growth in a majority of districts this reporting cycle," the Fed said in its recently released survey which polled business contacts across the central bank's 12 districts through July 8.

• While seven Fed districts reported some level of increase in activity, five noted flat or declining activity - three more than in the prior reporting period, the survey noted, as firms forecast a dimming outlook.

• The Fed's analysis, released roughly every six weeks, comes as Fed Chair Jerome Powell and his colleagues have emphasized that risks on inflation and jobs are now in balance.

💡So what: A slowdown in US business growth and a softening job market could trigger a ripple effect: businesses cut costs (read: layoffs), consumers tighten spending, the Fed adjusts interest rates, and the stock market gets jittery. On the other hand, a slowdown could also spur innovation, economic rebalancing, and sweet discount deals for budget-minded shoppers.

Thursday - U.S. Leading Economic Indicators

Friday - New York Fed President Williams Speaks

📈 Investing legend David Swensen shares his top investing tips

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🧵 Fashionable acquisition!

WHAT: EssilorLuxottica is snapping up Supreme from VF Corp. for $1.5 billion in cash, adding the streetwear star to its lineup alongside Ray-Ban and Oakley. Streetwear is a surprising choice for EssilorLuxottica, which was formed from the merger of two of Europe’s most prominent eyewear companies — Italy’s Luxottica and France’s Essilor. For VF, selling Supreme will allow the company to simplify its business and raise cash to pay down debt.

WHY: Supreme was founded in New York by James Jebbia in 1994, selling clothes and footwear targeting skateboarding and urban trends. It has moved from being a cult favorite, with its distinct red and white logo, to a mainstream success and now has an online business as well as 17 stores in the US, Asia and Europe.

🐮 Big meat, dairy failing to address climate woes

WHAT: The world's biggest meat and dairy companies are turning a blind eye to the environmental mess their livestock are making, throwing a wrench in the climate fight, says a report from the Changing Markets Foundation. Fifteen of 22 suppliers studied have some kind of net-zero target, but none meet UN standards, found the analysis released by the nonprofit that pressures companies to cut emissions.

WHY: Several companies are now rolling out methane-suppressing feed additives, and working to convert manure into biogas as part of efforts to cut emissions. Companies including Cargill Inc. and Nestle SA are touting regenerative agriculture practices.

🤖 New British govt turns attention to AI regulation

WHAT: Britain's new Labour government has announced it will look into how to keep AI in line, but hasn't quite rolled out the rulebook yet. King Charles set out newly-elected Prime Minister Keir Starmer's legislative agenda in a speech to open the new session of parliament which included more than 35 new bills covering everything from housing to cyber security measures.

WHY: The country's last prime minister Rishi Sunak had sought to position Britain as a world leader in AI safety, bringing world leaders and company executives together last November for a summit at Bletchley Park to discuss the issue.

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