📈 US Economy Rolls On As...?

Good morning. US stock futures rose in Friday morning trading as investors looked ahead to a reading of the Federal Reserve’s preferred inflation gauge.

📈 US economy continues to defy expectations as GDP growth picks up steam

📝 Our report: The US economy picked up speed in the second quarter, outpacing expectations and giving a pleasant surprise to forecasters. The Bureau of Economic Analysis's advance estimate of second quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 2.8% during the period, well above the 2% growth expected by economists surveyed by Bloomberg.

 🔑 Key points:

• The latest reading came in higher than first quarter GDP, which was revised down to 1.4%.

• The data's release comes as investors try to gauge when the Federal Reserve will start cutting interest rates and if the central bank can achieve a soft landing, where inflation comes down to its 2% target without a significant economic downturn.

• US Treasury Secretary Janet Yellen saw the GDP report as “affirming the path we’re on to steady growth and declining inflation,” in remarks she delivered in Rio de Janeiro at the ongoing G20 summit.

💡 So what: The US economy surpassing GDP expectations has significant implications, including boosting investor and consumer confidence, influencing monetary policies, and potentially delaying interest rate hikes. It usually leads to job creation and wage growth as businesses expand, and enhances corporate performance and stock prices. On a global scale, it attracts foreign investment and promotes economic stability. For consumers, it means increased spending power and improved living standards. Additionally, it increases tax revenues, allowing for better public services and potentially reducing budget deficits, highlighting a robust and resilient economic environment.

Friday - Consumer Sentiment

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🤖 OpenAI takes on Google with “SearchGPT”

WHAT: OpenAI has rolled out a new prototype search engine called SearchGPT, which might give Google's search dominance a run for its money. Microsoft-backed OpenAI says SearchGPT will be available to a small group of users and publishers as it develops the software and collects feedback. The company is positioning its offering as a new means of searching the web.

WHY: OpenAI also says that its SearchGPT is separate from how the company trains its AI models, and that even if publishers opt out of having their data used to train the OpenAI's models, they'll still appear in the SearchGPT search results.

🚗 Ride-hailing companies claim victory in California gig-worker case

WHAT: Uber and Lyft can keep classifying their California drivers as independent contractors, after the state’s top court decided a voter-approved law doesn’t overstep the legislature’s authority on worker protections. The unanimous ruling upholds California’s Proposition 22, which received majority voter support in 2020. Had the judge ruled to invalidate Prop 22, the companies would have faced the threat of millions of dollars in additional cost to pay drivers if they were to be reclassified as employees.

WHY: But further legal and legislative fights loom ahead. Drivers and labor advocates that argued the law improperly shifts the cost of doing business onto gig workers and denies them other protections, such as minimum wage, sick leave, and overtime pay, renewed their calls to unionize in response to the ruling in emailed statements.

📱 Meta hit with antitrust fine in EU

WHAT: Meta Platforms is facing its first European Union (EU) fine over claims it abused its dominance by linking Facebook Marketplace to its social network, making waves in the classified ad market. As part of the upcoming EU order — set to be issued in the coming months — European Commission regulators could also tell Facebook that it’ll have to create a separate version of its classified ads platform, according to people familiar with the matter.

WHY: As part of a formal warning in December 2022, EU watchdogs alleged that Meta imposed unfair trading terms that enabled it to use data on competing online classified ad services for its Marketplace platform. Facebook Marketplace has also been targeted by other regulators, including the UK’s Competition and Markets Authority, which earlier accepted a slate of concessions.

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