Good morning. US stock futures inched higher in Tuesday morning trading as investors awaited the release of key inflation data slated for later in the week.

"As a rule, panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works"

John Stuart Mill

Top News

US lawmakers mull changes to TikTok crackdown bill

WHAT: US lawmakers are gathering to discuss some changes to a bill that could put Chinese-owned TikTok in a bit of a pickle. The bill, endorsed by the White House, would grant the Commerce Department new authority to review, block and address a range of transactions involving foreign information and communications technology that pose a national security risk. Lawmakers are concerned that the bill would give the Biden Administration new powers to ban TikTok.

WHY: The Biden Administration in March demanded TikTok’s Chinese owners divest their stakes or face a US ban. Attempts in 2020 by then President Donald Trump to ban TikTok were blocked by US courts.

Fed exec: More work needed to curb inflation

WHAT: Nobody at the Federal Reserve seems to be satisfied with where inflation is at. Those are the sentiments being echoed by Fed Vice Chair of Supervision Michael Barr who said the US central bank still has more work to do to raise interest rates to a level that will contain inflation. “Inflation is far too high” Barr told a Bipartisan Policy Center meeting recently.

WHY: The Fed held interest rates steady in June after raising them for ten straight meetings to a range of 5%-5.25%.

Another day, another AI lawsuit

WHAT: Comedian Sarah Silverman is teaming up with two authors to take on the AI giants! They’re slapping Meta Platforms and OpenAI with copyright infringement lawsuits, claiming that their content was used without permission to train language-learning artificial intelligence models.

WHY: The lawsuit against OpenAI claims that the summaries generated by ChatGPT, a product of OpenAI, suggest that the bot was trained using their copyrighted content. “The summaries get some details wrong” but still show that ChatGPT “retains knowledge of particular works in the training dataset” the lawsuit states.

In Other News

100 million Threaders!

 WHAT: In what seems like the blind of an eye, Instagram’s new Threads app has crossed 100 million users…in just five days! Threads became the fastest growing app in history, surpassing OpenAI’s ChatGPT which took two months to get to the same number of users.

WHY: Threads proved to be an early hit almost immediately. In its first two hours it hit 2 million users and steadily climbed from there ending the first three days post-launch at 70 million users.

Banks must hold more in reserves

WHAT: The Federal Reserve’s regulatory chief has cooked up a plan to beef up capital requirements for the biggest banks in the US. Fed Vice Chair Michael Barr said many additional regulatory initiatives were under consideration including obligating banks with over $100 billion in assets to hold larger sums in reserve to bolster the resilience of the banking system.

WHY: The Fed has itself come under criticism for its oversight of banks involved in this years banking crisis. The banking industry called the new efforts misguided and said such moves could hinder lending.

UK regulators go after “crypto machines”

WHAT: The Financial Conduct Authority (FCA) in Britain is cracking down on sneaky crypto ATMs across the UK. The watchdog, in a coordinated effort with other law enforcement agencies said it “disrupted” over 26 machines, while warning customers that they could lose all their money by using such machines.

WHY: “If you use a crypto ATM in the UK, you are using a machine that is operating illegally and you may be handing your money over to criminals” Steve Smart, executive director of enforcement and market oversight said.

Key Economic Events

• Tuesday - No Major Economic News

• Wednesday - US CPI Y-o-Y, Fed’s Kashkari Discusses Monetary Policy, Banking Solvency

• Thursday - Initial Jobless Claims (wk end 8-Jul)

• Friday - U. Of. Mich. Sentiment

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