☕️ Going south

Why the stock market had such a bad day... August 06, 2024 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [Cuts]( Good morning. After coasting for months, the stock market is looking as queasy as a triathlete after swimming in the Seine. If you want to stay more plugged into the pandemonium on Wall Street, we’ve got a newsletter for that: Brew Markets, which arrives in your inbox minutes after the bell rings at 4pm ET and helps you become a smarter, more informed investor. [Sign up here to get the next edition this afternoon]( when hopefully there will be better news to report. —Sam Klebanov, Cassandra Cassidy, Molly Liebergall, Abby Rubenstein, Neal Freyman MARKETS Nasdaq 16,200.08 -3.43% S&P 5,186.33 -3.00% Dow 38,703.27 -2.60% 10-Year 3.785% -1.0 bps Bitcoin $54,443.23 -7.06% Kellanova $73.20 +16.23% Data is provided by *Stock data as of market close, cryptocurrency data as of 6:00pm ET. [Here's what these numbers mean.]( - Markets: Global stocks [took a beating]( yesterday in a trend that started in Japan and then took over the world like Pokémon (more on this in a sec). Tech stocks got hit extra hard, with the Magnificent Seven shedding $650 billion in value. One exception to the dour day was Kellanova, the company that Kellogg’s spun off to house its snack brands, which soared on the news that M&M’s-maker Mars is in advanced talks to buy it.  FINANCE [The day the stock market went south]( [Market meltdown]( M. Santiago/Getty Images Check in on your finance friends who probably worked overtime yesterday dealing with the sea of red that filled stock screens around the world. The [trading floor nightmare]( began with a jolt from Japan while Jim Cramer was likely still fast asleep: - Japan’s Nikkei 225 index nose-dived 12%—its biggest drop since 1987—as investors there reacted to the US’ rising unemployment and slower job creation reported on Friday and figured that an economic slowdown across the Pacific heralds hard times for Japanese companies. The pessimistic outlook was further compounded by a more expensive yen. - The stateside sell-off commenced as soon as Wall Street rubbed its eyes in the morning, with the S&P 500 plummeting 4% before gaining back some ground (but still having its worst day since 2022). - The tech-heavy Nasdaq Composite took an even bigger pummeling and was at one point down 6% as investors processed recent reports of sluggish returns from astronomic AI bets and weekend news that Warren Buffett’s Berkshire Hathaway sold almost half its Apple stock in Q2. Jittery vibes: The VIX, a measure of expected volatility referred to as Wall Street’s fear gauge, briefly rose to its highest level since the early days of the pandemic. Some commentators [called]( for the Fed to cut the federal funds rates ASAP to avoid further trouble. But market wonks say a different central bank is at least partially to blame for the sell-off. Land of the rising yen Last week, the Bank of Japan hiked interest rates, prompting the country’s currency’s value to spike like the social standing of someone who just got asked out by the most popular kid in class. The move derailed the long-running “carry trade” investment strategy, in which international investors borrowed cash in yen at historically low interest rates to buy higher-return assets abroad, like US stocks. As the yen became more expensive in relation to the dollar, many investors were forced to sell assets to cover the loans. Looking ahead…many analysts advise touching some grass before you dump your entire stock portfolio—if only to see some much-needed green. They point to a still-strong US economy with relatively low unemployment and higher-than-expected GDP growth last quarter as signs that the market chaos might be temporary. One promising sign: Japan’s stocks have already begun to rebound.—SK PRESENTED BY CUTS [Business casual, but better]( [Cuts]( Are you team WFH, RTO, or JHSIDGF (just here so I don’t get fired)? No matter which team you rep, you deserve to be comfortable in your gear. Cuts gets it, so they created clothes comfortable enough for lounging at home but stylish enough to make your co-workers think you’re really dressed to impress. They’re celebrating their anniversary this month, and they want to offer *you* early access to their [Anniversary Sale](. For 24 hours only, you can [get 30% off]( the softest, sleekest tees, tanks, polos, pants, and more. Look good and feel good in your new biz outfit—and get it for 30% off with code [BREW30](. WORLD [Tour de headlines](#) [A gavel hitting Google's logo]Illustration: Anna Kim, Photo: Adobe Stock Google lost the antitrust case over search. Big Tech may have to get a little smaller after a federal judge ruled yesterday that Google [acted illegally]( to sustain its grip over internet search, writing, “Google is a monopolist, and it has acted as one to maintain its monopoly.” The ruling marks a major win for the government as the first big antitrust victory against a tech giant in the internet era. The DOJ and several states argued in the case that Google ran afoul of antitrust law by paying smartphone companies like Apple and Samsung billions of dollars to be their default search option. The decision found Google liable but didn’t dictate a remedy, which the judge must now decide. Bangladesh’s prime minister resigned amid deadly anti-government protests. Prime Minister Sheikh Hasina has [stepped down]( and left Bangladesh, causing celebration among protesters, some of whom stormed her former official residence. Bangladesh’s military said it is working toward forming an interim government. The change in leadership comes after weeks of deadly clashes between police and protesters who demanded an end to quotas for filling government jobs that benefit the descendants of those who fought for Bangladesh’s independence from Pakistan. Elon Musk-backed PAC investigated for possible state election law breaches. Michigan is [looking into]( possible violations committed by America PAC, a political action committee backed by the billionaire Trump supporter. The investigation stems from the PAC collecting detailed information on voters in swing states via a section of its website labeled “register to vote,” which does not actually help those voters register. North Carolina is also considering an inquiry, according to CNBC. Separately, five secretaries of state drafted a letter urging Musk to update X’s chatbot, Grok, to stop spreading election misinformation after the bot said Kamala Harris was ineligible for many states’ ballots. AVIATION [CrowdStrike tells Delta to take it back]( [Delta terminal at an airport]( Tama/Getty Images CrowdStrike has had enough of being Delta’s punching bag. The IT company went on the offensive this weekend, telling its side of the story after Delta blamed it for mishandling the fallout from a [flawed]( software update in late July that caused widespread computer outages. Read it and weep. On Sunday, CrowdStrike lawyers sent a pointed [letter]( to Delta’s legal counsel—the prominent lawyer David Boies—saying it was “highly disappointed by Delta’s suggestion that CrowdStrike acted inappropriately” and “strongly rejects any allegation that it was grossly negligent.” - The letter said CrowdStrike CEO George Kurtz personally offered onsite assistance to Delta CEO Ed Bastian, contradicting a claim Bastian made last week on CNBC that CrowdStrike was nowhere to be found during the breakdown. - If Delta does pursue legal action, it should be ready to [explain]( why it took longer to recover than other airlines, according to the CrowdStrike letter. Delta canceled more than 5,000 flights during the outage, and the Department of Transportation is investigating its handling of the crisis. What gives, Delta? The airline said it would seek [$500 million]( in damages for the outage. CrowdStrike clapped back that its contractual liability is only in the single millions.—CC FROM THE CREW [The Crew]( Expense scaling. Employing tried-and-true best practices when scaling expense management is pivotal. So, um…what are these best practices? [Tune in for our virtual chat with BILL]( where we’ll tackle these topics and more. Got questions about automation? Corporate card rewards? Scaling and tech? All you’ve gotta do is [save your seat to learn more](. AI [OpenAI is sitting on a tool that catches AI cheaters]( [Magnifying glass inspects red text on computer screen]( Kim When people say “bring back gatekeeping,” this isn’t what they mean: Sam Altman & co. have [held off]( on releasing technology that detects writing generated by OpenAI’s ChatGPT with near-perfect accuracy, even though the tool has been launch-ready for about a year, the Wall Street Journal reported on Sunday. Why? OpenAI is torn between the company’s transparency pledge and the risk that it could lose AI plagiarists users. According to internal documents reviewed by the WSJ and to unnamed sources who spoke to the publication: - OpenAI found the tech to be 99.9% effective at detecting copy generated by ChatGPT. - Almost one-third of loyal ChatGPTers said the anti-cheating tool would dissuade them from using ChatGPT. - Altman encouraged OpenAI’s anti-cheating project but hasn’t pressed for the tool’s release. Teachers have begged for this. AI-assisted schoolwork is running rampant, many educators believe, partly because students have realized that third-party detectors don’t always [catch them](. ChatGPdefense: After the article dropped, OpenAI [took to]( the company [blog]( to describe the detection tech as “highly accurate” but susceptible to workarounds and possibly stigmatizing for non-native English speakers. Elsewhere on an OpenAI FAQ [page]( that hasn’t been updated in over a week, the question “Do AI detectors work?” is answered with “In short, no, not in our experience.”—ML STAT [Prime Number: F-bombs are everywhere](#) [A scene from Deadpool & Wolverine featuring the titular characters]Disney If you’re one of the many people who helped make Deadpool & Wolverine the highest-grossing R-rated movie ever, you probably noticed two things: 1) They finally put Hugh Jackman in the yellow suit and 2) the characters say the f-word. A lot. Characters in the Marvel film drop f-bombs more than [100 times]( per Reuters, which also notes they’re dropping the once incredibly taboo term into an increasingly cuss-friendly pop culture landscape. Taylor Swift uses the word 18 times in the song “Down Bad” on her latest album, and the serious academics who study these issues say that usage has evolved. A 2021 study in the UK found it was the most popular swear word, and research from 2023 found British teens using it more in friendly conversation instead of as an insult or a euphemism for sex, Reuters reports. NEWS [What else is brewing](#) - [Debby]( made landfall as a Category 1 hurricane in Florida, causing catastrophic flooding before weakening to a tropical storm and heading for Georgia and the Carolinas. - [Elon Musk]( sued OpenAI and Sam Altman, claiming they’ve ignored the organization’s mission to develop AI to benefit humanity. If that sounds familiar, it’s because Musk already filed and dropped a similar suit. - Meanwhile, [OpenAI]( continues to have leadership drama: The Information reports that co-founder John Schulman has decamped to rival Anthropic, President Greg Brockman has taken an extended leave of absence, and experienced Product Manager Peter Deng has also left. - [More US companies]( made it onto Fortune’s Global 500 List than Chinese ones this year for the first time since 2018. Walmart kept its No. 1 spot. - [Justice Clarence Thomas]( did not disclose a 2010 flight from Hawaii to New Zealand aboard Republican donor Harlan Crowe’s private jet, a Democratic senator said, adding to a list of concerns about his financial disclosures. - [An Army officer]( from Michigan was crowned Miss USA this weekend after the original winner stepped down. - At the Olympics…[Mondo Duplantis]( won the pole vault gold, breaking his own world record for the ninth time—he gets a cash bonus every time he does. In gymnastics, the US’ Simone Biles (silver) and Jordan Chiles (bronze) [celebrated]( floor exercise gold medal winner Rebeca Andrade of Brazil on the podium. On the [balance beam]( Italy’s Alice D’Amato won gold, and the US was shut out after Biles and Suni Lee both fell. RECS [Tuesday To Do List] Drink globally: A visualization of [alcohol preferences]( around the world. Bake: Make your own version of the [chocolate muffin]( that’s gone viral at the Olympics. Watch: A water park employee fulfills our childhood dream of [walking on the big slides](. Read: The New Yorker [profile]( that has [everyone]( talking about JFK Jr. and a bear corpse. Get started with AI: Master the AI landscape, learn proven use cases, and build more effective prompts in [this 1-hour webinar](. You’ll leave with a comprehensive understanding of AI. Biz points: Want sweet perks and travel rewards? The [Southwest Rapid Rewards® Business Credit Cards from Chase]( lands the best offer this year. Through September 16, earn up to 120,000 bonus points. Biz owners, [learn more here]( *A message from our sponsor. GAMES [The puzzle section](#) Brew Mini: If the Olympics has your competitive juices flowing, see if you can beat Neal’s time of 26 seconds on today’s Mini. [On your marks…go](. Vice president trivia With Kamala Harris expected to reveal her VP pick today, here are two questions about US vice presidents: There is only one VP in history who killed a person while in office. Who was he, and what was the name of the person he killed? SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( ANSWER Aaron Burr, who killed Alexander Hamilton in a duel. We learned about it in a musical. Word of the Day Today’s Word of the Day is: dour, meaning “gloomy.” Thanks to Melissa from Pittsburgh, PA, for cheering us up with the suggestion. Submit another [Word of the Day here](. ✤ A Note From Chase *Accounts subject to credit approval. Restrictions and limitations apply. Cards are issued by JPMorgan Chase Bank, N.A. Member FDIC. All Rapid Rewards® rules and regulations apply and can be found at Southwest.com/rrterms. Written by [Neal Freyman]( [Abigail Rubenstein]( Sam Klebanov, [Cassandra Cassidy]( and [Molly Liebergall]( Was this email forwarded to you? Sign up [here](. Interested in podcasts? - Check out ours [here]( [ADVERTISE]( // [CAREERS]( // [SHOP]( // [FAQ]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright © 2024 Morning Brew. All rights reserved. 22 W 19th St, 4th Floor, New York, NY 10011