>>> Barron's Weekend Summary

Barron's Weekend Summary: ohn Malone, a cable mogul, has been a media trailblazer since the 1980s

Cover:
-John Malone, a cable mogul, has been a media trailblazer since the 1980s. He has built a successful empire under the name Liberty Media, which has been mentioned alongside Warren Buffett and Berkshire Hathaway. However, at 83, Malone is facing challenges in his empire, including pressure on Sirius XM Holdings and Charter Communications, the country's second-largest cable operator. Other companies associated with Malone, such as Warner Bros. Discovery, have also suffered. Malone's debt-based business model has lost its luster as interest rates have risen. Despite this, some of his holdings, such as Formula One racing and the Atlanta Braves, are thriving. Malone is still making deals, which could unlock the value of his empire and provide an opportunity for investors to navigate his complex web of stocks. Pivotal Research Group senior research analyst Jeffrey Wlodarczak believes that Malone would prefer to do things sooner rather than later. Malone keeps a relatively low profile and lets Liberty Media CEO Greg Maffei do most of the talking.

Interview:
-Jeremy Siegel, a professor emeritus of finance at the University of Pennsylvania's Wharton School, first published Stocks for the Long Run in 1994, highlighting the importance of diversification and staying invested in the stock market. The book, titled The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies, argued against trying to pick individual winners and losers in the stock market. Siegel also recommended staying invested and resisting the urge to market-time. The S&P 500 index fund, which was published in 1994, has grown exponentially since its publication, with the index now at around 5550, a gain of nearly 1,100%. Nvidia, the world's third-most-valuable company, is worth more than $3T. A passive approach to investing ensures ownership of America's most dominant companies in vibrant industries. Siegel remains a strong believer in indexing, stating that it's hard to beat an index portfolio no matter how you do it, especially when factoring in fees for an actively managed fund.

Tech Trader:
-Investors are questioning the returns on capital expenditures invested in AI, with some predicting workforce reductions as the first outcome. David Cahn, a venture capitalist at Sequoia Capital, estimates that Nvidia's customers will need to add $600 billion in AI revenue to get an acceptable payback on their investments. He believes that AI will transform the economy, similar to the internet and railroads once did. Sequoia has backed AI start-ups, but many speculators in these technologies got torched when initial valuations crashed, benefiting everyone using rail or internet services. Morgan Stanley analyst Brian Nowak also considered the returns on invested capital for Meta stock, considering the $45B it plans to invest in capex this year and again in 2025. Nowak concluded that AI will drive higher engagement at Facebook and Instagram, sticking with his Buy recommendation for Meta.

The Trader:
-Alphabet's stock fell after a strong earnings report, with earnings of $1.89 a share on revenue of $84.7B, beating estimates for $1.85 and $84.2B, respectively. However, the stock dropped 5% on Wednesday, its largest decline since late February, and is now off more than 12% from their peak on July 10. Alphabet's expectations were likely high heading into earnings, given the stock's 30% gain this year heading into the print. However, there were other worries, particularly the amount of money Alphabet is spending on artificial intelligence, particularly after capital expenditures rose 91% in the second quarter and are likely to continue rising at a fast rate. Evercore ISI analyst Mark Mahaney notes that Alphabet's bets on AI already look to be paying off, with Google's AI summaries of stories attracting users, more usage by 18- to 24-year-olds, and more than 1.5 million developers using Gemini, Google's AI product.
-The tech stocks market has seen a rough week, but it is more excited about small-cap stocks. The Dow Jones Industrial Average rose 0.75%, the S&P 500 index dropped 0.8%, and the tech-heavy Nasdaq Composite fell 2.1%. The NASDAQ’s losses are a reflection of its recent performance, which was up 18% this year. Investors have been taking profits in stocks, driven by Alphabet's earnings beat, which sent the stock down 6.2% on Wednesday. The S&P SmallCap 600 index rose 3.6% this past week as investors rebalanced their portfolios to own more small-cap stocks and less tech heavyweights. Inflation data continues to behave, with June's personal consumption expenditures price index rising 2.5% year over year, down from May's 2.6%, and second-quarter gross domestic product rising a faster-than-expected 2.8%. This should allow the Federal Reserve to cut interest rates in September, supporting economic growth and restoring the market's confidence in sales and profits across sectors. The S&P 600 has been up about 6% over the past two weeks, but small-caps should continue to rise, even if they may need a breather.

Features:
-Tesla stock was up by over 2% in premarket trading on Friday, closing down 0.2% just under $220 a share. The S&P 500 and Dow Jones Industrial Average rose 1.1% and 1.6%, respectively. Tesla shares are still about $25, or 10%, below where they closed just before reporting weaker-than-expected second-quarter numbers. The miss generated price-target cuts and analyst downgrades, with Phillip Securities analyst Jonathan Woo cutting his rating to Sell from Reduce and his price target going to $135 from $145. The downgrade reflects factors that have already affected the stock this week, such as pricing, tariffs, and profit-margin pressure. Tesla's management spent little time dispelling concerns over its stalling auto business, which was reflected in Wednesday's drop. Tesla shares have picked up about $5 from post-earnings lows because the quarter wasn't great, but it was not all that bad.
-3M reported better-than-expected second-quarter earnings with growth picking up, resulting in a 23% gain on shares. The company announced adjusted earnings per share of $1.93 on sales of $6B, which was higher than Wall Street's expected $1.68 from sales of $5.9B. Shares gained 23%, closing at $127.16, while the S&P 500 and Dow Jones Industrial Average rose 1.1% and 1.6%, respectively. This was the largest one-day gain for the stock ever, according to Dow Jones Market Research. Year-over-year comparability is affected by the company's healthcare spinoff, which completed the separation of Solventum on April 1. Adjusted for the spin, 3M reported first-quarter earnings per share of about $1.70 on sales of $5.7B. Organic sales grew by about 1% in the first quarter and by about 1.2% in the second quarter. CEO William Brown stated that 3M delivered another strong quarter with adjusted earnings growth up double-digits and robust cash generation.

Europe:
-Ursula von der Leyen has been elected as the second five-year term as European Commission president, winning a first-ballot majority of the European Parliament. Despite the election, the future of the EU seems less inspiring. Von der Leyen, a 65-year-old former German defense minister, has proven to be an extraordinary crisis manager, leading the EU to take decisive action during the Covid pandemic, support Ukraine, and wean the EU off Russian natural gas imports. However, the bloc may revert to its glacial status quo without such fires to fight and with its two dominant member states in political disarray. The most effective change in the new European Parliament is not the rise of the far right, but the decline of the Greens, who slipped from 70 to 53 seats in the 720-member body. The focus is now shifting to how to reduce emissions while maintaining economic growth. Hard renewable energy targets are giving way to fuzzier rhetoric about increasing Europe's competitiveness, with talk of a "capital markets union" harmonizing national financial regulations and taxation.

Emerging Markets:
-No update

Commodities:
-No update

Streetwise:
-Apple is set to introduce Apple Intelligence, a new feature in its iPhone lineup, which aims to integrate artificial intelligence tools into its devices. The company has released a short film showcasing new tricks, such as allowing users to create emojis and images by typing or speaking. The feature also includes Siri, Apple's voice assistant, which is becoming more capable. A beta version of the new features will launch this fall for iPhone 15 users, recent iPads, and Mac computers. Those with older phones can stay in the Stone Age or upgrade to the iPhone 16, which has Wall Street debating whether the iPhone supercycle is on the horizon. Wedbush analyst Dan Ives believes Apple is heading for an "AI Driven Massive Upgrade Cycle," with Cupertino being the gatekeepers of the consumer AI Revolution. Erik Woodring at Morgan Stanley also supports Apple Intelligence, calling it a clear path to a multiyear product upgrade cycle. In mid-July, he named Apple a top pick and raised his price target from $216 to $273.

>>> Weekend Papers Summary

Weekend Papers Summary

FINANCIAL TIMES
-Kamala Harris's advisers have approached top crypto companies to "reset" relations between her Democratic party and a sector that has become an important backer of Donald Trump, her rival for the US presidency. The vice-president's team has contacted people close to crypto companies, including Coinbase, Circle, and Ripple Labs. Harris's overture to crypto companies comes as Trump is enjoying strong levels of support from the sector. Crypto groups are likely to be an important source of funding for candidates in the election, as pro-crypto super Pac Fairshake has raised over $200M from backers.
-Kamala Harris made her most clear pitch for the White House in a social media video, using Beyoncé's "Freedom" as a soundtrack. With 100 days until the US presidential election in November, Harris's first official campaign video allowed her to reintroduce herself to the American electorate and preview messages for her campaign. The video highlighted the stark choice Americans will face when they head to the ballot box in November, with a sharper contrast across generations, gender, and race. Republicans will frame Harris as a dangerous radical, while Democrats will highlight the distinction between a 59-year-old prosecutor and a 78-year-old former president.
-The Paris Olympics began with an extravagant opening ceremony, carrying 10,500 athletes along the Seine. The event was expected to be watched by a billion people. However, criminal sabotage caused nationwide transport chaos and heavy rain delayed the three-hour show. Interior minister Gérald Darmanin assured that no specific threats had been detected and that the railway sabotage would not directly affect the Olympics or the ceremony. The event featured a massive cast of dancers, orchestras, and pop stars.
-Four of the Magnificent Seven technology stocks that have driven the US market rally for the past nine months have ended the week in correction territory, having fallen by more than 10% from recent peaks. Microsoft and Amazon are close to double-digit falls that define a correction. Investors are looking ahead to further tech earnings updates next week amid worries about punchy valuations and the risks that returns from vast artificial intelligence-related spending may not live up to early hopes. Nvidia and Tesla are each down 17% from their recent peaks, while Meta and Google parent Alphabet have fallen 14% and 12% respectively. Apple is the best performer in the group, having lost just 7%, while Microsoft and Amazon have slid about 9% each. Alphabet sparked a wider market sell-off when its shares fell more than 5% on concerns about AI-related investments.
-Donald Trump has expressed his desire to ease tensions with Israeli Prime Minister Benjamin Netanyahu, calling for the immediate return of hostages held by Hamas. The relationship between the two was close during Trump's presidency, but soured in late 2020 when Trump criticized Netanyahu for congratulating Biden for winning the 2020 election and backing out of an operation to kill former Iranian Revolutionary Guard Corps commander Qasem Soleimani. Trump also criticized Democratic opponent Kamala Harris' call for a ceasefire and criticism of the humanitarian suffering in Gaza, calling her remarks disrespectful. Netanyahu's far-right allies also criticized Harris for her comments after meeting Netanyahu, who expressed more empathy for Palestinian suffering and a tougher stance on Israel than Biden.
-Europe's data protection watchdog is investigating X, Elon Musk's social media platform, for allowing users' data to be automatically used for xAI's artificial intelligence systems. Users discovered that they had been 'opted-in' to have their posts and interactions with its Grok chatbot used for training and fine-tuning xAI's systems without obtaining explicit consent. The move was made without first obtaining users' explicit consent for data sharing. The Data Protection Commission, responsible for holding internet companies to EU privacy law, has been engaging with X for months over its plans to use users' data to create AI systems. The regulator has sent questions to the company about transparency for users and is seeking clarity on the matter.
-A federal grand jury in Los Angeles has charged prominent short seller Andrew Left with over a dozen counts of fraud, alleging he made profits of at least $16mn from a long-running market manipulation scheme. The Department of Justice stated that Left knowingly exploited his ability to move stock prices by targeting popular stocks with retail investors and posting recommendations on social media to manipulate the market and make fast, easy money. The grand jury indictment charged him with 17 counts of securities fraud, one count of engaging in a securities fraud scheme, and one count of making false statements to federal investigators. The indictment alleged that Left publicly claimed that companies' share prices were too high or low, creating the false pretense that Left's economic incentives aligned with his public recommendation.
-A federal grand jury in Los Angeles has charged Andrew Left with over a dozen counts of fraud, alleging he made at least $16M from a market manipulation scheme. The Department of Justice claims Left knowingly exploited his ability to manipulate stock prices by targeting popular stocks with retail investors and posting recommendations on social media. The indictment charges him with 17 counts of securities fraud, one count of engaging in a securities fraud scheme, and one count of making false statements to federal investigators.
-The European Medicines Agency (EMA) has declined to approve a new Alzheimer's treatment, Leqembi, due to concerns about rare brain swelling side-effects. The decision comes after the US Food and Drug Administration approved the drug for US patients last year. Leqembi, which is expected to generate $154M in revenue worldwide this year, is expected to be approved in the EU, with thousands of patients already receiving infusions in the US. The EMA has raised concerns about amyloid-related imaging abnormalities, or Aria, caused by the drug, which could lead to serious events and hospitalizations.

THE NEW YORK TIMES
-Vice President Kamala Harris has expressed her concern for Palestinian suffering in the Gaza war, marking a shift in emphasis from the president's statements. This move aims to establish herself as the leader of her party and show the public who she is while demonstrating loyalty to President Biden. Harris has been the quiet understudy for nearly four years, relegated to the role of the supportive deputy while President Biden made pronouncements. Now, she has suddenly been thrust to the fore as the new presumptive Democratic presidential nominee, and neither silence nor agreeable head nods are sufficient anymore. The challenge for Harris over the next 100 days is to find her own voice without overtly breaking with Biden, a delicate political high-wire act without a reliable net.
-Kamala Harris is considering Arizona Senator Mark Kelly as her running mate for Vice President. Kelly, a Navy veteran and former astronaut, has a strong political background and expertise on the Southern border. He has won two elections to the Senate in Arizona and has a deep understanding of the terrain around Douglas, Arizona. The rugged border lands around Douglas, Arizona, are difficult for a 30-foot steel bollard wall but not for cartels smuggling people and contraband from Mexico. Even the state's Republicans acknowledge this fact. Kelly has pushed for the expansion of Douglas as an official, expanded port of entry into the United States, which both the senator and Douglas' G.O.P. mayor, Donald Huish, see as a way to inject economic stability into the region and potentially defang the cartels and coyotes that roam the region. Both parties believe the plan could inject economic stability into the region and potentially deter drug traffickers.
-Kamala Harris, has been gaining attention as a presidential candidate. The Obamas called her to offer their endorsement, and the former president and first lady sounded like parents in a Lifetime movie talking to their child at summer camp. The Biden-turned-Harris campaign managed to make the Obamas sound like parents in a Lifetime movie.
-The XXXIII Olympiad in Paris marked a significant milestone, marking the first Olympics in a century, with equal gender participation, the first opening ceremony in full air, and the first sponsored by a global luxury company. The opening ceremony featured a red carpet, a runway show, and vignettes showcasing the history and spirit of the host country, including the French Revolution and Notre Dame reconstruction. The event was centered around the Eiffel Tower, Grand Palais, and Place de la Concorde, with LVMH as a premium partner. The goal was to showcase French savoir-faire through cabaret, heavy metal, dance, acrobats, and 1,800 outfits from both new and old brands. The fashion competition stakes were set high, raising the competition for every other national team.
-The arrest of Ismael Zambada García, the founder of the Sinaloa drug cartel, at a small airport outside El Paso, Mexico, is a tale of subterfuge and betrayal. García, known as El Mayo, had for decades evaded capture by Mexican and American authorities, living a life of luxury in the mountains of Sinaloa. Despite the $15M U.S. bounty on his head, García lived a life of luxury in the mountains of Sinaloa. However, U.S. officials said that he was betrayed by the son of his closest criminal ally, Joaquín Guzmán Loera, the infamous drug lord known as El Chapo. The son of Guzmán Loera, the son of his closest criminal ally, Joaquín Guzmán Loera, is now serving a life sentence in an American federal prison. The arrest of García, who is now serving a life sentence in an American federal prison, is a significant step towards capturing one of Mexico's biggest drug lords.
-The FBI has provided the most definitive explanation for the injury to former President Donald Trump's ear during an assassination attempt this month. The FBI said that Trump was struck by a bullet, whether whole or fragmented into smaller pieces. This explanation was the most definitive to date after the bureau's director had earlier suggested the former president might have been hit by shrapnel. The controversy surrounding Trump's injury turned into a political firestorm as the former president and his political allies attacked the F.B.I. director, Christopher A. Wray, for comments he made before Congress. The FBI's statement has sparked a political firestorm.
- Donald Trump has intensified his attacks on Vice President Kamala Harris, accusing her of attempting to impose left-wing values on the nation. In a speech to religious conservatives in Florida, Trump accused Harris of being overly liberal on immigration and abortion, and calling her a "bum." Speaking at the Believers Summit, a faith-focused conference hosted by Turning Point Action, Trump invoked the specter of San Francisco, a liberal city used as a shorthand by conservatives to denigrate Democrats. He argued that Harris would impose far-left values on the country if elected, a claim that Trump made in his second campaign speech since Harris became the presumptive Democratic nominee. Trump's barbs seemed more focused than earlier in the week, when he unleashed a flurry of wide-ranging attacks.
-The Justice Department has defended a US law that could force the sale or ban of TikTok, arguing that the proposed changes would not prevent China from using the app to collect US users' data or spread propaganda. The Justice Department's first detailed response to TikTok's lawsuit challenged the new US law that could ban the social media app, stating that measures TikTok previously offered to address the government's security concerns, such as walling off US user data domestically, were insufficient. The agency argued that the Chinese government could still collect sensitive data on Americans or manipulate content, and it has incentive to misuse the app due to larger geopolitical goals.
-California Governor Gavin Newsom has expressed his desire for cities to clear homeless encampments, a controversial issue that has faced strong opposition in Los Angeles. Newsom's declaration urged state and local officials to take action, stating that there are no longer any excuses for the encampment's existence. In a video statement, Newsom stated that there are no longer any excuses for the encampment's existence, which has seen items like a box fan and a plastic kiddie pool stashed. Los Angeles Mayor Karen Bass responded with visuals from a different encampment cleanup, highlighting that 15 residents who had been displaced from this particular encampment had been "brought inside." The clearing of encampments has long been framed as a partisan issue, with Democrats on one side reluctant to remove homeless people and Republicans demanding citations and arrests.
-Former President Donald Trump and Israeli Prime Minister Benjamin Netanyahu met in Florida, a day after their main opponent, Vice President Kamala Harris, criticized Israel's conduct of the war in the Gaza Strip. Trump and Netanyahu remained on good terms after the meeting, and Trump would be a stronger ally of Israel than Vice President Kamala Harris. The two were close allies during Trump's presidency, but their ties became strained after the 2020 election. Trump said that they don't have to rebuild their ties if he won in November, as they have had a good relationship.
-Japan's Labor Ministry and labor union have found that one in 10 to half of workers have experienced customer harassment. Companies and service providers are warning customers against mistreatment and developing rules to guide staff on what constitutes a legitimate complaint and unacceptable behavior. Employers have removed surnames from name tags to protect employees from doxxing on social media. SoftBank is developing an "emotion canceling" voice alteration service for call centers to reduce anger from incoming complaints.

THE NEW YORK POST
-A Democrat running for statewide office has criticized her party mate and governor, Josh Shapiro, leading to a war of words with the Pennsylvania party chief. Treasurer nominee Erin McClelland accused Shapiro of sexism and covering up sexual harassment, implying he wouldn't be satisfied playing second fiddle. McClelland is running against GOP incumbent Treasurer Stacy Garrity and wants a VP pick that is secure enough to be second under a woman, content to be VP, won't undermine the President, and doesn't sweep sexual harassment under the rug. North Carolina Gov. Roy Cooper is another potential veep pick for presumptive Democratic presidential nominee Kamala Harris.
-The Justice Department has accused TikTok of using an internal web-suite system called Lark to gather bulk information on users based on views on divisive social issues like gun control, abortion, and religion. TikTok and its Beijing-based parent company ByteDance used Lark to enable TikTok employees to speak directly with ByteDance engineers in China. This led to the sending of sensitive data about US users, which has since been stored on Chinese servers and accessible to ByteDance employees in China. The filing states that one of Lark's internal search tools allows ByteDance and TikTok employees in the US and China to gather information on users' content or expressions, including views on sensitive topics. Last year, the Wall Street Journal reported TikTok tracking users who watched LGBTQ content through a dashboard the company said it had since deleted.

FT : My dry cleaning disaster. . . and what it taught me about how to care for v

My dry cleaning disaster


Walking past SK Vintage in Kentish Town with 10 minutes to spare, I popped in to say hello and see what was new. No, I’m not looking for anything, I said as I plucked a black cocktail dress off the rail; just browsing. This dress was long-sleeved, with a crossover bodice and spectacular beaded fringing at the hem. The label said Bellville Sassoon, no size indicated. “Try it,” owner Sarah Khan urged. “You never know.”

It was divine: an internal zipped skirt that hugged everything just-so; a deep (but still on the right side of saucy) V-neckline; that fringe — it swished and clacked around my thighs as I checked all angles in the full-length mirror. Of course I bought it. How could I not? I was off to Paris in two days; coming across the ultimate dinner-in-Paris dress with this timing felt too serendipitous and right to do anything else.

The dress and I had a marvellous time in Paris, wine spills and all. The day after returning to London, I took it to my dry cleaner. I pointed out the beaded fringe and asked the cleaner if he thought it would be OK. He noted that since there were no care instructions on the tag, he’d clean it as a delicate item.

You can guess what happened next. I arrived to collect the dress and the cleaner sucked his teeth. He went into the back (ominous) and brought out a mound of fabric — my dress — with both hands. Laying it across the counter, he showed me that all the plastic beads had melted and stuck to the fringe, creating a hard, sticky web. “I told you cleaning was at your own risk,” he said as I stood there in minor shock. I asked too few questions and received unsatisfying-to-defensive answers. I knew it was time to leave when I started to cry.

I’m not the only person with an emotional attachment to clothes to go through this. Practically everyone has a story about a time when a coat came back with mysterious splotches or a delicate blouse was too aggressively pressed. A stylist still mourns an Alessandro Michele-era Gucci shirt with an exaggerated collar that somehow melted and shrunk in the cleaning process. There have been missing fabric belts; oil-slick stains on suede; felted blankets. Biro is a recurring theme: a yellow dress or white blouse that came back with a slash of pen across the chest, as if someone had been startled while writing a ticket.

Mishaps do occur because you’re looking at an industry that has no way of standardising any process

Mathilde Blanc
Then there are the times when interventions are well-intentioned but misguided. An editor I know still shudders when she talks about how cleaners ironed out all the micropleats in her mother’s Issey Miyake dress, not realising the brand’s signature pleating was intentional. “They said it had taken a long time,” she recalls. “My mum couldn’t bring herself to tell them.”

Knowing others had been similarly afflicted didn’t help when I lay awake in bed at 2am, feeling like an irresponsible dress owner. When you buy vintage, you aren’t just acquiring an item of clothing; you’re agreeing to be a custodian of a rare piece. In this I had failed. Waves of disappointment washed over me: about the wasted expense of the dress and the impossibility of fixing it.

“I’m sorry that happened to you,” says Mathilde Blanc, co-founder and chief executive of Blanc, the eco-friendly London dry cleaning group that works with Christian Dior, Prada and Gucci, as well as operating four retail locations (I wish I’d taken my dress to one of them). “Mishaps do occur because you’re looking at an industry that has no way of standardising any process.”

Dry cleaning, she explains, is a misnomer. In standard dry cleaning, clothes are loaded into a machine and covered with a viscous solvent derived from petroleum, then heated to 80 degrees; the liquid is then evaporated at a very high temperature, lifting dirt and stains with it.

Without a care tag, “there’s no indication for the experts to know what to do with your garment. So it’s a matter of experimenting, and sometimes experimenting goes wrong.”

Blanc says that when her team thinks cleaning a garment may be risky, they decline to accept it. “My advice would be to avoid cleaning anything special as much as possible. Unless it’s incredibly smelly or stained, in which case ozone technology [a gentle technique that uses ozone gas to clean and remove odours] is brilliant to refresh and sanitise the item.”

Then again, not every garment that calls for dry cleaning actually requires it. Frej Lewenhaupt, co-founder and chief executive of Steamery, the Scandinavian textile-care brand, says: “A lot of clothing manufacturers put ‘dry clean only’ on the tag because they don’t want to take full responsibility for how to actually clean it in your own household.”

Cashmere, for example, can be handwashed cold in delicate detergent and flat-dried at home. He says that with suitable detergents and wash-protection bags, and “a little bit of extra knowledge about textile composition, washing and drying, it’s just as efficient to take care of clothes in your home environment”.

That can also be the gentler option with regard to the environment. “Dry cleaners don’t always have the knowledge of how to treat their leftover chemicals,” Lewenhaupt adds, and when not disposed of properly, these can pose a danger to fish and aquatic life.

But back to the damage. Citizens Advice says that anyone can claim compensation if belongings are damaged or lost in a dry cleaner’s care, and most chains have procedures in place to resolve customer disputes. When it comes to the small, independent businesses that represent the majority of high-street dry cleaners, it’s less clear-cut — cleaners might deny responsibility, as in my situation, or offer free cleaning services as recompense. And realistically, not many people really want to take on a dispute with a local business over an item of clothing.

So most rue the day they walked into that dry cleaner and move on. Not me. I went to V V Rouleaux, the Marylebone ribbon and trimmings emporium, carrying the carcass of the dress. No beaded fringe in stock. There was nothing similar at MacCulloch & Wallis on Poland Street either, but a fashion student who worked there brought out plain black fringing and beads to show me how I could create my own beaded tassels. It would be painstaking as well as expensive. I took a 10cm length of fringe but gave up five minutes into a YouTube tutorial.

Then, a miracle: After a week of searching, I found a twin of my dress on eBay. Too small for me to wear, but it did have the same embellished fringe. A tailor Khan referred me to said she could lift the fringe and use it to replace the damaged material on my dress. Could I really bear to cannibalise another dress to save my own, I asked myself as I tapped to buy. Yes. Yes, I could.

Now the dress is hanging in my wardrobe, with no visible sign of its misadventures. I know I won’t get that lucky twice. Next time it needs to be cleaned, I’ll take it to a specialist or cold-wash it on a delicate setting at home. A good dress is a terrible thing to waste.

FT : US reveals security concerns around TikTok and ByteDance

US reveals security concerns around TikTok and ByteDance
Department of Justice alleges sensitive American user data was stored in China

The US government has disclosed new national security concerns around TikTok and its Chinese parent ByteDance, as it fights their challenge to a law that would force a sale or ban of the app.

In legal documents filed on Friday, the US Department of Justice alleged some of TikTok’s US user data had been stored in China and the company was able to collect data based on users’ views on sensitive issues such as abortion.

Under a bill Congress approved in April, ByteDance must divest TikTok by January 2025 or face a countrywide ban. The move came after US officials warned the popular platform posed national security risks, partly because ByteDance could be compelled to share the personal information of the 170mn Americans who use the app with Beijing under Chinese law.

According to a declaration by Casey Blackburn, assistant director of national intelligence at the Office of the Director of National Intelligence, “ByteDance and TikTok Global have taken action in response to [Chinese government] demands to censor content outside of China”.

In May, TikTok and ByteDance sued the US government to block the bill, claiming it was unconstitutional and violated the First Amendment, which protects free speech. TikTok has denied the Chinese government has any control over the app or that it has handed over any data to Beijing.

“Nothing in this brief changes the fact that the Constitution is on our side,” said a TikTok spokesperson. The “government has never put forth proof of its claims, including when Congress passed this unconstitutional law”.

“Today, once again, the government is taking this unprecedented step while hiding behind secret information. We remain confident we will prevail in court.”

In its filings, the DoJ defended the bill’s constitutionality, arguing it raised no First Amendment issues as it focused on threats to national security. It added that China, ByteDance and TikTok Global are not covered by First Amendment rights, while TikTok US “by its own admission is merely a conduit for content moderation decisions made by the Chinese entities”, said a senior justice department official explaining the filings.

The DoJ official also said “any burden” on creators’ speech is “incidental” and they had no First Amendment rights to use TikTok in particular.

The department alleged TikTok employees had shared “significant amounts of restricted US user data” to address operational issues on Lark, a software developed by ByteDance that staff at both TikTok and its parent company use to communicate internally. It added this resulted in sensitive US data being stored on Chinese servers and accessible to China-based ByteDance staff.

TikTok in 2022 sought to remove sensitive US user data “improperly” held on Lark channels, according to the filings.

The DoJ also claimed ByteDance and TikTok employees in the US and China could collect bulk user information based on content, including opinions on religion, abortion or gun control. A separate instrument could allegedly censor content based on the use of certain words. Although this was “subject to certain policies that only apply to users based in China”, other policies may have been applied to users elsewhere, the official said.

TikTok in 2022 investigated whether these policies had been used in the US, according to the filings.

TikTok has invested more than $2bn in “Project Texas”, its corporate restructuring plan to protect US user data from Chinese influence through a partnership with Oracle. But the DoJ official said this was “not sufficient to persuade the executive branch that they can be trusted to live by that agreement”.

In their petition to block the bill, TikTok and ByteDance had argued that a divestiture “would disconnect Americans from the rest of the global community on a platform devoted to shared content — an outcome fundamentally at odds with the constitution’s commitment to both free speech and individual liberty”.

TikTok successfully sued the US government in 2020 when then-president Donald Trump issued an executive order to ban the app, giving ByteDance 90 days to divest from its American assets and any data that TikTok had collected in the country.

TikTok’s fate may still depend on American politics. Trump, the Republican presidential nominee in 2024, recently said he would not ban the app if he returned to the White House in order to preserve “competition” in a market dominated by Mark Zuckerberg’s Meta.

FT : Kamala Harris campaign seeks ‘reset’ with crypto companies

Kamala Harris campaign seeks ‘reset’ with crypto companies
Vice-president’s team aims to improve relations after industry criticism of the Biden administration

Kamala Harris’s advisers have approached top crypto companies to “reset” relations between her Democratic party and a sector that has come out as an important backer of Donald Trump, her rival for the US presidency.

Members of the vice-president’s team have contacted people close to crypto companies about meeting in recent days, said four people with knowledge of the matter. Those include leading exchange Coinbase, stablecoin company Circle and blockchain payments group Ripple Labs, two of the people said.

The vice-president’s office and the Harris campaign declined to comment. Ripple and Coinbase declined to comment. Circle did not immediately respond to a request for comment.

Harris’s overture to crypto companies comes as Trump enjoys strong levels of support from the sector. The former president — once a vocal crypto sceptic — has thrown his weight behind the industry and is delivering the keynote speech at a Bitcoin conference in Nashville on Saturday.

Crypto groups will probably be an important source of funding for candidates in the election: pro-crypto super Pac Fairshake has raised more than $200mn from backers including Coinbase, Ripple and Andreessen Horowitz, according to filings.

People advising the Harris campaign on business matters said the decision to reconnect with the crypto industry had little to do with attracting new electoral contributions. They said the objective was instead to build a constructive relationship that would ultimately set a smart regulatory framework that would help the growth of the entire asset class.

The outside advisers to the campaign said Harris wanted to change the perception among many top executives America that the Democrats were anti-business. One person said her campaign was using the change of leadership on the Democratic ticket as an opportunity to reset relations with the tech industry, which had felt targeted by the Biden administration, particularly on antitrust matters.

The underlying message Harris wants to strike is that the Democrats are “pro-business, responsible business”, said one person close to her campaign.

Harris is aiming to win back those in the tech community, many of them in her home state of California, who have turned away from the party in protest at the threat of new taxes or regulation of their industry.

This month, venture capitalists Marc Andreessen and Ben Horowitz announced they would back Trump in the election, having previously supported several Democratic candidates. Their firm, Andreessen Horowitz, claims to be the largest crypto investor in the world and raised about $8bn to invest in the sector.

When they announced their support for Trump, the two venture capitalists railed against Joe Biden’s White House and Gary Gensler’s Securities and Exchange Commission. “They have just fought us every step of the way, and using very nefarious means,” Horowitz said at the time. “They are nuking the industry.”

Some crypto companies are hopeful Harris will be more sympathetic to them. “The fact that she’s willing to listen is a big deal. With Biden you couldn’t even get a meeting . . . It has left people with such a bad view of the Biden administration,” one crypto company executive said.

Barrons : What Comes Next After the Stock Market’s Rotation. The ‘Exhaustion’ Fa

What Comes Next After the Stock Market’s Rotation. The ‘Exhaustion’ Factor.

Forget Team Trump versus Team Kamala. All the market cares about is Team Tech versus Team Rotation.

It isn’t hard to see why the focus is on the run-up to the election, which has been more dramatic than usual. Vice President Kamala Harris is now the presumed Democratic nominee after President Joe Biden’s disastrous debate performance confirmed what many already knew—he’s just too old for a second term. Nor is it hard to find someone who will blame Harris’ ascension for the stock market’s tough week because it made the election’s outcome less certain, just as many credited the rising odds of a Red Wave that would see the Republicans take the House and the Senate for some of the recent gains.

Please. Nearly everything that can be attributed to Trump or Harris can be explained by the economic data, assumptions about the Federal Reserve, or just run-of-the-mill business activity. The outperformance of the small-cap Russell 2000 relative to the S&P 500 and Nasdaq Composite ? It began with June’s consumer price index, which was weak enough for investors to price in a nearly 100% chance of a rate cut in September. It continued as investors fretted about whether the artificial-intelligence trade had gotten ahead of itself after Alphabet and Tesla reported earnings.

Even the selloff in solar stocks likely had as much to do with problems at SunPower, a large residential installer of solar panels, as anything to do with Trump.

“On the surface, the intense political climate seems to have caused a notable shift in the marketplace, moving from prominent tech stocks to cyclical, defense, and small-caps,” writes Jeff O’Connor, head of market structure at Liquidnet. “However, it’s hard to attribute this rotation solely to political events. Historically, the impact of presidential elections on the market has been far less pronounced than perceived.”

What really matters is the impact of interest-rate cuts, the strength of the economy, and the direction of earnings. Rate cuts, in particular, are most helpful for companies that are economically sensitive, have a lot of debt, or are just plain small. That’s reflected in the performance of small- versus large-caps, with the Russell 2000 outperforming the S&P 500 by 12.7 percentage points over the 12 days ended July 24, the largest gap for that period on record. The rally has been so intense, and the drop in the S&P 500 large enough, that the Russell, which started July up 1% for the year, is now up 11%—just three percentage points behind the large-cap index’s 14% rise.

Sustaining the rotation won’t be easy. Much of the tailwind from rate cuts is already reflected in the iShares Russell 2000 exchange-traded fund, which is trading at a steeper premium to the SPDR S&P 500 ETF than it had been at the end of June.

The expectation of rate cuts—and the widening valuation gap—means that further gains in small-caps will likely be smaller and come at a reduced pace, says 22V Research strategist Dennis DeBusschere.

Whether the rotation has legs could come down to both rates and the economy. Bank of America’s Ohsung Kwon looked at when the equal-weight S&P 500—another proxy for the rotation trade—outperformed the market-cap-weighted version of the index. He found that it did so 90% of the time when the yield on the 10-year Treasury fell a full point from its 12-month high and when the Institute for Supply Management’s manufacturing purchasing managers index rose over four points from its lows. For those two things to happen now, the 10-year yield would have to drop to 3.99% from a recent 4.21%, and the PMI would have to hit 50.5, from June’s 48.5. That seems like a big ask.

Tech stocks have their own issues. Partially weighing on the stocks: the big spending on AI and whether those investments will ultimately pay off.

Investors will get more information this coming week when Microsoft, Apple, Amazon.com, and Meta Platforms report earnings. John Higgins, chief markets economist at Capital Economics, is optimistic about the ability of Big Tech to keep Wall Street satisfied through the end of 2025.

“Even if the Magnificent Seven only meet expectations for growth in EPS through the end of next year...we suspect their aggregate market value will continue to rise as their combined price/forward 12-month earnings ratio expands further,” he writes.

The stock market as a whole, though, may still be headed lower. August and September are historically the worst-performing months of the year for the S&P 500. Rich Ross, head of technical analysis at Evercore ISI, expects the index to drop to at least 5250—or 8% below its recent high—before getting set to rally again. He also worries that small-caps and other rotation beneficiaries are showing signs of “exhaustion,” leaving investors in something of a bind.

For now, it might be best to simply ride it out: Don’t give up on the tech trade, but hold a little cash and make sure to have exposure to stocks beyond the Mag 7. Right now is one of those times when it’s better to find a middle ground than pick a side.

WSJ : Why the Great Stock Rotation Is Skipping Consumer Staples

Why the Great Stock Rotation Is Skipping Consumer Staples
Uneven earnings and worries about the U.S. consumer are dragging on the sector

Investors have been rotating out of technology shares and into those parts of the market that have lagged behind. But one such area—the consumer-staples sector, featuring makers of everyday goods from potato chips to paper towels—isn’t benefiting much.

The tech-heavy Nasdaq Composite peaked on July 10 and has fallen 6.9% since. Over that time, the S&P 500 consumer staples subindex is up just 1.5%, trailing the S&P 500 equal weight index, which is up 2.7% over the period. Other sectors have done far better. Industrials in the S&P 500 are up 3.5%, and the KBW Regional Banking Index has rallied over 18%.

These companies’ uneven performance so far this earnings season helps explain why. While Coca-Cola KO 1.48%increase; green up pointing triangle posted impressive results that demonstrated superior pricing power, others turned in mixed quarterly reports, dragged down in particular by concerns about U.S. consumers.

Take global food giant Nestlé, which reported results Thursday. Real internal growth, the company’s measure of underlying sales volume, rebounded to grow by 2.2% in the second quarter from a 2.0% contraction in the first quarter. Encouragingly, the recovery in volumes was broad-based across business divisions and geographies.

But investors focused instead on the company’s pricing which, while up 0.6% from a year earlier in the quarter, slowed substantially from a 3.4% increase in the prior period. Nestlé also lowered its forecast for full-year organic sales, a key industry measure that strips out impacts from currency movements, mergers and divestitures, to growth of “at least 3%” from “around 4%” earlier, saying “we have seen pricing come down faster than expected.”


“There is stress in particular at the low end of the income scale in North America, but also in select other geographies. And so people are value-seeking. And hence, promotional intensity has been particularly strong,” Nestlé Chief Executive Mark Schneider said on a conference call with analysts. Nestlé’s Switzerland-traded shares fell 5.1% in response.

Similarly, Kleenex-maker Kimberly-Clark KMB 0.52%increase; green up pointing triangle on Tuesday reported decent organic sales growth of 4% from a year earlier in the second quarter, driven by a balance of pricing and volume. But that was a tad lower than the 5.1% growth analysts were looking for, according to consensus estimates from VisibleAlpha. And on the company’s conference call, Chief Executive Michael Hsu characterized the promotional environment in the U.S. as back to pre-Covid levels. Kimberly-Clark shares slid 5.7% the day of the earnings.

There were more positive updates from some. Colgate-Palmolive CL 3.01%increase; green up pointing triangle on Friday reported strong organic sales growth of 9.0% for the quarter, on volume growth of 4.7%—the best since the pandemic surge of 2020—and 4.2% pricing growth. Shares rose 3.0%. Here too, though, there were notes of caution in the U.S., where pricing fell 3.3%. On a conference call, managers said they had pulled back too much on promotions in the second quarter last year, requiring stepped up promotions now.

Coca-Cola was the strongest of the pack, reporting a 15% increase in second-quarter organic sales. North American volumes were down just 1%, while pricing and sales mix were up 11% on-year. This suggests that the company, more so than peers, remains able to push through price increases despite a cautious consumer, possibly speaking to the strength of its brands. PepsiCo PEP 1.01%increase; green up pointing triangle, by contrast, earlier this month reported a 3% decline in North America beverages volume and only a 1% increase in revenue for the segment, indicating much weaker pricing. Coca-Cola shares didn’t move much after reporting on Tuesday but made steady gains through the week, reaching a record high on Friday.

Overall, though, the picture is of an industry that is managing to grow volumes globally but with uneven pricing power, particularly among lower-income consumers in the U.S. This somewhat undermines its traditional position in investor portfolios as a sector that does better when times get tough—perhaps because consumers are simply exhausted by higher prices.

This time around, consumer staples don’t look like much of a safe haven.

FT : Paris’s green revolution is still a work in progress

Paris’s green revolution is still a work in progress
Swapping the car for the tree has not been a universally popular strategy

Recently, going through a box of old family photos, I found a black and white snap of my mother sitting on a chair overlooking the Place de la Concorde. It was 1962. The vast square, one of formal Paris’s centrepieces, was a car park.

It’s hard to imagine now but we accept improvements as if they’d always been there and we become a little blasé about the benefits of change. The 19-acre Place de la Concorde is about to become a forest. Or at least that is the rhetoric. The reality is likely to be the greening of its edges and of the Champs-Élysées, which runs from it. But that in itself is no mean feat. Paris’s principal street is now a traffic-clogged, unappealing place trudged by tired tourists. Mayor Anne Hidalgo is using the Olympics to radically realign the city towards a greener future, promising to plant 170,000 trees by 2026 and, by 2030, to have half the city’s area covered by planted spaces becoming, in the process, Europe’s greenest capital.

The green transition hasn’t been entirely smooth. Motorists, a coalition of wealthier and poorer residents from the edges of the city, deride Hidalgo as a “bobo”, or bourgeois bohemian, creating a city for wealthy hipsters. Yet she has ploughed on with plans to remove traffic from streets outside schools, turning them into social spaces for both children and their parents.

A recent referendum led to the tripling of parking charges for SUVs. Parking spaces remain an insanely wasteful use of space, a temporary privatisation of a part of the city for personal use. Meanwhile, though, plans to create a garden around the Eiffel Tower resulted in uproar when the city authorities began cutting down mature plane trees to make it, bizarrely, greener. 

Amid all this there is also the issue of the Seine and its “reconquest”. As London’s rivers fill with effluent so rowers get sick, Hidalgo had a swim in the Seine and the river was used for Friday’s Olympic opening ceremony.  

On top of this, the city, learning from London, is reusing existing spaces and stadiums, while all new buildings contain wood, including the accommodation for the athlete’s village, which is due to become city-owned social housing. 

Trees are everywhere, from the streets and squares to the structure of the impressive new aquatics centre, and building regulations have been changed to allow it to happen. But it is the greening that remains the most visible, dynamic intervention. The vast circular postmodern Place de Catalogne is being transformed with almost 500 trees. And a new neighbourhood, the zero-carbon “ilôt fertile” near Porte d’Aubervilliers, has been conceived around allotments, parks, roof gardens and green terraces.

Paris has historically revelled in a formalised version of nature; avenues of trees, parks set out in geometric lines, small, mostly paved squares with perhaps a few big plane trees. It is a city of about 484,000 trees. In contrast, London has about as many trees as residents, perhaps 8.4mn. Trees enjoy proximity, space in which their roots can commingle and they can create their own small ecosystems and microclimates. Paris, with its zinc roofs and tarmac surfaces, is the perfect example of an urban heat island, a city that struggles to cool down at night.

The strong showing of the far right in recent elections in France is often taken to indicate a backlash against green policies. As in so many cities, the collision in Paris is between the middle classes in the centre and the more car-dependent on the edges. But the French capital is also building a new metro line linking some of the banlieues to the centre and its public transport is good. There is no doubt that swapping cars for trees can make the city a more pleasant place to live and to visit. The question is whether Hidalgo can somehow reconcile the citizens with the saplings to pull off a remarkable transformation. 

TechCrunch : Privacy watchdog says it’s ‘surprised’ by Elon Musk opting user dat

Privacy watchdog says it’s ‘surprised’ by Elon Musk opting user data into Grok AI training

X, formerly Twitter, quietly pushed out a change that appears to default user data into its AI training pool for Grok, a move that was spotted by users of the platform on Friday.

Grok is the name of a conversational AI, or large language model (LLM), developed by Elon Musk-owned X and intended as a rival to OpenAI’s viral ChatGPT chatbot — but with less political correctness (and more humor) as its claimed selling point. Anyone concerned about their X info being fed to Musk’s chatbot can learn more about how to turn off the feature here.

The development has caught the attention of X’s European privacy watchdog, the Irish Data Protection Commission (DPC), which told TechCrunch it’s “surprised” by the platform’s move. The watchdog said it has “followed up” and is awaiting a response from X.

“The DPC has been engaging with X on this matter for a number of months, with our latest interaction occurring as recently as yesterday,” DPC deputy commissioner, Graham Doyle, told TechCrunch. “Therefore we are surprised by today’s developments. We have followed up with X today and are awaiting a response. We expect further engagement early next week.”

The DPC leads on oversight of X’s compliance with the European Union’s General Data Protection Regulation (GDPR), a pan-EU law that allows for penalties for confirmed breaches of up to 4% of global annual turnover.

Text accompanying the default-enabled Grok data-sharing setting on X reads: “Allow your posts as well as your interactions, inputs, and results with Grok to be used for training and fine-tuning.” Smaller (grayer) print adds: “To continuously improve your experience, we may utilize your X posts as well as your user interactions, inputs and results with Grok for training and fine-tuning purposes” — with X further specifying such data “may be shared with our service provider xAI for these purposes.”

The language is ambiguous, so it’s not clear whether X is helping itself to all user data for training Grok or whether this processing refers only to user interactions with the chatbot (which is available to subscribers of X premium).

Either way, in the EU the company needs a valid legal basis for processing people’s data under the bloc’s privacy laws. But it’s not clear it has one.

A similar plan by Meta to repurpose the data of Facebook and Instagram users for AI training was paused in Europe just last month after GDPR complaints drove regulatory scrutiny in Ireland and the U.K.

We understand the DPC expects further developments on the Grok AI data-sharing issue next week.

We contacted X to ask about the legal basis it’s relying on for processing European’s data to train Grok. But at the time of writing, the company’s press email had only delivered the standard automated line: “Busy now, please check back later.”

TechCrunch : Alphabet X spinoff partners with Arc’teryx to bring ‘everyday’ exo

Alphabet X spinoff partners with Arc’teryx to bring ‘everyday’ exoskeleton to market

Image Credits: Skip/Arc’teryx

Skip, a wearable tech startup that began as a secretive project inside Alphabet, exited stealth this week to announce a partnership with outdoor clothing specialist Arc’teryx. The deal is the first to bring Skip’s technology to market: “powered pants” that utilize a soft exoskeleton.

The tech, called MO/GO, short for “mountain goat,” is a hybrid soft/rigid system designed to assist wearer mobility and boost the wearer while walking. Rather than actually walking for a person, it provides a 40% energy assistance to the quadricep and hamstring, while offloading work from the knees.

Reservations for the technology open this week, with plans to begin shipments later this year. MO/GO is getting a soft launch in late-summer, early-fall as a rental, offered near hiking destinations like the Grand Canyon.
TechCrunch first wrote about the technology in 2021, while it was still a project being developed in-house at Alphabet’s X Labs moonshot factory.
But between late 2023 and early 2024, Alphabet reportedly began cutting resources at X as part of company-wide layoffs. The Google parent includes X Labs in a unit called “Other Bets,” which lost $1.19 billion in Q3 of last year.

“Toward the end of 2023 was when it started becoming clearer that it wouldn’t really make sense as a project within Alphabet,” founder and CEO Kathryn Zealand tells TechCrunch. “That was also a time in the world where there was a lot of cost cutting, and this was going to be tricky. We had to start fundraising.”
Alphabet wouldn’t sell Skip’s foundational IP to Zealand as an individual, so she engaged with VCs in a bid to form the spinout. To date, the startup has raised $6 million through a combination of funding and grants.

As it began to strike out on its own, signing a fashion partner became an increasing focus for Skip’s go-to-market.
“I have a terrible fashion sense,” Zealand says with a laugh. “It was clear, even when we were working in X, that the technology had potential. People would come in and they’d have knee pain or struggle with stairs. They would put on a prototype and they could do it.”

Zealand tells the story of a woman who hadn’t climbed up a flight of stairs in 25 years, only to do it twice in quick succession while wearing the technology. “But the jump from ‘it works in the lab’ to what would be a viable consumer product that people would use every day — a lot of these were wearability challenges,” she says.

Skip initially explored multiple clothing partnerships, ultimately settling on launching with just one. Arc’teryx “ticked all the boxes,” according to Zealand. The Vancouver, BC-based company produces clothing but also “hard goods” like harnesses and ski boots — a cross section between form and function that was right in Skip’s sweet spot.

Hiking rentals will provide anonymous data collection to test MO/GO in rugged, real-world scenarios, but Skip’s ultimate focus is everyday wear. The launch cost of $4,500 will almost certainly restrict its use for the non-mobility limited. Zealand says the company is currently in clinical trials to test the system’s efficacy in assisting conditions like Parkinson’s.

Any potential to have the system classified as a medical device is, however, is likely still years off. In the shorter term, Skip is looking toward having its system covered by FSA to help bring down the price for users. Scaling manufacturing will help bring the price down as well over time.

Alphabet has employed a variety of different methods for working with X Labs spinouts over the years. Big bets like Waymo tend to receive more foundational support from the tech giant, while smaller projects are nudged from the nest and encouraged to fly on their own.

The latter model looks to become a more frequent option, as Alphabet has scaled back resources. Iyo founder and CEO Jason Rugolo told us a similar story when we spoke about his company’s generative AI headphones back in May, noting that Alphabet served as an early investor but opted against taking a seat on the startup’s board.