WSJ : Christian Majority in U.S. Could Shrink to Minority by 2070

Christian Majority in U.S. Could Shrink to Minority by 2070
New study from Pew Research Center finds nearly a third of people raised in the Christian faith currently leave before turning 30 years old

Christianity could become a minority religion in the U.S. by 2070 if Americans continue to leave the faith at the current rate, according to new projections by the Pew Research Center.

The projections, released in a report Tuesday, used surveys and other data to figure out what religion in America would look like in the next 50 years. Pew created four different scenarios for its projections, including if Americans continued to leave Christianity at current rates or if that trend stopped. It found that the number of those with no religious affiliation would grow in all four scenarios.

Pew estimates that nearly a third of people raised in the Christian faith currently leave the religion before turning 30 years old, and an additional 7% do so after that age. If those rates continue, the group projects that 46% of Americans would identify as Christian by 2070 and those with no religious affiliation would stand at about 41%. That would mean Christianity would no longer be the majority religion in the U.S., according to Pew.

As of two years ago, Pew estimated that about 64% of Americans were Christian; 30% had no religious affiliation; and 6% were Jewish, Muslim, Hindu or part of another religion.

Religious affiliation in the country continued to fall during the Covid-19 pandemic, according to a Pew survey released in December, even as a portion of Americans said their faith had grown stronger.

If Pew’s latest projections become reality, the U.S. would fall more in line with other Western European countries, where Christianity has already lost its majority. In the U.K., for example, the percentage of those with no religious affiliation surpassed the percentage of those who said they were Christians in 2009, according to the British Social Attitudes Survey.

To come up with its projections, Pew said it used its surveys and looked at data, including birthrates and how religion is passed on from parents.

Pew said if the number of people switching to having no religious affiliation accelerated, Christianity would lose its majority earlier, by 2045 or 2050, depending on whether the rates of others joining the religion grow or not.

Many young people consider themselves spiritual but don’t identify with an organized religion, according to a 2021 study by the nonpartisan nonprofit Springtide Research Institute.

The survey found that half of young people ages 13 to 25 don’t think that religious institutions care as much as they do about issues that matter to them. Those include issues related to racial justice, gender equity, immigration rights, income inequality and gun control.

If Americans stopped leaving Christianity, which Pew said wasn’t realistic, the share of Christians in the U.S. would still fall by 10 percentage points in the next five decades to 54% in 2070. Pew said that is because Christians tend to be older, and Christian deaths would outpace Christian births.

It also noted the possibility that events outside the study’s model could reverse current religious trends, such as war or economic depression, and lead to a revival of Christianity in the U.S. But Pew said no current patterns could be factored into its models to project that result.

WSJ : Tencent Gets China’s Approval for Its First Game in More Than a Year

Tencent Gets China’s Approval for Its First Game in More Than a Year
The tech giant unveiled the game—‘Health Defense’—at an event last year, but approvals were halted amid a regulatory crackdown

SINGAPORE—Chinese videogame developer Tencent Holdings Ltd. TCEHY -3.01% won its first license for a new title since last June, allaying some investor concerns about the prolonged absence of approvals granted to tech giants in the country.

“Health Defense,” a mobile game for health education operated by a company controlled by Tencent executives including Chairman and Chief Executive Pony Ma, was among the 73 videogames that Beijing approved this month, according to a Tuesday statement from China’s National Press and Publication Administration.

NetEase Inc., NTES -0.08% China’s second-largest videogame company after Tencent, also got its first new game approval since last July.

Beijing last summer halted granting new licenses to titles and restricted the playtime for gamers under 18 years old as part of a broader regulatory crackdown on the country’s internet sector. Tightened scrutiny sent China’s videogame market into decline for the first time in more than a decade in the first half of this year.

Approval for the titles from Tencent and NetEase is likely to have limited financial impact, but it suggests the government licensing is becoming more normal and will help remove concerns that the industry’s leaders might be specifically excluded, said Alicia Yap, analyst at Citigroup.

Without getting new approvals, Tencent has had to rely on aging cash cows, like “Honor of Kings,” to retain users and compete with rivals. Hong Kong-traded shares of Tencent and NetEase both fell 1.44% on Wednesday morning, smaller than a 2.96% drop in the Hang Seng Tech Index.

Tencent unveiled the game at its annual videogame event in May 2021. It said the game, where players battle pathogens, could help users learn about immunization and fight rumors during the Covid-19 pandemic.

Since Beijing in April resumed the licensing process, the regulator has kept a steady pace of approving dozens of new games each month, but the rate is lower than in previous years and most of them have been given to smaller companies. No foreign games have been approved since last year. In China, companies must seek government approval to charge players for a new game.

“Maintaining the current pace is probably the base case for the market,” said Robin Zhu, an analyst that focuses on China’s internet industry at Sanford C. Bernstein.

The Chinese publishing regulator now also allows videogame companies to apply for cross-platform licenses for existing game titles, instead of requiring separate licenses, giving more flexibility to developers for adapting games for different platforms. Tencent and NetEase also had one of their titles each approved to be adapted for other platforms, according to a separate statement from the regulator on Tuesday.

FT : Aston Martin faces £150mn lawsuit from dealers over Valkyrie hypercar

Aston Martin faces £150mn lawsuit from dealers over Valkyrie hypercar
Carmaker last year sued the dealers, alleging they withheld millions in deposits

Aston Martin is facing a lawsuit from two former dealers who claim they are owed about £150mn for underwriting the development of its troubled Valkyrie hypercar.

The luxury car maker revealed that Nebula Project AG — a Swiss company owned by Andreas Baenziger and Florian Kamelger — had filed a case against Aston in London.

Details are not public because it is private arbitration but the case centres on a deal to underwrite the development of the £2.5mn Valkyrie hypercar, according to two people with knowledge of the matter.

When the carmaker began developing the Valkyrie in 2016 it turned to Baenziger and Kamelger, who ran an Aston dealership in Switzerland and dealt with many of the company’s top-end clients, to underwrite the project.

The project covered the Valkyrie, the slightly cheaper Valhalla supercar, and a third model.

They were guaranteed royalty payments of about 3 per cent, worth about £150mn, once the cars were on sale, according to three people with knowledge of the arrangement at the time.

However, last year Aston claimed the pair had withheld Valkyrie customer deposits from the company, and sued them to recoup the £15mn it said it was owed. At the same time, it cancelled the contract.

Aston confirmed the existence of the London case by Nebula in its prospectus for its £576mn rights issue, published last week, but did not include the details.

In the prospectus, it stated the suit from Nebula was “retaliatory and without merit”.

It said: “The arbitration proceedings are at an early stage but the group is of the view that it can defend the claims brought by Nebula Project AG and assert valid counterclaims in the arbitration. At this stage it is not possible to assess the group’s potential total overall exposure.”

In the prospectus, Aston said it brought “civil legal proceedings against Nebula Project AG and criminal proceedings against its board members . . . following the failure to pay some customer deposits for Aston Martin Valkyrie programme orders received by Nebula Project AG to the group.”

It also stated that “there is a dispute between the group and the other shareholders of one of its subsidiary entities, which is ongoing and from which a future obligation may arise”.

In a statement on Tuesday evening, Aston chair Lawrence Stroll said: “Last year Aston Martin filed civil legal proceedings against Nebula Project AG, and criminal proceedings against its board members, after we became aware that Nebula had failed to pay what the company believes to be millions of pounds of deposits taken from our Valkyrie programme customers.

“Aston Martin is working with our affected customers to ensure they receive delivery of their vehicles. We are confident in our legal position and believe their counterclaims are retaliatory and without merit.”

Nebula declined to comment, citing confidentiality.

A liability, whether of £150mn or of a lower amount, would be a significant outlay for the company that is already struggling with cash. The case is likely to run for several years.

The group is in the process of raising £653mn by bringing in Saudi Arabia’s PIF as an investor, and through the rights issue to shore up its finances and pay down debt.

The Nebula dispute is the latest fallout from the Valkyrie, which was intended to be a halo product for Aston but has become a liability after long delays led several customers to ask for deposit refunds.

Since launching, the company has had to take back several models for technical fixes, though Stroll recently said the cars that had been delivered were “working well”.

Solving the Valkyrie problems is also important for Aston, as the company has often relied on its limited-run high-price special models to bolster its finances.

FT : Porsche IPO: the race to catch Ferrari

Porsche IPO: the race to catch Ferrari
German sports car brand seeks luxury valuation in long-awaited float

Ferrari’s blockbuster listing in 2015 proved that carmakers can transcend their manufacturing roots and be valued as luxury businesses.

Now, with its own IPO only weeks away, the race is on for Porsche to convince investors that it belongs to the same exclusive class as the Italian thoroughbred.

“The idea [to list Porsche] has been there ever since the [Agnelli family] IPO-ed Ferrari,” said Cole Smead, an investor in Volkswagen, which owns Porsche. “It captured the imagination of what Porsche is truly worth.”

There are some obvious parallels with Ferrari. Both make powerful, head-turning sports cars sold to the world’s wealthy. Both have pledged to invest in electric models, while also keeping their much loved combustion engine models on the road for as long as possible.

Porsche has also hired Italy’s Mediobanca, which took Ferrari and luxury names such as Salvatore Ferragamo public, as a financial adviser for the IPO.

But there are also significant differences, which stem from the radically different roads the two businesses have taken over the past few decades.

Ferrari has focused exclusively on expensive sports cars, raising prices and limiting supply — hallmarks of the luxury trade.

Porsche, however, has expanded into the more affordable market and embarked on a major expansion in sport utility vehicles, propelling sales above 300,000 a year, close to Jaguar Land Rover.

Sales of its Taycan electric sports car alone are four times Ferrari’s total annual shipments.

Porsche advisers, pressing the case for luxury valuation, point out that it sells 15,000 cars in the super-luxury price bracket, similar to Ferrari, and intends to launch additional models at this level.

But that does not wash with some analysts, who say a carmaker’s claim to luxury status should be judged by its cheapest model, not its most expensive. Nobody considers Ford — which makes the $500,000 GT supercar — a luxury nameplate, they argue.

The crucial question is “how much you have to pay to access the brand”, said Philippe Houchois, an auto analyst at Jefferies.

Today, customers can buy a new Mercedes for $35,000 and a Porsche for $65,000, but they will have to pay upwards of $250,000 for a Ferrari, he added.

Brand positioning aside, there are other big differences between the two.

Porsche, for example, has said it is targeting a profit margin of between 17 and 19 per cent in the mid term, and more than 20 per cent in the long term. This is a long way short of Ferrari’s 25 per cent margin in 2021 and it says it wants to increase that again this decade.

The German group is also a long way behind its rival on corporate governance.

Ferrari is run independently of its former parent Fiat and the Agnelli family and trades freely on the open market.

In contrast, retail investors are being offered only 10 per cent of Porsche’s shares and they do not carry voting rights. The remaining 2.5 per cent on sale is likely to be bought by the Qatar Investment Authority, one of VW’s largest shareholders.


At the same time, the Porsche-Piëch family which is VW’s largest shareholder, is being offered 25 per cent of the voting shares, which puts them in effect back in charge of an asset they lost direct control of in 2012 when VW bought Porsche in a reverse takeover.

It also means that the business remains firmly enmeshed in VW’s convoluted corporate governance structure — a web of different interests including the state of Lower Saxony, unions and the Porsche-Piëch’s investment vehicle — which have deterred some serious investors from buying the stock.

“The Porsche IPO bears the hallmarks of inadequate corporate governance at the VW Group,” said Ingo Speich, a portfolio manager at institutional investor Deka, a top 20 VW shareholder.

“First and foremost, it is about the owning [Porsche-Piëch] family being able to invest in Porsche ordinary shares and continue to call the shots.”

At the same time, VW recently replaced chief executive Herbert Diess with Porsche’s own boss Oliver Blume, who will continue to hold both roles after the listing.

Blume has insisted that VW and Porsche “have the same interests”, although they have recently taken different paths on software and autonomous driving. Some investors have backed his dual mandate, one arguing that the arrangement “might speed up things”.

Nonetheless, such decisions contrast unfavourably with Ferrari, said Houchois.

“If you’re going to use Ferrari as a benchmark, the returns [at Porsche] are half, the governance is unclear and the liquidity is a challenge,” he said. “There are a lot of Ferrari features in Porsche, but they are too big and too accessible to be truly compared.”

Aware of these criticisms, Porsche executives stress the advantages of its size and strategy of targeting a bigger market.

“Ferrari is a luxury niche player,” Porsche chief financial officer Lutz Meschke said in July. “We can benefit from our economies of scale. That’s a big difference.”

For now, investors seem convinced to a certain extent.

While advisers expect a 30-40 per cent corporate governance discount on Ferrari’s valuation, this would still make the Porsche listing one of Europe’s largest ever, valuing the business above the likes of Mercedes-Benz at around €80bn.

The IPO could also follow the trajectory of Ferrari’s flotation, which priced at the top of the range as investor demand outstripped shares on offer, then fell in the first few weeks after the sale before rising in subsequent months, the advisers added.

One prominent Tesla investor, who is considering buying, expects the Porsche IPO to be a success, achieving a valuation at the higher end of estimates of between €60bn and €90bn.

Bankers marketing the deal also insist questions about corporate governance are unlikely to undermine sales.

“Corporate governance is certainly the focus topic [among potential Porsche investors],” said one banker involved in the IPO, “but it’s not a deal-breaker”.

“We should not expect VW to become a governance leader, we have to accept it the way it is,” commented a major VW shareholder.

“Porsche is an outstanding asset. This is what people will look at in the end, the fundamental numbers.”

>>> US Close Dow -3.94% S&P -4.32% Nasdaq -5.16% Russell -3.91% VIX 27.27 +14.2%

Closing Stock Market Summary

The stock market logged steep losses today on the heels of disappointing August inflation data that served as a reality check for a market that bought into the peak inflation narrative. The major averages took a sharp turn lower at the open and then moved sideways before geopolitical worries sent the market distinctly lower ahead of the close. Broad selling brought the S&P 500 and Nasdaq Composite below their respective 50-day moving averages, and the S&P 500 fell toward the 3,900 level by the close.

The initial sell-off was precipitated by hotter-than-expected August inflation data, which challenged the peak inflation narrative. This fueled worries about the Fed's rate hike path. To that end, the fed funds futures market is now pricing in a 32% probability of a 100 basis point rate hike at the September 20-21 FOMC meeting versus 0.0% yesterday, according to the CME FedWatch Tool. Effectively, then, the market is assigning a 100% probability to a rate hike of at least 75 basis points next week.

Geopolitical factors further weighed on investor mentality following a Reuters report that the U.S. is looking at possible sanctions on China that would deter a possible invasion of Taiwan. This came after an earlier Reuters report today that said President Putin and President Xi will be meeting in Uzbekistan on Thursday and that they will discuss various matters, including Ukraine and Taiwan. 

Bids fell by the wayside following this afternoon news item and the major indices cascaded lower into the close, settling near their worst levels of the session. 

Separately, a fund manager survey by BofA revealed the highest cash level (6.1%) since 2001 and a record-low share of fund managers taking higher risk than normal. That extreme bearish-minded positioning is considered to be a contrarian indicator, but the stock market's performance was ultimately dictated by the disappointing CPI report and geopolitical worries.

Treasury yields rose sharply in response to the CPI data. The 2-yr note yield, which was at 3.50% before the release, settled at 3.76%. The 10-yr note yield, which was at 3.30% before the release, settled at 3.42%.

The US Dollar Index also moved noticeably higher following the CPI report. It was up 1.4% to 109.86. 

Selling efforts were broad and orderly in nature in what amounted to a general buyers' strike. All 11 S&P 500 sectors closed in the red with losses ranging from 2.5% (energy) to 5.6% (communication services). All 30 Dow components finished with a loss.

There was little discrimination as many stocks logged sizable losses. The Vanguard Mega Cap Growth ETF (MGK) closed with a 5.4% loss and the Invesco S&P 500 Equal Weight ETF (RSP) closed with a 4.0% loss. The Russell 3000 Growth Index closed down 4.6% and the Russell 3000 Value Index closed down 3.6%.

Decliners outpaced advancers by an 8-to-1 margin at the NYSE and a 10-to-3 margin at the Nasdaq.

Energy complex futures settled mixed with WTI crude oil futures falling 0.4% to $87.49/bbl while natural gas futures rose 0.2% to $8.33/mmbtu.

Looking ahead to Wednesday, market participants will receive the weekly MBA Mortgage Application Index (prior -0.8%) at 7:00 a.m. ET, August PPI (consensus -0.1%; prior -0.5%) and core PPI ( consensus 0.3%; prior 0.2%) at 8:30 a.m. ET, and weekly EIA Crude Oil Inventories (prior +8.84 million) at 10:30 a.m. ET.

Reviewing today's economic data:

  • NFIB Small Business Optimism reading was 91.8 compared to the prior 89.9 reading
  • Total CPI increased 0.1% month-over-month in August (consensus -0.1%) and core CPI, which excludes food and energy, rose 0.6% month-over-month (consensus 0.3%). That left the year-over-year increases at 8.3% for total CPI (versus 8.5% in July) and 6.3% for core CPI (versus 5.9% in July).
    • The key takeaway from the report is the acceleration in the year-over-year rate for core CPI, which was pushed in part by increases in the indexes for shelter, medical care, and new vehicles. That has provided a disheartening data point for market participants -- and the Fed -- that suggests the rate hike at the September 20-21 FOMC meeting will be 75 basis points and that one cannot be assured that there won't be another aggressive rate hike after that.
  • The Treasury Budget for August showed a deficit of $219.6 bln versus a deficit of $170.6 bln a year ago. The Treasury Budget data is not seasonally adjusted, so the August deficit cannot be compared to the deficit of $211.1 bln for July.

Dow Jones Industrial Average: -14.4% YTD
S&P 400: -14.5% YTD
S&P 500: -17.5% YTD
Russell 2000: -18.4% YTD
Nasdaq Composite: -25.6% YTD

>>> US After Hours Summary: Quiet session after-hours; RLGT +5.6% on earnings; F

After Hours Summary: Quiet session after-hours; RLGT +5.6% on earnings; FLS -2.7% on updated Q3 earnings forecast

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: RLGT +5.6%, OI +1.3%, RTX +0.3%

Companies trading higher in after hours in reaction to news: TBLA +4.5% (announces restructuring program, reducing headcount by 6%), BWXT +0.8% (submits New Drug Application to FDA), O +0.4% (increases monthly dividend), AKRO +0.2% ($175 mln common stock offering), TWTR +0.2% (stockholders approve merger agreement with Elon Musk), CTT +0.1% (shareholders approve merger with PotlatchDeltic), RM +0.1% (expands operations into Louisiana), IBM +0.1% (to transfer $16 bln defined benefit pension obligations), CPA +0.1% (reports August traffic)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FLS -2.7%

Companies trading lower in after hours in reaction to news: PNT -10% (commences common stock offering), TSLA -0.1% (hires Ontario government official for mineral supply chain in Canada, according to Electrek)

FT : AI tries its hand at economics

AI tries its hand at economics
The ability to simulate problems and solutions could help real world policies

Over the next few months, you and your computer code can hatch a plan to save a planet. It’s a fictitious artificial planet, granted, but one that simulates the economy, geopolitics and climate of our real world. And perhaps your ideas will soon prove useful here on warming Earth.

Launched last month, AI for Global Climate Cooperation is a competition organised by Mila (an artificial intelligence institute in Quebec) and Salesforce Research. The group, working at the intersection between AI and economics, is soliciting submissions in the form of novel climate agreements and negotiation protocols.

Academic economics is generally a conservative enterprise, but AI is slowly beginning to seep in. Instead of writing down and solving trusty formal mathematical models, with the assumptions and difficulties they carry, AI may allow economists to throw all their ingredients into a simulated stew and find out how it tastes.

When it comes to saving the planet, these ingredients will be plugged into “a multi-region integrated assessment model” called RICE-N, calibrated to the latest real world data. Each proposal will change the simulated world in some way, as its AI agents go about their self-interested business. The fictitious temperature will be checked and winners will be declared. But that’s not where the work will end.

“That competition is just a vehicle for the community to quickly try out a lot of new solutions,” said Stephan Zheng, a research scientist at Salesforce and a contest organiser. If the work passes ethical and peer review, “we can start thinking about communicating those results to the policymaking world, to the actual climate.”

“We can do things that are hard to do analytically,” said David Parkes, a member of the competition’s jury. “Economic models tend to be highly stylised — maybe with AI we can get closer to the real problem.”

The real economic problem in this instance is climate change. But a similar approach could shed light on other knotty challenges for economists — tax policy, contract design, trade deals or the supply chain.

The advantages are many. AI agents might be able to do some of the dirty work for us, playing out our proposals to their conclusions. They also mean that if we mess things up, we won’t cause our own extinction. Let the simulation wrestle with the tricky business of geoscience, meteorology, macroeconomics, international politics and national interests.

AI for Global Climate Cooperation (perhaps an algorithm could invent a snappier name) builds off the earlier AI Economist project, in which AI citizens wander around a simulated two-dimensional digital world of houses, coins, wood and stone. An AI government keeps a watchful eye, aiming to maximise productivity and equality, learning as it goes about the behaviour of its digital constituency and responses to new policies such as a changes in the income tax rate.

There are hopes that the growing influence of AI in economics might also address a trio of nagging difficulties in the field. The first is the sheer number of people that exist, with all their different interests. For tractability, economists often assume the existence of a Platonic “representative agent”, or simply elide the fact that many real people make up the real world. With enough computational power, perhaps you can simulate them.

Second are the logistical, political and financial barriers that exist when it comes to experimentation. It’s not often feasible to test a pet tax policy, social program or international agreement in the real world. But it’s easy enough to change the laws and parameters of an artificial planet.

The final hurdle is a conundrum at the heart of game theory. Just because an agreement is great for the collective, or the climate, doesn’t mean that individual actors will adhere to it — the central result of the prisoner’s dilemma. No single authority can enforce the optimal deal, so successful agreements — climate agreements included — must be upheld through a scaffold of supporting incentives. Perhaps a simulation can test many of these possible scaffolds without the risk of the whole thing falling apart.

But AI cannot solve the most crucial problems in economics — or anything else — on its own. The most interesting problems are multidisciplinary and require wisdom beyond the models and algorithms. And eventually real people will need to shake hands, sign agreements and pass laws. At some point, the humans will need to get involved.

FT : JPMorgan warns of up to 50% drop in investment banking fees

JPMorgan warns of up to 50% drop in investment banking fees
Gloomy outlook underscores Wall Street anxiety over global economy and debt markets

JPMorgan Chase’s third-quarter investment banking revenues could be as much as 50 per cent down on last year’s, one of the bank’s most senior executives warned on Tuesday. 

Daniel Pinto, JPMorgan president and head of the corporate and investment bank, said he expected third-quarter investment banking fees to be down 45-50 per cent on the $3.3bn achieved a year earlier, having fallen 44 per cent in the first six months of 2022. The bank will announce its results on October 14.

The gloomy forecast for the largest US bank by assets, which is an industry bellwether, underscores the anxiety on Wall Street over a dealmaking slowdown amid economic uncertainty, war in Ukraine and unsupportive debt markets for leveraged buyouts. 

The slump in fees follows a blockbuster 2021 and has raised the spectre of lower bonuses and potential lay-offs on Wall Street. Goldman Sachs is planning to start a job-cutting programme in the coming weeks that could affect hundreds of employees. 

Pinto said JPMorgan would “adjust over time to whatever we believe is a medium-term structure needed, and overall banking business size needed, to cater to that wallet size”. 

“You need to be very careful when you have a bit of a downturn, to start cutting bankers here and there, because you will hurt the possibility for growth going forward,” Pinto said. 

“So if anything in an environment like this, there may be some very, very top bankers that you could not access or hire in the past and now they’re available to be hired.” 

Given that the lion’s share of banker pay packets is made up of performance-based compensation, Pinto said the bank can “adjust not just letting people go, you can adjust by reducing comp”.

He added that JPMorgan’s trading business, which has benefited this year from volatile equity, credit and commodity markets, was on track to be up about 5 per cent year-on-year in the current quarter. In the first six months of the year, trading revenue was up 4 per cent year-on-year. 

Pinto also said interest rate rises by the Federal Reserve, increasing loan demand and higher revolving balances at its cards business would boost lending business more than the bank had previously anticipated. JPMorgan’s latest guidance for full-year net interest income, excluding its trading business, was $58bn-plus. Pinto said the current environment meant that plus was now “bigger”.

Despite worries of a potential US recession and high inflation, Pinto said JPMorgan views the US consumer as being “in a very good place”. 

“People are not touching much . . . of the wealth that they accumulated over the last couple of years. And they are saving less to pay to maintain consumption and to pay for higher prices,” Pinto said.