As we noted in a tweet this morning, price action of US equities has been flipped from Tuesday with large caps suffering larger losses than small caps. Looking at yesterday, the decline in the Russell 2,000 (-2.1%) dwarfed the S&P 500’s (-0.4%).  For the small cap Russell 2,000, that marked the first daily move of at least 2% (positive or negative) since June 5th when the index rallied 2.4%.  As shown below, that three month stretch without a daily move of 2% is far from the longest on record, but it does stand out as one of the largest in some time. Running for 61 trading days, it was the longest since the 133 day streak ending on 10/9/18.

As previously mentioned, today’s price action is a bit of the reverse of Tuesday, however, the S&P 500 is far from a 2% drop of its own.  In fact, the S&P 500 has been on an even longer streak without a 2% daily move.  At 136 trading  days, the current streak ranks as the longest since February 2018 (310 days). As with the Russell, the current streak would have a long way to go to reach records that lasted for years like from 2003 to 2006. Regardless, the fact of the matter is that day to day volatility by this measure has been extremely muted of late.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

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On This Day in History:
Labor Day’s Launch.  On September 3rd, 1894, American’s celebrated Labor Day for the first time. Before it became a federal holiday, Peter J. McGuire, a union leader, suggested that there be a day to celebrate American workers, roughly between Independence Day and Thanksgiving. Labor activists and others in support paraded in New York City and the day slowly gained traction throughout the states. In 1894, the same year as the Pullman Strike and May Day riots, President Grover Cleveland suggested a bill that was made into law and thus Labor Day was made official. Enjoy the long weekend!

Health & Wellness

Screens, Lack of Sun Are Causing an Epidemic of Myopia (WSJ)
The growing epidemic of nearsightedness in children is associated with their reduced exposure to sunlight and increased screen time. Kids these days spend an average of more than seven hours a day on various types of screens, which studies suggest will result in half the global population being nearsighted by 2050. Tech companies like Apple are employing a range of features to encourage spending time outdoors while doctors are recommending similar action to avoid this issue going forward. [Link]

To Pay for Weight Loss Drugs, Some Take Second Jobs, Ring Up Credit Card Debts (WSJ)
Many are paying thousands of dollars for popular weight-loss drugs like Mounjaro, a diabetes treatment from Eli Lilly (LLY), highlighted in our Triple Play Report last week week, that is being used off-label for weight loss. While they can result in significant weight loss, they are often not covered by insurance plans. As a result, patients are taking on extra jobs, using credit cards, and making other financial sacrifices to afford these medications.  Can’t there be an easier way? [Link]

Housing

Americans Are Bailing on Their Home Insurance (WSJ)
Speaking of hurricanes this week, homeowners are increasingly choosing to go without home insurance due to rising premiums and the belief that the likelihood of a disaster is low. What many don’t know is that insurance goes beyond covering the cost of a destroyed home and its contents. Without insurance, homeowners could be liable for debris removal and rebuilding. Mortgage lenders often require insurance as well, and the lack of insurance can impact the ability to qualify for a mortgage. [Link]

Hong Kong Is Building Public Housing on a Golf Course in a Snub to the Old Elite (Bloomberg)
The Hong Kong government is set to reclaim a portion of the Fanling Golf Course near the mainland Chinese border to build 12,000 public housing units in one of the world’s least affordable housing markets. The move highlights the government’s commitment to addressing housing issues despite opposition from the city’s powerful business elites. The decision also reflects the shifting political landscape in Hong Kong from old elites towards Beijing loyalists. [Link]

Ethics & Practices

FBI Hoovering Up DNA at a Pace That Rivals China, Holds 21 Million Samples and Counting (The Intercept)
The FBI now has 21.7 million DNA profiles, or the equivalent of 7% of the US population, and the agency will continue to expand its efforts with the help of an budget increase request. Substantial growth is partly due to a Trump-era rule mandating DNA collection from migrants detained by immigration authorities that President Biden has not reversed. Critics argue that this rapid expansion raises concerns about the creation of a universal DNA database, potentially infringing on civil liberties and privacy rights. [Link]

At Taser maker Axon, ex-staff say loyalty meant being tased, tattooed (Reuters)
Axon (AXON), who recently received a feature in our Triple Play Report on August 28^th, has a corporate culture that some have now described as toxic and extreme. Loyalty is tested in unusual ways, including “exposures” to the company’s Taser product and even tattoos of the Axon logo. Claims have surfaced that those who do not participate face unfavorable treatment or risk being fired, all of which Axon denies. This information also raises concerns about workplace diversity and other cultural issues. [Link]

Recent Developments in Hedge Funds’ Treasury Futures and Repo Positions: is the Basis Trade “Back”? (The Federal Reserve)
Hedge funds appear to be increasing their positions in the Treasury cash-futures basis trade, which involves shorting Treasury futures while holding a long Treasury cash position and using repo borrowing for leverage. Hedge funds have increased their repo borrowing in the sponsored segment by $120 billion between October 2022 and May 2023. Short futures positions in 2-year, 5-year, and 10-year contracts have also risen by $411 billion over the same period. While this trend suggests increased basis trade activity, the full scale cannot be determined conclusively due to limited data availability. [Link]

‘Doing the right thing’ earned this ex-Marine mom of three $40 million (NBC News)
A former US Marine and employee of Booz Allen Hamilton exposed a civil fraud scheme at the consulting firm that overcharged taxpayers to subsidize its losing contracts, including contracts with foreign governments like Saudi Arabia. Booz Allen’s settlement goes down as the third-largest contract fraud settlement in history for which the whistleblower, Sarah Feinberg, was awarded $40 million. The moral decision to do right, Feinberg says, is attributed to her time in Iraq with the Marines. [Link]

A Private Phone. Secret Recordings. Inside One CEO’s Relationship with a TV Anchor (WSJ)
Under Armour’s founder, Kevin Plank, provided anchor Stephanie Ruhle with private communication devices to disclose confidential financial information in return for her help with poor sales. The documents detailing this relationship stem from a lawsuit alleging that Under Armour inflated its share price by using improper methods to uphold a 26-quarter streak of at least 20% YoY revenue growth. Ruhle contributed by countering a report from early 2016 that exposed the realistically weakening sales along with other efforts. [Link]

Technology

An AI pilot has beaten three champion drone racers at their own game (Engadget)
Researchers from the University of Zurich, in collaboration with Intel, have developed an AI piloting system called “Swift” that outperformed world champion drone pilots in a race. Its technology calculated the fastest path around the track, but humans showed that they can better adapt to changing conditions during the race. While it doesn’t look great from a man versus machine perspective, the AI piloting system does have potential in search and rescue operations, forest monitoring, space exploration, and film production. [Link]

Google’s new AI tool may save your skin if you’re running late for a meeting or terrible at taking notes — here’s how it works (Business Insider)
Duet AI, Google’s new tool, allows users to send AI to meetings in their place and take notes for them. Duet AI will also be able to translate and use face-detection, all in an effort to improve worker’s productivity. This is perhaps just the next step in the AI race between Alphabet and Microsoft.  How long before meetings are majority attended by AI tools? [Link]

Food

The best pizza in America, by region and style (Washington Post)
If you’re looking to find the best pizza around, this article will give you the full run down. New York, Chicago, Detroit, New Haven, and California Neapolitan are some of the most highly regarded pizzas in the US, all boasting their own styles. You’ll get the history of each pizza, what makes it so special, and the best places to go. Positioned right between New York City and New Haven here at Bespoke, we might have it best!  What’s your favorite place for a slice or a pie? [Link]

The Race to Breed a Better Potato Chip (Ambrook Research)
The National Chip Program (NCP) is investing $1 million annually for the competition to breed potatoes suited for potato chips. The potato chip industry may seem small, but the US is the world’s leading chip producer valued at $22 billion. Efforts in the competition and collaboration aim to evaluate potato prospects based on factors like yield and disease resistance, and address water scarcity issues crucial for sustainability. The work has broad implications for supporting potato growers and the agricultural system as a whole. [Link]

Automotive

Success: Drivers are Slowing Down on Streets with 24/7 Speed Cameras (Streetsblog New York City)
New York City has been implementing speed cameras which has led to a 30% decline in violations in areas where the cameras are posted. The automated system has issued millions more speeding tickets than cops, year-to-date, and traffic deaths are down because of it. That data largely eliminates the “cash grab” narrative around the cameras. [Link]

China’s gasoline demand could peak as early as this year (Quartz)
Sinopec, China’s largest oil and gas company, predicts that combined demand for gasoline and diesel in China will peak in 2025, with gasoline demand peaking this year. As EVs become more popular in China, oil products are displaced. The increasing demand in the EV market in China is helping improve its infrastructure with charging stations and other advancements as it overtakes Japan in EV sales and strengthens partnerships with foreign carmakers. [Link]

Environmental

America Is Using Up Its Groundwater Like There’s No Tomorrow (NYT)
Groundwater supplies 90% of the nation’s water systems and is vital for agriculture; however, that water is being depleted into a crisis. The overuse is reducing crop yields, threatens drinking water supplies, and can even cause land subsidence and earth fissures. Rising temperatures and volatile precipitation patterns are making the problem worse, forcing us to be increasingly reliant on groundwater. There is also a lack of federal regulation and often weak state laws. [Link]

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Have a great weekend!