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IT’S HAPPENING!
Anthropic targets $2 trillion IPO in October—largest ever public float
Anthropic will stage an IPO in October at a predicted valuation of $2 trillion, even larger than SpaceX and therefore the largest public offering of stock ever, the FT reports.
Investors told the paper they believe the AI lab’s annual revenue run rate will be between $100 billion and $120 billion by the end of the year. The IPO is still under discussion, and the valuation has not been formally fixed within the company, sources said.
THE MARKETS
U.S. stocks rise as benign inflation number makes interest rate rises less likely
Traders in Fed futures now believe the central bank will keep interest rates at 3.5% in September, according to CME FedWatch, which shows 64% favor the “hold” position. Stock investors cheered the news (rising rates are bad for equities) and the S&P 500 ticked up 0.26% yesterday. Futures are up marginally this morning before the opening bell in New York.
As always, markets were buoyed by retail investors who net bought $7.2 billion (mostly via ETFs) in the most recent week recorded by Arun Jain and his colleagues at J.P. Morgan.
- S&P 500 futures were up 0.1% this morning. The index was up 0.26% yesterday.
- In Europe, the Stoxx 600 was up 0.15% in early trading and the U.K.’s FTSE 100 was down 0.35% before lunch.
- Asia: South Korea’s KOSPI was up 3.56%. Japan’s Nikkei 225 was up 1.16%. India’s Nifty 50 was down 0.25%. China’s CSI 300 was down 0.57%.
- Brent crude was $87 per barrel this morning.
- Bitcoin was at $63,759.
Q2 was one of the best earnings seasons of the last 20 years
More than 1,500 companies have reported Q2 earnings so far and “this has been one of the strongest earnings seasons relative to expectations in the last couple of decades,” according to Bespoke Investment Group. In all, 77% of companies beat expectations on EPS.
“That’s about ten percentage points higher than the 67% EPS beat rate we’ve seen across the 90,000+ earnings reports that have occurred over the last ten years,” the group said. Here’s how it broke down by sector:
MORE FROM FORTUNE
The Philippines needs ‘power of all sorts’ to build energy security following a nationwide crisis, says Prime Infra CEO Guillaume Lucci – Angelica Ang
Nvidia found a new way to keep the AI boom funded: your retirement money – Eva Roytburg
AI was supposed to power Canva’s next act. It also exposed software’s most expensive problem – Mia Osmonbekov
Nearly a dozen firms are already paying up to $100,000 per month for early access to Trump’s Truth Social posts – Sasha Rogelberg
Japan and the U.S. just spent billions to try to save the yen. Why is it already losing ground? – Nicholas Gordon
THE FUTURE OF FUTURES
Compute is the new crude — and it needs a new futures market
According to Kalshi CEO Tarek Mansour, “compute”—a term that describes the chips and electricity powering the AI revolution—will eclipse oil as the world’s most valuable commodity, and spur a futures market for hedging it. He recently predicted that compute will be a $10 trillion industry by 2030. And if it follows the pattern of derivatives markets for other commodities, its futures market will grow to 10-15 times the size of the underlying spot market—meaning compute futures will one day be worth $100-$150 trillion, Jeff John Roberts reports for Fortune.
THE GULF
Iran will keep the Strait of Hormuz closed and prolong the war for as long as possible
Only 13 ships per day are making it through the Strait of Hormuz, according to Kpler, the maritime monitoring firm.
The Persian Gulf Strait Authority said, “the Strait of Hormuz remains blocked and will not be reopened until Iran’s conditions are accepted,” according to CNBC.
That’s deliberate, Mohammad Reza Naqdi, an IRGC official, told PBS: Iran aims to prolong the war for as long as possible “so that if anyone else wants to attack Iran, they will know there is a cost.” The U.S. military was “weaker than what we perceived,” he said.
- President Trump begged to differ. “The U.S.A. has total control over the Strait of Hormuz. I THINK WE WILL KEEP IT! Our Naval Blockade is being called, by everyone, ‘A WALL OF STEEL,’ and there is nothing Iran can do about it,” he said on social media. “They have no Navy, they have no Air Force, their remaining soldiers are unpaid, the IRGC is decimated and fleeing, and their ‘Leadership’ is uncertain, at best! They have No Money – Their country is ‘shot.’ All they have is FAKE NEWS and 300% INFLATION, and getting worse! Iran is all talk and no action, the Bully of the Middle East No Longer. Praise be to Allah!”
JOBS-POCALYPSE NOW
AI appears to be killing jobs at entry-level and in IT services
AI might be nibbling away at the IT services job market and among entry-level jobs for college grads, according to new data from Jefferies and Bank of America, but the jury is still out on whether we face a full-scale jobs-pocalypse.
At Jefferies, Surinder Thind and his colleagues track job openings at nine IT services companies, including Accenture, Globant, CGI Inc., and Cognizant. Those listings declined last month at five of the nine. While job listing data is volatile due to “idiosyncratic factors at each company,” the long-term trend seems clearer: These companies just aren’t hiring the way they were five years ago. And these companies are all heavy users of AI and are all engaged in “decoupling revenue growth from headcount growth driven by AI,” Thind said in a note.
At Bank of America, “One of our core views around AI is that it will not lead to massive job losses,” according to Stephen Juneau and his team. However, “one area that does show some negative effects from AI adoption is youth employment. Unemployment rates of those college graduates aged 22-27 have risen since lows in 2023 and are above 2019 levels. Some of the increase is likely due to uncertainty created by tariff policies last year. That said, there has been little improvement even as uncertainty has faded, suggesting that other factors like AI may be at play.”
CHART OF THE DAY
Is biofuel putting up the price of food?
About 3.5 million barrels of biofuel are burned every day, mostly for transport in the U.S., E.U., and Brazil, which consume about 80% of all biofuel, according to Daan Struyven and his team at Goldman Sachs. As the Gulf crisis has pushed up the price of oil, government mandates for biofuel—a blend of ethanol (from corn or sugarcane) and diesel; or diesel and vegetable oil—have also risen. “In the U.S., the share of soybean oil used for biofuels has risen from 40% in 2020 to ~55% in 2026,” Struyven said in an email. With fewer of those crops showing up in the food system, food prices have gone up as a result, as the above chart suggests.
NUMBER OF THE DAY: Time billionaires
31.7 years
The number of years that have elapsed after 1 billion seconds. If you believe you have more than 31.7 years of life left, then you are a “time billionaire.” The term was popularized by Graham Duncan, co-founder of East Rock Capital, on the Tim Ferriss podcast in March 2019. Duncan uses it to persuade young people that their wealth is best measured in time left on this earth, and that therefore the sooner you start investing the better (in order to take advantage of the miracle of compounding). It’s another way of expressing the concept “time in the market beats timing the market.”
THE FRONT PAGES TODAY
Forbes Fired Top Editor After Discovering He Received Secret $6 Million Payment – NYT
Smile, you’re on camera: when the boss wants to read your mood – FT
South Korea’s Kospi has staged a stunning comeback. How long will the bull market last? – CNBC
Trump’s ballroom costs are rising. What we know about the secret underground bunker – Axios
Inside North Korea’s Operation to Conquer the American Job Market – WSJ
Iger and Kushner Landed Lakers Deal in a Day, No Bankers Needed – Bloomberg
ONE MORE THING
Sam Altman: I was ‘peer-pressured and tricked’ into an internship at Goldman Sachs that would have been ‘unbelievably terrible’
OpenAI CEO Sam Altman said he once applied for an internship at Goldman Sachs, and was accepted, because he was “peer-pressured and tricked into it.” He only backed out at the last minute, according to Fortune’s Mia Osmonbekov and Catherina Gioino.
“It sounds like unbelievably terrible now, but at the time that was the cool thing, that was what everybody wanted to do,” he said on stage at the Z Fellows Internapalooza conference. Watch the video here.
