This week’s world-famous-news-haiku-competition™ is all about how Walmart is transforming ordinary store visits into VIP experiences for World Cup tourists. Don’t worry, the World Cup is over this coming weekend, then we can talk about…baseball…or something. Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers. (Don’t worry if you get a bounceback email. The mailbox is working, it’s just been inundated with haikus lately, thank goodness!)

And now, news!

Matt Davis — Need2Know Chedditor

Table of Contents

• Big Banks Smash Earnings Records

• Boomers, Not Gen Z, are Cutting Back Most on Booze

• U.S. Workers Are More Productive Than Ever

• Inflation Slowed During Pause in War With Iran…Ah…

• AI Data Centers Are Paying Millions for Farmland

• Poll of the Day: Drink up!

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 0.38% )  $DJI ( ▲ 0.02% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$JPM ( ▲ 2.5% ) $GS ( ▲ 9.0% )  $BAC ( ▲ 1.88% ) $WFC ( ▼ 2.72% )  $DEO ( ▼ 1.89% )  $BF.A ( ▼ 3.6% )  $TFC ( 0.0% )  $MS ( ▲ 2.98% )  $BX ( ▲ 2.07% )

Big Banks Smash Earnings Records

How do you survive a global landscape of sticky inflation, war, and basic human struggle? Simple: Become a Wall Street megabank.

While you were weeping at the pump or desperately trying to figure out if you could afford both gas and groceries, JPMorgan Chase $JPM ( ▲ 2.5% ) , Goldman Sachs $GS ( ▲ 9.0% ) , Bank of America $BAC ( ▲ 1.88% ) , and Wells Fargo $WFC ( ▼ 2.72% ) casually swept up a cool $43 billion in record collective second-quarter profits. As the old adage goes, "in a world of uncertainty, one reliable rule is that Wall Street will find a way to make money.”

Take JPMorgan Chase, which dragged in a modest $21 billion. CEO Jamie Dimon wants you to know it’s because the U.S. economy "demonstrated notable resiliency this year, with stronger business investment and hiring." Of course, he also warned of "risks shifting below the surface like tectonic plates.”

Over at Bank of America, quarterly profits hit an easy $9 billion. CEO Brian Moynihan attributed the run to a "healthy economic backdrop" and his "resilient" consumer clients — namely, us, the consumers who keep paying higher interest rates for longer.

Meanwhile, Wells Fargo pocketed over $6 billion. CEO Charlie Scharf acknowledged "concerns" about affordability and inflation, but comforted us by noting that times are just too good to fail. "We know that such favorable conditions do not go on forever, so we are being selective about how much and where to grow," Scharf said, sounding almost melancholic.

Finally, Goldman Sachs pulled in $6.6 billion, riding a wave of investment banking fees and hot financing deals for AI companies.

Wall Street wins again. And we helped!

Quote of the Day

Boomers, Not Gen Z, are Cutting Back Most on Booze

For years, the media has painted Gen Z as a saintly congregation of kale-munching, mocktail-sipping ascetics, while labeling Baby Boomers as the generation of unbridled, wine-filled indulgence. Well, put down your artisanal kombucha, because the data has arrived to turn that worldview upside down.

According to new research from IWSR, the market researcher for the global beverage industry, it turns out Boomers are actually the ones ghosting the local pub (probably because it’s so loud down there, and their hearing is going?) the Financial Times reports. 71 percent of Boomers (born between 1946 and 1964) consumed alcohol in the past six months — the lowest drinking rate of any generation. Meanwhile, a whopping 74 percent of legal-age Gen Zers were busy raising their glasses, a number that has actually risen from 66 percent three years ago. And good for you, kids.

As IWSR president Marten Lodewijks bluntly put it, “The narrative that Gen Z is the generation of moderation is now conclusively debunked.” 

While young people in their twenties are enthusiastically catching up with the rest of the drinking population, Boomers are apparently going cold turkey. The study found that Boomers drank the absolute fewest drinks on the fewest occasions, averaging a microscopic 2.6 drinks per “session.” That’s weak, guys. It’s weak! Get another round!

This devastating drop in senior-citizen partying has sent global alcohol giants like Diageo $DEO ( ▼ 1.89% ) , Pernod Ricard, and Brown-Forman $BF.A ( ▼ 3.6% ) into a flat-out panic. They spent years designing fancy non-alcoholic botanical spirits for hipsters, only to realize they should have been marketing chamomile tea to their grandparents.

Lodewijks noted that while drinking less in your sixties and seventies is typical, the rate of this latest drop is unprecedented. “If this trend continues, it may actually be the Boomers, not Gen Z, who deserve the title ‘generation of moderation’,” he said.

Congrats, meanwhile, to Gen Z, who it turns out are fun after all. Let us know how much you’re drinking in today’s poll below. 👇🏻

U.S. Workers Are More Productive Than Ever

We’ve all heard the Silicon Valley gospel: Generative AI is going to write our emails and do our chores while we lounge on beaches. But according to the latest economic data, American workers are currently crushing productivity records, and they are doing it the old-fashioned way: By working themselves to the bone.

Meanwhile, AI remains a mere afterthought in the productivity mix. That’s right, U.S. labor productivity is climbing at its fastest pace in at least two decades. And yet, as former Federal Reserve Chair Jerome Powell recently admitted, “we haven’t really started to see the effects of generative AI.” So what is the actual secret sauce? Digitization, remote work, tight labor markets, and good old-fashioned corporate dread.

Take the oil fields of West Texas, where they aren't exactly using chatbots to extract crude. Steve Pruett, CEO of Elevation Resources, explains that they run leaner simply by drilling further: “As tech improved and we got better at it, we still drill two miles deep, but now we drill two miles out...” he told the New York Times. No advanced AI needed, just better drilling technology and far fewer humans on the payroll.

And speaking of running leaner, nothing says "productivity" like massive layoffs. Corporate job cuts in tech and finance have left companies doing more with less. Mike Skordeles of Truist Bank $TFC ( 0.0% ) admits he no longer needs junior staff to do his charting: “Only a few years ago... I would have had or hired three lower-level junior economists doing some of the charting and stuff that I can now do with the click of a button,” he said.

So, congratulations, American workforce! You are officially more efficient than ever, largely because you are terrified of losing your jobs and your compensation is lagging far behind your output. Sing it with me…

🎶 Oh say can you see…by the dawn’s early light… 🎶

Song of the Day: Allison Russell, ‘Searchlight’

"Searchlight" is the central focus track from Grammy-winning artist Allison Russell's third studio album, In the Hour of Chaos, released on July 10. The song is a slow jam duet featuring rising artist Kashus Culpepper, designed as a hopeful plea for human connection amid times of isolation. So, it’s just like this newsletter.

Inflation Slowed During Pause in War With Iran…Ah…

For one brief, shining moment in June, American consumers could actually look at a gas pump without weeping. The Consumer Price Index slowed to a 3.5 percent annual increase, down from May's stomach-churning 4.2 percent. Prices even dropped 0.4 percent month-over-month, the biggest outright decline since the world fell apart in 2020.

Why this sudden economic miracle? We can thank a brief, beautiful pause in our war with Iran. Oil prices tumbled, pushing retail gasoline back below $4 a gallon after topping a wallet-busting $4.50 in May. Even core inflation, which politely ignores the fact that humans must eat and use electricity, cooled to 2.6 percent.

Economists were thrilled. Blerina Uruci, chief U.S. economist at T. Rowe Price, told the New York Times that early supply chain panic was happily overblown: “There was a lot of fear back in April and May about how disruptive this energy price shock... would be... and we just haven’t seen that.” Even grocery bills and rent behaved themselves. Relatively speaking.

But don't go planning that luxury trip just yet. The cease-fire has officially ended, the war is back on, and oil prices are shooting right back up. So... that’s not great.

Morgan Stanley's $MS ( ▲ 2.98% ) Michael Gapen warned that as oil spikes, “the more you get second-round effects on things like airlines and transportation and even food prices.” Meanwhile, new Fed Chairman Kevin M. Warsh has sworn to “deliver price stability,” which is central-bank speak for "we might raise interest rates and make your mortgage impossible again" if inflation misbehaves.

Cherish the memory of comparatively cheap-ish June gasoline, eh?

AI Data Centers Are Paying Millions for Farmland

Artificial intelligence is supposed to exist in "the cloud," a magical digital realm where physical constraints don’t exist. But it turns out the cloud is actually made of concrete, requires massive amounts of power, and has a weirdly expensive taste for Pennsylvania hog farms.

Just ask Marilee and David Kiliti. Two years ago, developers showed up at their struggling 89-acre farm in Salem Township, Pennsylvania, offering a staggering $22 million. Unlike other parts of the state, there was no natural gas or oil under their soil, but the developers didn't care about what was in the dirt, only about the nuclear transmission lines running nearby. At the time, the couple was chewing on deer bologna and thought the offer sounded like a bunch of, well, deer bologna. But QTS, a data-center developer owned by giant investment firm Blackstone $BX ( ▲ 2.07% ) , was deadly serious.

The Kilitis are among 96 local families who sold out to QTS for a collective $586 million. To celebrate, the newly minted multimillionaires printed T-shirts.

And what does one do with sudden AI millions? You build a massive, two-story "barndominium" featuring a pool, a theater room, and a master bedroom deck with a sunset-facing hot tub. Or as David Kiliti downplayed it: “Nothing crazy.”

Not everyone is raising a glass, though. Neighbor Stephanie Black, who is fighting a proposed server farm next door, lamented, “You just sold out your entire town that you supposedly loved.” But for the Kilitis, the future looks bright. As Marilee put it, “We’re going from one view, to the next.” With $22 million.

Of course, they had to farm pigs in Pennsylvania for a generation, first. But it’s not a bad payout, is it?

Free Yourself From Advertising Forever!

Should You Check Your 401(k) Today?

👎️ 

Still no, I’m afraid.

Poll of the Day: Drink up!

Poll of the Day: The $150 Store!

We asked: How much did you spend on your last trip to Costco?

You answered:

🟨🟨🟨⬜️⬜️⬜️ Less than $100 (112)
🟩🟩🟩🟩🟩🟩 $100-$200 (192)
🟨🟨🟨🟨⬜️⬜️ $200-$300 (142)
🟨⬜️⬜️⬜️⬜️⬜️ $300-400 (44)
⬜️⬜️⬜️⬜️⬜️⬜️ $400-$500 (16)
⬜️⬜️⬜️⬜️⬜️⬜️ More than $500 (26)
532 votes via @beehiiv polls

So that’s settled, then. Also I’d like to go shopping with the last 26 of you please. Thx.

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