Hello, Wednesday-N2K’ers!

The stock market continues to party like John Belushi on a long weekend, and there’s absolutely no downside risk associated with that kind of partying, as Mr. Belushi would tell us if he hadn’t (checks notes) died after overdosing on a “speedball” at 33. Ah, I see what you’ve done there. Maybe it’s time to buy pharma stocks as a hedge?

—Matt Davis, Need2Know Chedditor

News You Need2Know

• Nasdaq, Dow, and S&P all partying hard

• Why are lawmakers buying pharma stocks?

• Tesla shares drop as Trump feud persists

• The U.S. consumer is in debt, but so what?

• Lululemon sues Costco over alleged ‘dupes’

Companies mentioned in today’s newsletter

$NASDAQ ( 0.0% )  $DJI ( ▼ 0.63% )  $SPX ( ▼ 0.33% )  $LLY ( ▲ 0.3% )  $JNJ ( ▼ 0.5% )  $PFIZER.NSE ( ▲ 0.25% )  $MRK ( ▼ 0.79% )  $TSLA ( ▲ 1.18% )  $LULU ( ▼ 0.84% )  $COST ( ▲ 0.02% )  

Nasdaq, Dow, and S&P all partying hard

It seems the S&P 500, Dow, and the Nasdaq $SPX ( ▼ 0.33% )  $DJI ( ▼ 0.63% )  $NASDAQ ( 0.0% ) didn’t just wake up this quarter — they chugged a triple-shot espresso, hit record highs, and made those of us who keep our savings in coffee cans feel bad about ourselves. Financial types are pointing out that we’ve just had the best quarter in over a year, which makes you wonder: what happened last quarter? Answer: Let’s say… we did not have a good quarter, which may actually explain why we did just have a good one. Yay, the stock market! I’m sure it can only go up from here, right? #NotFinancialAdvice

Song of the day: This must be the place

"This Must Be the Place (Naive Melody)" is a song by American rock band Talking Heads. The closing track of their fifth studio album Speaking in Tongues, it was released in November 1983. In the "Self Interview" on the DVD of the concert film Stop Making Sense (1984), David Byrne says it is a love song:

It’s also featured on the soundtrack of the movie “Wall Street,” starring Michael Douglas and Charlie Sheen. So, is it a love song to Wall Street? You tell me.

Why are lawmakers buying pharma stocks?

Even as the Trump administration takes an aggressive stance against the pharmaceutical industry, threatening tariffs and demanding price cuts, U.S. lawmakers continue to invest heavily in drug company stocks.

According to Politico healthcare reporter Amanda Chu, an analysis of financial disclosures from members of the House and Senate revealed investments totaling up to $2.9 million in major U.S. pharmaceutical companies such as Eli Lilly $LLY ( ▲ 0.3% ) , Johnson & Johnson $JNJ ( ▼ 0.5% ) , Pfizer $PFIZER.NSE ( ▲ 0.25% ) , and Merck $MRK ( ▼ 0.79% ) . Republicans have outpaced Democrats in these purchases.

Chu explains that these investments come at a time of significant economic uncertainty, making pharmaceutical stocks an attractive "defensive option." She notes, "It's because people need their medications, and pharma companies enjoy patent protections and market exclusivity. Investing in pharma is a good option to do when you're worried about where the economy is going to go."

This historical perception of stability and insulation from economic downturns continues to draw investors, including those in Congress.

The significant lobbying efforts by the pharmaceutical industry on Capitol Hill further underscore the close relationship between pharma and Congress. In the first quarter of this year, the industry spent a record $13 million on lobbying — at least four times the amount of pharmaceutical stock owned by congresspeople. This long-standing influence, combined with the perception of pharma as a secure investment, helps explain why lawmakers continue to bet big on drug company stocks even in the face of intense political pressure.

Today on the ‘gram: Get out of town!

Post of the day: Deport Elon Musk?

Quote of the Day

Tesla shares drop as Trump feud persists

File under “Billionaires being jerks.” Elon Musk, the world’s richest man, and Donald Trump, our president, are feuding like two toddlers fighting over the last juice box — but the juice box is billions of dollars in taxpayer-funded subsidies.

Musk, who spent hundreds of millions on Trump’s re-election, now seems to regret his investment the way people regret buying memecoins. Why? Trump’s newly passed tax-and-spending bill would slash subsidies for electric cars, which Tesla famously makes. Musk responded in true Musk fashion: by criticizing the bill, hinting at starting a new political party, and possibly naming it something like “The Party of Innovation and Memes” because…well. Did I mention he has a well-reported horse tranquilizer habit?

Trump’s response was to threaten to cut off all federal support for Tesla and SpaceX, including subsidies, rocket launches, and satellite contracts. In his words, “No more Rocket launches, Satellites, or Electric Car Production. Our Country would save a FORTUNE!”

Musk, being Musk, doubled down, saying, “CUT IT ALL NOW.” LOLS.

Tesla $TSLA ( ▲ 1.18% ) shares then went down 5.5%.

Should you check your 401(k) today?

👍️ 

Heck to the yes! It’s never been higher!

The U.S. consumer is in debt, but so what?

The latest economic reports paint a concerning picture for the American consumer: household debt is on the rise, and delinquencies are ticking up. Is this a cause for panic? Elizabeth Renter at NerdWallet offered us some perspective.

"Balances are up really across debt types, including credit card debt, and delinquencies are rising," Renter confirmed. However, she points out that some of this increase is a natural rebound. "A lot of people paid down debt and got current on their accounts in the immediate aftermath of that first wave of COVID. So in 2021 and 2022, we all had excess savings, we had some fiscal stimulus in our bank accounts, and we were able to really clear away some of that debt."

So, while debt levels are indeed rising, they are in some ways returning to pre-pandemic levels. The real concern, according to Renter, lies in the pace of delinquencies. "Delinquency rates are rising quickly. Faster than they were before the pandemic. This is concerning because if we go through a high inflation period now, it's gonna look quite different to households as it did just a couple of years ago when they were sitting a little prettier in their budgets."

High interest rates exacerbate the issue. Renter warns, "Being overextended on debt really prevents you from dealing or coping with economic shocks in your household." This means unexpected bills or reduced work hours can quickly push consumers into dire straits.

"People making only minimum payments are rising, and that's concerning to me because once you get behind on credit card debt it's a slippery slope and you could find yourself in financial dire straits," she warns.

Lululemon sues Costco over alleged ‘dupes’

Lululemon $LULU ( ▼ 0.84% ) is sweating over Costco’s $COST ( ▲ 0.02% ) alleged dupes, and not in a “hot yoga” kind of way. The leggings titan filed a lawsuit accusing Costco of selling knockoff versions of its beloved hoodies, jackets, and pants.

Lululemon claims Costco’s Kirkland-brand products are causing “confusion” among customers, with some shoppers allegedly believing they’re scoring legit Lululemon gear for $19.97 instead of the usual $100+.

Imagine the bourgeois horror of finding out your "Lululemon" hoodie is actually a Costco creation, while you’re aligning your chakras in downward dog!

Costco is taking its usual “say-nothing” stance, perhaps hoping their customers are too busy gobbling free samples to notice their $20 hoodies are the subject of legal drama. But honestly, $19.97 for a Costco hoodie versus $100+ for the Lululemon version? It’s time to head down to Costco, right?

Lululemon’s spokesperson says they “invest significantly” in research and design, which now has me imagining laboratory scientists testing the durability of yoga pants under extreme squatting conditions. The lawsuit seeks a jury trial, monetary damages, and a ban on the supposed dupes.

Poll of the Day: Consumer debt concerns

Poll Results: Middle class affordability concerns

We asked: Are you concerned that the Big Bill does more for wealthy people than middle class Americans? You answered:

⬜️⬜️⬜️⬜️⬜️⬜️ No, if you make it big you deserve to thrive in America (55 votes)

🟩🟩🟩🟩🟩🟩 Yes, middle class people are struggling to make ends meet and need more help (1029 votes)

1084 Votes via @beehiiv polls