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Matt Davis — Need2Know Chedditor

Table of Contents

• Skin Cancer Vaccine Raises Moderna's Stock 176%

• Bond Yields Dive After Treasury Steps Up Buybacks

• ICE Bans Its Staff From Wearing Meta Smart Glasses …

• ABC Sues to Block Threat to Its TV Licenses

• Investment Bank Lets Hedge Funds Bet on Kalshi

• Poll of the Day: A Question of Perspective

• Poll of the Day: Beat LA!

What’s the Stock Market Up To, Eh?

$SPX ( ▲ 0.21% )  $DJI ( ▲ 0.22% )  $NDX ( ▲ 1.59% )  

Companies Mentioned in Today’s Newsletter

$MRNA ( ▲ 176.97% )  $MRK ( ▲ 12.6% )  $SNDK ( ▼ 3.5% )  $META ( ▲ 0.43% )  $DIS ( ▲ 2.87% )  $AAPL ( ▲ 2.19% )  $KALSZZX ( ▲ 0.5% )  

Skin Cancer Vaccine Raises Moderna's Stock 176%

Remember when Moderna $MRNA ( ▲ 176.97% ) was the darling of the pandemic? Neither does Wall Street. After the COVID vaccine gold rush evaporated, the vaccine-maker found itself crowned as the most shorted stock in the entire S&P 500 last year. But nothing cures a painful stock market hangover quite like tackling... well, cancer.

In a spectacular turnaround, Moderna shares more than doubled yesterday, surging by up to 176% in early afternoon trading. The magic trick is an experimental mRNA therapy, developed with Merck $MRK ( ▲ 12.6% ) , that custom-tailors a skin cancer vaccine to a patient's specific tumor types. It is, in the words of principal investigator Professor Georgina Long, a “landmark moment for adjuvant melanoma treatment.”

My ears perked up, personally, when I heard the news. Skin cancer runs in the family and I’m vigilant about wearing a hat and sunscreen as often as I can. Soon I’ll be able to slather myself in butter again, and make like Kramer in Seinfeld!

Wall Street inflated Moderna’s market cap to a cool $60.4 billion yesterday, making it the second-best performer in the S&P 500 this year after Sandisk $SNDK ( ▼ 3.5% ) , which has shot up more than 400% since January. CEO Stéphane Bancel took to his blog to celebrate, writing that the firm has “started to demonstrate the potential of an entirely new class of medicine — and an entirely new way of thinking about cancer care: Using the information encoded within an individual patient’s cancer to design a specific therapy that helps train their immune system to fight it.” Meanwhile, analysts at TD Cowen swooned, telling the Financial Times that this is indeed a “landmark moment” with regulatory approval expected next year.

Of course, let’s keep our sunscreen on, shall we? Even with this massive surge, Moderna is still trading at less than a third of its 2021 peak. But why let historical reality ruin a party that has healthcare investors partying like it’s late 2020? For now, the short sellers are crying, the executives are blogging, and Moderna is a corporate hero once again. Just don't ask about the company’s leftover COVID boosters, mm-kay?

Quote of the Day

Bond Yields Dive After Treasury Steps Up Buybacks

Just when the 30-year U.S. Treasury yield hit its highest level in 19 years, sending bonds and wider stock markets reeling on Tuesday, Treasury Secretary Scott Bessent pulled off a classic bit of market intervention. With a single announcement, the Treasury revealed it would double its long-term debt buybacks, causing bond yields to take a sudden, dramatic dive, and broader markets to stabilize. For now.

Don't call it a panic intervention. The Treasury solemnly declared that it does not intend to mitigate episodes of acute market stress. Heavens, no. Certainly not like…they just did? With this one? No. They just happened to double their bond-buying, right as investors were hyperventilating over bond yields.

Of course, this doesn’t fix the underlying plumbing issues. As Wall Street Journal columnist James Mackintosh noted yesterday, Bessent is arguably just “fiddling around the edges.” The underlying spike in yields is driven by a “nasty combination of three trends: government deficits, the artificial-intelligence boom, and geopolitics,” Mackintosh wrote. With the U.S. government projected to borrow a staggering 7.5% of GDP this year, and tech firms turning into “capital-hungry operators of gigantic data centers,” a few extra buybacks are unlikely to provide the long-term stability the bond market needs, Mr. Mackintosh argued. Worse still, papering over the problem exposes government finances to “even higher borrowing costs” down the road.

Although for now, of course, there are midterms looming, in November. So.

ICE Bans Its Staff From Wearing Meta Smart Glasses

Immigration and Customs Enforcement (ICE) has officially banned its employees from wearing Meta’s $META ( ▲ 0.43% )  smart glasses on the job. Because if there is one thing a massive surveillance apparatus simply cannot tolerate, it is... being surveilled.

In a Tuesday memo, ICE’s acting director, David Venturella, warned that the glasses — which can discreetly film the world, "could unintentionally capture, record, or transmit sensitive information, potentially compromising privacy and legal protections." Yes. The very agency whose agents faced fierce backlash for wearing these glasses to public protests and during immigration raids has suddenly discovered the sanctity of "privacy."

But don't worry, my Big Brothers, the government is not suddenly turning soft on high-tech surveillance. While banning consumer-grade gear because "personally owned body-worn cameras and unauthorized recording are prohibited," as a Department of Homeland Security spokesman put it, DHS has requested $7.5 million in its budget to build its own smart glasses. Their dream prototype? Custom eyewear designed to "enable biometric identification of illegal aliens." It seems spying is only a civil liberties crisis if Mark Zuckerberg owns the video feed.

Naturally, privacy advocates are screaming into the void. The ACLU, alongside 77 organizations, warned that "facial recognition technology built into inconspicuous consumer eyewear represents a serious threat to privacy and civil liberties for every member of our society." Meanwhile, Zuckerberg remains undeterred, calling smart glasses "the ideal form of superintelligence." 

Then again, how would he know? His company’s stock is down 26% this year. Until the government's multi-million-dollar custom spying specs are ready, ICE agents will have to navigate the federal workspace using their own regular, non-superintelligent eyeballs. And I do wish you all the very best of luck with that, indeed, guys.

Song of the Day: Fabrizio, ‘Let Being Sober Be Your Cure’

"Let Being Sober Be Your Cure" by Fabrizio is a powerful, starkly honest country-Americana ballad that serves as a standout highlight of his debut EP, “Recovery.” The track has earned widespread acclaim from roots music critics and fans alike for its visceral, uncompromising look at substance abuse and the restorative power of sobriety. So, it’s a lot like this newsletter!

ABC Sues to Block Threat to Its TV Licenses

A late-night comedian cracks a monologue joke, a president gets offended, and suddenly a multi-billion-dollar media empire is fighting to keep its TV stations on the air.

That’s why ABC has officially sued the Federal Communications Commission (FCC), calling the agency's sudden, early review of its broadcast licenses, after Jimmy Kimmel criticized conservative reactions to the murder of Charlie Kirk, an “existential threat” to its entire operation.

The FCC’s official justification for this sudden regulatory assault is an ongoing investigation into ABC's diversity and inclusion practices. But the actual paperwork demands look a bit more like a political fishing expedition, ABC contends. The FCC has forced ABC to hand over 13,000 pages of documents, including internal communications between the producers of The View and an itemized list of employees' political donations. As ABC’s lawyers dryly noted in the complaint, “The process is itself the punishment.”

According to the lawsuit, “This case boils down to a simple question: Can the administration use its control over the federal regulatory apparatus to punish a media organization for editorial decisions and news coverage it dislikes?”

Currently, it seems, the answer is: Maybe?

FCC Chairman Brendan Carr is playing the role of innocent public servant. He quickly dismissed the lawsuit as “meritless,” arguing that “Holding a broadcaster accountable to their public interest obligations and statutory obligations is not a violation of their First Amendment rights, and that is what the FCC is doing.” 

Of course, nothing protects the public interest quite like subpoenaing Joy Behar’s email inbox. While the FCC officially accuses ABC owner Disney $DIS ( ▲ 2.87% ) of an “ongoing campaign of disinformation,” other FCC commissioners are cheering on ABC. Democratic FCC Commissioner Anna M. Gomez applauded Disney’s “courage,” calling the lawsuit “a welcome sign for every broadcaster who has felt the weight of this overreaching government pressure in silence.”

I’m going to write my cheesy news jokes a lot more carefully from now on, though. Promise.

Investment Bank Lets Hedge Funds Bet on Kalshi

Why bother with the intellectual exhaustion of analyzing Apple’s $AAPL ( ▲ 2.19% ) balance sheets, profit margins, or macroeconomic headwinds when you can just place a giant yes-or-no bet on how many iPhones they sell next quarter?

In a move that proves that the line between high finance and the casino floor has, let’s say, become increasingly porous, investment bank Cantor Fitzgerald is giving its 3,000 institutional clients, ranging from buttoned-up family offices to hyper-leveraged hedge funds, full access to Kalshi’s $KALSZZX ( ▲ 0.5% ) prediction markets. According to Pascal Bandelier, co-chief executive of equities at Cantor, “The investor base that we’ve met — we’ve met dozens — has been really keen on entering and participating in the prediction markets.”

Of course they are. If there is one thing institutional investors love more than high management fees, it is a formalized way to gamble on weather forecasts, oil prices, and carbon allowances. Meanwhile fewer than 7% of active large-cap U.S. managers beat the index over the last 20 years. So: It’s time to gamble!

Proponents of this system solemnly claim that prediction markets merely harness the wisdom of crowds to hedge risk. Joe Grubb, head of business development at Susquehanna Predictions, told the Wall Street Journal, “I think prediction markets allow us to be much more creative with the types of hedging,” adding that they are “seeing a lot of interesting ideas from counterparties.” 

"Creative hedging" is a beautiful euphemism. Although, naturally, Kalshi is delighted to welcome the high rollers. I mean, big spenders. I mean, well. Max Crowley, Kalshi’s vice president of business development, explains, “We get a lot of questions of, I do want to hedge specific event risk, but I don’t know how to do it,” before confidently concluding, “The demand is there.”

My money is always on red, unless it’s on black, just in case you were curious. Meantime these people are probably running a percentage of our pensions. Shudder.

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Poll of the Day: A Question of Perspective

Poll of the Day: Beat LA!

We asked: Lakers, or Literally Any Other NBA Team?

You answered:

🟩🟩🟩🟩🟩🟩 Beat LA! Beat LA! (247)
🟨⬜️⬜️⬜️⬜️⬜️ Lakers all the way, baby. ALLLL. THE. WAY. (44)
291 Votes via @beehiiv polls

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