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- š° 5 Fact Friday: AI Saves Google, Sweeney Saves AEO
š° 5 Fact Friday: AI Saves Google, Sweeney Saves AEO
This week, AI disrupted antitrust law, Sydney Sweeney moved markets, and Trumpās tariffs hit a $210B legal wall. Itās a wild oneāletās dive in.
Good morning, Maniacs!
September has historically been the marketās worst month, but you wouldnāt know it from this week. The S&P 500 just notched a fresh all-time high, shaking off the seasonal slump ā at least for now.
That strength follows the best summer in 40 years. But with todayās jobs report on deck, the mood could shift fast.
If hiring cools as expected, Wall Street may treat it as one more green light for rate cuts. But if hiring heats up, good news might suddenly look like bad news.
Meanwhile, Google avoided a historic breakup, Klarna and Gemini are kicking off the yearās biggest IPO week, and Sydney Sweeney sold so many jeans she sparked a 38 percent retail rally.
Letās dive in! š
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ECONOMY
1. Tariffs Face Legal Test Worth $210 Billion āļø
Trumpās signature tariffs just hit a $210 billion legal speed bump.
A federal appeals court ruled that the Trump administration illegally used emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose tariffs on dozens of countries. The ruling targets all āLiberation Dayā tariffs, including duties of 50% to 145% on imports from China, India, and Brazil.
But donāt expect those tariffs to disappear overnight.
The ruling is real, but its enforcement is paused until October 14. In the meantime, the federal government has requested an emergency Supreme Court review.
If the high court takes up the case and sides with the lower court, the U.S. Treasury could be on the hook to refund hundreds of billions of dollars in tariff revenue.
Who gets the money?
Not you, unfortunately. Importers like Walmart, Amazon, and thousands of other retailers and manufacturers could be in line for substantial checks.
You might think: āGreat! Ending tariffs should lower inflation.ā After all, thatās been the popular narrative all year.
But the markets had a different take.
If the Treasury has to issue massive refunds, that cash has to come from somewhere. And with no surplus in sight, the government would likely turn to more borrowing ā a.k.a. money printing.
After the ruling dropped:
Gold prices hit an all-time high, now over $3,600 and up 38% on the year
Treasury yields spiked, briefly flirting with 5%
This was not a celebration. It was a warning sign.
Removing a major source of revenue, issuing $210 billion in refunds, expanding tax cuts, and prepping for a possible rate cut in two weeks isnāt exactly a recipe for price stability.
The Supreme Court is widely expected to hear the case in its new term beginning next month. Legal experts think a final ruling could land sometime in mid-2026. Until then, the tariffs stay put and the fiscal drama continues.
Why It Matters for You
Cost of credit: Higher Treasury yields often lead to higher interest rates on mortgages, credit cards, and business loans.
Inflation risk: Markets aren't cheering the end of tariffs. They're bracing for more fiscal strain and possible inflation.
Cost of goods: Apparel, electronics, furniture, machinery, and even bicycles could get cheaper if tariffs are rolled back.
Investments: Could be a boon for retailers, foreign exporters, and emerging markets, but a blow to U.S. manufacturers facing new competition.
This is a legal, political, and economic decision that could shape everything from taxes to inflation for years to come. Stay tuned.
STOCKS
2. Court Lets Google Keep Chrome šļø
Google just dodged a major breakup ā and it has AI to thank.
A federal judge ruled that Google can keep its Chrome browser, despite accusations of monopolistic behavior. The Justice Department had floated extreme remedies, including a forced Chrome sell-off and a ban on Googleās $20 billion-a-year search deal with Apple.
Then came a surprise twist: Perplexity offered $34.5 billion to buy Chrome, in hopes of forcing the breakup. It didnāt work.
In his 226-page opinion, Judge Amit Mehta pointed to the rise of generative AI tools like ChatGPT and Perplexity as a major reason for restraint. While the court found that Google did engage in anticompetitive conduct, Mehta noted that the search landscape is shifting fast.
"The emergence of GenAI changed the course of this case," Mehta wrote.
"These new realities give the court hope that Google will not simply outbid competitors for distribution if superior products emerge."
He added that this shift weighed in favor of "caution" before imposing structural changes.
Hereās what the court decided:
Google keeps Chrome, avoiding a messy spinoff
Apple keeps its $20B/year deal, but it must renegotiate annually
Exclusive search deals are banned, but non-exclusive ones can continue
Google must share certain search data with competitors
The ruling is a clear win for both Alphabet and Apple. Alphabet stock jumped 9%, adding around $230 billion in market cap. Apple rose nearly 4%, good for about $130 billion in gains.
Hereās the twist: Google wasnāt cleared of wrongdoing. It was let off easy because the judge no longer sees its dominance as unshakeable.
After all, AI is already chipping away at Googleās core business.
With more and more āsearchesā starting outside of traditional search engines, Google has been forced to disrupt itself. One in five Google searches now include an AI summary. According to Pew, those summaries result in about 40% fewer clicks ā striking at the heart of Googleās ad model.
Itās no wonder Google is pivoting. In 2017, search ads made up 87% of the companyās total revenue. Today, that share is less than 75%.
Bottom line: The court didnāt excuse Googleās past behavior. It simply acknowledged that the future looks different. In this new era of AI-driven search, the top spot is still up for grabs.
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FAST FACTS
3. New Listings, New Laws, And New Money š§¾
š IPO frenzy returns to Wall Street ā Klarna and Gemini headline a five-company push that could deliver the largest U.S. deal volume of the year. [Read]
š¦ Missouri axes capital gains tax ā The state is the first in the nation to fully exempt residents from paying capital gains tax, and policymakers are now eyeing a full income tax repeal. [Read]
šÆ Powerball jackpot rockets to $1.7B ā Donāt count your millions just yet. A new breakdown shows how much winners actually keep after taxes in each state. [Read]
š September slump arrives ā Since 1980, September is the only month with negative average stock returns. Will Wall Streetās ājinx monthā live up to its reputation? [Read]
š American Eagle pops 38% ā A viral āGreat Jeansā ad starring Sydney Sweeney racked up 150M+ views, sold out fast, and drew applause and outrage from Wall Street to Washington. [Read]
š Housing emergency on the horizon? ā Treasury Secretary Scott Bessent hinted one may be declared this fall, sparking debate about supply, affordability, and government action. [Read]
š America now has over 1,100 billionaires ā Most arenāt household names, and many didnāt build tech empires. Here's where they live, how they give, and what theyāre worth. [Read]
šŖ Galaxy tokenizes its own stock on Solana ā Itās the first SEC-registered company to trade real shares on-chain, offering a glimpse at what blockchain-based equity could look like. [Read]
ECONOMY
4. Workers Had The Upper Hand... Not Anymore š
Although the unemployment rate remains at 4.2%, near historic lows, trouble is brewing beneath the surface.
For the first time since 2021, there are now more unemployed Americans than job openings.
According to the latest JOLTS report, job openings dropped to 7.18 million in July, missing economist expectations by a wide margin. That falls short of the 7.24 million unemployed Americans now looking for work.
In other words, for every job seeker, thereās less than one open position. Just a few years ago, that ratio was 2 to 1 ā a workerās paradise. Today? Not so much.
The power shift is clear:
The quits rate is stuck near 2%, the lowest since 2016. Workers are "job hugging," clinging to the roles they have.
The average job hunt now takes 24 weeks, nearly a month longer than last year.
Layoffs and job cuts are slowly creeping higher.
Slower immigration may help cushion the slowdown. But AI and automation are having the opposite effect, eliminating some jobs and putting a freeze on hiring in others, particularly for new graduates.
Even the Fed seems to be shifting focus. At Jackson Hole, Chair Jerome Powell noted āthe shifting balance of risks may warrant adjusting our policy stance.ā Translation: the Fed is beginning to see the labor market, not inflation, as the bigger threat.
What comes next?
Wage growth could slow as employers regain leverage.
A rate cut is nearly certain. The CME now pegs odds of a September 17th cut at 99%, with 1-2 more by year end.
Bottom line: The job market hasnāt fallen off a cliff, but the safety net is looking thinner. The Fed is now being forced into a balancing act ā less tunnel vision on inflation, and more consideration for the labor market.
STOCKS
5. Guess That Stock šµļøāāļø
This iconic American food giant is breaking itself in two ā and not everyoneās happy about it.
Can you guess the stock?
Even though the stock hasnāt moved in years, it offers a juicy 6% dividend yield of 40 cents per quarter.
Warren Buffett owns over 25% of the company and was the architect behind its 2015 megamerger, when a processed cheese powerhouse joined forces with a condiment king.
That megamerger? Itās now being undone. The company is splitting into two: one for fast-growing condiments and spreads, the other for slower-moving grocery staples.
Its portfolio includes over 200 brands, including Velveeta, Oscar Mayer, Lunchables, Capri Sun, Philadelphia cream cheese, Classico pasta sauce, and Jell-O.
The company's name is a two word mash-up coming from its iconic mac and cheese brand and its best-selling ketchup label.
Got a guess? Tap here for the answer ā
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