IBM fell 25% in a day. It took 112 years to have a day this bad.
We don’t own IBM, and Thursday is a pretty good advertisement for why. A stock that can reprice 25% on one pre-market phone call is a stock where the insiders and the shareholders were reading two different books. Is it cheap now? Sure — the way a flooded car is cheap. Everything works except the part you can’t see. We’ll look again after two consecutive quarters of stabilized consulting billings, and not one press release sooner. Meanwhile the actual AI trade — the silicon, not the slideware — stays where it was: AVGO, TSM, MU, held and unbothered.
Uber just bought the food-delivery wars. Price: $14.8 billion.
For a decade, food delivery was a knife fight in a phone booth — five apps, four continents, everybody losing money and calling it market share. Thursday, Uber (UBER) ended it, agreeing to buy Delivery Hero for $14.8 billion in stock. The combined outfit spans 70-plus countries; Delivery Hero’s shareholders walk away with about 5% of the merged company. Note the currency: stock. Not debt. Not cash the company doesn’t have. When a business that spent its adolescence burning investor money starts paying for acquisitions with its own equity and nobody flinches, that’s not a deal — that’s a graduation.
UBER stays reinforced, and honestly this made the case for us. An all-stock deal at this scale means the balance sheet can carry consolidation without a single covenant getting nervous. The war is over; what’s left is a toll road with a very large map. Delivery Hero (DLVY) itself we leave alone until the deal closes — merger arbitrage is a profession, and it isn’t ours. The read for clients: the best time to own a knife fight is the day it becomes a monopoly-adjacent utility. That day was Thursday.
Merck's new cholesterol pill: 60% reduction, no needle, $5 billion attached.
The FDA on Thursday approved Lipfendra, Merck’s (MRK) new cholesterol pill — the first oral PCSK9 inhibitor to make it to market, and the kind of drug that makes a cardiologist put down the sandwich. It cuts bad cholesterol by roughly 60%, versus the 20–30% you get from statins, and it does it without the injectable routine that made the existing PCSK9 drugs — Amgen’s (AMGN) Repatha, Regeneron’s (REGN) Praluent — a hard sell for the needle-averse. The Street has $5 billion-plus in peak annual sales penciled in. Your arteries, as ever, remain one of the great addressable markets.
MRK stays reinforced — but let’s be precise about why. Not because one pill makes the company; big pharma is a portfolio business and Merck’s is deep. Because a first-in-class oral in a proven category is the cheapest kind of blockbuster: the science is already validated, the market already exists, and the only innovation the patient notices is that nothing gets injected. AMGN and REGN stay held — a category this big doesn’t crown one winner, it feeds three. The lipid business has been minting money since the first statin. We see no reason to argue with fifty years of plaque.
The sun over the Midwest is a dim orange coin again. Canada is burning.
More than 100 uncontrolled wildfires in Canada sent smoke rolling south Thursday, wrapping the Northeast and Midwest in the kind of sepia haze that makes noon look like a memory of noon. Air-quality alerts run through Friday from Michigan to Maine; meteorologists call it the densest smoke event in more than a year, and it’s the second one this summer. Airports are reporting delays. Insurers are doing math. Everyone else is just squinting.
No trade — and no pretending weather is a thesis. But we keep the file open, because smoke has a way of becoming earnings: insurers (AIG, AIZ) if claims season runs hot, utilities (NEE) if regulators start asking about grid hardening, and the fertilizer names (MOS, CF) if the haze settles over growing zones long enough to matter. For now it’s a watch column, not an action column. The books were built so that a bad sky doesn’t require a decision. That’s the whole point of building them in July instead of during the fire.
Retail sales grew 0.2%. The American consumer has discovered the word "no."
June retail sales rose 0.2% — half of May’s pace, under the 0.4% forecast, and the sound you hear is the great American wallet closing with a soft, dignified click. Cheaper gas did some of it (pump prices fell 8% on the month, and nobody celebrates spending less at the pump by spending more elsewhere anymore). Apparel and furniture did the rest. Meanwhile UnitedHealth (UNH) beat and raised on the same day IBM fell down the stairs — which tells you the economy isn’t weak so much as it is sorting. Health premiums get paid. Consulting engagements get postponed. The couch can wait.
This is the quiet story that outranks the loud one. A consumer growing at 0.2% is a consumer rationing, and rationing is where discretionary earnings estimates go to die. Staples — KO, PG, CLX — stay reinforced; people economize toward the products, not away from them. The discretionary bench (NKE, MCD) stays benched. We’re not calling a recession — employment is solid and the savings rate is positive. We’re calling a repricing of optimism, which is slower, quieter, and much more common. UNH’s beat-and-raise stays held: the one bill nobody skips.
Brussels to Google: open the vault. Google: noted.
The European Union on Thursday handed Alphabet (GOOGL) a binding order to open Android and Search data to competitors — the muscliest enforcement of the Digital Markets Act yet, and a template American regulators will read with a highlighter. Google has 60 days to propose compliance. The stock dipped, then shrugged, which is the market’s way of saying it has seen this movie: the fine gets paid, the lawyers get rich, the moat gets a footnote. Twenty-five years of antitrust attention, and the search box is still the front door of the internet.
GOOGL stays held. Here’s the unfashionable truth about regulation and moats: a moat that can be drained by a compliance filing was never a moat, and Google’s isn’t that kind. The advantage is scale, habit, and eleven billion daily acts of muscle memory — none of which fits in a data-sharing mandate. What we actually watch for is whether “open the data” produces a competitor or just a compliance department. History bets heavily on the compliance department. We’re not selling the front door of the internet over paperwork.
Young drivers are going “psycho” on the road — and filming it for the algorithm.
The job market is solid — unless you’ve been out six months, in which case it’s a wall.
The FDA would like a word with 14 online ketamine sellers.
Two feet of rain in the Hill Country. Two dead, 230 rescued, one grim anniversary.
Debt-collection lawsuits hit multi-year highs. $1.25 trillion on the card.
