Good Morning! US stocks closed in a sea of green Tuesday as inflation data came in cooler than expected. Bank of America is finally listening to the backlash - and is telling its bankers to report any bosses that pressure them to work more hours. The Justice Department is considering breaking up Google, and VCs are inserting a record number of "pay to play" provisions into term sheets. Plus how to stop unhealthy competition at work, and is physical stamina the cheat code in high-stress jobs?

Evaluate your financial advisor’s performance + uncover hidden fees with Rainbook (it’s free).

_{SQUEEZ OF THE DAY}

Starbucks Steals Chipotle's CEO

Starbucks just isn’t what it used to be before the pandemic, and the chain has been struggling lately. When faced with the choice between a $10 venti cold brew and your office’s mediocre but free coffee, you’re probably opting for the latter.

Before yesterday, Starbucks’ stock had plunged over 40% from its July 2024 highs. The coffee giant has been grappling with a lack of growth, with sales down about 3% year-over-year. Long wait times, overpriced drinks, and supply chain disruptions have only added to the chain’s woes.

Pressure had been mounting from activist hedge fund investors, Elliott and Starboard, pushing Starbucks to make some big changes.

It seems like Starbucks absolutely swung for the fences - and made a home run hire by poaching the legendary Chipotle leader, Brian Niccol, to become the chain’s new CEO. 

Starbucks stock was up 25% on the news and added $22 billion in market cap. On the flip side, Chipotle’s stock dropped more than 7% on the news. Under Niccol’s leadership, Chipotle had become a shareholder darling, with its stock surging nearly 800% during his six-year tenure, compared to a 185% rise in the S&P 500.

Starbucks, which has gone through three CEOs since 2022, is clearly looking for stability. Niccol’s track record of steering Chipotle out of a major crisis and rebuilding its brand reputation has investors hopeful he can work similar magic at Starbucks. Niccol is set to take over on September 9th.

Takeaway: Chipotle has been one of the few food and beverage chains to achieve consistent growth, especially impressive given consumer cutbacks due to rising inflation. Niccol nearly 10x’d Chipotle’s market cap, and if today’s stock performance is any clue, investors think his hiring could be worth at least a quarter of Starbucks’ value. And let’s be real—Starbucks probably threw in a lifetime supply of cold brew to seal the deal!

_{PRESENTED BY RAINBOOK}

Are You Overpaying Your Financial Advisor?

Ah, summer. Time for barbecues, beach vacays, and oh yea–your financial advisor taking their quarterly fees. 

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• Management fees range from 0.80% to 1%–are you overpaying?

• Red flag report: Is your advisor a true fiduciary, or just a registered broker?

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Find out if your advisor is a fiduciary at Rainbook.

_HEADLINES

Top Reads

• Bank of America tells bankers to report bosses who pressure them to underreport hours (WSJ)

• Today’s CPI report could mark a change in thinking for the Fed (CNBC)

• Credit score dating app shuts down (TC)

• Justice Department considers breaking up Google (YF)

• Venture capitalists move toward "pay to play" (Axios)

• UAW files federal labor charges against Donald Trump and Elon Musk (CNN)

• Home Depot shoppers on hold (CNBC)

• Paris Olympics ratings soar 82% over Tokyo Games (CNN)

• The interview questions Goldman candidates were asked (YF)

• The labor market might not be as weak as it appears (Axios)

_{CAPITAL PULSE}

Markets Rundown

Stocks closed higher after inflation data came in at cooler than expected.

Movers & Shakers

• (+) Buzzfeed ($BZFD) +26% after the media company announced strong Q2 results.

• (+) Starbucks ($SBUX) +25% after the coffee chain announced a CEO change.

• (–) Chipotle ($CMG) -8% after the company’s CEO left for Starbucks.

Private Dealmaking

• Carlyle bought the kidney care business of Baxter for $3.8 billion

• Rural Healthcare Group bought the Stewards physicians group for $245 million

• PayZen, a healthcare financing tools provider, raised $32 million 

• Guidewheel, a factory ops software provider, raised $31 million

• FlexAI, an AI startup, raised $30 million

• Lamini, an enterprise AI platform, raised $25 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

_{BOOK OF THE DAY}

On The Edge

In the bestselling The Signal and the Noise, Nate Silver showed how forecasting would define the age of Big Data. Now, in this timely and riveting new book, Silver investigates “the River,” the community of like-minded people whose mastery of risk allows them to shape—and dominate—so much of modern life.

These professional risk-takers—poker players and hedge fund managers, crypto true believers and blue-chip art collectors—can teach us much about navigating the uncertainty of the twenty-first century. By immersing himself in the worlds of Doyle Brunson, Peter Thiel, Sam Bankman-Fried, Sam Altman, and many others, Silver offers insight into a range of issues that affect us all, from the frontiers of finance to the future of AI. 

Most of us don’t have traits commonly found in the River: high tolerance for risk, appreciation of uncertainty, affinity for numbers—paired with an instinctive distrust of conventional wisdom and a competitive drive so intense it can border on irrational.

For those in the River, complexity is baked in, and the work is how to navigate it. People in the River have increasing amounts of wealth and power in our society, and understanding their mindset—and the flaws in their thinking— is key to understanding what drives technology and the global economy today.

Taking us behind the scenes from casinos to venture capital firms, and from the FTX inner sanctum to meetings of the effective altruism movement, On the Edge is a deeply reported, all-access journey into a hidden world of power bro­kers and risk-takers.

“Engaging and entertaining… a glimpse of the economy of the future.”

_{DAILY VISUAL}

S&P 500 Firms Less Worried About a Recession

_{PRESENTED BY MOSAIC}

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_{DAILY ACUMEN}

Imagination

Imagination is the workshop of the mind, where every great achievement begins.

Einstein said, "Imagination is more important than knowledge."

How can you cultivate a more vibrant imagination?

Consider Walt Disney, who imagined a world of magic and made it reality.

Or Elon Musk, whose imagination is reshaping industries.

Feed your imagination.

Read widely.

Daydream.

Ask "what if?"

Remember, the man who has no imagination has no wings.

_{ENLIGHTENMENT}

Short Squeez Picks

• Tools for boosting executive function 

• Traveling has never been better if you’re rich, or worse if you’re poor

• How physical stamina can boost careers

• 3 neuroscience-backed strategies to become a better leader

• How to stop unhealthy competition at work

_{MEME-A-PALOOZA}

Memes of the Day