Good Morning! It looks like the intern is handling updates over at the Bureau of Labor Statistics - the BLS came out yesterday and admitted they overstated March 2024’s job growth by over 800k. Amazon will let you add an annual grocery delivery subscription option, and the Fed is gearing up to finally cut rates next month. Starbucks’ pumpkin spice latte is back earlier than ever, and meme stocks are surging again. Plus how to manage stressful zingers in your career, and how to use OneNote to maximize productivity.

Wall Street's newest hack? Mosaic, the tool that takes you from CIM to LBO in just 5 minutes (with zero errors). See it in action here.

_{SQUEEZ OF THE DAY}

Zombie Trade Is Back

The leveraged trades that crumbled during the 2008 financial crisis are making a comeback, now rebranded as "return stacking." 

This updated version of the “portable alpha” strategy is gaining traction in ETFs like the Return Stacked US Stocks & Managed Futures ETF (RSST).

Return stacking combines leverage with diversification, aiming to enhance returns by stacking uncorrelated assets. RSST, for instance, gives investors exposure to US equities while adding extra bets through trend-following strategies.

The idea is that with the right mix, leverage can boost returns rather than magnify risks. However, the strategy isn’t foolproof—leverage can still cut both ways, and costs are high, with expense ratios around 1%.

Since its launch, RSST has pulled in $200 million, contributing to a total of $600 million across return-stacking ETFs. While the strategy offers a way to potentially outpace a simple S&P 500 ETF, it relies heavily on historical correlations that may not persist.

Takeaway: For investors willing to take on the associated risks, return stacking offers a potential hedge against missing out on market gains, particularly when a simple S&P 500 ETF might not suffice. RSST is up 16% in 2024, matching the S&P 500 and outperforming the standard 60/40 portfolio by 5 percentage points. But the strategy is not without its challenges, as recent market volatility has shown.

_{PRESENTED BY MOSAIC}

What To Do When Your VP Needs An LBO (It’s Friday)

Don’t cancel your weekend plans!

Instead, try Mosaic, a #1 leading private equity tool that takes you from CIM to LBO in less than 5 minutes. 

“How’s that possible, is it even accurate?” Yup. Mosaic runs dividend recaps, M&A, cost savings, extended investment holds–all without any errors or faulty templates. 

Don’t take our word for it: Mosaic is trusted by funds like CVC, Investcorp, New Mountain, Warburg Pincus, and more.

Level up your modeling today.

_HEADLINES

Top Reads

• U.S. jobs growth was overestimated by 30% (CNN)

• Cramer says it might be time to start building a position in Sweetgreen (CNBC)

• Amazon adds an annual grocery delivery subscription option (Axios)

• Fed ready to cut, minutes show (Reuters)

• Starbucks pumpkin spice latte launching earlier than ever (Axios)

• Meme stocks are surging again (YF)

• Target CEO addresses 'price gouging' accusations in retail (CNBC)

• Five bodies recovered in wreckage of superyacht that sank off Sicily (CNBC)

• How younger consumers are reshaping the luxury market (YF)

• Startup using blockchain to prevent copyright theft by AI valued over $2B (CNBC)

_{CAPITAL PULSE}

Markets Rundown

S&P 500, Nasdaq resume climb as Fed minutes signal 'likely' September rate cut.

Movers & Shakers

• (+) Keysight ($KEYS) +14% after the electronic test maker raised guidance.

• (+) Target ($TGT) +11% after the retailer posted strong earnings thanks to price cuts that enticed customers.

• (–) Macy’s ($M) -13% after the retailer missed on sales; cut its forecast.

Private Dealmaking

• Walmart sold its stake in JD.com for $3.7 billion

• JT Group bought Vector Group for $2.4 billion

• LetsGetChecked bought Truepill for $525 million

• Hyatt Hotels bought Standard International for $335 million

• Story, a blockchain startup, raised $80 million

• AstroForge, an asteroid mining startup, raised $40 million

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

_{BOOK OF THE DAY}

Why Machines Learn

Machine learning systems are making life-altering decisions for us: approving mortgage loans, determining whether a tumour is cancerous, or deciding whether someone gets bail. They now influence developments and discoveries in chemistry, biology, and physics—the study of genomes, extra-solar planets, even the intricacies of quantum systems. And all this before large language models such as ChatGPT came on the scene.

We are living through a revolution in machine learning-powered AI that shows no signs of slowing down. This technology is based on relatively simple mathematical ideas, some of which go back centuries, including linear algebra and calculus, the stuff of seventeenth- and eighteenth-century mathematics.

It took the birth and advancement of computer science and the kindling of 1990s computer chips designed for video games to ignite the explosion of AI that we see today. In this enlightening book, Anil Ananthaswamy explains the fundamental math behind machine learning, while suggesting intriguing links between artifical and natural intelligence. Might the same math underpin them both?

As Ananthaswamy resonantly concludes, to make safe and effective use of artificial intelligence, we need to understand its profound capabilities and limitations, the clues to which lie in the math that makes machine learning possible.

“Illuminating overview of how machine learning works.”

_{DAILY VISUAL}

Negative Population Growth in China

_{PRESENTED BY PUCK}

Unveiling Wall Street's Black Box

What do CEOs and West Wing staffers have in common? They all read Puck, the platform for smart and engaging journalism. Puck’s Bill Cohan is a former investment banker turned all-star journalist.

Read his work—including his continued chronicle of the Shari Redstone Paramount deal—and everything else Puck covers, from Wall Street to Washington + Hollywood, for free. Check ’em out.

_{DAILY ACUMEN}

Adaptability

In a world of rapid change, adaptability is more valuable than ever.

It's not the strongest or the most intelligent who survive, but those most responsive to change.

How can you become more adaptable?

Think of companies like Netflix, which evolved from DVD rentals to streaming to content creation.

Or individuals like Madonna, constantly reinventing herself over decades.

Embrace change.

Learn continuously.

Be willing to pivot.

Remember, the only constant in life is change.

_{ENLIGHTENMENT}

Short Squeez Picks

• How to use OneNote to maximize productivity

• 3 steps to manage stressful zingers in your career

• 6 of the best supplements to reduce cortisol

• Habits of people who never reach their full potential in life

• How to make the most of your vacation when you can’t fully unplug

_{MEME-A-PALOOZA}

Memes of the Day