Good Morning! Trump pushed back on Anthropic call for AI restraint, saying the only control AI needs is a "STRONG AND SMART" president. Industry execs warn that boom-era PE funds will fail to deliver the returns they promised investors. And Airbnb is committing an initial $250 million to provide gap financing for housing projects.

Michael Dell's family office led a $7.7 billion deal to take insurance broker Baldwin private. Goldman hosted a bootcamp for ultra-rich Gen Z heirs called NextGS Investment Intensive with an average fortune of $90 million. And a rig at Citadel's Miami construction site fell, injuring four workers.

Plus: Space startups raised big money in a funding blitz as Europe aims to challenge US dominance, the US private credit default rate hit a record 6.3%, and a simple equation to predict how successful you will be.

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SQUEEZ OF THE DAY

AI Banking Boom Hits a Pothole

Jamie Dimon might have said that banking conditions were as “close to as good as it gets” back in July. And Wall Street has spent much of this year celebrating the return of dealmaking. But yesterday at the Barclays Global Financial Services Conference, Bank of America just gave investors a reason to wonder whether the party is already slowing down.

BofA CEO Brian Moynihan warned Monday that the bank expects third-quarter investment banking fees to fall more than 10% from a year ago, to somewhere between $1.6 billion and $1.8 billion, down from $2 billion. Investors were surprised by the news and BofA shares closed down ~5%.

After a strong Q2 when BofA's investment banking fees surged 50%, investors were hoping the AI buildout would keep the pipeline full, with IPOs and M&A as companies scramble to finance the infrastructure behind it. For the banks that spent the post-2021 drought waiting for animal spirits to return, it finally looked like the good times were back.

But now the question is whether BofA is just having a bad quarter, or if the firm is giving investors an early warning about everyone else.

Moynihan said investment banking activity across the broader market is down roughly 10%. Citi offered a somewhat better read later Monday, saying its investment banking revenue is tracking toward low-single-digit growth. And while that’s hardly a collapse, it’s also a long way from the blockbuster numbers investors got used to last quarter.

Citi CFO Gonzalo Luchetti said the final few weeks of the quarter could meaningfully change the numbers as deals heat up post-Labor Day, and Moynihan said BofA still has a robust deal pipeline. And investment banking revenue is notoriously lumpy, and a few large deals slipping from September into October can make one quarter look considerably worse without changing the underlying pipeline.

Takeaway: BofA’s warning doesn’t necessarily mean Wall Street’s dealmaking comeback is over, but a 5% stock drop shows how much investors had already priced in the good times continuing. And after a quarter in which investment banking fees jumped 50%, “down more than 10%” is a pretty brutal comedown. Now Goldman, JPMorgan and Morgan Stanley get to answer the question BofA just put on the table: was Q2 the beginning of another deal boom, or just a really good quarter?

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HEADLINES

Top Reads

• AI bosses risk clash with Wall Street and Trump over safety call (BB)

• Boom-era PE funds will fall short on promises, executives warn (FT)

• Airbnb sets up $250 million fund to invest in housing construction (WSJ)

• Dell's DFO-led consortium taking Baldwin Group private for enterprise value of $7.7 billion (WSJ)

• Inside Goldman's bootcamp for ultra-rich Gen Z heirs: how to read the news, buy luxury watches and invest in sports teams (NY Post)

• Crane collapses on cars in Miami financial center; four injured (BB)

• Space startups raise big money in funding blitz as Europe aims to challenge U.S. dominance (CNBC)

• US private credit default rate hits a record of 6.3%, Fitch says (BB)

• Anthropic tells investors it will be profitable for 2nd straight quarter (FT)

• Mark Walter's financial empire was fueled by retirement savers (WSJ)

• Baldwin Insurance going private for $7.7 billion (Axios)

• Trump says no need for more AI regulation, slams Anthropic CEO Dario Amodei (CNBC)

• 10-year US Treasury is closing in on 5% (CNBC)

• Microsoft sets limits for future AI models as industry throttles frontier development (CNBC)

CAPITAL PULSE

Markets Rundown

Market Update

• The S&P 500 fell 0.5% and the Nasdaq fell 0.6% as AI-safety concerns and Middle East uncertainty weighed on sentiment.

• WTI crude traded above $100 after planned Iran-Gulf diplomatic talks were postponed.

• The 10-year Treasury yield was little changed near 4.99%, and the U.S. dollar strengthened against developed-market currencies.

Economic Data

• S&P 500 earnings are expected to grow more than 30% in 2026, with U.S. small- and mid-cap earnings growth above 20%.

• Labor-market conditions, manufacturing activity, and consumer spending have all remained supportive.

• International value-style stocks are favored for diversification given lower tech exposure.

AI and Geopolitics

• Several AI lab CEOs, including Anthropic's Dario Amodei, called for slowing advanced-model development over safety concerns, while President Trump opposed slowing AI development.

• Saudi Arabia closed a key pipeline bypassing the Strait of Hormuz, pushing Brent and WTI crude both above $100.

• Despite a roughly 9% Q1 peak-to-trough decline, the S&P 500 is up nearly 12% year to date through Friday.

Movers & Shakers

• (+) Palo Alto Networks ($PANW) +13% after AI safety concerns sparked a rally in cybersecurity stocks.

• (+) Roblox ($RBLX) +13% because executives detailed plans to broaden the gaming platform and pursue new audiences.

• (–) Bank of America ($BAC) -5% after CEO Brian Moynihan said investment banking revenue will fall in Q3.

Prediction Markets

• With Week One under our belts, who is your Super Bowl favorite?

• Trade on real-world events with Kalshi. Use code OWS to get a $10 bonus when you trade $10.

Private Dealmaking

• Sequence Holdings and DFO Management agreed to acquire Baldwin Insurance Group for $7.7 billion

• Open Cosmos, a U.K. satellite maker, raised around $385 million

• Tabby, a Saudi BNPL company, raised $233 million

• Firehawk Aerospace, a maker of rocket motors, is in talks to raise up to $200 million

• BrainChild Bio, a developer of CAR T-cell therapies to treat pediatric brain tumors, raised $116 million

• Tandem Health, a Swedish medical scribe startup, raised $100 million

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BOOK OF THE DAY

Stop Making Stupid Investments

Description:
David Leiter offers a practical framework for avoiding the mistakes that can permanently damage an investor's wealth. Drawing on more than 30 years of experience across Wall Street, finance, and real estate, Leiter lays out seven rules focused on avoiding large losses, thinking independently, understanding how markets actually work, controlling emotions, and being skeptical of investment products that promise easy returns. He also addresses private equity and real estate deals, trading systems, crypto, and the importance of allowing compounding to work uninterrupted. The book's central message is that successful investing is often less about finding the next spectacular opportunity and more about developing the discipline to avoid bad ones.

Book Length: 256 pages
Release Date: July 14, 2026

Ideal For:
Individual investors, professionals, entrepreneurs, and anyone looking to build long-term wealth while avoiding hype, unnecessary risk, scams, emotional decision-making, and investments they don't fully understand.

Building wealth is often less about finding the perfect investment and more about avoiding the investments that can permanently set you back.

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DAILY ACUMEN

Expert Chimp

Starting in the mid-1980s, political scientist Philip Tetlock ran a study that would take twenty years to finish. He recruited 284 people who made their living forecasting political and economic events for a living, the kind routinely quoted in newspapers and booked on television, and tracked 82,361 of their predictions against what actually happened.

The average expert performed barely better than random chance, roughly on par with what Tetlock memorably described as a dart-throwing chimp. The most unsettling detail was not the mediocre average. It was that the experts who were most confident, and most frequently invited onto television, tended to be the least accurate of the entire group.

One distinction did matter. Thinkers who integrated many small perspectives and stayed comfortable with uncertainty outperformed thinkers who filtered everything through one big confident theory. Credentials and TV appearances told you almost nothing about accuracy. How someone actually thought told you a great deal.

ENLIGHTENMENT

Short Squeez Picks

• 2 nervous habits that mean you’re extremely wise

• Is it okay to use a little bit of cannabis?

• A simple equation to predict how successful you will be and why

• 6 reasons why you keep self-sabotaging 

• 3 qualities to consider to stay sane in your next job

MEME-A-PALOOZA

Memes of the Day

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