Hello there.

Happy Hump Day. We’re back at it again, somewhere between the desert of It’s So Over and the oasis of We’re So Back.

Up Next:

Sometimes we think of the economy being run by a wise wizard behind a curtain, but lately, I’ve been wondering if it’s more like a barrel of monkeys let loose in a cockpit. Hey, better them than me. Who can afford to fly these days? Let’s dive in. 👇

You know your credit score. You know your net worth. But you've never had a number for how good your portfolio actually is. AltIndex fixes that. Connect your brokerage and every position gets a live 0 to 100 grade, built from hiring, insider, Reddit, and web-traffic data. Rotten Tomatoes for your portfolio.

US business activity just hit its highest level since 2022, which feels weird to say out loud after two years of doomscrolling financial feeds. The S&P Global composite index (the market’s favorite report card) jumped to 56 in August. Anything over 50 means growth, so 56 is pretty solid territory.

The service sector is carrying most of the weight here. Restaurants, hotels, software companies, consulting firms- basically, stuff that doesn't involve building physical products but still brings in cash. Demand is up, companies are hiring again, and factory activity is picking up too. That last part is an especially welcome surprise because manufacturing has been kind of rough for a while.

Strong business activity usually means companies keep hiring, consumer spending stays healthy, and earnings reports look better. None of that guarantees anything about stock prices, but it does mean the economic foundation is steadier than a lot of people expected heading into fall.

Basically, this is all a welcome break from the doom and gloom. Sometimes a boring, steady climb is exactly what you want from the economy.

Wells Fargo and Citigroup are the two big banks that could actually buy a major regional bank right now, and five potential targets keep coming up in conversations. Under US banking rules, once you control more than 10% of all deposits nationwide, you're basically locked out of making big acquisitions. JPMorgan and Bank of America already crossed that line. Wells Fargo and Citi still have room.

The names getting mentioned: Fifth Third, Huntington, Citizens Financial, KeyCorp, and Regions Financial. And these are no small fries; we're talking institutions with $100 billion+ in assets.

Regulators have gotten way more relaxed about big mergers lately, which is a major shift from the last decade of "too big to fail" paranoia. Wells Fargo's CEO has openly said they'd consider a transformational deal if the opportunity made sense. Citi's playing it cooler, saying organic growth is the priority.

The catch is that regional banks are doing pretty well right now. Stock prices are up, earnings are solid, and nobody feels pressured to sell cheap. Still, analysts expect consolidation to reshape the industry by 2030, potentially shrinking the number of regional banks from 49 to around 30. If you hold shares in any of those five names, or in Wells Fargo or Citi, it’s worth keeping an eye on who starts making calls.

A lot can happen in a week!

Let’s take a quick look at who struck gold and who struck out since our last issue:

Tesla, Inc. (TSLA): +3.32%
Microsoft Corporation (MSFT): +2.06%
Apple Inc. (AAPL): +1.11%
Alphabet Inc. (GOOGL): +0.78%
Amazon.com, Inc. (AMZN): +0.62%

Broadcom Inc. (AVGO): -9.09%
Space Exploration Mfg. Company (SPCX): -3.80%
Taiwan Semiconductor (TSM): -3.49%
NVIDIA Corporation (NVDA): -3.04%
Meta Platforms, Inc. (META): -0.26%

That’s all for today. Write us and let us know your thoughts on the market, the newsletter, or the weather—we’d just love to hear from you.

Till next time,
— Brandon and Blake of Invested Inc.