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📈 Defense Startups Are Hot
Adobe crushes earnings, Gen-Z rewrites retirement, OpenAI eyes a $500B pivot, and why your “generational wealth” plan might be garbage.
Good Morning & Happy Friday!
From Gen-Z chasing FIRE to Wall Street chasing record highs, we’re breaking down what matters: Microsoft & OpenAI's new deal, Adobe’s big earnings beat, defense startups heating up in Europe, and why “generational wealth” might be the most misunderstood term in finance.
Grab your Iced Latte and let’s get into it. ☕️ 👇️
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Market News
📉 Futures slip with Fed rate cut seen as done deal
U.S. stock futures dipped slightly Friday as Wall Street paused after a record-breaking rally, with the Dow closing above 46,000 for the first time. Investors are bracing for next week’s Fed rate decision, betting on a quarter-point cut amid weakening job data and sticky inflation. Markets are pricing in three cuts by year-end, despite lingering concerns over Trump-era tariffs and economic headwinds.
👀 Two Big Banks Just Raised Their S&P 500 Targets
Wall Street bulls are charging ahead, with Deutsche Bank and Barclays both raising their S&P 500 targets, citing strong earnings, rate cut hopes, and the unstoppable AI boom. Deutsche now sees the index hitting 7,000 by year-end, while Barclays lifted its 2025 and 2026 targets, though with a bit more caution. Both banks expect Fed rate cuts to cushion the economy, even as labor risks and macro pressures loom.
🪖 Defense startups are booming as VCs race to rearm Europe
Since Russia’s 2022 invasion of Ukraine, private capital has surged into European defense startups, with investor interest hitting levels “unrecognisable” from just a few years ago, according to Dealroom's CEO. Venture capitalists are betting big on security and resilience tech, but challenges remain, especially around unclear exit strategies. The momentum, however, shows no signs of slowing.
🧠 Microsoft, OpenAI reach non-binding deal to allow OpenAI to restructure
Microsoft and OpenAI have signed a non-binding deal to redefine their partnership, clearing the path for OpenAI to restructure as a for-profit company and potentially go public. While details remain under wraps, the move would shift OpenAI away from its nonprofit roots as it seeks a $500B valuation and ramps up deals with Oracle and Google to meet massive AI demand. Microsoft, which has poured over $11B into OpenAI, wants continued access to its tech, even if it hits artificial general intelligence.
📣 Adobe Stock Jumps 4%
Adobe jumped 4% after delivering a double beat on earnings and revenue, posting $5.31 EPS on $5.99B, and lifting its full-year outlook slightly. While AI competitors like Canva and OpenAI loom, Adobe’s solid quarter reminded Wall Street it still has layers to work with, just don’t expect fireworks yet.
Invest & Strategies
🕶️ Gen-Z Chases FIRE with High Yields
Gen-Z investors are ditching traditional retirement paths for high-yield plays in pursuit of FIRE, not YOLO. Many are swapping 401(k)s for dividend portfolios and YieldMax ETFs, chasing passive income now, even if it means risking long-term erosion. The movement reflects deep skepticism of the work-then-retire model, but some are learning the hard way that 50% annual withdrawal rates don’t end well. It’s dividends and chill, until the math doesn’t work.
🤯 More ETFs Than Stocks, And Most Aren’t Helping You
With over 640 new ETFs launched this year alone, the fund industry is inventing complexity faster than investors can keep up. While a few may be worth a look, most are costly, opaque, and poorly designed, often relying on tactical or alternative strategies that rarely deliver. As fund closures and underperformance pile up, the advice is clear.
🌎️ How To Avoid First World Problems
Overcrowded lounges and sold-out resorts are sparking complaints, from the wealthy. But behind the frustration lies a deeper truth, consumerism promises joy but delivers dissatisfaction, as fleeting luxuries create endless cravings. Comparison is the real villain, and breaking the cycle means embracing passions that anchor you in the present,like lifting weights or tending a garden. True wealth is found in meaning, not more.
👴 Why “Generational Wealth” Is Getting Hijacked
The term “generational wealth” has become a buzzword weaponized by social media grifters selling quick fixes and bad financial products. A viral video pitching a trust-life insurance combo as a guaranteed wealth hack highlights how misleading and incomplete the advice can be. Real generational wealth isn’t built on gimmicks, it’s built on education, planning, and intention.
Best of Twitter
If you bought the S&P at 23 x at any time in history, in every single case your annualised return over the next 10 years is between +2% and -2%.
The S&P is currently trading at 23 x.
— Godzilla Trader 🦖 (@David_Tracey)
6:43 AM • Aug 25, 2025
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