Italian outlet ANSA reported that a 37-year-old man, who has not been named, used a blunt object to make five engravings on a wall of the House of Vestals. The engravings included his initials, his daughters' initials, and the date.
Photos of the damage shared online showed the initials "JW LMW MW" etched into the ancient structure alongside "07/08/24" and "MYLAW."
Staff alerted local authorities, who intervened and reported the incident to a court in Torre Annuziata as "damage to artistic heritage."
The man apologized and said he made the carvings to commemorate his family's trip. He could face a hefty fine and even prison time.
Italian officials approved larger penalties for people who damaged cultural sites and monuments this January to combat "eco-vandals," according to Reuters. Eco-vandals are environmental activists who target well-known artwork and monuments in public to draw attention to their cause.
People can now be fined between 20,000 euros and 60,000 euros. They also face prison terms between six months to five years.
Representatives for the Archaeological Park of Pompeii did not respond to Business Insider's request for comment.
It's not the first time Pompeii has weathered bad behavior from tourists. A man from Kazakhstan defaced one of Pompeii's houses this June, and an Australian tourist apologized in 2022 after riding a moped around Pompeii.
Such behavior has spread across Italy since the travel industry rebounded after the COVID-19 pandemic.
"These tourists are also vandals, because they have no respect for our cultural heritage, which belongs not just to Italy, but to the whole world. We've introduced a bill with a very simple concept: You break it, you pay for it," she said.
Joe Rogan on Friday walked back his apparent endorsement of RFK Jr. for president after receiving sharp criticism from Donald Trump and his allies.
Getty Images
Joe Rogan, speaking Thursday on his podcast, said he preferred RFK Jr. for president.
By Friday, facing intense criticism from Donald Trump and his allies, the podcaster walked it back.
"I'm not the guy to get political information from," Rogan said in a social media post.
Joe Rogan wants you to know that calling Robert Kennedy Jr. "the only" presidential candidate who "makes sense" wasn't an endorsement.
It sounded like Rogan was backing the long shot independent presidential candidate when, during a Thursday episode of his podcast "The Joe Rogan Experience," he called Kennedy Jr. a "legitimate" guy and described himself as "a fan."
When discussing a hypothetical debate between former President Donald Trump and Vice President Kamala Harris with his guest, Bob Gymlan, Rogan said politicians "gaslight you, they manipulate you, they promote narratives," adding: "The only one who's not doing that is Robert F Kennedy Jr."
Kennedy Jr. embraced Rogan's praise in a post on X, writing: "From one 'legitimate' guy to another, thank you @JoeRogan for always putting substance first."
But by Friday, Rogan walked it back after facing a meltdown from MAGA stans and direct attacks from Donald Trump himself.
"For the record, this isn't an endorsement," Rogan said in a post on X over a clip of him praising Kennedy Jr. "This is me saying that I like RFKjr as a person, and I really appreciate the way he discusses things with civility and intelligence. I think we could use more of that in this world."
Rogan added: "I also think Trump raising his fist and saying 'fight!' after getting shot is one of the most American fucking things of all time. I'm not the guy to get political information from."
But his post was too little too late to appease Trump and his allies, who continued to attack the podcaster online.
"It will be interesting to see how loudly Joe Rogan gets BOOED the next time he enters the UFC Ring??? MAGA2024," Trump wrote in a post on Truth Social shortly after Rogan publicly hedged his support of Kennedy.
On Rogan's post, Trump allies continued to insult Rogan's intelligence and trustworthiness. Some suggested the only way Rogan could redeem himself would be to host Trump for an interview on his massively popular podcast.
"It sounds like you just realized that most of your listeners are Trump supporters," one user wrote in response to Rogan walking back his comments about Kennedy Jr. "Maybe you should support them as much as they support you."
Rogan and Trump's shared demographics
In a 2022 appearance on Lex Fridman's podcast, Rogan said he has repeatedly turned down Trump's requests to be on his show and indicated he is "not a Trump supporter in any way, shape or form," adding, "I'm not interested in helping him."
According to a YouGov poll, Rogan's audience is 81% male, with more than 56% of listeners under 35 — a key demographic for Trump in the coming election. While Rogan has sometimes been painted as a conservative figure for his controversial statements about COVID-19 and his support of Florida Gov. Ron DeSantis, he hasn't officially endorsed a candidate in the 2024 presidential election.
Mike Madrid, a Republican political consultant, told The New York Times that Rogan's support of Kennedy Jr "takes straight from the Trump base." While Kennedy Jr. has embraced his campaign as a "spoiler" for both Biden and Trump, political consultant James Carville has predicted his candidacy would harm Trump's campaign more than the Democratic ticket.
In July, it briefly appeared that Kennedy Jr. would drop out of the race and endorse Trump himself. However, a potential deal between the two — in which Kennedy Jr. would receive a cabinet position in exchange for his endorsement — fell through.
Attacks from Trump allies have recently caused other conservative figures to backtrack from criticizing the former president.
Kyle Rittenhouse, who became a darling among conservatives after he was acquitted of killing two men during civil unrest in Kenosha, Wisconsin, in 2021, last week said Trump "has bad advisers, making him bad on the Second Amendment," BBC reported.
"If you cannot be completely un-compromisable on the Second Amendment, I will not vote for you," BBC reported Rittenhouse said on X, the social platform formerly Twitter, adding: "I support my decision and I have no take-backs."
Within 12 hours, after a barrage of pointed attacks from Trump supporters, BBC reported Rittenhouse reversed course, writing in a separate post that he'd had "a series of productive conversations with members of the Trump's team and I am confident he will be the strong ally gun owners need to defend our Second Amendment rights."
Representatives for Kennedy, Trump, and Rogan did not immediately respond to requests for comment from Business Insider.
JPMorgan is warning incoming bankers about taking "future-dated" jobs with private-equity firms.
Junior bankers who disclose jobs that create conflicts for the firm could lose their employment.
Here's what the crackdown could mean for junior bankers, the PE recruiting cycle, and more.
JPMorgan Chase is shining a spotlight on an unusual recruiting practice that seeks to poach its youngest talent for jobs that won't start for two years — forcing it and other investment banks to act as a training ground for rival employers.
In communications to incoming investment-banking analysts, America's biggest bank by assets addressed the notorious ritual of buy-side recruiting. In a practice unique to Wall Street, private-equity and other investment firms reach out to first-year investment-banking analysts to woo them with offers forlucrative jobs that start at a future date, usually in two years. While it's become a hallmark of the junior banker experience, it can also prove a nuisance for both the banks and their newest hires —disrupting their jobs and even their job training.
Now, JPMorgan is imposing new rules for those employees who choose to participate.
"We understand that the practice of interviewing and accepting a role at another firm has accelerated and is happening even earlier in your career with us," JPMorgan wrote to new bankers in a communication shared by the Litquidity account on Instagram and others on social media this week. (A person familiar with the message confirmed its authenticity to BI.)
"This puts undue pressure on you and puts us in a difficult position, too," the bank continued, adding: "We cannot take on client business where there could be a conflict of interest. If you accept a future-dated offer of employment, you have an obligation to disclose that acceptance to your manager immediately. This could impact the projects that you are staffed on so that the firm can properly manage any potential conflicts."
Finally, the firm added: Accepting a job with a PE firm while holding onto their banking jobs "could result in us reconsidering the status of your employment."
JPMorgan's message has become the talk of Wall Street as everyone from recruiters to junior bankers tries to figure out what it might mean for them. According to one leading buy-side recruiter, the bank's ominous line about potentially firing bankers who have taken future-dated gigs risks plunging the private-equity recruiting apparatus into chaos. It could also increase the employment allure of the boutique banks, a former junior banker suggested.
Here are 4 ways JPMorgan's missive could impact Wall Street, from private-equity recruiting to junior bankers who fear of losing their jobs and more.
Bankers with hush-hush PE jobs are in a tough spot
The bank's message about mitigating and preventing conflicts of interest seems sensible enough. It's simply asking workers with future-dated job offers to do the ethical thing and disclose them to avoid actual or potential conflicts of interest. But JPMorgan's warning that coming forward could get one fired leaves junior bankers in a damned-if-you-do-damned-if-you-don't scenario.
"It puts you in a really bad position if you're a junior banker who has accepted a buyside offer," said Anthony Keizner, co-founder of Wall Street search firm Odyssey Search Partners, adding, "If you're a young banker who's just done oncycle, do you just try and not tell the bank?"
Bankers who get fired stand to lose their private-equity job offers, too. Those offers are usually given with the expectation of having two years of training and deal experience at an investment bank.
"There's a reason that PE jobs are post-dated, because of the firms' capacity and pipeline planning and needs — but it's also because they want you to be trained and have deal experience before you come," Keizner said.
The suggestion that young bankers could be fired for disclosing their future-starting private equity jobs could encourage the opposite of transparency, he said.
"It's more likely to bury these issues or make someone less forthcoming," said Keizner. "This seems to, I think, cause more confusion and concern than clarifying or allaying any fears."
This could be the 'nail in the coffin' to on-cycle recruiting
The first wave of private-equity recruiting is known as "oncycle," and it has become increasingly chaotic and stressful for junior bankers as firms start the process earlier each year. The oncycle-recruiting process has been kicking off so early (it took place in June this year) that buy-side firms are often hiring candidates with zero deal experience. In some cases,it's turning off newbie bankers, as BI has previously reported.
"There's been pressure on oncycle, and I think this will further weaken its importance because of the effect that it will have on worried bankers who have enough to do in their days without having to worry about potential legal implications and employment curtailment by their banks," said Keizner.
"I think probably the biggest impact is going to be on current bankers and prospective bankers," he said. "It's turning up the issues that relate to this on-cycle process, and frankly, this email is potentially another nail in the coffin of oncycle."
"I think it will make candidates even more reluctant to interview for roles in such a long-dated fashion and make them more likely to say, 'I don't know where this is going, but this sounds like a legal and employment mess so I'm going to keep my head down, do my first year, and then I'll look for opportunities for a sooner start or an immediate start.'"
Other banks are likely to follow JPMorgan's lead if they haven't already
As exemplified by virtually collectivereturn-to-office mandatesfollowing the COVID-19 pandemic, Wall Street tends to move in packs when it comes to employee policies. So the impact of JPMorgan's missive will also depend on whether others follow suit.
"I haven't seen other banks come forward with something that is so clear," Keizner said. "It'll be interesting to see if other banks follow suit or if this really is just a JPMorgan thing."
A spokesperson forGoldman Sachstold BI that the firm has had a similar policy to JPMorgan's in place for more than a decade, requiring analysts to disclose future offers of employment. A spokesperson for Citigroup said the bank does not have a policy similar to JPMorgan's in place. Spokespersons for other banks, including Morgan Stanley, Bank of America, Deutsche Bank, and Barclays, either did not respond to or declined requests for comment on their respective policies.
Boutique banks could become even more attractive
Boutique banks have become an increasinglyattractive place for junior talent— and JPMorgan's potential new policy could give them yet another leg up.
One former junior investment banker who started working in private equity this year said smaller boutique banks tend to be more accepting of their young talent participating in buy-side recruiting.
"The bulge bracketsare just so backwards with this stuff," this person said. "I can get the compliance and conflicts aspect of it, but it's just not that big of a deal."
They added that at the boutique they worked at in New York, senior staff were actively supportive when analysts would go for private equity interviews and land offers.
"They actively want their analysts to go to the client side because analysts are basically the clients of tomorrow," they said.
They added: "I'd put this in the bucket with backwards thinking that the seniors at these firms have. It's all power and ego."
Lucia Polverino landed a coveted role as a venture capital analyst in London in her early 20s.
She said her experiences in PR and product management were instrumental in this transition.
Polverino shared tips for Gen Zs to break into VC, using their existing skillsets.
This as-told-to essay is based on a transcribed conversation with Lucia Polverino, a 24-year-old analyst at a venture capital firm based in London. Business Insider has verified her employment. The following has been edited for length and clarity.
I was always passionate about getting into the workplace as quickly as possible after university. After graduating, I dabbled in a career in public relations and product management before landing my role as a venture capital analyst — but my varied experiences helped me get to this point.
My first office job was a placement in my first year at university, where I studied for a degree in business administration. I worked at Piper Sandler, an American investment bank. I spent six months in their healthcare M&A division. It was a really good first formative experience, but it was challenging.
My next placement was in my third year of university. I worked at KKR in their private credit team. But because this happened during the COVID-19 pandemic, I had to be proactive as we weren't in the office, and try to get my colleagues to give me more work to do. It was a really valuable experience.
After graduating, I was adamant I wanted to try something less corporate. My first job out of university was at a tech PR firm. I've always been interested in entrepreneurship, media, and communications. It was a 15-person team when I joined, which made for a startup-like environment — very entrepreneurial and dynamic. I worked with eight clients across AI, cyber security, e-commerce, and business-to-business sectors. That was an inflection point because it diverted my career toward the tech world.
I loved working with tech companies and startups, so after nine months, I decided to go in-house and work at a tech company. As a recent graduate, I was still eligible for roles targeted toward recent university graduates which provide a structured career path into a particular sector. I loved the sound of product management. You can work with a bunch of different teams, such as engineering, marketing, and UX; this was similar to the way I worked in PR with different clients. I was lucky enough to secure a grad job in the product team at ICIS, which is a data team within LexisNexis, a software company.
My job in product management was instrumental in leading me to venture capital. I understood the key levers in a tech company that influence its growth. I've always liked wearing different hats, and these threads led me to join Playfair, a generalist VC fund.
I was so surprised at how relevant my PR experience was
I was so surprised at how relevant my PR experience was because so much of VC is investor relations. It's really important to form friendships with investors, not just transactional relationships. Equally, because I was working with tech companies in my PR role, it was easy to verbalize and justify why I loved tech companies and working with startups in my interview. It's really important for young people in interviews to bring in their past experiences and talk about how it will help them be good candidates.
For young people who want to apply to VC, it's really important to figure out the kind of fund you want to apply for. If your background is generalist and diverse, that kind of VC fund would likely suit you. But if you started your career with a technical background, you'd perhaps be suited to a deep tech fund. You should understand where you will add the most value.
Being a pandemic graduate also made me less worried about finding a linear career path and sticking to it for five years. During the pandemic, I thought, who knows what will happen in six months? Nothing was certain — it seemed like the pandemic would never end. This impacted my mindset, and I was more willing to take risks and figure out what I actually liked. I think it's also more of a Gen Z trend because we are more likely to job-hop than previous generations.
You don't need a background in investment banking to get into VC anymore
It may have been true in the past that you need an investment banking background to get into VC, but that's not the case anymore. I've met more people that don't come from banking than do. In my case, at a pre-seed fund, making a financial model from scratch would be less useful a skill to have.
VC is such a broad industry — and your experience will be shaped by what stage your fund invests in. The hiring managers usually like young people who have had startup experience, such as being an operator. I've also met so many people who come from software engineering and technical backgrounds and work at deep tech funds. I've also met a lot of people coming from NGO and charity backgrounds. This ultimately speaks to the sector you may want to specialize in once you get into VC.
You could also show you have an entrepreneurial mindset to some degree. My hiring managers loved that I had a fashion blog when I was at university and that I would reach out to brands to partner with for my videos. It's really important to show that you love entrepreneurship and working with founders.
Try to leverage recruiters if you can. At Playfair, we have a very transparent hiring process, and the fund markets the position as much as possible — but that's not the same for all VC funds. I found my job through a recruiter called JumpStart, and it's a very helpful avenue for younger grads.
Michael McCaman (right) and Trey Fischer, two of four cofounders of Orion Therapeutics.
Courtesy of Michael McCaman
Michael McCaman cofounded a small biotech business when he was 68.
Many baby boomers like him are starting businesses late in life for things like more flexibility.
He's not on the payroll but chooses to work because he believes in the startup's mission.
For nearly a decade, Michael McCaman had an idea for a company — he just needed the right opportunity.
Two years ago, when he was 68, that opportunity arose: McCaman cofounded Orion Therapeutics, a small company developing new ways for RNA medicine to reach specific areas of the human body.
McCaman is among the older Americans who are rethinking retirement and starting businesses instead. Among people 55 and older who started a business in 2023, 44% said they wanted more flexibility in their work schedule, and 41% said they believed they had a business opportunity, according to data shared with Business Insider by Gusto, a payroll services company for small businesses.
Gusto surveyed 1,345 new business owners of all ages between late January and early March using its payroll platform.
McCaman, now 70, is the vice president and chief strategy officer at Orion Therapeutics. McCaman said Orion's biotech field is risky yet meaningful and received particular interest after the development of the COVID-19 vaccines.
He works remotely outside Frederick, Maryland, while the rest of his team is based in Knoxville, Tennessee. McCaman is passionate about staying engaged with his interests and said remote work has enabled him to extend his career.
"Call it semi-retired if you want," McCaman said. "It's actually a fun time to sit back and go, 'Okay, what can I do? What is still fun to do?'"
Starting a business at 68 and finding purpose in 'semi-retirement'
McCaman studied chemistry at the University of California San Diego before earning his Ph.D. in biochemistry from the University of California, Davis. He enjoyed a decadeslong career working in biotech in California.
Yet, in 2011, McCaman was looking for a new job and said he needed a change. McCaman and his wife packed up their things and drove across the country, with McCaman chasing potential job offers.
That year, he landed a position at Lonza, a manufacturing company in Maryland, where he worked as head of cell development. After four years, he switched jobs again. From 2015 until 2020, McCaman was vice president of process development at Intellia Therapeutics, a biotech company.
He said his time at Intellia reinvigorated his passion for scientific research, and in March 2020, McCaman quit his job and began consulting.
"As the consulting picked up, it was like, 'Oh, the world is still out there, and I can be a part of it,'" he said.
In 2021, McCaman met Trey Fischer, then a recent Ph.D. graduate at the University of Tennessee. McCaman and Fischer launched Orion with Deidra Mountain, a University of Tennessee professor, and Jennifer Zachry, a graduate student.
McCaman put up the first $10,000 investment for Orion and, in July, the company received $300,000 from the University of Tennessee Research Foundation and Launch Tennessee, a nonprofit that supports tech startups in the state. The $300,000 is part of a $5 million fund to fuel startups that help bring research from the University of Tennessee to the market.
However, McCaman is not on the payroll. He said he earns enough from his consulting work and prefers to keep Orion's budget lean.
Orion is his passion project, and he said he hopes the company takes off so colleagues like Fischer can develop it into a full-time career.
"I think being part of a movement — it's not a political movement, it's a technology movement — but being an enthusiast and being a participant, there's just an adrenaline rush," he said.
Working into his 70s makes him feel active
McCaman said the experience of working in his 70s helps him feel mentally engaged. Additionally, working at Orion gives him an opportunity to mentor and work with a younger generation.
Working remotely also gives him work-life balance, something he feels passionate about after recent health crises. In 2022, McCaman was hit by a motorcyclist while he was riding a John Deere lawnmower. McCaman broke both of his legs and said he needed a wheelchair for months. While recovering, he was diagnosed with prostate cancer, which has since been treated, and in February, he had a stroke.
Working at Orion also lets McCaman set his own schedule so he can build in time for family, like his grandchildren.
McCaman said he doesn't have a retirement date in sight. He said it's hard to stop when he's passionate about what he does.
"I can't run the mile the way I used to, so I'll walk that mile," he said. "But I'll still do it, and I'll still go see things."
Are you a baby boomer who founded a small business? This reporter wants to hear your story. Please reach out atjtowfighi@businessinsider.com
Cindy Ord/Getty Images for Yahoo; iStock; Rebecca Zisser/BI
Wall Street's fear gauge has reversed course after a historic surge earlier this week.
The VIX hit its third-highest level ever on Monday due to a violent unwind of the yen carry trade.
The degree of the VIX's reversion since then shows the worst of the scare is over, says Fundstrat's Tom Lee.
The historic surge and subsequent decline of Wall Street's fear gauge suggests that the worst of the stock market's "growth scare" is over.
That's according to Fundstrat's Tom Lee, who said in a Wednesday note that the CBOE Volatility Index, better known as the VIX, is behaving like a bottom in the stock market is in.
The only time the VIX hit a higher level was at its 89.53 peak reached during the Great Financial Crisis in October 2008 and its 85.47 peak hit during the COVID-19 pandemic in March 2020.
But since hitting its third-highest level ever on Monday, the VIX has sharply declined, falling from 65.73 to 27.71 on Tuesday, representing a peak-to-trough decline of 58%. Still, it remains markedly above where it was trading prior to the market sell-off.
"VIX falling from 66 to 27 is a positive sign and further sign this is a 'growth scare' with the worst likely behind us," Lee said, adding that the normalizing VIX affirms that the stock market plunge over the past week is not a systematic crisis.
Markets Insider
On a closing basis, the VIX closed down 28.2%, representing its second-sharpest daily decline on record, only being eclipsed by the 29.6% decline seen on May 10, 2010, which was the trading day after a flash crash sent the Dow Jones Industrial Average plunging about 9% in a matter of minutes.
Carson Group chief market strategist Ryan Detrick told Business Insider on Wednesday that when the VIX experiences such swift declines, the stock market tends to see some sizable gains going forward.
"The VIX closed down more than 10 points yesterday, which is very rare. This last happened after the Flash Crash in May '10, the US debt downgrade in August '11 and March 2020. All three of those times were quite bullish times for investors and a year later the S&P 500 was higher each time and up 37% on average," Detrick said.
Fundstrat's new note from Wednesday referenced commentary from last Friday suggesting stocks could bottom this week. At that point the VIX was up 65% over the course of three days. Note that it spiked another 65% on Monday as the S&P 500 saw its worst day in two years.
The firm's finding showed that since the VIX's inception in 1990, there have been nine times when the VIX saw a three-day surge of more than 65% and closed above the 25 level.
In nearly half of those instances, stocks found their bottom within a few short days and the S&P 500 delivered a three-month median return of 7% over the next three months with a 100% win rate.
"Whenever the VIX surges like this, half the time you're at the end of a decline and you bottom within two days, so I think the rally that started today kind of falls within those parameters," Lee said in a video update to clients on Tuesday.
Since the VIX peaked on Monday, the S&P 500 has rebounded 4% while the Nasdaq 100 is up about 5%.
Looking ahead, lower interest rates have long been viewed as a positive catalyst for stocks. As of right now, investors expect the Fed to cut rates by 100 basis points between now and the end of the year, according to the CME FedWatch Tool.
"There is going to be a real cost of money decline," Lee said, which should "benefit tremendously" for consumers taking out home loans, auto loans, and other types of lending vehicles like credit cards and business loans.
"Bottom line, markets are certainly showing strong signs of gaining their footing. And we also view this panic as ultimately being a growth scare," Lee said.
Stocks tumbled after weak economic data, sending ripples across the global economy.
But BofA's Chief US Economist Michael Gapen says the market is overblowing recession risks.
Gapen also says the economy is "not even close" to needing an emergency Fed rate cut.
The stock market is going through an upheaval, and Wall Street is buzzing about the possibility of a recession.
The S&P 500 closed 3% lower on Monday while the Dow dropped 2.6% , marking the third consecutive trading day of stock market losses. The VIX, Wall Street's fear gauge, briefly breached 50 on Monday morning, a level not hit since the beginning of the COVID-19 pandemic in March 2020. The poor jobs data that is partially fueling the market chaos is prompting some economists to call for an emergency rate cut.
But Bank of America has some reassuring news for anxious investors: we're still on track for a soft landing.
A recession is "highly unlikely," according to Michael Gapen, the bank's chief US economist. Gapen also believes the Fed is "not even close" to an emergency rate cut. In a recent note, he shared three reasons he believes the market is overreacting to the latest economic data.
Hurricane Beryl blew the jobs report out of proportion
There's an unlikely culprit that's to blame for last week's listless jobs report: Hurricane Beryl.
Although last Friday's job report stated that "Hurricane Beryl had no discernible effect" on the collection of unemployment numbers, Bank of America believes that the Category 5 Atlantic hurricane that swept through the Gulf Coast of the US in July certainly had an impact.
According to the jobs report, 436,000 people were employed but unable to work because of bad weather in July. That's more than seven times the June number of 59,000. And compared to the historic July average of 33,000 from 2000 to 2019, this year's July data certainly seems like an outlier.
Bank of America
How does crazy weather affect the jobs report? Three million Texas households and businesses lost power when the hurricane made landfall. A disruption of this scale prevents employees from going to work, recording hours, and showing up on payroll. Bad weather can also decrease the number of hours worked and increase the number of temporary layoffs. Gapen believes that investors should take this one-time natural disaster into account for some much-needed context when approaching last week's jobs report.
The Sahm Rule is Sahm-times wrong
The triggering of the Sahm Rule recession indicator was another factor that pushed markets to panic. The Sahm Rule states that an economy has entered a recession when the three-month moving average of the US unemployment rate is 0.5% or more above its lowest point during the prior 12 months. Last week, this indicator flashed positive as the moving average rose to 0.53% above the one-year trough. Investors are especially concerned because the Sahm Rule has had a perfect track record of identifying recessions going back to at least the 1960s.
In Gapen's opinion, what has worked to predict recession in the past isn't likely to work in the present, given the unique trajectory of the US economy post-Covid. Historically, increasing job layoffs and unemployment have snowballed into an economic downturn.
"The US does not have recessions without layoffs picking up sharply," Gapen wrote. And according to the data, layoffs are still subdued.
Bank of America
Even Claudia Sahm, the rule's creator, says that the Sahm Rule might not be the most applicable to the current situation. She points out that the rise in the unemployment rate over the last year isn't due to job layoffs but rather labor supply boosted by immigration, and Gapen agrees. In fact, labor force growth might actually be underestimated, considering the difficulty in estimating immigration, according to Bank of America.
The ISM manufacturing index was unsatisfactory — but not really relevant
Gapen also wants investors to know that a lower ISM manufacturing index shouldn't necessarily spark bearish sentiment. Last week, the index, which measures the level of economic activity in the US manufacturing sector on a monthly basis, dropped to 46.8 from 48.5.
Wall Street is sensitive to manufacturing output because industrials, durable goods, and other related areas are highly cyclical and correlated to the booms and busts of a business cycle. However, Gapen doesn't believe that the manufacturing industry is the most accurate indicator of recession risk in a post-pandemic economy. The economic rebound of the last few years has been largely driven by increased services output, not manufacturing. US manufacturing has been on a steady decline ever since the 1950s, falling from 25% of GDP to a meager sub-10% proportion by 2024. Given that manufacturing plays such a small role in the US economy, Gapen finds it highly improbable that a decline in the sector could have the ability to spark a recession.
Additionally, Gapen points out that the latest ISM manufacturing index is solidly in line with recent performance. From January 2023 to June 2024, the average reading on the ISM manufacturing index was 47.7, only slightly above the current reading.
Bank of America
Be on the lookout for rate cuts, not recession
Gapen believes that a recession is highly unlikely in the current scenario. If anything, the last few days will solidify the occurrence of a rate cut in September. Bank of America forecasts a 25 basis point rate cut starting this fall and continuing quarterly until mid-2026. The bank believes that rates will bottom out around 3.25-3.5%.
Although some economists are speculating that the Fed will enact an emergency rate cut before its September meeting, Gapen is extremely doubtful this will happen.
"Our point is simply to say that history suggests the bar for intermeeting cuts is extremely high and that conditions on the ground today do not warrant such an action," Gapen wrote in a separate August 6 note. In recent history, the Fed has only resorted to such drastic measures in reaction to events such as the COVID-19 pandemic, the global financial crisis, and 9/11.
Ultimately, Gapen believes that the market meltdown is a dramatic overreaction to recent economic data.
"The economy is cooling but remains resilient enough to stay in expansion," Gapen affirmed.
Griswold provides in-home care services to clients across the US.
Griswold
Griswold uses AI to reduce turnover rates and improve caregiver experience.
The platform rewards employees for completing tasks and can predict when a caregiver might quit.
This article is part of "CXO AI Playbook" — straight talk from business leaders on how they're testing and using AI.
Griswold is a home-care company that assigns caregivers to older people to help with daily living in their homes.
Founded in 1982 and headquartered outside Philadelphia, Griswold operates eight locations and has about 150 franchises in more than 30 states.
Situation analysis: What problem was the company trying to solve?
Michael Slupecki, the CEO of Griswold, said turnover rates in the home-care industry have been increasing nationwide, especially in the wake of COVID-19.
Slupecki said that in the past few years, Griswold's turnover rate had reached about 80% annually in the locations it operates in Pennsylvania. Finding and replacing caregivers is costly for the company and affects the care clients receive.
"There's a high correlation between consistency in the caregiver workforce and client satisfaction, which goes to your reputation, which goes to the strength of your business in attracting more clients and more caregivers," Slupecki said.
Griswold wanted to improve caregiver experience, reduce turnover, and predict which helpers were most likely to quit, he said.
Last year, the organization started using TeamEngage, a system created by WellSky, a health and community-care tech company, and powered by Ava, an artificial-intelligence platform.
The tool incentivizes and rewards caregivers for completing activities and reaching goals.
Key staff and partners
Katherine Schiavino, the chief financial officer at Griswold, and the company's human-resources team determined which metrics would be used to recognize caregivers, such as being on time for work, taking extra shifts, and referring new caregivers. They also decided on a point system for rewards, she said.
Katherine Schiavino is the chief financial officer at Griswold.
Courtesy of Griswold
AI in action
The AI tool automatically assigns points to caregivers when they complete activities or achieve goals, Schiavino said. For example, if they clock in on time or accept a shift to fill in for someone, the system gives them points. They also receive points for their birthdays and work anniversaries.
The points can be redeemed for gift cards, such as for Starbucks, or a preloaded Mastercard, she said. When caregivers receive a reward, it's announced on a community platform in the system, which others can see. And their colleagues can congratulate them there.
Employee recognition used to be a manual process, but office staff sometimes lacked the capacity to consistently celebrate caregivers, Slupecki said. The AI tool automates honoring these milestones and minimizes the administrative workload, ensuring that caregivers' work isn't overlooked.
Michael Slupecki is the CEO of Griswold.
Courtesy of Griswold
"It helps reach out to all of our caregivers and recognize them in a way that they should be recognized," he said.
The AI platform also tracks and analyzes factors that might contribute to caregivers quitting so the company can find solutions to retain them, Slupecki said. For instance, it identifies those who haven't had a rate increase recently or who've been assigned a client who lives a long driving distance away.
Did it work?
Griswold has reduced turnover by about 20% in the locations it owns since it started using TeamEngage in October, Slupecki said.
Schiavino attributed that to the reward system and to how the tool helps identify caregivers who need extra encouragement. For example, someone might be arriving at a client's home on time but not clocking in right away — so the system notifies the company and caregiver that they're late. The system will then automatically incentivize the caregiver to change their behavior.
Receiving recognition on the community platform has improved morale and fostered a sense of community, which is important since caregivers work in client homes and don't typically gather together, Schiavino said.
The AI tool has also helped Griswold increase employee referrals since caregivers earn points when they recommend others for the job.
What's next?
Griswold is using TeamEngage across the locations it runs in Pennsylvania — which employ about 400 caregivers — and in a few franchises, Slupecki said.
The company said it planned to discuss the tool's benefits at its franchise conference in August to encourage more franchises to improve their turnover, he said.
"It's worked really well for our caregivers," Schiavino said. "They've really connected with this."
Behind the scenes, 5G infrastructure is powering live broadcasts worldwide and the moments spectators and athletes capture and post on social media.
High-speed fiber-optic networks, 5G cellular towers, and advanced WiFi systems have been deployed at 120 sites across Paris to handle the internet demands of global broadcasters, millions of visitors, and the Games' intricate operations.
Events as expansive and popular as the Olympics demand robust and high-capacity networks to broadcast live events to viewers worldwide and support the digital needs of athletes, officials, and spectators.
Rolf Werner, the head of mobile networks in Europe at Nokia, said that with careful planning, these types of 5G connectivity investments can last for years.
"By investing in 5G infrastructure, cities can create a robust digital foundation that benefits local communities long after the event has concluded," Werner told Business Insider. That includes strengthening local businesses' internet connectivity, he said.
Sandeep Raithatha, the head of strategy, innovation, and 5G IoT products at Virgin Media O2, said private 5G networks that were initially deployed in Olympic venues for broadcast-service use could be repurposed for live events.
"Once installed, these networks can continue to be utilized for future events as well, ensuring a lasting benefit beyond the initial investment," Raithatha told BI.
That's been the case for Olympic host cities like London and Tokyo, where 5G installations continue to power connectivity for residents and visitors.
London 2012: Stratford Halo
Virgin Media O2 upgraded London's connectivity infrastructure when the city hosted the Games in 2012.
"This included installing additional masts around major airports to ensure tourists could get online immediately and deploying small cells around the venues so that fans could consistently connect in densely populated areas, whether to send selfies, stream videos, or share their location for safety reasons," Raithatha said.
One key build was the Stratford Halo, which acted as the TV broadcasting tower for the Games. After the event, it became a hub for YouTubers and other content creators because of its gigabit-speed internet connectivity. It was considered revolutionary because the average internet speed in the UK at the time was slower.
The planning efforts allowed the Stratford Halo to be repurposed into a residential building two years after the closing ceremony.
In the lead-up to the Games, connectivity infrastructure was embedded in the London Underground light-rail network and the Westfield shopping center in Stratford. Communities continue to rely on this technology for internet access.
Tokyo 2020: Tokyo Data Highway
Japan has a reputation as a technology innovator. But its capital, Tokyo, which in 2021 hosted the delayed 2020 Summer Olympics, had a meager showing of 5G infrastructure.
5G technology wasn't adopted at a consumer level until 2019, and Japan's 5G-infrastructure rollout was delayed by the COVID-19 pandemic. In 2020, just 10 5G towers were installed.
But 5G technology became more common by 2021, two years after Tokyo launched its 5G-infrastructure project, the Tokyo Data Highway. Buoyed by the Olympics, the city added dozens of 5G towers to its connectivity system, expanding to 149 installations in 2021.
The goal is to have 5G available throughout the city by 2030, though it's unclear how far along the project is.
The 108-mile Beijing-Zhangjiakou high-speed railway connected the host city of the 2022 Winter Olympics with the rest of China.
It linked Beijing to the competition space outside the Chinese capital where events like ski jumping, snowboarding, and freestyle skiing took place. Athletes were able to take the driverless train between the two locations at speeds of up to 217 mph.
But the railway's legacy goes beyond the hyperfast transportation it continues to provide; it was also the first high-speed train equipped with 5G coverage.
The train route was also lined with 5G signal towers to ensure reliable, high-speed internet. In 2022, the 5G technology was fast enough that train riders could watch the opening ceremony on their personal devices. Now riders can enjoy superfast interest connections while traveling on the railway.
Traders are increasingly pinning their hopes on an emergency Fed rate cut.
They currently see a 60% chance that central bankers will cut rates by 25 basis points within the next week.
The Fed rarely cuts rates outside of scheduled meetings, with its last emergency move prompted by the pandemic.
Wall Street has been so suddenly gripped by fears of recession that talks of an emergency rate cut are gathering steam.
Traders are pricing in a 60% chance the Fed could issue an emergency 25 basis-point rate cut in the next week, Bloomberg reported.
That's evidenced by an extreme rally in the US bond market, with US Treasury yields — which are tied to interest rate expectations — dropping to their lowest level in a year. The yield on the 2-year Treasury note plunged as much as 16 basis points on Monday, while the yield on the 10-year Treasury note dropped as much as 10 basis points.
Investors in risk-off mode after an unexpectedly weak jobs report on Friday. Payroll growth slowed more than expected last month, while the unemployment rate surged. That triggered the Sahm Rule, a highly accurate recession indicator that flashes when the three-month moving average of the unemployment rate surpasses a key threshold.
That's led more investors to wonder whether the Fed made a mistake in waiting over 28 months from their first rate hike to ease monetary policy — with some urging central bankers to take drastic measures in the coming weeks.
Wharton professor Jeremy Siegel pressed the Fed to issue an emergency 75 basis-point rate cut, followed by another 75 basis-point rate cut at their September policy meeting. Otherwise, markets risk responding poorly, since interest rates should be about 175 basis points lower from where they are now, he told CNBC in an interview on Monday.
"How much have we moved the fed funds rate? Zero," he said. "That makes absolutely no sense whatsoever."
"If they are going to be as slow on the way down as they were on the way up, which by the way was the first policy error in 50 years, then we're not in for a good time with this economy," Siegel later added.
Nobel Laureate Paul Krugman also said he saw a case for an emergency rate cut, pointing to the panicked selloff in stocks.
"I wasn't calling for an inter-meeting cut, because that might signal panic. But since we may be seeing a panic anyway, that argument loses its force. Real case for an emergency cut soon," he said in a post on X.
The Fed typically only implements interest rate changes during its scheduled policy meetings. But it has issued early rate moves during times of extreme volatility, such as during the COVID-19 pandemic, or the dot-com stock crash.
Markets are also ramping up their bets for steeper-than-expected rate cuts through the end of the year. Investors are pricing in a 92% chance the Fed will cut rates by 100 basis points or more by the end of the year, according to the CME FedWatch tool, up from 0.2% odds priced in a week ago.
"We now expect faster cuts because the funds rate looks more clearly inappropriately high," Goldman Sachs economists said in a note on Monday, raising the odds of an incoming recession to 25%. "The Fed looks behind, having worried too much about inflation for too long and held steady in July; and the rationale for cutting now includes the more urgent priority of supporting the economy."
Global stock markets plummeted on August 5, 2024, led by sharp declines in Asia.
The selloff was partly due to the Bank of Japan's interest-rate hike on July 31.
Taiwan's Taiex saw the heaviest losses ever. Markets in Japan, South Korea, and Australia also marked grim days.
Monday could go down as one of the worst days for stocks in recent history.
The market rout started in Asia, where stocks kicked off with sharp declines that only got worse over the day. US futures and European stock markets also got dragged into the fray. Major crypto coins, including Bitcoin and Ether, took significant hits.
To be sure, markets were already jittery before Monday's rout due to fears of a US recession, caution over the AI hype, and geopolitical tensions in the Middle East.
But, as Tony Sycamore, an analyst at IG Australia, told Bloomberg TV, it was the Bank of Japan's interest rate hike on July 31 that was "the straw that broke the camel's back."
"We haven't seen a day of carnage like this, really, since the COVID selloff back in February, March 2020," Sycamore told the network.
The VIX index, a key volatility indicator, was up 48% at one point on Monday, a four-year high.
Here's how the massive selloff hit stock markets.
Japan's Nikkei 225 revisited Black Monday
Japan's stock market has been a standout over the past few years, with the benchmark Nikkei 225 index posting outsized gains of 44% in 2023 that bettered those from the S&P 500.
The Nikkei continued to extend gains in 2024, first hitting a record high in February — the first time in 34 years — before breaching new highs.
Its gains were fueled by the AI boom, as well as a weak yen that made it cheaper for foreign investors to buy Japanese equities. The weaker currency also helps Japanese exporters selling products overseas.
However, the BOJ's interest-rate hike unwound trades related to the yen, sending the Nikkei way down and wiping out all of its gains this year.
On August 5, the Nikkei 225 index crashed by as much as 13% and closed 12.4% lower — the worstsince the Black Monday stock market crash of October 1987, when the Japanese index lost 14.9%.
The Nikkei shedding 4,451.28 points was also its largest-ever loss in terms of points.
South Korea's Kospi saw worst days since the Global Financial Crisis
South Korea's Kospi also marked a grim milestone on August 5 after closing 8.8% lower. Its losses were so huge that trading halts kicked in.
The Kospi's decline was its biggest percentage decline since October 24, 2008 during the Global Financial Crisis.
The losses were driven by heavy declines in the shares of semiconductor chip heavyweights Samsung Electronics and SK Hynix, which tanked 10.3% and 9.9%, respectively.
Like Japan, the Kospi has been boosted by the AI rush as investors bet on its chipmakers.
Taiwan's stock market experienced its worst day ever
Taiwan's benchmark Taiex stock index closed 8.4% lower in its worst day since 1967, when trading started.
Taiwan is the world's semiconductor hub, where chip giant Taiwan Semiconductor Manufacturing Company is based, so the Taiex has also benefited tremendously from the AI craze.
The index surged nearly 70% from the start of 2023 to its record high last month, before massively crashing on August 5, marking its worst day in history.
On Monday, TSMC shares closed nearly 10% lower.
Australia's ASX200 posts largest decline since May 2020
Among the sea of red in Asia, Australia's ASX 200 index appeared less bruised.
The benchmark Australian index closed 3.7% lower, but still marked its largest one-day decline since May 2020, during the thick of the COVID-19 pandemic.
The ASX200's losses were led by losses in IT stocks.
However, Australia is a commodity giant and the ASX's largest company by market value is miner BHP, which fell just 2.1%. Fellow mining heavyweights Fortescue and Rio Tinto fell 1.9% and 0.1%, respectively.
China will have more than 70 million urban pets and less than 40 million children under the age of four by 2030, Goldman Sachs said in a report.
CFOTO/Future Publishing via Getty Images
Goldman Sachs says China's urban pets could outnumber the country's toddlers by 2030.
The investment bank says this could lead to a $12 billion market for pet food.
China's population has been shrinking since 2022, as more people decide not to have children.
China's baby bust could see its urban pet population outnumbering the number of toddlers by 2030, investment bank Goldman Sachs wrote in a July 28 report.
"We expect to see stronger momentum in pet ownership amid a relatively weaker birth rate outlook and higher incremental household pet penetration from the younger generation," Goldman Sachs said in its report.
According to Goldman Sachs' forecasts, China will have more than 70 million urban pets by 2030.
That is nearly double the 40 million children under the age of four that China is expected to have in the same year, the report said while citing data from the country's National Bureau of Statistics.
The rise in pet ownership, the bank said, could help push China's pet food market to $12 billion by 2030.
People having more pets than babies shouldn't be surprising considering how China is presently grappling with a demographic crisis.
According to the most recently available official data, the number of maternity hospitals in China went from 807 in 2020 to 793 in 2021.
"I am not very surprised to hear about Goldman Sachs' forecast," said Lin Zhang, a University of New Hampshire professor who studies entrepreneurship and the digital economy in China. "We could observe similar trends in early developed countries in Europe and East Asia."
Pets, she said, also play an important cultural role as companions to unmarried and childless youths, and seniors whose children don't live with them.
"In general, I think China's going through a cultural transformation related to its rising living standards that people start to find cultural meaning in pets instead of treating them more as functional animals like in traditional agricultural society," Zhang added.
Cash gifts and subsidies haven't stopped China's baby bust
The ticking demographic time bomb has become a top concern for Chinese policymakers, who have pulled out all stops to arrest the decline in births.
But the incentives don't seem to have changed the minds of Chinese women, who told Business Insider in February that they were turned off by the hefty financial costs of starting a family.
"Let's face it, having a child is like owning an investment with no guaranteed return for at least 18 years," said Chinese venture capital analyst Bihan Chen, 26, told BI.
Content creator Emily Huang, 29, told BI that the biggest thing on her mind right now is how she's going to fund her own retirement. Having children, she said, would make that goal even more distant.
"I wouldn't choose to spend a part of my income on children because it's expensive," Huang said. "I feel like with my current level of income, I can't retire comfortably anytime soon."
The boom in pet spending is not just a China-only phenomenon
To be sure, China is not the only country that is expected to see a boost in pet-related expenditure.
In the US, more households have pets than children. According to a 2023 report by the National Association of Realtors (NAR), 40% of American households had children in 2022, down from 48% in 2002.
In contrast, pet ownership has increased, particularly since the COVID-19 pandemic. The NAR report states that 70% of American households owned a pet in 2022, up from 56% in 1988.
In March 2023, Bloomberg Intelligence published its Pet Economy Report, which forecasts that the global pet industry is expected to increase in size from $320 billion to $500 billion by 2030 as the worldwide pet population continues to grow.
According to the report's authors, the surge in spending isn't solely due to an increase in pets per se but also because pets are living longer.
"Increased pet nutrition is leading to longer pet lives around the world," Ann-Hunter van Kirk, a senior biopharmaceutical analyst at Bloomberg Intelligence, said in a statement about the report.
"With this comes an increased need for spending relating to expensive healthcare for aging pets, and we project that this spending on lasting health for pets will continue to swell over the next decade," she continued.