markets

7/24/25

Artificial intelligence will help save souls, ServiceNow CEO kind of says

ServiceNow CEO Bill McDermott isn’t saying that artificial intelligence will save your soul.

But he’s not not saying it.

“We’re slowing down the hiring in jobs that are — quite frankly — soul-crushing jobs,” McDermott said in an interview on Bloomberg TV that followed the release of the cloud software company’s impressive quarterly earnings.

He highlighted fields like IT and customer support as well as security and risk management as areas where AI was reducing ServiceNow’s need for labor.

“The supporting cast of the soul-crushing work is now being done by agents,” he said. “They work hard 24 by 7, you don’t have to pay ’em, and they don’t need any lunch, and they don’t have any healthcare benefits, so they’re very affordable and that really complements our workforce.”

ServiceNow is still hiring, but hiring less for these functions, McDermott added, saying that he expects this approach to be adopted by “all well-run companies.”

Josh Kahn, senior vice president and general manager of core business workflows, was singing from a similar hymnal back in May at a conference hosted by Bernstein, but in a way that sounded a little brighter for workers:

“For those people in the procurement team, we can give them a new interface with AI agents that’s going to automatically do a lot of their soul-crushing manual work,” he said. “So instead of spending four days prioritizing potential sourcing events, they’re going to spend five days executing on real high-value sourcing opportunities.”

At the very least, comments like these should help lead to a resurgence in sales for David Graeber’s “Bullshit Jobs.”

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5m

US stocks unbothered as initial jobless claims jump to highest level since 2021, inflation print comes in mildly hotter

A much weaker-than-expected piece of labor market data, coupled with a mildly hotter-than-anticipated inflation report, took some wind out of the sails of US stocks this morning — but not for long.

Initial jobless claims unexpectedly popped to 263,000 for the week ended September 6, a near four-year high, while economists had anticipated a moderation to 235,000. It’s another piece of poor labor market data that comes on the heels of the most negative annual revision to US nonfarm payrolls since 2009 and the soft August jobs report. An outsized jump in initial claims from Texas seemingly fueled this weekly increase.

Separately, the August inflation report showed that headline consumer prices were up 2.9% year on year, with both headline and core CPI up slightly more than expected, month on month.

Two-year Treasury yields declined following these releases.

As of yesterday, the pricing of Federal Reserve interest rate policy over the next 15 months, when compared to what inflation swaps and the stock market were trading, suggested that traders did not think that more easing from the central bank would be a catalyst for an ongoing inflation problem, nor that the magnitude of cuts was symptomatic of underlying economic ills.

The recovery in the SPDR S&P 500 ETF following a knee-jerk dip in the wake of this data suggests that it’ll take a lot more evidence of negative momentum to shake that zeitgeist.

markets

1h

The K-shaped economy, in one chart

The idea of a “K-shaped recovery” — relatively affluent Americans doing well, while those lower on the income spectrum struggle mightily — was in vogue as the US economy emerged from its Covid-induced recession in 2020.

A few years of better wage growth for lower earners helped put a dent in this trend, but now, the “K-shaped economy” is back in a big way:

BofA Institute chart on income growth

Liz Everett Krisberg, head of the Bank of America Institute, and senior economist David Michael Tinsley wrote in a new report (emphasis ours):

“The labor market slowdown appears to be impacting lower-income households, in particular. According to Bank of America deposit data, after-tax wage and salary growth slipped to just 0.9% year-over-year (YoY) for lower-income households in August — the smallest gain since the start of the series in 2016. Wage growth for higher-income households, on the other hand, rose to 3.6% YoY, the highest growth rate since November 2021. This growing divergence between income cohorts is also reflected in spending trends, with credit and debit card spending growth easing for lower-income households but accelerating for higher-income ones.”

Deteriorating labor market outcomes for lower-income and traditionally marginalized groups sucks. Full stop.

From a macroeconomic perspective, however, remember that the top 40% of earners drives over 60% of US consumer spending. That means any easing of nominal consumption growth at the lower end of the income scale can be more than offset by a similar-sized pickup in spending growth at the upper end.

markets

15h

Opendoor soars as cofounders Keith Rabois and Eric Wu added to board of directors, Shopify COO Kaz Nejatian appointed as new CEO

Opendoor Technologies is soaring after announcing that two of the online real estate company’s cofounders, Keith Rabois and Eric Wu, have been added to its board of directors. Rabois will serve as chairman.

The company said Wu and Rabois’ venture capital firm is buying $40 million in Opendoor stock via a private investment in public equity (PIPE) financing.

In addition, Opendoor has poached Shopify COO Kaz Nejatian to serve as its new CEO after Carrie Wheeler resigned in mid-August.

“Literally there was only one choice for the job: Kaz. I am thrilled that he will be serving as CEO of Opendoor,” Rabois said.

The company touted in its press release that it’s “going into founder mode” with these additions, with lead independent director Eric Feder championing this injection of “founder DNA.”

That exact phrase, “founder DNA,” was used by Eric Jackson, architect of the initial rally and social interest in Opendoor, as he openly campaigned for these very two individuals to be added to the board.

This underscores how far the company is willing to go in embracing a new strategy of listening to its investors (particularly the most prominent one, it seems!) as management aims to engineer a fundamental turnaround in its business to match the optimism embedded in its stock price.

Nia Warfield, Luke Kawa

Three stocks power S&P 500 to fresh record closing high

Eighty-three basis points of today’s return in the SPDR S&P 500 ETF, more than 2x its daily gain, were attributable to Oracle and the two leading US chip designers, Nvidia and Broadcom.

Bull horns

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Matt Phillips, Max Knoblauch19h

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