Good morning, we'd like to wish our American readers a happy and safe Memorial Day. Our London-based writers have spent the last 8 hours trying to avoid even the slightest slither of a Succession finale spoiler, which is why we didn't even attempt to find any entertainment stories for today's newsletter. We're exploring:
The calm before…
Considering the backdrop of a potentially havoc-wreaking US government default, stock markets are remarkably quiet.
Indeed, US stocks have been calm all year, swaying only gently from side-to-side on any given day. The sharpest drop in the flagship S&P 500 Index came on February 21st, when the market fell 2%. Last year, a 2% drop would have only been the 24th worst day, and of course it’s absolutely nothing compared to the ~8%, ~10% and even 12% falls that we saw in 2020, during the early days of the pandemic.
The Wall Street Journal blames the robots for the calm, citing a rise in systematic (algorithm-driven) investors, which have pushed markets higher, as discretionary investors sit on the sidelines.
Reasons to (not) worry
In addition to the debt ceiling, the current crop of top concerns includes ongoing geopolitical conflicts, still-high inflation, how the impacts of the interest rate rises will filter through the economy and whether the short banking crisis we saw earlier this year is truly resolved. That’s a steep wall of worry that stocks have to climb — but then that’s almost always been the case, an idea well illustrated by this chart, tracking nearly a hundred years of the strongest "reasons to sell". So far this year, investors haven't hit the panic button yet.
New data published last week reveals that more Americans are living alone than ever before, with single occupants filling out 27.6% of US households in 2020, according to the US Census Bureau.
The latest figure continues a decades-long trend of independent living and the rise of solo households in the states, though the shift may not be entirely without its issues. Indeed, estate agent giant Zillow found in February that the “singles-tax” is costing one-bed renters who live by themselves an extra $7,000 a year on average, not to mention the recent reports on the epidemic of loneliness and isolation.
The share of one-person households in the US has increased substantially since the mid-20th century, as cultural norms shifted and people sought greater levels of independence. The move from rural areas into cities has also been pointed to as a key driver of the trend — in Washington DC, for example, nearly 50% of the 320,000 households are filled by single occupants.
In 1940, just 7.7% of occupied US households contained just one person. That rate had nearly tripled just 40 years later, with a 22.7% share in 1980. Since then, the "solo share" has climbed more gently, though it's still risen every decade.
Wings and lassos
Adobe is the latest company to jump on the AI bandwagon, announcing last week that it's integrating the technology into its editing software Photoshop. The new tool will work similarly to other generative AI technologies, such as Midjourney and DALL-E, allowing users to quickly create, extend or edit images with simple prompts. Examples demonstrated included replacing a cowboy's lasso with strands of spaghetti, adding wings to a jumping dog, and more mundane edits like extending images or replacing backgrounds.
Integrating AI into its products makes a lot of sense for Adobe — the company’s share price is up 14% since the news — turning what could have been an existential threat into another feature of its flagship design software. Those tools will also have to stay fresh. Adobe’s business is now overwhelmingly subscriptions, rather than one-off sales, a shift that means more predictable revenue for Adobe, but also pressure to keep delivering product updates in a fast-moving industry. Last year the company splurged $20bn buying startup Figma (a deal that’s still being held up by UK regulators), this time the company seems more comfortable building its latest features in house.
Can’t trust your eyes
With Photoshop embracing AI, discussions will intensify about the risks posed by AI-generated fake images, like one of the Pentagon from last week. Interestingly, Adobe is including a free tool that will encode AI generated images with invisible digital signatures to separate the organic from the algorithmic. The company hasn't addressed concerns around job losses quite so convincingly, however — merely describing the tool as a “co-pilot” rather than a replacement for human designers.
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• Immigrants make up a greater share of the US labor force than ever, at a record 18.1%.
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• Charting the unisex American baby names that have switched predominant gender since 1930.
Off the charts: Which American sports league, that recently announced it would be adding a 30th team set to debut in the 2025 season, were we charting about earlier this year? Answer below.