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Good morning readers. Rumors are swirling that Alphabet could be in line to buy out HubSpot in an all stock deal. Reports of a potential deal were first reported by Reuters in April, with Bloomberg following up on the story earlier this month, letting everyone pretty much know that talks were still on. With a market cap of about $33 billion, this would easily be Alphabet’s largest deal ever. In light of the news, HubSpot’s stock jumped 8%.

Neither company has responded to a request for comment (yet).

Let’s jump into today’s storylines.

In today’s digest:

• A stock market crash indicator triggered last week

• Headline Hustle: Hess shareholders approve $53 billion purchase of Chevron, evidence against Trump in hush money trial is apparently ‘overwhelming’, OpenAI forms a new safety board after key safety members leave

• Memorial Day box office weekend was…underwhelming

• Pulse Points: What’s Trending

FINANCE

Market crash indicator, Hindenburg Omen, went off last week

Beware the bear in bull’s clothing. While Wall Street celebrates its dizzying heights, the notorious “Hindenburg Omen” has reappeared, casting a long shadow over the stock market's party.

Last week, David Keller of StockCharts.com flagged the appearance of this ominous indicator, which has a reputation for predicting disasters like the 1987 crash and the 2008 financial crisis. Named after the ill-fated airship, this metric watches for a storm of new highs and lows among stocks, hinting at potential turbulence ahead.

A signal, not a sentence

Despite its dramatic history, the Hindenburg Omen isn’t exactly a crystal ball. Its hit rate? Less than stellar, with meaningful pullbacks signaled less than 30% of the time, as noted by The Wall Street Journal. “It has a track record of calling major market tops, but there are more false signals than true,” explained JC O’Hara, chief technical strategist at Roth MKM. “It's more of a 'heads up' than a 'head for the hills.'"

But even as the S&P 500 and other benchmarks post record numbers, not all that glitters is gold. Tuesday saw a mixed bag: the Dow dipped, the Nasdaq climbed, buoyed by Nvidia’s 6% jump. This mixed market behavior, termed 'poor breadth' by analysts, has raised some concerns about the rally's robustness.

What’s on the horizon? Despite the concerns, analysts remain bullish, predicting the S&P 500 could reach 5,700—a 7% increase—in the coming months. But they also cautioned that the pool for stock picking is narrowing, with large-cap stocks overshadowing their smaller counterparts.

For now, experts view the Omen as signaling a shift in market leadership rather than an impending crash, with money moving into traditionally smaller sectors like utilities and real estate. Yet, they’re keeping an eye out for more signs of trouble, particularly in consumer discretionary stocks, where weakness could presage a significant downturn.

The final verdict: While the Hindenburg Omen signals traders to be wary, it's perhaps more reflective of evolving market leadership than an imminent plunge. Investors might do well to keep their eyes peeled and portfolios prepared for turbulence or transition, whichever comes first.

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IN THE KNOW

Headline Hustle

⛽️ Hess approved $53 billion purchase price for Chevron. Hess Corporation shareholders approved a $53 billion acquisition by Chevron, despite a murky timeline due to a dispute with Exxon Mobil over rights to Hess' assets in Guyana. Exxon's arbitration claim, asserting a right of first refusal in the Stabroek Block, could terminate the deal if successful. The merger, facing both FTC scrutiny and arbitration outcomes, may delay until at least 2025. Concerns have risen among investors as the deal's closure remains uncertain, impacting Hess' stock stability.

⚖️ Evidence against Donald Trump in hush money trial is ‘overwhelming’. In the criminal hush money trial against former president Donald Trump, the prosecutor described the evidence as "literally overwhelming." Assistant Manhattan District Attorney Joshua Steinglass argued that Trump directed a scheme to suppress damaging information during the 2016 election. The jury will soon deliberate on 34 felony charges against Trump, who faces a maximum of four years per charge if convicted. This marks the first criminal trial of a former U.S. president, with Trump also entangled in other legal battles.

🤝 OpenAI forms new safety board after recent departures from key employees. OpenAI has announced the formation of a new committee focused on safety and security, led by CEO Sam Altman, board chair Bret Taylor, and board member Nicole Seligman. This move follows the departure of key personnel and the dissolution of a team dedicated to AI safety. The company also revealed it is developing a successor to the AI model behind ChatGPT, progressing towards artificial general intelligence. The committee will assess OpenAI's safety processes and safeguards, with plans to share recommendations after a 90-day review.

MEDIA

Memorial Day weekend mirrors 1995's box office bust

Remember when Memorial Day weekend promised the thrills of a summer blockbuster opening? This year, it seems the only "action" at the box office was the audience quietly sneaking out to beat the traffic. With an underwhelming $128.3 million haul, this Memorial Day weekend could go down as one of the quietest in decades, trailing far behind the record-setting pace set by "Fast & Furious 6" back in 2013.

Silence on set

Media analysts across the industry minced no words about the situation: "There’s no way to sugarcoat it, the numbers that are coming out this weekend are nothing to write home about." Indeed, this year's figures pale in comparison to the pre-pandemic glory days and even last year's $205 million bonanza. Blame it on a lackluster lineup or the lingering effects of Hollywood's strike saga, but the sizzle of summer cinema seems subdued.

The traditional summer movie season, which accounts for nearly 40% of annual box office revenue, is off to a shaky start.

• Without a Marvel powerhouse or a new "mega-blockbuster" to anchor the lineup, the industry has had to pin its hopes on a mixed bag of sequels, prequels, and animated adventures.

• Despite the lackluster start, there's some hope on the horizon with potential crowd-pleasers like "Deadpool & Wolverine" and "Inside Out 2" still to come.

Looking for a hero: Last year, hits like “Barbie” and “Oppenheimer” combined to rake in nearly a billion dollars. This summer, however, finds the studios navigating through a maze of mid-range offerings and hoping for a surprise hit to fill the void. As the industry grapples with production delays and a slow recovery from strikes, the spotlight turns to upcoming releases like “Deadpool & Wolverine,” to capture some of that old summer magic.

SNIPPETS

Pulse Points

• A leak of thousands of internal documents allegedly reveals insights into Google's search operations, suggesting possible deceit about its practices for years; Google has yet to comment on the documents' authenticity.

• Porsche unveiled the first production hybrid version of its iconic 911 sports car on Tuesday, priced starting at $164,900.

• Jan Leike, a former lead safety researcher at OpenAI who resigned earlier this month, announced on Tuesday that he has joined Anthropic, a rival AI startup.

• Adam Neumann has given up trying to purchase WeWork, the bankrupt shared-workspace company he co-founded and from which he was ousted five years ago.

• OpenAI CEO Sam Altman and his husband have joined the Giving Pledge, committing to donate their wealth to philanthropic causes.

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