Good morning readers. A spectacular solar storm lit up the evening skies over the weekend, casting brilliant hues of magenta, green, and blue across much of the northern hemisphere. The aurora borealis, commonly known as the northern lights and typically confined to higher northern latitudes, extended as far south as Louisiana, thanks to a series of intense solar eruptions. In anticipation of this rare event, the National Oceanic and Atmospheric Administration issued its first severe geomagnetic storm warning since 2005 on Thursday, alerting skywatchers to the impending celestial spectacle.

Check out pictures of what the aurora looked like around the world.

Let’s jump into today’s storylines.

In today’s digest:

• The recent stock market rally may be a bit misleading

• Headline Hustle: Apple employees are forming their own union, Tesla will invest $500 million into expanding its charging network, Target is limiting its LGBTQ merchandise for Pride Month

• Bumble wants an AI bot to date on your behalf

• The Week Ahead: What to Expect

• Pulse Points: What’s Trending

FINANCE

Are we just paying too much for our stocks?

Ever wondered if the stock market is just a financial rollercoaster designed by Wall Street to test our nerves? May's surprising rally after April’s dip might have you thinking just that.

May flowers after April showers

After a dismal April where the S&P 500 lost 4.2% of its value, May has painted a rosier picture with a 3.7% gain. Analysts love to pin these swings on economic data or potential Federal Reserve maneuvers, echoing the post-2008 sentiment that "bad news is good news" for stocks. This notion suggests that weak economic signals could lead to lower interest rates, which historically benefits the market.

But a deeper dive into recent economic indicators tells a different story. Despite a couple of weak U.S. job reports stirring hopes of a summer rate cut, the labor market remains robust, and retail sales in the eurozone are ticking up. The U.K. has shrugged off recession, and even China is posting unexpectedly strong numbers. So, this isn't exactly the backdrop for a doom-and-gloom fueled rally.

Valuation: The elephant in the room

What really seems to be driving the market may not be the economic data but the valuations themselves.

• As of late March, the S&P 500’s surge had pushed its price to a lofty 21 times expected earnings, making some sectors look overpriced. This valuation squeeze likely explains April’s selloff more convincingly than any other factor.

• By May, with valuations slightly corrected to 20 times earnings, the market found room to breathe—and grow.

Investors' reactions have also been telling. The lackluster response to earnings beats and the harsh penalties for misses suggest a market that’s sensitive to any signs of overvaluation. And while macroeconomic factors are still in play, with April’s consumer-price index on the horizon stirring up inflation fears, it’s the internal market dynamics—particularly valuations—that may pose the real challenge moving forward.

The takeaway. So, if you find yourself scratching your head at the market's sudden shifts, remember, it might just be the stocks finding their true value, rather than the economy throwing curveballs.

IN THE KNOW

Headline Hustle

⚖️ The next union organizing wave is at Apple. Apple faces mounting labor unrest as its store workers in Towson, Maryland, consider striking over unresolved issues in work-life balance, scheduling practices, and wages. This follows their historic union formation in June 2022, marking Apple's first union at a U.S. store. The National Labor Relations Board (NLRB) recently upheld a decision against Apple for union-busting tactics in New York City, highlighting the company's broader challenges with labor practices. Workers at another store in New Jersey are also holding a union election, reflecting a nationwide wave of organizing across major U.S. companies.

⚡️ Tesla is investing money into expanding its charging network after all. Tesla plans to invest over $500 million to expand its electric vehicle charging network this year, despite recently laying off much of the team responsible for the Supercharger network's expansion. CEO Elon Musk clarified that the funds would develop new sites and expand existing ones, separate from higher operational costs. This announcement comes amid broader company challenges, including a 10% workforce reduction and a significant drop in Tesla's stock price, down nearly 31% year-to-date.

🎯 Target is limiting its LGBTQ merchandise for Pride Month. Target has decided to limit the availability of its LGBTQ-themed merchandise for Pride Month to about half of its 2,000 stores, responding to a backlash from right-wing activists last year that impacted its financial performance. This marks a significant shift from the previous decade where such items were widely available across its U.S. stores. The retailer will continue to offer Pride-themed adult apparel and home goods in select stores and online, based on historical sales data. Despite maintaining internal support for the LGBTQ community and participating in local Pride events, this change has led to criticism from the Human Rights Campaign, which argues that the move could alienate LGBTQ+ individuals and allies, potentially affecting Target's values and bottom line.

TECH

Bumble wants AI to go on dates for you

Is your next great love story written by an algorithm? Bumble's Whitney Wolfe Herd thinks so, sparking a mix of curiosity and laughs with her vision for the future of dating: letting AI do the heavy lifting.

During a lively discussion with Bloomberg’s Emily Chang, Herd floated the idea of an AI "dating concierge" that could transform modern romance. Imagine chatting about your dating insecurities with a bot that not only empathizes but offers solid dating advice.

Taking it a step further, Herd envisions a world where your AI could go on a digital date with another user’s AI. If the bots hit it off, congratulations, you’ve got a match without the hassle of endless swiping and small talk.

A real-life 'Black Mirror' episode?

The concept might sound like it's straight out of "Black Mirror," and social media was quick to make that comparison, referencing the episode "Hang the DJ" where simulations date to find their human counterparts' perfect match. While the episode may harbor dystopian undertones, Herd's proposal aims to streamline love in a sprawling digital age, potentially reducing the fatigue of finding the right partner amid the vast sea of singles.

The future of dating? While the idea of outsourcing romance to AI might raise some eyebrows, it underscores a deeper reality: the evolving interplay between technology and personal connections. As Bumble explores these futuristic frontiers, the question remains: are we ready to trust algorithms with our hearts, or is this just a sci-fi fantasy becoming a tad too real?

WEEK AHEAD

What to expect

• Trump’s hush money trial continues: Former President Donald Trump's trial in Manhattan on 34 counts of falsifying business records to conceal a $130,000 hush money payment to Stormy Daniels continues this week. Trump's fixer-turned-prosecution witness, Michael Cohen, may testify this week as prosecutors aim to conclude presenting their case.

• Notable earnings this week include: Walmart, Alibaba, BT, Vodafone, Greggs, Tencent, JD.com and Bayer.

• Boeing gets a new chair: Steve Mollenkopf officially takes over from Larry Kellner at the company’s annual shareholders' meeting.

What else is happening:

• Singapore will have its first new prime minister in 20 years, Lawrence Wong, on Wednesday.

• The French Riviera will attract world media attention for the annual Cannes Film Festival, but the event faces strike threats from festival workers.

SNIPPETS

Pulse Points

• AI startup Anthropic is modifying its policies to permit minors to use its generative AI systems under certain conditions.

• Around 800 activists protested Tesla's expansion plans near its Berlin factory, with some clashing with police while trying to break into the plant.

• A California federal judge dismissed a lawsuit filed by Elon Musk's X against Israel's Bright Data over the scraping of public online data and its uses.

• Russian President Vladimir Putin has appointed a civilian to replace Defense Minister Sergei Shoigu, citing the need for "innovation" and addressing rising military spending.

• McDonald's is introducing a $5 value meal in U.S. stores to address the challenging economic environment for consumers.

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