Goldman Sachs has grown more confident that the Fed’s Goldilocks scenario may come true. That is, a situation where the Fed doesn’t decrease rates by too little, allowing the economy to run too hot, and doesn’t decrease rates too much, putting economic activity on ice. Unfortunately, Goldman still sees a 20% chance of a recession or, to stick with the metaphor, Goldilocks being savaged by a hungry bear (market).

The lowdown

• 🔮 Goldman Sachs cuts its prediction of the probability of a US recession in the next 12 months to 20%.

• 🦤 Cathie Wood’s Ark Invest marks down the value of its Twitter stake by 47%.

• 🌾 Wheat prices, and consequently corn and soybean prices, surge as Black Sea Grain Initiative deal expires without renewal.

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Berkshire Hathaway misses out on Activision upside

Berkshire Hathaway sold 70% of its stake in Activision Blizzard in the second quarter prior to a US federal court rejecting the FTC’s attempt to halt the deal. This means that Buffett left quite a lot of money on the table.

On 30 June, Berkshire owned 1.9% of Activision or 14.7 million shares, down from the 6.3% (or 49.4 million shares) it held at 31 March. The investment in Activision was primarily viewed as an arbitrage opportunity by Buffett, betting on the Microsoft-Activision merger despite regulatory skepticism. Berkshire's remaining stake in Activision is roughly equal to its initial position before increasing the stake in 2022, implying an exit from the arbitrage portion of the bet.

While all appears well for the deal in the US, Microsoft’s appeal against the UK's block of the acquisition is ongoing, though has been paused for the moment.

The content we're consuming today

• Odd Lots podcast: Josh Wolfe on Where Investors Will Make Money in AI.

• The Atlantic: Goodbye to the Prophets of Doom ($).

• The Telegraph: ‘Chain restaurants go bust because they charge too much for bad food’.

Off-balance sheet items

• Possibly inspired by Le Tour, I have decided that I want to learn how to make croissants (so the increase in wheat prices has come at a bad time). I have been playing around with this recipe and I still have some way to go.

The bottom line