Zero Rss

Cameco And Brookfield Positioned To Lead New Jersey's $24 Billion Nuclear Build Out

New Jersey has launched a competitive procurement process for new nuclear capacity under the Power New Jersey Act signed last month. The framework targets at least 1,100 MW of electrical power (MWe) at pre-approved sites and carries an estimated $24 billion price tag. 

Westinghouse's AP1000 reactor sits coincidentally at about ~1,200 MWe.

State officials are emphasizing shovel-ready locations and lessons learned from earlier projects to accelerate deployment. Federal financing tools that can cover up to 80% of costs are expected to play a central role, such as from the DOE's Energy Dominance Financing Office.

This state move sits squarely inside the larger federal nuclear effort we have tracked since last fall. We reported in detail on the $80 billion strategic partnership between the U.S. government, Cameco, and Brookfield to advance up to 10 Westinghouse AP1000 reactors. Cameco leadership later indicated the combined opportunity across Department of Commerce and Department of Energy channels could reach as many as 20 AP1000 units. 

Several utility pairs already sit in advanced planning stages, with work progressing on long-lead items and financing models that range from federal build-own-operate structures to support for existing operators.

While state officials and the current procurement documents continue to describe the effort as targeting 1,100 MW, the underlying economics and signals from the federal side point to something larger. 

Cameco (and MIT) has been clear that meaningful cost reductions are likely to appear on the third and fourth AP1000 units, and the DOE’s broader program has consistently favored paired reactor deployments that allow shared infrastructure, long-lead procurement, and supply chain efficiencies. 

Given that the PSEG Early Site Permit already authorizes two units at the site, the publicly stated 1,100 MW floor may simply be the minimum the process is required to deliver while the actual project that clears the competitive negotiation ends up being a full two-reactor plant once the federal financing package and execution commitments are locked in.

Cameco and Brookfield bring distinct advantages into the New Jersey process. Their controlling stake in Westinghouse, combined with direct involvement in the federal large-reactor program and Brookfield's separate partnership with The Nuclear Company to scale deployments, positions them to handle the capital intensity and leverage federal backstops at scale. 

The state's preference for proven large-reactor execution over unproven SMR designs at this stage further aligns with their strengths.

Cameco shares have posted gains of roughly 24% over the past year as the nuclear investment case gained traction. Near-term trading has been more mixed, with some pullbacks coinciding with the momentum trade that nuclear has trended with over the past couple years.

Tyler Durden Thu, 07/16/2026 - 14:45

The Six Vectors Of Gold Remonetization Revealed

Authored by Ronnie Stoeferle via VonGreyerz.gold,

A look at monetary history reveals that the question of “sound money” was never purely academic in nature but has always been of central importance for economic stability and social order. The past five decades of the pure fiat experiment are, measured against 5,000 years of monetary history, a brief anomaly. And anomalies tend to be corrected.

Our thesis of a remonetization of gold may seem bold at first glance, which makes a clear conceptual framework all the more important. Those waiting for the reintroduction of a classical gold standard will be disappointed: Governments have no incentive to voluntarily relinquish the fiscal and monetary flexibility that the fiat regime offers them. Rather, what is meant is a process in which gold regains monetary relevance. Not necessarily as money in the strict sense, but certainly as the ultimate reference asset for value, trust, and settlement.

This remonetization does not occur by decree, but through function; not through revolution, but through evolution; not a sudden fanfare, but a steadily rising crescendo. Paradigm shifts often creep in through customs, certainties, and economic necessities. Gold is not moving to the center of the system. Rather, driven by fiscal exhaustion, geopolitical fragmentation, and dwindling institutional trust, the system is moving toward gold.

What connects the following six vectors is a shared underlying structure: At each of these junctures, gold regains a key role as a store of value and a safe haven. Not all vectors will become reality simultaneously or in their entirety, but several parallel channels should suffice to sustainably strengthen gold’s monetary relevance. 

The six vectors Vector I: Reserve Function & Sovereignty

Ever since the freezing of Russian reserves in 2022, it has become clear to many market participants that fiat reserves carry not only market risk but also political risk. Gold is the only major reserve asset without issuer risk. Repatriations in Germany, Poland, the Netherlands, and most recently France underscore this trend.

Vector II: Private Remonetization

Not only governments but also institutions are rediscovering gold as a store of value. Pension funds, family offices, insurance companies, and sovereign wealth funds have often held only minimal gold allocations to date. Even small shifts away from the global bond market could trigger enormous demand. Gold is thus evolving from a tactical allocation to a strategic liquidity reserve, from a “satellite” to a “core” investment.

Vector III: Accounting & Recapitalization

Gold functions not only as a reserve but also as an accounting lever. Since 1999, the Eurosystem has regularly valued gold at market prices; the resulting revaluation reserves effectively act as equity. In the US, too, the debate over revaluing gold reserves is gaining traction. In highly indebted countries, gold can thus become an instrument of silent recapitalization.

Vector IV: Anchoring Through Gold-Backed Bonds

Gold-backed government bonds could strengthen confidence and lower financing costs. Proposals such as those by Judy Shelton show that what is at stake is not a new gold standard, but a credibility standard. The difference between an unsecured government bond and a gold-backed one is similar to that between a promise and a pledge.

Vector V: Western Central Banks as Buyers

The major gold buyers in recent years have come primarily from emerging markets. The next phase could begin if Western central banks with low gold holdings—such as Canada, Japan, Australia, or the United Kingdom—replenish their gold reserves. Even moderate target reserves would generate demand equivalent to one year’s worth of mine production.

Vector VI: Digitalization

Tokenization could solve gold’s historical transaction problem. Gold-backed tokens combine physical scarcity with digital transferability. This positions gold as a competitor to fiat payment systems and CBDCs. The key factor remains whether ownership rights, backing, verifiability, and insolvency resilience are robustly structured.

The vectors described do not operate in isolation. A rising gold price improves central bank balance sheets, facilitates policy reassessments, strengthens the appeal of gold-backed bonds, and increases interest in tokenized forms of gold. It is precisely these feedback loops that make remonetization not a single event, but a self-reinforcing process.

Remonetization is taking shape

We are by no means the only analysts pointing to the possible evolution of the monetary system. Zoltan Pozsar had already elevated the debate on a new world monetary order to a new level in 2022 with his article “Bretton Woods III,” against the backdrop of sanctions on Russian currency reserves. He concluded his remarks with the following forecast: “From the Bretton Woods era backed by gold bullion, to Bretton Woods II backed by inside money (Treasuries with unhedgeable confiscation risks), to Bretton Woods III backed by outside money (gold bullion and other commodities).”

There is no question in our minds that we are irrevocably on a journey toward a new global (monetary) order. It will require an internationally recognized anchor of confidence. For several reasons, gold appears to be predestined for this role:

• Gold is neutral – it knows neither flag nor ideology and is thus free from geopolitical manipulation.

• Gold has no counterparty risk – unlike any claim or digital account entry, it exists independently, without relying on the promise of a third party.

• Gold is liquid – with a daily trading volume of around USD 330bn, it ranks among the world’s most liquid assets.

• Gold cannot be multiplied at will – gold reserves have been growing steadily by around 1.8% per year for decades. This geologically determined supply discipline is the fundamental difference from any fiat currency.

The composition of global currency reserves shows how far remonetization has already progressed. For decades, US Treasury bonds formed the backbone of official portfolios. Since the global financial crisis, the trend has reversed: The share of US bonds held by foreign central banks is declining, while gold is gaining significantly again. Despite significant purchases, emerging markets still hold considerably less gold than Western institutions.

What Connects the Six Vectors: Feedback Loops

As different as these six vectors may seem, they share a common underlying structure. In every case, gold regains monetary significance precisely where the existing system relies on trust, the quality of collateral, or political neutrality. Gold is not becoming more relevant because it has been modernized. It is becoming more relevant because the weaknesses of the alternatives are becoming apparent.

Feedback instead of addition

The key point is that the vectors do not act in isolation but reinforce one another. The cycle reads like a self-reinforcing engine:

• Accumulation (Vector V) and private demand (Vector II) drive the gold price.

• A rising gold price improves central banks’ balance sheets (Vector III).

• Improved balance sheets reduce political resistance to gold-backed bonds (Vector IV).

• Gold-backed bonds legitimize gold as a reserve asset (Vector I).

• A higher, legitimized gold price makes tokenized gold products more attractive (Vector VI).

• Tokenization, in turn, increases demand – and closes the loop.

This positive feedback loop is the actual catalyst. Once a critical mass is reached, the process accelerates on its own. Remonetization is thus not a binary event but a gradual phase transition. It can begin with reserves, gain traction through private portfolios, become politically relevant through balance sheet logic, and open up new areas of application through technological innovations. Those waiting for one big bang will overlook the crucial point: Systemic turning points are not heralded by decrees but by changing practices.

An Overview of the Vectors

 

Arguments against the concept – and why we remain convinced

 

However, there are also factors that argue against the remonetization of gold. The following structural objections deserve serious consideration:

• The cash flow argument: Gold generates no current income. As long as government bonds are considered risk-free, the institutional incentive remains limited. Counterargument: It is precisely this status that is eroding – see Vector III.

• The systemic risk argument: An erratic rise in the price of gold would destabilize the debt-based monetary system. Political resistance to this stems not from a conspiracy but from rational politics of interest. Counterargument: An orderly process like the Eurosystem model is in any case more attractive to policymakers than market chaos – the question is not if uncontrolled, but when controlled.

• The substitution argument: Gold could lose its collateral function to other assets, such as Bitcoin or tokenized commodities. Counterargument: Complementarity is more likely than substitution (see the Bitcoin discussion in Vector III).

What would have to happen for the remonetization thesis to fail? Three scenarios are conceivable:

• Significant debt reduction through real economic growth or fiscal consolidation

• Substantial geopolitical détente with the lifting of all sanctions and a return to multilateral cooperation

• A technological breakthrough in CBDCs that renders gold obsolete as an anchor of trust

Each of these scenarios is possible on its own. However, it is extremely unlikely that they would occur in combination. Remonetization would fail only if several secular trends were to reverse simultaneously.

The burden of proof has shifted

The real flaw in the current debate lies in what is considered normal. Over half a century of fiat regimes has clouded historical memory: The unbacked paper money system is now regarded as the norm, while gold is seen as a relic. Historically speaking, it is exactly the opposite. The past 54 years are the anomaly, and 5,000 years of monetary history are the proper frame of reference.

The burden of proof, therefore, does not lie with those who consider a gradual remonetization plausible. It lies with those who claim that a historically unique fiat regime will be able to function permanently without resorting to monetary anchors.

Back to the monetary future – this is also the title of the 20th-anniversary edition of the In Gold We Trust report 2026. It is not a nostalgic throwback. It is the sober realization that the history of money is longer and more cyclical than a single political cycle. Gold is not returning because it romanticizes the present. It is returning because the present can no longer keep its promises.

The shadow gold price

Should gold return to the center of the monetary system, the question of price consequences inevitably arises. An exact valuation is, by nature, impossible, but analytical approximations at least give us an idea of possible orders of magnitude. The best-known concept is the so-called shadow gold price.

The shadow gold price refers to the theoretical gold price at which the base money supply would be fully backed by gold. In other words: The shadow gold price is the price level at which a return to a fully backed gold currency would be mathematically possible. We do not consider such 100% backing of M0, as is sometimes advocated, to be necessary; it would currently imply a gold price of USD 20,900 per ounce. During the era of the gold standard, the market forced central banks to maintain coverage ratios between one-third and one-half, which corresponds to a current gold price between USD 7,000 and USD 10,400 per ounce.

Let’s take it a step further and look at the global level. The international shadow gold price corresponds to the gold price that would result if the central bank gold reserves were to cover the money supplies of the leading currency areas – the US, the euro area, the UK, Switzerland, Japan, and China – weighted by their share of GDP. The result reveals the extent of monetary expansion: With 100% coverage of the broad money supply M2, the gold price would be just under USD 250,000; even at a moderate 25%, it would be over USD 60,000.

Tyler Durden Thu, 07/16/2026 - 14:30

NYC Council Grapples With Debate Over Bill To Ban Horse-Drawn Carriages

Authored by Nicholas Zifcak via The Epoch Times,

The family of Romanch Mahajan delivered emotional testimony over video link and in person on July 15, during a New York City Council hearing about a law that would phase out carriage horse rides in Central Park.

Tearful aunts and uncles of the deceased 18-year-old urged city council to outlaw the horse-drawn carriage rides and spare other families the grief they are still struggling to cope with.

The law, renamed in honor of the teen from India who died on June 17, would stop the city from issuing new licenses and over two years phase out the horse-drawn carriage rides through Central Park by June 1, 2028.

Majahan was thrown from a carriage after the horse spooked and bolted during a ride with his family on June 17 during their visit to New York. At the time the carriage driver had stepped down to take a photo of the Mahajan family in the carriage. City law requires carriage drivers to hold the reins of horses at all times.

Testimony from the family was followed by city officials, animal rights activists, and the union representing carriage drivers, TWU Local 100.

On Tuesday, New York City Council Speaker Julie Menin announced her support for the bill in a video on X, calling the teen’s death “heartbreaking and infuriating,” and preventable. She said it’s time “to begin the transition away from horse-drawn carriages. “

Multiple past attempts to end the horse-drawn carriage rides in Central Park have failed. The previous bill, Ryder’s law, introduced in 2022, was blocked by then-Speaker Adrienne Adams, according to former council member Bob Holden, who introduced the bill and attended Wednesday’s hearing to testify.

City Council members focused on how to help the 208 drivers navigate a career change and how to make sure horses are not sold for meat or end up pulling a carriage somewhere else.

Dr. Gabriel Cook, a veterinarian who was hired by carriage owners to look after the health of their horses, said the bill would be a death sentence for the horses. He said many horse retirement sanctuary facilities struggle financially and are not necessarily a better environment for the horses than their current stables.

Council Member James Gennaro of Queens berated city officials for lax enforcement of city law, demanding to know how many carriage medallions were revoked or suspended for violations in recent years.

“What have you done to enforce?” asked Gennaro when questioning Carlos Ortiz, the deputy commissioner at the city’s Department of Consumer and Worker Protection. Ortiz said there have been suspensions but could not provide exact numbers.

Gennaro favors reforming the industry and introduced a bill on June 11 that would require the city to study ways to improve safety for horses by such improvements as allowing pitching posts in the park to tie horses up and allowing them to start working at 7 a.m., when temperatures are cooler.

Ashley Byrne of People for the Ethical Treatment of Animals (PETA), echoed Gennaro’s argument of “little to no enforcement from the city,” leading to the injury and death of a long list of horses over the past several decades.

Gennaro challenged Byrne in a heated exchange about what PETA has done for horses after the death in June of carriage horse Deniz, which TWU Local 100 has said died from eating poisonous Japanese yew that the Central Park Conservancy had planted within reach of the carriage route. Gennaro said he organized a campaign and reached out to the Conservancy.

“What have I done about a plant?” Byrne shot back at Gennaro as the audience jeered the council member. But Gennaro’s allotted time was up.

Speaking on the topic on July 14, Mayor Zohran Mamdani expressed concern that adequate assistance be provided to carriage drivers, who would be put out of work.

“We support the spirit of the bill,” Mamdani told reporters, speaking at an unrelated press conference on July 14 in Inwood, Manhattan.

He suggested that the council do more to make sure drivers and stable hands employed in the industry find new employment.

Tyler Durden Thu, 07/16/2026 - 13:45

Goldman Slashes Global PC Shipment Forecast As Memory Chip Crunch Derails Upgrade Cycle

The global PC market is facing mounting pressure as a worsening memory-chip crunch, limited product availability, and consumers balking at higher prices threaten to deepen the downturn. These headwinds prompted Goldman analysts to "further trim" their PC shipment forecasts for this year and next.

"We further trim our global PC shipment estimates for 2026-27E, considering the near-term pressures of higher memory and CPU costs, and the flattening replacement cycle following the end of Win 10," said Allen Chang, a managing director and head of Goldman's Greater China Technology research team.

Chang continued, "We now expect global PC shipments to be down -14%/ -5% YoY in 2026E/ 27E, followed by zero growth in 2028E (vs. -10%/ +3%/ +3% YoY previously). Our updated PC shipment forecasts are 255m/ 243m/ 244m in 2026-28E, respectively."

Global PC Shipments: -14%/ -5%/ 0% YoY in 2026-28E

Global PC Revenues: -5%/ -2%/ +3% YoY in 2026 / 27E

PC ASP: increasing pricing due to specification upgrades and rising BoM

Global PC shipments: consumer vs. commercial

Chang noted that AI PCs are expected to remain a top growth driver:

We expect global AI PC shipments to reach 150m / 199m in 2026E / 28E (+15% CAGR), vs. 150m / 219m in our previous forecast, indicating 59% / 82% penetration of the total PC shipments worldwide. We expect global AI PC revenues to be US$169bn / 221bn in 2026E/ 28E (+14% CAGR), vs. US$169bn/ $226bn previously. We are positive on AI PC penetration ramp up in 2026E, with continuous introduction of new AI applications, such as OpenClaw and Seedance by Bytedance.

We expect global Gaming PC shipment to reach 26m / 28m in 2026E / 28E (+4% CAGR, vs. -2% CAGR for overall PC shipments), indicating 10% / 12% penetration of the total PC shipments worldwide. We expect global Gaming PC revenues to be US$46bn / $52bn in 2026E/ 28E (+7% CAGR, vs. +1% CAGR for overall PC revenues), riding on customers' rising specialized needs for PCs. We model global Gaming PC ASP to increase, driven by specification upgrades (report link), including graphic card platform upgrades, thinner design, AI features, silent mode, and long durability, which would bring better user experience when enjoying triple-A games.

Professional subscribers can read a lot more on tech trends here at our new Marketdesk.ai portal.

Tyler Durden Thu, 07/16/2026 - 13:25

Deflationary Money Hits Different: Losing Half Its Price And Winning Anyway

Authored by Bryan Lutz, Contributor at The Sovereign Capitalist:

The FUD is back, baby.

Bitcoin is down nearly half from its 2025 high. And now, the obituaries are out of cold storage and back in heavy rotation. Sentiment surveys are scraping levels we haven’t seen since the 2022 crypto-winter, and the financial press has rediscovered its favorite genre: the Bitcoin post-mortem.

And this time they’ve got a chart to wave around. The Dow just had its best year against Bitcoin since 2022 – the Dow/BTC ratio has more than doubled off its August 2025 low, from 0.36 to 0.84.

Here it is. We’ll even draw the red line for them:

The Dow’s twelve-month winning streak against Bitcoin. Note what the line still hasn’t touched: 1.0.

Anyone holding through it felt every point. If you wanted to write the “Bitcoin is finished (again)” piece, this is the chart you’d lead with.

Notice what the line still hasn’t done, though.

It hasn’t touched 1.0.

After the worst sentiment stretch in years, after a ~45% drawdown, after twelve months of losing to the most boomer-coded stock index on earth, the entire Dow Jones Industrial Average still cannot buy one Bitcoin.

Against thirty of America’s biggest companies, the coin wins, with change left over.

Flip the fraction.

If that seems impossible, it’s because you’re reading the fraction the way CNBC wants you to read it:

Bitcoin

───────

$$$$$$$

Bitcoin as the numerator, dollars as the denominator, and the numerator just got cut in half. Case closed, right?

Wrong fraction. As Mark Jeftovic laid out in It’s the denominator, stupid, the entire point of Bitcoin is that it isn’t the thing being measured. It’s the thing you measure with. Put the index where it belongs:

  DOW

───────

BITCOIN

Now extend the chart back a decade and hit the log button, which is a one-click jailbreak for fiat-denominated brains:

The Dow, denominated in Bitcoin. A 99% decline that survived every Bitcoin crash along the way, including this one.

In 2014 it took more than 40 Bitcoin to buy the Dow. At the 2015 extreme, 84.

Today: 0.83.

Measured in the new denominator, the Dow has lost roughly 99% of its value in twelve years, and the “comeback” everyone is celebrating shows up on that chart as a wiggle at the bottom of a cliff. Bitcoin just took its worst beating in years and gave back approximately none of a decade of relative gains.

That’s what deflationary money does. It hits different.

It’s about the maths

The Dow is priced in dollars, and dollars multiply, inflate, depreciate, and then die… which is the business model for the whole fiat system. M2 only ever pauses on its way up, every crisis gets solved with more of it, and index earnings get marked up in the same shrinking units.

Bitcoin’s supply schedule, meanwhile, doesn’t attend FOMC meetings. The halvings keep halving. Twenty-one million, take it or leave it.

Run the numbers since January 2000: the Dow is up 361% in dollars. M2 is up 394%. Divide one by the other and the twenty-six-year bull market vanishes: measured in the money itself, the index has gone nowhere. Every point of “Dow 52,000” that isn’t printer output rounds to zero.

The Dow and the money supply, same starting line, 26 years later. The index never got ahead of the printer.

So, the fraction has a numerator inflated by an expanding money supply, sitting on top of a denominator that does not expand. Run that equation for a decade and the line on the chart is the only possible output. The drawdowns – 2018, 2022, this one – are volatility inside the trend. And that trend is division between fiat money and Bitcoin.

A Dow’s comeback measured in a shrinking yardstick must sprint just to stand still. This year, it’s rallied hard in dollars. In Bitcoin terms, it clawed back a rounding error.

Same story, slower clock.

If this framework sounds familiar, it should. Gold holders have been living it since 1971, just at a different tempo.

In 2001 the Dow cost 42 ounces of gold. Today, with the Dow at nominal record highs and the algos doing victory laps, it costs 12.7 ounces. Two-thirds of the index’s gold-denominated value, gone, during a quarter century of “stocks always go up”.

Yes, gold and Bitcoin diverged this cycle. Gold at $4,142 while Bitcoin sits in a drawdown. They have different volatility profiles, and different adoption curves. Yet, they share the same denominator maths. One asset is the incumbent hard money, the other is the challenger still crossing the chasm. The DOW index can’t outrun either of them over any window that matters.

“Stocks at record highs” is mostly the yardstick shrinking. It is always has been.

Deflationary Money Still Undefeated this Decade

Here’s the thing about extreme bearish sentiment: it’s a report on the emotional state of leveraged tourists, not on the asset. Nothing about Bitcoin(or gold) changed this year. The supply schedule didn’t change. The halvings didn’t change. The $300+ trillion in bonds denominated in a melting currency didn’t change, except to get bigger.

The only thing that changed is the price, quoted in the old denominator, and the old denominator’s entire job description is to go down.

So, the mainstream news cycle might be right about one thing:

Deflationary money doesn’t win every year.

However, it does win every decade, and it’s undefeated.

Tyler Durden Thu, 07/16/2026 - 13:05

House Defeats Bid To End Israel Aid While Senate Blocks US-Israel Intel Integration

The U.S. House on Wednesday rejected an amendment by Rep. Thomas Massie (R-Ky.) that would have eliminated $3.3 billion in annual U.S. military aid to Israel, voting 314–104 to defeat the proposal.

As Tom Gantert reports for The Epoch Times, the vote exposed divisions within the Democratic Party, with 103 Democrats joining Massie in support of the amendment, while 98 Democrats voted against it and 10 voted present. Massie was the only Republican to vote in favor of the amendment.

“Though my amendment to strike $3.3 billion in aid to Israel from the State Dept Approps bill did not pass, 104 House Members voted in favor of it,” Massie said on X.

“The tide is changing. Americans want their tax dollars to be spent improving things here at home, not waging war and genocide.”

The amendment was considered as the House debated the fiscal 2027 State, Foreign Operations and Related Programs appropriations bill.

Before the vote, House Minority Leader Hakeem Jeffries (D-N.Y.) urged lawmakers to reject the amendment, calling it “overly broad” because he said it could restrict funding for humanitarian aid, refugee resettlement, peace-building efforts, and U.S. Embassy operations.

While criticizing Israeli Prime Minister Benjamin Netanyahu’s government and calling for a “major reset” in U.S. policy toward Israel, Jeffries said the amendment was not the appropriate way to achieve those goals.

“In addition, the so-called Massie amendment would restrict our country’s ability to confront Hamas, Hezbollah, and other terrorist organizations in the region who are sworn enemies of both the United States and Israel,” Jeffries’s letter to his colleagues stated.

Rep. Randy Fine (R-Fla.) made reference to Massie, who lost his primary election to a President Donald Trump-backed candidate in May.

“Very proud of my @HouseGOP colleagues,” Fine posted on X after the vote.

“Today we unanimously repudiated our soon-departing Jew-hating colleague, making clear that standing with our greatest ally is core to America’s interests.”

Fine continued, “It takes a lot of effort to eradicate the green shoots of Jew Hatred that want to infect our party the way they have Democrats. Folks in Washington are learning I won’t allow it.”

Netanyahu said he wants Israel to phase out its reliance on U.S. military aid over the next decade, saying the country has grown strong enough economically and militarily to become more self-sufficient.

Israel currently receives about $3.8 billion annually under a 10-year, $38 billion U.S. assistance agreement that expires in 2028. Netanyahu said ending the financial component of military assistance would reflect Israel’s increasing independence while preserving a close strategic partnership with the United States.

At the same time, Democrats in the US Senate have blocked debate on an annual defense policy bill, objecting not only to President Trump’s war on Iran but also to provisions that would more closely integrate the United States and Israeli militaries.

The motion to proceed failed 50-46, well short of the 60 needed, with votes on strict party lines, and Thune flipping to "no" procedurally to preserve a revote

The NDAA process is where the integration fight lives: Massie is fighting the House version's Section 219, which he says would begin "co-mingling our military supply chains and technology with Israel's"

Reuters reports that the version of the Bill before the Senate has also triggered backlash over measures that would deepen US military and intelligence ties with Israel.

One key provision would require the Pentagon to appoint an official to coordinate between the US and Israel on defence technology.

That would include joint weapons research, production and the integration of each country’s technologies into the other’s military systems.

The provision also controversially calls for “data fusion”, which Human Rights Watch defined in June as combining feeds from multiple sensors and intelligence sources into a single targeting picture.

The group said the arrangement could see the US absorb Israeli intelligence that may have been collected through what it described as problematic mass surveillance programmes.

A separate measure in the 2027 Intelligence Authorization Act, which is usually considered alongside the NDAA, would expand intelligence sharing with Israel.

Democrats framed the block around the war: Schumer said Republicans want the NDAA passed "as though none of this is happening," and Murphy called it flatly "an authorization for the Iran war, a war that nobody in this country wants."

Senate Democrats’ efforts reflect a broader shift within the Democratic Party, where support for Israel has cratered ahead of the November midterm elections. Israel’s favourability rating among Democrats dropped from 59 percent in 2018 to 22 percent in May, according to a June Reuters/Ipsos poll.

Tyler Durden Thu, 07/16/2026 - 12:45

Headwinds And Tailwinds: Minding The Market Weather

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

A sailor who fixates on the barometer will rarely leave port. A sailor who never checks it will eventually get caught in a storm. It’s easy for most investors to fall into one of those two modes, either warning that headwinds are approaching and taking cover, or waving off every warning because AI spending is carrying the market higher.

This article walks through several market headwinds that warrant attention, as well as a tailwind that may be large enough to keep the boat moving forward. Appreciating the headwinds and tailwinds in more detail will help you better monitor the market barometer, allowing you to assess and adjust risk levels with more awareness going forward.

Storm Forecasting

Market forecasting has more in common with hurricane forecasting than most investors appreciate. The goal when managing an investment portfolio is not to predict a single outcome but to understand the environment well enough to establish a range of possible outcomes.

When a hurricane is brewing, meteorologists don’t draw a single storm track forecast on the map; they draw a “cone of uncertainty” that contains dozens of possible paths. Over time, as more information is gathered, the cone tightens.

Some storms cause immense damage, while others prove much weaker than expected. Other once-threatening storms never reach land and peter away in the ocean. Which path materializes depends on many variables layered on top of each other.  Like markets, it’s a dynamic process that is impossible to predict with certainty.

Investors face the same task as meteorologists. We must gauge the many forces acting on markets simultaneously and consider a slew of others that may or may not pressure markets in the future. Doing so efficiently provides us with a range of outcomes rather than relying on a single forecast.

With many headwinds arising, the job for investors right now is to closely track the environment and be ready to trim their sails if needed.

The Headwinds Worth Watching Global Liquidity

Liquidity is the lifeline of markets. To wit, Stanley Druckenmiller once stated: 

“It’s liquidity that moves markets”

With the recent surge in the use of derivatives, options, margin debt, and other forms of leverage, changes in liquidity conditions are even more important than ever in shaping market expectations.  

Michael Howell’s Global Liquidity Index (GLI) uses factors such as central bank balance sheets, cross-border bank lending, shadow banking, repo markets, and collateral availability to assess how liquidity is likely to change. In a recent Commentary, in which we elaborate on his work and his current view, we stated:

The cycle is now pointing down into 2027. Howell projects $40 trillion in global debt rollovers by 2027, a $4 trillion increase from the previous year.  That borrowing demand comes as liquidity contracts, creating a mismatch between refinancing demand and tightening financial conditions.

The graph below charts Howell’s GLI alongside a 65-month sine wave that has been a good predictor of liquidity peaks and troughs. Howell’s index and the sine wave show the liquidity cycle peaked in mid-2025 and has been declining since, with the next trough not expected until 2027. Historically, the declining phase of this cycle has favored cash, long-duration government bonds, and gold over risk assets, precisely because a shrinking pool of global liquidity makes markets more dependent on cash flow and less prone to speculative excess.

Treasury Issuance

In a similar vein, the federal deficit continues to demand liquidity to fund the rapidly growing issuance of Treasury debt. That supply of debt has to be absorbed by someone. Heavier net debt issuance competes with demand for all other investments. On the demand side, with no QE and domestic banks constrained by regulation, there is less ability to absorb the new supply than in years past.  

Bear in mind, however, that if there is a stimulus package or even increased government spending to boost support for Republicans in the midterm elections, this headwind can also be a tailwind.

Restrictive Fed Policy

Even with the last cycle of rate cuts, real policy rates, as shown below, remain above levels most economists would consider neutral. Such a restrictive policy works with a lag, and the economy has so far absorbed it well. That does not mean the lagged effects are gone.

Furthermore, the Fed’s hawkish tone and the potential for rate increases could make financial conditions even more restrictive.

The Yield Curve And Volatile Equity Rotations

We recently wrote, Are Flattening Yield Curves and Style Rotations Deceptive Omens, to help readers differentiate between monitoring financial conditions and timing market tops.

The article explains why a bear flattening of the yield curve and instability in leadership between growth and value stocks, as we are witnessing now, are both symptoms of the repricing of growth expectations and the discount rate. The lesson from that piece is that these signals describe a changing environment but do not tell you when or whether a market or economic downturn might occur.    

The last two sentences of the article sum up this headwind well:

The signals suggest the regime may be changing, and we should be prepared for that possibility. However, until that becomes more evident, we must take advantage of what the market has to offer. 

Low VIX – High Implied Correlation

Our daily Commentary from July 9, 2026, points out a wide and unusual divergence between the low S&P 500 volatility index (VIX) and the lack of correlation among the index’s individual stocks. 

As we share below, the condition represents a potential headwind, but for now, just something to be mindful of.

The low VIX (first graph) implies smooth sailing ahead, while a record-low implied correlation (second graph) suggests the market could be at risk. Goldman is hedging the risk of a correction, i.e., an implied correlation spike. Often, when implied correlation rises sharply from extreme lows, as it did in August 2024 during the yen carry trade unwind, the divergences that kept the index calm disappear. Stocks start moving together again, and most of the time they move down. This condition is not a warning to expect a market downdraft, but it does suggest that risk awareness is critical.  

Midterm Elections

Markets tend to dislike uncertainty. Accordingly, the months leading up to the midterm elections often bring volatility. This year, the potential for the Democrats to regain the House and, less likely, to take the Senate as well poses greater risks than if the Republicans were expected to maintain control of both houses.

We suspect that toward later summer and early fall, market trepidation will increase over the unknown election outcomes and what they may mean for policies and ultimately markets. Accordingly, this is likely a stock market headwind that will intensify as the year progresses.

Consumer Struggles

After two strong months of outsized growth, consumer credit, mainly credit cards, contracted for the first time in almost two years. The personal savings rate sits at 3.0%, near its lowest level since 1960. Both sets of data indicate that consumers’ wage growth is no longer keeping pace with inflation, forcing them to reduce borrowing and/or draw down savings and run tighter budgets.

This is a genuine headwind, and it isn’t going away soon. But it’s not the whole consumer story either. Unemployment remains low, and the struggle appears concentrated among lower-income individuals and parts of the middle class. Many indications of spending among upper-income households point to continued strength, and that cohort accounts for an outsized share of total consumption. Per Yahoo Finance:

A new report from Moody’s Analytics shows the top 10% of earners now account for nearly half of all U.S. consumer spending, a historic high that shows how dependent economic growth has become on wealthy households.

A squeezed lower class matters for retailers and lenders exposed to that segment, but less for the broader market, where spending is increasingly a story about who still has room to spend.

This is a headwind worth watching more closely if the unemployment rate starts to rise and financial struggles spread to higher-income earners.

Tailwinds That Could Become Headwinds Margin Debt

Record levels of margin debt have boosted demand for stocks, providing a strong tailwind for the market. As we wrote in Margin Debt Risk;

Margin debt just set another record. In May 2026, investors owed their brokers a combined $1.42 trillion, the highest in history and a 53.7% jump from the prior year.

While record and growing margin debt is a powerful tailwind, it’s a wind that can reverse direction suddenly. Per the article:

Leverage peaks near tops. Then it mean-reverts violently because the unwind forces the selling.

In addition to watching margin debt, pay attention to the most favored stocks. Today, semiconductor stocks are bolstered by a disproportionate share of the margin. If they start faltering while the broader markets hold up, this may be a sign that margin usage is about to reverse. Further, any indication of liquidity trouble in the money markets could also result in a decline in margin debt.

The Yen Carry Trade

The yen carry trade is a source of leverage pushing the market higher. As we wrote in a recent Commentary:

The carry trade thrives with a weak yen, as we have today.  Despite higher Japanese borrowing costs, the yen has depreciated significantly against the dollar, more than offsetting the higher interest costs for carry trades. A weakening yen means the trade remains profitable, and the leverage the carry trade provides to markets continues to build.

The risk today to US investors is that higher Japanese yields and a stronger yen could force a rapid, disorderly reversal of the carry trade.  Bear in mind that the more the yen falls, the more the trade grows, and the larger the unwind will be whenever the BOJ finally acts.

The Tailwind: AI Capital Spending

Working against every headwind we discussed, and others, is a single counterweight of extraordinary size: the capital spending boom tied to artificial intelligence infrastructure.

The four largest hyperscalers (Amazon, Microsoft, Alphabet, and Meta) are on pace to spend roughly $725 billion combined on capital expenditures in 2026, up about 75% from last year.  Goldman Sachs has raised its cumulative capex estimate for these four companies from 2025 through 2030 to $5.3 trillion, up from $4.5 trillion prior to first-quarter earnings.

That spending shows up directly in corporate earnings, employment in construction and semiconductors, and demand for everything from GPUs to transformers to turbines. The spending is also self-reinforcing in the near term. For instance, cloud backlogs at companies are growing, giving management the revenue predictability needed to justify increased spending. Although there is considerable skepticism about the durability of this spending cycle, it has thus far yielded results that suggest otherwise.

This is the tailwind doing the heavy lifting in the economy and market. It has been large enough and persistent enough to absorb concern about the headwinds. The question worth asking is not whether the tailwind is real but how much further it can carry markets before the headwinds start to matter more than the continued spending.

Summary: Take Advantage Or Trim Your Sails?

In meteorological speak, the Cone of Uncertainty is wide. However, just because the headwinds are numerous and the range of potential outcomes is vast, investors don’t need to trim their sails and batten down the hatches.

The more productive approach is to keep using the favorable winds while they are blowing, and to pay close attention to market barometers and remain prepared for a shift in the winds. That means participating in the areas of the market most directly tied to the AI capital spending cycle while it remains intact, while also paying attention to balance sheet quality, maintaining valuation discipline, closely monitoring technical conditions, and remaining diversified in other sectors less impacted by the AI spending boom.

Tyler Durden Thu, 07/16/2026 - 12:25

Global Investments In Nuclear Fusion Surge 69% To $4.5B

Authored by Alex Kimani via OilPrice.com,

• Private investment in nuclear fusion reached a record $4.48 billion in 2025.

• Most fusion firms are targeting commercialization in the 2030s.

• Major tech companies are backing fusion developers, with Microsoft signing a binding power purchase agreement with Helion, while Google, Nvidia, and other investors are funding companies such as Commonwealth Fusion Systems and Proxima Fusion.

Global private investments in nuclear fusion hit a record $4.48 billion in 2025, in large part driven by the booming energy demands of AI data centers and rising global energy security concerns.

According to the Fusion Industry Association (FIA), confidence in the viability of nuclear fusion technology is growing, with ~71% of fusion companies now expected to deliver commercial power to the grid by the 2030s.

And that confidence is now translating into tangible dollars and infrastructure with fusion companies now inking site selection and Power Purchase Agreements (PPAs) with major tech companies.  

To wit, three years ago, Helion Energy signed a first-of-its-kind power purchase agreement with Microsoft Corp. (NASDAQ:MSFT), with Helion committing to supplying Microsoft with at least 50 megawatts of electricity from a commercial fusion plant by 2028. Unlike a loose letter of intent, this is a binding corporate PPA, with Helion facing potential financial penalties from Microsoft and its transmission partner Constellation Energy (NASDAQ:CEG) if it fails to deliver on schedule. Constellation Energy serves as the primary power marketer, managing transmission from the reactor straight to the grid.

Last year, Helion broke ground on its first commercial-scale power facility dubbed Orion in Malaga, Washington. The Malaga site was strategically selected near the Columbia River to hook directly into Washington's main power delivery network, landing just upstream to power Microsoft’s massive cloud infrastructure. 

Helion is heavily backed by OpenAI CEO Sam Altman, who has injected hundreds of millions of dollars of his personal capital into the company. To keep pace with the strict 2028 Microsoft deadline, last year, Helion closed a $465 million Series G funding round led by Thrive Capital. The capital injection elevated Helion’s valuation to $15.5 billion, moving it from a speculative science venture into a heavily capitalized utility competitor.

In August 2025, Massachusetts Institute of Technology (MIT) spinoff, Commonwealth Fusion Systems, raised $863 million in a Series B2 funding, with the oversubscribed round bringing its total funding to nearly $3 billion. Some of CFS’ High-profile backers included tech heavyweights and PE firms such as Nvidia Corp. (NASDAQ:NVDA), Google (NASDAQ:GOOG) and Planet First Partners, as well as tech billionaires Bill Gates (Breakthrough Energy Ventures), George Soros's Counterpoint Global and Stanley Druckenmiller. CFS will utilize the funds to develop its proprietary fusion device SPARC, a compact, tokamak device that aims to generate net-positive fusion energy by 2027. Unlike Helion’s Orion, SPARC is a 170,000-square-foot research and demonstration facility designed to prove that commercial fusion is scientifically and practically viable. By using HTS magnets developed in collaboration with MIT, SPARC can be built at a fraction of the size and cost of traditional fusion machines. The facility's subsystems, including cryoplants and magnet power systems, are currently being installed and commissioned 

That said, CFS is also designing ARC, which could be the world's first grid-scale commercial fusion power plant. Located in Virginia, ARC is expected to generate about 400 MW of zero-carbon power--enough electricity for roughly 150,000 homes. Construction is slated to begin after permitting, with the reactor scheduled to start generating power for the electrical grid in the early 2030s.

Meanwhile, Munich-based deep-tech company Proxima Fusion recently raised €411 million, boosting its valuation to €2.4 billion and making it the best-funded and most valuable fusion company in Europe. Tech giant Google and German utility provider RWE signed on as critical industrial partners, each contributing €25 million. Proxima also received plenty of institutional support, with KfW Capital, Germany's deep-tech agency SPRIND, Burda Principal Investments, and the European Innovation Council (EIC) Fund joining alongside existing early backers like Plural and UVC Partners.

As the first spin-off from the prestigious Max Planck Institute for Plasma Physics (IPP), Proxima Fusion builds on decades of scientific breakthroughs from Germany's Wendelstein-7-X program. The funds will help accelerate the vertical integration of Proxima and the construction of "Alpha," a net-energy fusion demonstrator targeted for the early 2030s near Munich. The company is building commercial power plants based on the Quasi-isodynamic (QI) stellarator concept, a major physics breakthrough derived from the Max Planck Institute's Wendelstein 7-X programme.

Unlike most commercial fusion competitors that use a donut-shaped "Tokamak" reactor architecture, Proxima is developing stellarators. While more challenging to design than tokamaks, stellarators use a complex, twisted magnetic cage layout that prevents plasma disruptions, allowing the plant to run continuously rather than in short pulses. This makes the stellarator design highly stable and structurally ideal for providing steady-state electricity to industrial power grids.

Tyler Durden Thu, 07/16/2026 - 11:45

"Fatal Cancer On Civilization": Trump's War On Marxism Enters Action Phase As Rubio, Miller And Bessent Address 65 Nations

Summary: 

• Bessent Describes Action Phase Against Marxist NGOs Underway & Foreign Subversion Networks
• Rubio, Miller, Bessent Address Rise Of Far-Left Terrorism To Delegations From 65 Countries 
• Trump Team Declares War On Radical Left Groups 

Rubio, Miller, Bessent Address Delegations From 65 Countries On Far-Left Terrorism

Secretary of State Marco Rubio, White House Deputy Chief of Staff Stephen Miller and Treasury Secretary Scott Bessent addressed delegations from more than 65 countries on the alarming rise of far-left terrorism.

The broader message from all three speakers was very clear: Just as the US and its allies confronted the spread of Marxism in previous generations, Washington now believes the West needs an all-of-government, multinational strategy to counter far-left political violence, foreign influence networks and subversion movements seeking to destabilize Western institutions.

Rubio called for the civilized world to unite against an "encroaching darkness," urging all leaders in the room to defend what they have built and fight back against those who seek to destroy it. The enemy Rubio is referring to is the rise of transnational far-left terrorism. 

NEW: Secretary of State Marco Rubio calls for the civilized world to unite against an "encroaching darkness," urging nations to defend what they have built and fight back against those who seek to destroy it.

"It is easy to destroy great things. It is far more difficult to make… pic.twitter.com/G14GjBSIXE

— Fox News (@FoxNews) July 16, 2026

Rubio said, "In the United States, the share of left-wing terrorist attacks and plots has risen to levels not seen in DECADES. In Germany, far-left violence has jumped by more than 40% in just the last year alone."

🚨 JUST IN: Marco Rubio is throwing Democrats into a frenzy by dropping this truth nuke that terrorism is COMING FROM THE LEFT

"In all-out assault on our immigration officers, sniper attacks, explosives, armed ambushes, a transgender shooter opening fire on Catholic elementary… pic.twitter.com/jENXMAqe1U

— Eric Daugherty (@EricLDaugh) July 16, 2026

Rubio added that Antifa is being directly aided by Iran and Cuba through a massive international network that seeks to attack the West with terrorism and propaganda.

Marco Rubio says Antifa is being directly aided by Iran and Cuba through a massive international network that seeks to attack the West with terrorism and propaganda.

"They despise the West because the West is great." pic.twitter.com/20o7JSLdKY

— Shadow of Ezra (@ShadowofEzra) July 16, 2026

After Rubio, Miller addressed the hundreds of high-level officials in the room, saying, "Here in the United States, we have taken the necessary and essential action formally recognizing left-wing violence as a form of political terrorism that is a direct threat to our national security and the survival of our republican form of government."

Stephen Miller: "Here in the United States, we have taken the necessary and essential action formally recognizing left-wing violence as a form of political terrorism that is a direct threat to our national security and the survival of our republican form of government." pic.twitter.com/MMvYho2t87

— Breaking911 (@Breaking911) July 16, 2026

He called left-wing political violence: "This is a fatal cancer to civilization… The greatest risk that we have is that our institutions have grown too soft and too cowardly to be able to defend themselves against a mortal threat."

Stephen Miller on left-wing political violence: “This is a fatal cancer to civilization… The greatest risk that we have is that our institutions have grown too soft and too cowardly to be able to defend themselves against a mortal threat.” pic.twitter.com/RJCZDMAfCX

— Breaking911 (@Breaking911) July 16, 2026

Last but not least, Bessent then describes how the US Treasury will dismantle the foreign subversion networks that use nonprofits to wage war against the US:

Treasury is expanding its efforts to identify organizations that abuse charitable and nonprofit structures as vehicles for illicit finance.

We are examining where tax exempt status has been exploited, where charitable entities have become financial conduits for foreign influence activity and how those entrusted with stewardship of these organizations have instead enabled violence, where the evidence leads we will not hesitate to follow and of course we will hold these organizations, officers, directors, accountable and just as financial institution must know their clients they must know their grantees.

That work is well underway.

At President Trump’s direction, @USTreasury is bringing the full weight of our authorities to defend the integrity of the U.S. and global financial systems.

We will identify illicit funding, however artfully it is concealed. We will dismantle the networks that sustain political… pic.twitter.com/oS1ri4kZeX

— Treasury Secretary Scott Bessent (@SecScottBessent) July 16, 2026

All in all, the meeting should be viewed as a signal that the Trump administration has entered the action phase to dismantle the command-and-control structures of foreign subversion networks routed through Marxist groups and nonprofits seeking to destabilize the West. 

Watch Live: Rubio, Bessent Convene 65 Nations For Global Crackdown On "Far-Left Political Terrorism" 

Secretary of State Marco Rubio will host delegations from 65 countries in Washington on Thursday morning to coordinate a specialized international response to combat what the Trump administration describes as a "resurgence" of far-left political terrorism.

Watch Live here (due to start at 0910ET):

CNN cited a senior State Department official who said the delegations will come from "across the Western Hemisphere, Asia, Europe, and beyond."

The meeting will focus on countering the spread of far-left political violence and terrorism across the West, including riots, attacks on critical infrastructure and acts of industrial sabotage. 

Here's color from the outlet on today's meeting:

According to sources, many of the delegations will not be led by the foreign ministers of the countries, but rather more working-level and technical officials. Several cited scheduling, with invitations to the event only being issued at the beginning of July.

Countries that had worked with the administration on the topic were among those invited, the official said, noting they've had "very productive engagements with Germany, with Greece, with Italy, and that’s often where the problem is most pronounced in Europe."

Another State Department official told CNN that Rubio plans to describe left-wing terrorism as "the result of a unique evil rooted in a deep resentment towards civilization."

The threat of left-wing terrorism "has not really been addressed collectively in an effective way," the official said.

According to the official, partners have said they "have a handle" on other forms of political violence but "this one is more difficult for us."

We wrote one month ago: 

• Troubling Pattern Of Left-Wing Revolutionaries Targeting "Capitalists" Raises Alarm Over Youth Radicalization

We noted at the time, "While the cases appear separate, both point to a broader concern: revolutionary and radical-left rhetoric is increasingly bleeding into an alarming pattern of real-world violence, with younger and younger extremists resorting to violence targeting wealthy individuals or even right-leaning political figures."

Far-left extremist Hasan Piker calls on his followers to kill capitalists... 

Hasan Piker calls on his followers to kill capitalists:

“Yeah kill them! KiII those motherfuckers and murder those motherfuckers in the streets. Let the streets soak in their fucking red capitalist blood, dude.”

Democrats are campaigning with him. pic.twitter.com/YiZxGgRkgc

— Eyal Yakoby (@EYakoby) April 9, 2026

Treasury Secretary Scott Bessent and White House deputy chief of staff Stephen Miller are also expected to be at today's meeting. 

Bessent signaled in late May to reporters that "in the weeks and months" there will be a lot to talk about in terms of dark-money-funded NGOs fueling chaos and revolution in the US.

Ahead of today's meeting, a State Department official spoke with Breitbart News about foreign subversion networks sowing chaos in America:

"The State Department will be issuing a report detailing the Cuban regime's longstanding campaign to foment left-wing extremism in the United States and internationally. The report finds that for nearly seven decades, the Cuban regime has played an indispensable role in nearly every notable far-left insurgency, revolution, and militant movement across the Western Hemisphere and beyond."

ZeroHedge was first to point out in late 2025:

• "Is There a 'Cuba Connection' Behind the Radicalization of America's Nonprofit Left?"

Last week, Jim "Fergie" Chambers, the Communist centi-millionaire and heir to the massive Cox media fortune, was arrested in Spain at the request of the US Justice Department and is awaiting possible extradition on federal charges linked to "international money laundering… with the intent to provide material support to and resources to foreign terrorist organizations." 

City Journal's Stu Smith wrote in a recent report, "Chambers is one of the main funders of America's radical Left. His money has flowed to a host of projects in the "anti-imperialism" organizing space," adding, "Chambers claims that he and Singham are effectively the two primary financiers of the US radical left." Despite this, the two have apparently been at loggerheads—a conflict that has now gone public."

And all of this raises one obvious question: Why is the Democratic Socialists of America a "partner" of ICAP, a US-sanctioned, Castro-era Cuban organization created to export Marxist ideology and cultivate foreign political networks?

ICAP can be viewed as an ideological intake valve, providing political cover and access points that could be exploited for influence or intelligence operations.

That relationship provides new context for statements from DSA leaders, such as: "The most important thing we can do is take that American empire down from within."

You know it's bad for Democrats when one of their own has to write a WSJ op-ed, calling for "Lawmakers, law-enforcement agencies and journalists should investigate the DSA to see if it is being funded by foreign governments and interests."

Tyler Durden Thu, 07/16/2026 - 11:34

Senate Unanimously Votes That Sam Bankman-Fried Should Never Get A Pardon

Authored by Micah Zimmerman via BitcoinMagazine.com,

The Senate passed a resolution on Wednesday stating that Sam Bankman-Fried should “under no circumstances” receive executive clemency, a rebuke of the FTX founder’s request that President Donald Trump commute or pardon his sentence.

The measure, S. Res. 772, cleared by unanimous consent, a procedure that adopts a resolution when no senator objects. It expresses the sense of the Senate that Bankman-Fried should receive neither a pardon nor a commutation, and it affirms the chamber’s commitment to “the rule of law and integrity of the United States financial system.” 

The resolution is nonbinding and does not limit the president’s constitutional power to grant clemency.

Senators Cynthia Lummis, a Wyoming Republican, and Ruben Gallego, an Arizona Democrat, sponsored the measure. The two serve as the top Republican and top Democrat on the Senate Banking Committee’s digital assets subcommittee. They introduced the resolution on June 17, days after Bankman-Fried filed a formal pardon application with the Justice Department.

Lummis is the crypto industry’s most committed advocate in Congress and has spent years drafting the legislation the industry seeks. On this measure she has led the push to keep one of the industry’s most infamous figures in prison. “He had his day in court,” Lummis said when she and Gallego introduced the resolution. Gallego’s statement closed with four words: “Keep him locked up.”

The text of the resolution states that Bankman-Fried’s 25-year sentence “reflects the extraordinary scale and deliberateness of his crimes, his lack of remorse, and the catastrophic harm inflicted upon millions of victims.”

Bankman-Frieds’ attempts to get out of jail

Bankman-Fried, 34, filed his petition on June 8. His application seeks a “pardon after completion of sentence,” a form of clemency that would not erase his conviction but would restore civil rights such as voting and jury service and lift barriers to licensing, employment, and housing after he leaves prison. 

He is not eligible for release until around 2044.

Trump said in a January interview that he had no intention of pardoning Bankman-Fried. During his second term the president has granted clemency to other figures tied to crypto and to online markets, including Binance founder Changpeng Zhao and Silk Road creator Ross Ulbricht, along with other white-collar offenders.

A jury convicted Bankman-Fried in November 2023 on seven counts tied to the collapse of FTX, a case prosecutors described as one of the largest financial frauds in U.S. history. American customers lost more than $8 billion. A judge sentenced him to 25 years in prison in 2024.

Bankman-Fried ran two companies at the same time. FTX was a crypto exchange, which holds customer money the way a broker does and is not supposed to spend it. Alameda Research was a trading firm he owned. 

He moved billions of dollars in FTX customer deposits to Alameda, which used the money for trades, venture investments, political donations, and Bahamian real estate. FTX’s software exempted Alameda from the rules that would have forced it to cover its losses like any other trader.

The arrangement came apart once Alameda’s balance sheet was found and reported that much of what the firm counted as assets was FTT, a token FTX had created and could issue at will. The collateral behind Alameda was, in effect, an asset its sister company had invented. The exchange Binance said within days that it would sell its FTT holdings, and the price of the token dropped.

Customers moved to withdraw their deposits, and FTX could not return the money because it was no longer there. The exchange filed for bankruptcy on Nov. 11, 2022.

CoinDesk was the first to report on FTX’s dubious balance sheets.

Tyler Durden Thu, 07/16/2026 - 11:05

1 In 30 Koreans Margin-Called As Kospi Crashes, Regulator Suspends New Levered ETFs, Hikes Margins

For the first time in over three years, South Korea’s central bank raised its policy interest rate by 0.25% points to 2.75%, inline with expectations, and kicking off a monetary tightening cycle aimed at containing inflationary pressures spurred by the AI-driven semiconductor boom. It also helped spark a fresh rout in Korean stocks whose daily volatility has become borderline farcical with daily 5% swings having become the norm. 

The move on Thursday was the Bank of Korea’s first rate increase in more than three years as well as its first under Shin Hyun-song, a renowned international economist who took over leadership of the central bank in April.  Before Thursday’s move, the BoK had held rates at 2.5% since May 2025 at the conclusion of an easing cycle.

As the FT notes, Shin has stressed the need for tighter monetary policy in recent weeks, pointing to robust economic growth driven by a surge in demand for memory chips on the one hand and persistent weakness in the won, elevated inflation and growing financial imbalances on the other (these, are of course, connected, as the collapsing currency helps cheap chip exports, which raises core inflation for consumer electronics both domestically and globally).

“Korea is expected to see the effects of the semiconductor boom spill over into domestic demand. Therefore, underlying inflationary pressures are likely to be stronger and persist for longer than previously anticipated,” he told a press conference on Thursday. “We will respond until we are convinced that inflation stabilizes at our target level.”

Shin has said that the semiconductor export boom was feeding through to stronger household spending, wage growth and investment, increasing the risk that inflation would remain elevated for a considerable period. 

Indeed, as shown in the chart above, Korean consumer inflation is running well above the bank’s 2% rate, rising 3.2% in June from a year earlier, its fastest rate since December 2023. The country’s reliance on imported energy has also raised concerns as the conflict in the Middle East has roiled global energy markets.

The central bank also highlighted sizeable bonus payments at leading chipmakers Samsung Electronics and SK Hynix, which it said could contribute to broader wage gains and stronger consumer demand.

One reason for the hike was the relentless plunge in the won: despite South Korea’s record current account surplus, the won has remained under pressure, weakening 5% against the dollar year to date to its lowest level since the 2008 global financial crisis and ranking among Asia’s worst-performing currencies.

Analysts blame the currency’s weakness on exporters retaining overseas earnings for reinvestment and overseas equity purchases by Korean institutional and retail investors. The weaker won has pushed up import costs, including for energy. Surging housing prices in Seoul and surrounding areas, coupled with high household debt, are also a concern for Korean authorities.

The crashing won has benefited the country's exporters: the central bank said that the economy is continuing to benefit from the AI boom. Exports surged 70.9% in June from a year earlier, the fastest growth rate in nearly half a century. The near record exports helped boost the country's economy: Korea posted its strongest growth last quarter in nearly six years, and the government this week upgraded its economic growth forecast for 2026 to 3% from 2%, exceeding the IMF’s 2.6% projection.

Of course, the tighter financial conditions did not help the stock market which slumped 6.4% and reversed all of Wednesday's gains.

However, the bigger catalyst behind the latest Korean rout which sent the Kospi back into bear-market territory after falling about 27% from its June peak, and to the lowest level since April, triggering another set of KOSPI/KOSDAQ sell sidecars in the early-morning... 

... was an emergency market monitoring meeting for the Korea's financial regulator, which unveiled measures to curb risks from single-stock leveraged exchange-traded funds, seeking to stabilize a local stock market that has seen wild swings, as individual investors use record amounts of debt to chase profits amid artificial-intelligence-related jitters.

The Financial Services Commission said Thursday that it would suspend new listings of single-stock leveraged ETFs, ban securities firms and asset managers from advertising or marketing such products, and triple the minimum cash deposit for new investments to 30 million won, equivalent to around $20,000.

The measures, which are long overdue and should have been implemented while millions of retail investors were piling into the bubble earlier this year, are aimed at curbing speculative trading and reducing risks tied to highly leveraged investment products following recent bouts of market volatility. 

Most of these ETFs, launched in South Korea in May to track surging and often volatile memory-chip stocks, have been blamed for recent stock-market volatility. They are largely tied to Samsung Electronics and SK Hynix, which together account for about half of the benchmark Kospi’s market capitalization. 

At the center of the volatility are Samsung Electronics and SK Hynix, whose shares fell 8.8% and 12%, respectively, on Thursday. Even so, Samsung shares have more than doubled and SK Hynix shares have nearly tripled this year. Such leveraged ETFs are designed to amplify daily moves in the underlying stocks by two times, and according to most traders they exacerbate volatility through the daily rebalancing needed to maintain their investment objective.

Yes, they help accelerate gains on the way up, but once momentum turns, what ensues is a historic destruction of wealth. Nowhere is this more obvious than in the 3x levered Kospi ETF, KORU, which is down 70% from its all time high hit on June 1, and is back to where it was at the end of January.

Herald van der Linde, HSBC’s head of equity strategy for Asia Pacific, said in a note Thursday that risks include intensifying retail participation, much of it through newly issued leveraged single-stock ETFs and margin lending, estimated at $23 billion, in South Korea. Foreign investors’ exposure to South Korean memory-chip stocks is rising, likely keeping market volatility elevated and reinforcing the case for diversification, he said.

Foreigners, however, were not hanging around for today's rout: they, together with local institutions, jointly turned back as net sellers in KOSPI, with selling focused on Tech (-$1.0bn/-$1.6bn), while retail investors were net buyers (+$2.6bn in Tech). Local instos were the main net sellers today (selling -$1.6bn in KOSPI), while their ETF net-selling (-$738mn) amounted to c.46% of the total net-selling.

At the forefront of today's rout were the usual suspects: SK Hynix plunged -11.5% and Samsung Electronics tumbled -8.8%, giving back all of yesterday's gains to retrace towards the 100DMAs as they tracked US overnight weakness in the SOX/SKHY.

Unfortunately, the "emergency measures" are too little too late. as we said earlier this week, the party for Retail Kospi investors - who have bought everything foreign investors had to sell - is ending: retail Margin Calls are soaring, hit 5% last Friday and on Monday will be far higher.  Finally, retail brokerage deposits plunge by 30trn won to lowest level since feb 20

Retail Kospi investors bought everything foreign investors had to sell. But the retail party is ending: retail Margin Calls are soaring, hit 5% last Friday and on Monday will be far higher. Finally, retail brokerage deposits plunge by 30trn won to lowest level since feb 20 https://t.co/XuxMwzBx3G pic.twitter.com/rwhQtDOYLT

— zerohedge (@zerohedge) July 13, 2026

What's worst of all is that as Ioannis Blekos on Goldman's trading desk noted, as of July 13, "a total of over 1.2 million leveraged retail accounts across the Korean market triggered margin calls. Approximately 320,000–360,000 accounts were fully liquidated by brokers. South Korea has an adult population (aged 15–64) of 35.7 million people… i.e. 1 in 30 (3.4%) adults got margin called."

And so, once again regulators are "boldly" stepping in only after the market tumbles, and millions of local investors are left with nothing. If only they had been more proactive, and popped the Korean stock bubble before it reached record proportions and assured huge losses... 

So what happens next, now that the Korean bubble has burst: look for all that capital to shift to China. 

“Now that selling momentum builds in the Korean semis, investors are returning to China where valuations are depressed,” Vey-Sern Ling, managing director at Union Bancaire Privee, said, adding China’s tech performance has been inversely correlated with high-flying Korean memory names recently.

With leading Korean chip names down, investors are rotating out of the country, said Yi Ping Liao, portfolio manager at Franklin Templeton. “But interestingly it doesn’t look like a broad based rotation out of tech as Taiwan tech and China tech remain well supported.”

Conveniently for those wondering where to go, one week ago Goldman gave the answer in "As Korea Tumbles, Goldman Tells Clients To Rotate To "China AI Value Chain"."

Tyler Durden Thu, 07/16/2026 - 10:45

US Slaps Brazil With 25% Tariffs After Rubio Says Socialist Leader "Failed To Negotiate In Good Faith"

US Secretary of State Marco Rubio revealed on X late Wednesday night that the Office of the United States Trade Representative (USTR) is set to impose a 25% tariff on "most Brazilian imports."

"Let there be no confusion about why: President Lula and his government have not negotiated with the US in good faith," Rubio said.

He added, "His economic policies are bad for Americans and bad for Brazilians. For the past year, Lula has put his own ego ahead of making a deal for the welfare of the Brazilian people, and these tariffs are the price for that."

Today, President Trump directed USTR to impose a 25% tariff on most Brazilian imports. Let there be no confusion about why: President Lula and his government have not negotiated with the US in good faith.

His economic policies are bad for Americans and bad for Brazilians. For…

— Secretary Marco Rubio (@SecRubio) July 16, 2026

USTR released a statement saying the 25% tariffs on certain Brazilian goods come after a yearlong Section 301 investigation that found trade and regulatory practices in the South American country unfairly restricted US commerce.

"Safeguarding American economic interests against unfair trade practices is the bedrock of President Trump's America First policies," Trade Representative Jamieson Greer wrote in a statement.

Greer commented on Bloomberg TV: 

Brazil’s unreasonable acts, policies, and practices have undermined the competitiveness of American farmers, workers, innovators, and businesses. pic.twitter.com/Opu5TOsqmo

— United States Trade Representative (@USTradeRep) July 16, 2026

Bloomberg cited a senior administration official who said imports of coffee, beef and certain ethanol products would be exempt from the new duties.

Honing in on Rubio's X post, which said Lula's “economic policies are bad for Americans and bad for Brazilians," the bigger issue here is that Lula is an unhinged socialist.

The Trump team, along with folks adjacent to the administration, has been working to reshape Latin America's political landscape by shifting the region away from socialist governments sympathetic to China and toward right-wing, capitalist governments more aligned with the US. The effort is part of a broader Western Hemisphere defense strategy.

Americas Political Map: Presidential Shift From Left To Right

Country-by-country presidential shift tracker

Following the stunning Colombian presidential race, in which Trump-backed Abelardo de la Espriella won the election, the next major race to watch will be Brazil's. Lula is expected to face right-wing Senator Flávio Bolsonaro in the run-up to October's presidential election.

Tyler Durden Thu, 07/16/2026 - 10:25

Das: Déjà Vu All Over Again! Are Stock Markets Repeating Dot.Com Mistakes?

Authored by Satyajit Das via NewIndiaExpress.com,

The sky-high valuations of space and AI firms today are similar to that of internet ventures before 2000. Herd instinct is leading promoters and investors, not financial and technological reality

Burning cash rapidly, with large unfunded commitments, space and AI businesses are all dependent on uncertain funding access (Express illustrations | Mandar Pardikar)

The listing of SpaceX and forthcoming artificial intelligence floats bear similarities to the lead-up to the 2000 dot-com crash, which resulted in losses of over $5 trillion.

Even survivors like Amazon, Microsoft, Cisco, Dell and eBay, which had sufficient cash to ride out the turmoil, suffered massive falls in share price that took years to recover.

Today, familiar mistakes around technology, investment approach, business models, valuation and oversight are being repeated. Like the actress Tallulah Bankhead, investors believe that if they have to live life again, they want to make the same mistakes—only sooner.

The dot-com boom was built around the internet, its enabling infrastructure and retail commercialisation as applications developed. Investors with little technical knowledge piled in, hoping for huge returns. Today’s focus is space and AI. 

Take SpaceX, an unwieldy conglomeration of Starlink satellite operations, a space launch business, a controversial social media service, a struggling AI venture as well as plans for orbital data centres, a moon base and an inter-planetary colonisation programme. The satellite broadband and X platforms use established technologies, but the launch business’s cost advantage relies on reusable rockets that remain a work in progress. Orbiting data centres and interplanetary colonies are technically unproven. The SpaceX prospectus provided unhelpful techno-babble—extending “the light of consciousness to the stars” and harnessing the sun “to power a truth-seeking AI”.

During booms, investors aggressively finance prospects with limited understanding and less due diligence, feeding herd-like tactics and poor business models that amplify risks and speculative excess. While some lessons have been learnt, others are recurring. SpaceX’s launch revenues are underwritten by the US government. That business and Starlink will face significant challenges from nationally sponsored and subsidised competitors, especially in Europe and Asia, because of increasing reluctance to outsource critical national infrastructure to US interests. 

Then there are other AI businesses hitting the stock market in the months ahead. One reason OpenAI pivoted away from a retail to an enterprise focus, replicating Anthropic’s strategy, was lacklustre conversion of free users to subscriptions. But companies have balked at the cost as suppliers switch from subscription models to payment for tokens, with many users now placing caps on usage.

OpenAI and Anthropic’s income and growth are also affected by increasing competition from cheaper, open-sourced—primarily Chinese—models, the threat of regulation and export bans because of potential AI security applications. The cost of the models themselves is growing because of scarcity of skills alongside shortages of processors, electricity and water for cooling.

These businesses all have uncertain paths to profitability, with SpaceX, whose primary profitable business currently is Starlink, warning in its prospectus: “We have a history of net losses and may not achieve profitability in the future.” Burning cash rapidly, with large unfunded commitments, these businesses are all dependent on uncertain funding access.

Yet, valuations have again decoupled from reality. In October 1999, shortly before the dot-com crash, the market cap of 199 internet stocks tracked by Morgan Stanley was $450 billion, against annual sales of about $21 billion and collective losses of $6.2 billion. Now consider that SpaceX raised around $75 billion in June, based on a market valuation of almost $1.8 trillion, or over 90 times of current revenue and 220 times earnings. Analysis by Morningstar argued that even using generous assumptions SpaceX was worth less than half that amount. OpenAI and Anthropic are expected to be valued in excess of $1 trillion. These values would be higher than those implied by their latest funding rounds. 

Current prices are not shaped by future free cash flows, but expressions of tribal affiliation and identity alongside deep faith in a technology. On the day that SpaceX listed, an equity trader gave a speech on the firm’s trading floor: “In 1969 we put a man on the moon… Now let’s go to Mars!” For many, SpaceX shares were cheap on a new extra-terrestrial measure: a price-to-universe ratio!

With negative earnings and cash flow, in a reprise of 2000, values are based on unreliable indicators like ‘eyeballs’ (unique website visitors or page views). With loss-making companies currently trading at a premium to money-making firms, as in the late 1990s, promoters do not want to be profitable as it would mean a lower valuation.

As in 2000, there is an absence of corporate governance. The imperious Elon Musk, the world’s first paper trillionaire, will control the world’s first ‘orbital infrastructure conglomerate’ using a dual-class share structure that reduces shareholder oversight and ensures that he cannot be removed. Musk’s known disregard for governance and self-dealing strategy shifts were dismissed. 

As in the dot-com bubble, banks, analysts and media, despite obvious conflicts of interest, play a pivotal role amplifying the ‘new economy’ narrative. Goldman Sachs, one of the underwriters, expects SpaceX’s AI revenue to increase 100-fold by 2030. Banks involved in the SpaceX offering received fees totalling more than $500 million. Exchanges desperate to boost the number of tech stocks listed agreed to include SpaceX in indices under expedited entry rules, meaning investors—especially passive investors—would have to sell existing holdings to make way for SpaceX, Anthropic and OpenAI shares. Intermediaries will benefit from large trading volumes. 

The real purpose of the current round of IPOs is to allow insiders to cash out, transferring risk to over-enthusiastic and unsuspecting investors. In 2000, once the 180-day lock-up period expired, allowing original funders and employees to sell restricted shares, there were widespread sell-offs as supply flooded the market. Listing overvalued stock also provides founders with currency for acquisitions. Musk may merge SpaceX with Tesla, consistent with his previous transactions involving Solar City, Twitter, and xAI. Given his unfettered control of SpaceX, it would obviate the need for an expensive and heavily-leveraged transaction to take Tesla private.

Like the dot-com episode, this too is likely to end badly. To paraphrase historian Christian Wolmar writing about British railways, booms cannot be sustained on “little more than optimism feeding on itself”.

Tyler Durden Thu, 07/16/2026 - 10:05

Vance Slams Israeli PR Campaign To Keep War Going 'Indefinitely', & Undermine Him

In a new interview on the world's largest podcast, Vice President JD Vance warned that "elements" of the Israeli government want to keep the Iran war going "indefinitely," and were pursuing an aggressive campaign to manipulate US public opinion -- going so far as to vilify Vance for his role in pursuing a diplomatic solution. In his nearly three-hour interview on the Joe Rogan Experience, Vance also tried to gently distance himself from Trump's decision to join Israel in launching a war on Iran and said the White House had botched its communications regarding the Epstein files. 

"There are some people within [Israel's] system, we know beyond a shadow of a doubt, who are manipulating and trying to change American public opinion to keep the war going on indefinitely. Again, not towards any objective, but just indefinitely," Vance said, noting that the attacks have not only been directed against US policy, but against him personally. He directed Rogan and his audience to read a recent Time article describing the big-budget mechanism Israel has sponsored to try to shore up Republican support for the war and for Israel. 

"It’s like worth reading because it lists a bunch of people who have quite literally been paid by a former Trump campaign person who was himself paid by certain elements within the Israeli government. And those people are attacking me viciously for quite literally trying to accomplish the negotiation objective that the president set for the country."

Vance was referring to former Trump campaign manager Brad Parscale, who now runs a communications firm called Clock Tower X. He is also Chief Strategy Officer of Salem Media Group, a conservative multimedia conglomerate. Last summer, Israel started paying Parscale's firm $1.5 million a month to create 100 pieces of digital content every month to be shared across multiple social media platforms. Controversially, Parscale also promised the “integration of narrative messaging into Salem Media Network properties and aligned distribution channels.”

Quite the listen pic.twitter.com/U9TpsTa1Yt

— Curt Mills (@CurtMills) July 15, 2026

As for how to end a war that's even less popular than the Vietnam War at its worst polling, Vance defended diplomacy and ridiculed hawkish critics whose grand plan is to only to "bomb them to oblivion." While Trump has been threatening to go on a rampage against Iran's bridges and energy infrastructure if the country doesn't bend to his wishes, Vance echoed the wisdom of many military and geopolitical observers who lampoon the idea that the US military can conquer any country -- much less one that's as large as Western Europe -- using only air power: 

“You can bomb them. You can take away their radar. You can take away some of their drones and some of their missiles, but it’s just too easy to fire at ships in the straits. So, you’ve got to actually be willing to talk and to try to figure out the problem.”

With each passing week and month, the unpopularity of the war on Iran looms larger and larger where Vance's 2028 presidential ambitions are concerned. Vance has been using interviews to delicately distance himself from the decision to attack, and he did so again with Rogan. When the podcaster asked Vance about the extent to which he agreed with Trump's decision to launch a war on Iran, Vance deftly used Trump's own characterizations to distance himself from the decision:

"Well, the president said publicly that 'JD was less enthusiastic about it.' I think that was the exact phrase that he used. I mean my attitude towards this, man, as you know, is the vice president— I’m not a public commentator. My job is to give the best advice I can to the president of the United States. I think he’s said a little bit about what that advice was. 

In April, a lengthy New York Times report on the decision to start the war portrayed Vance as a skeptic who warned that a war could unleash regional chaos and involve a high number of casualties -- including damage to Trump's coalition, a large segment of which was attracted by Trump's repeated promises not to start new wars. Describing the fateful meeting on Feb 26 that preceded the war's launch two days later, the Times paraphrased Vance as saying, "You know I think this is a bad idea, but if you want to do it, I’ll support you."

You can see Vance trying the thread the MAGA needle when it comes to Iran in this Rogan interview. He hints heavily that he's against the war, but he supports Trump publicly. pic.twitter.com/usuFwZPTGC

— Elijah Cone (@ElijahCone) July 15, 2026

Now, nearly five months later, 14 American service members are dead, more than 400 wounded, more than $100 billion has been squandered, the US arsenal significantly depleted, the Strait of Hormuz is largely closed, fuel prices have soared, a global economic catastrophe lurks, and the Iranian people have rallied around their government. Given the war has turned into such a fiasco, it's not clear how much credit Vance will get for having been anything less than a zealous opponent willing to publicly challenge the war from the start.  

Regarding the Epstein files, Vance disputed the notion that the Trump administration sought to hide anything from the American people, instead attributing the controversy to poor public communications about the files. “We absolutely screwed up the comms of the Epstein files,” Vance said. “We just did. But do I think the reason we screwed up the comms is because we were trying to hide something? No.” He faulted then-US Attorney General Pam Bondi for having "overstated what we had and what we didn’t have,” as she was caught up in "the political moment." 

JD Vance gets annoyed as Joe Rogan questions why MAGA influencers were given Epstein file binders pic.twitter.com/cbjjMMFlmy

— grizzy (@Furbeti) July 15, 2026

Though he stopped short of saying Epstein was working for Israel, Vance emphasized Epstein's links to both US and Israeli intelligence agencies. "He clearly had connections to the upper— the highest levels of American intelligence. He clearly had connections to the highest levels of Israeli intelligence," Vance said, later adding, "I’ve asked whether there were documents connecting Jeffrey Epstein directly to our intelligence agencies or anybody else’s, and the answer is no. But if that stuff existed, it wouldn’t exist in 2026." 

Here's the full interview: 

Tyler Durden Thu, 07/16/2026 - 09:45

Cracking Up And Joining Up

By Michael Every of Rabobank

Geopolitics is front and center, even in Argentina–England at the World Cup, where the contested Falklands/Malvinas, which could have oil reserves, saw jingoist 1980’s language. Yet it’s Hormuz, where 1980’s-style tanker wars are underway, that’s the penalty spot.

The US is striking Iran again night and day, as Tehran warns of an “existential war”. Reports have Trump leaning towards expanding US military operations; others say what he’s been hitting widen his options for escalation; and Trump has stated Iran “will be defeated soon.” However, the Financial Times today leads with Trump’s ex-defence chief saying the US will not win the war from the air, a sentiment echoed in the Wall Street Journal – and boots on the ground are highly unlikely.

Iran is attacking the Hormuz oil lifeline of ship-to-ship shuttle runs, with some vessels now reportedly refusing US-military guided transits. The US just hit a tanker heading for Kharg Island under the renewed Iran blockade, as some wonder again if the US could try to take control of Iran’s southern islands – which would certainly take boots on the ground.

The IRGC has threatened all global energy workarounds to Hormuz: that includes the Red Sea, where the Houthis may be preparing to attack; it might also involve Azerbaijan’s oil trade with Israel, meaning either striking Iran’s well-armed northern neighbour or the Eastern Mediterranean route its oil arrives via. Markets would move markedly if these developments were to occur.

Israel-Lebanon talks are getting some results, with agreement for Israel to pull back from two pilot zones to allow the Lebanese army to prove it can keep the territory free from Hezbollah – the IDF notably just killed three of the latter, and Trump is still talking about Syria fighting Hezbollah instead. PM Netanyahu will meet Trump in the US on Monday, as many fault lines are seen between the two. However, the flurry of radical domestic legislation the Israeli government just launched ahead of an October 27 election Knesset dissolution may suggest the foreign policy arena is not where they will look to flex for would-be voters.

Elsewhere, US General Caine is pleading with defense contractors to build weapons faster, as munitions constraints linger: the US Air Force plans to buy 28,000 low-cost cruise missiles ahead, showing procurement pivots are happening. The Secretary of War is also going to give US troops testosterone shots to make them stronger, as many NATO allies struggle to recruit the soldiers, sailors, and pilots that a military build-up will require; and senior defense officials are pushing for more censorship and are said to be looking at Cuba military options.

The EU again failed to strike a new Russia sanctions deal after three days of talks, with Athens reportedly opposing them to shield a Greek shipping company. On the other hand, the EU and Ukraine struck a deal to tap into €10bn of unspent SAFE funds to build drones in Ukraine – with a carve-out to buy some components from China. Ominously, Lithuanian and Latvian leaders also warned that Russia is planning infrastructure attacks on the Baltics or Poland, with other suggestions of potential false flag operations as the trigger for such.

Against that backdrop, and what Ukraine is doing to Russian refineries, a benchmark Bloomberg measure of crack spreads now stands above the panic peak of 2022, so while Brent oil is $85 --bang in line with where Joe DeLaura expected it to hover at while ‘Comfortably Bomb’ plays out-- the price of a barrel of diesel is around $147.  

The EU also just published a report calling China a “key enabler” and a “crucial enabler” of Russia’s war on Ukraine, further noting that: “At the centre of this transformation lies the determination of some powers, Russia and China foremost among them, to establish regional dominance and reshape the global order in line with their interests, fostering a return to a sphere-of-influence logic.”

That language echoes European complaints already made about the US, as a Pew survey shows that Xi now beats Trump in terms of popularity. But given nobody gets to vote on that, how much does such soft power matter? In that regard, the X thread from the US Under Secretary of War poopooing the idea of Middle Powers having options other than siding with the US (or China), which we noted yesterday, drew polarised reactions.

Those who pushed back strongest came from politics or economics, with a few from the military; by contrast, those who said the blunt (so unhelpful) US argument was true think across those disciplines. As a good example, Velina Tchakarova’s ‘The Middle Power Mirage: Colby, the Sceptics, and the Verdict Nobody Wants’ states: “Here is the strategic reality the convening class prefers to avoid. We are in a new Cold War between two systems, Pax Americana 2.0 and the DragonBear, the structural alignment of Chinese and Russian power across every systemically relevant domain. In that contest, middle powers without sufficient strategic leverage or autonomy will not be neutral conveners. They will be the first victims, hollowed out or cannibalized for the sake of global supremacy, or they will become the battlefield itself. There is no comfortable third space for the underprepared.” She also underlines that preparations can be made for that kind of third space, but they are fiscally, political-economically, and even ‘civilisationally’ uncomfortable.

That’s as EU-China trade data this week saw Brussels state that safeguard measures permitting tariffs and quotas against import surges may “become legitimate on a case-by-case basis.”; the UK Treasury suggest alignment of its financial system with the US, not the EU, and a stablecoins framework that opens the door for the USD variant to be used; Bloomberg says ‘Trump's Aides See China Cheating on Trade, But Shun Retaliation’ - there are too many fish to fry in Hormuz, it seems; and India’s PM Modi is pushing to cut import reliance to shield the economy from shocks.

Against this backdrop, national elections are now more existential than during the 2000’s policy consensus for ever more globalisation. Today, each vote can push or pull economies towards one of the two global poles of power, tipping the balance between them and/or legacy vs emerging stakeholders within them.

In that light, Trump is to give an address today focused on “free and fair elections” rumored to be politically explosive, as Democratic Party Senator Fetterman warns he’ll leave the party if it turns its back on Israel, and Supreme Court justices worried about their safety were told by Congress, “There’s not a money fairy up here.” In the UK, the terror inquiry into the murder of former MP Ann Widdecombe continues, as a man was arrested for threatening to shoot Reform UK leader Nigel Farage, who is involved in a scandal over a cash gift ‘for his security’. The Times of Israel opines that ‘Netanyahu hits new lows in his battle for survival; there will be a great deal of damage for better leaders to undo’; and Ukraine’s President Zelenskyy just ousted his reformist defence minister amid a government reshuffle, which critics have called a serious strategic error.

In short, norms are cracking up around us, not just in refined products, but in less ‘refined’ economics and politics.

To predict how this plays out one needs to join things up; and that involves looking at who is willing to join up, and where.

Tyler Durden Thu, 07/16/2026 - 09:30

'Slow Hire, No Fire' Economy Confirmed As Jobless Claims Drop Near Record Lows

The number of Americans filing for unemployment benefits for the first time dropped to just 208k last week - back near its lowest level on record...

...and still showing no signs of stress in the US Labor market.

Continuing jobless claims also fell last week to 1.805 million Americans...

And all of this positive labor market (no fire) news comes as payrolls suggests weaker growth...

It appears the US economy has morphed into a 'slow hire, no fire' regime.

Tyler Durden Thu, 07/16/2026 - 08:56

Despite Slumping Sentiment & Lower Gas Prices, The American Consumer Is Still Spending Strongly

While headline spend at gas stations is expected to decline (due to tumbling pump prices), BofA's almost omniscient analysts forecast a stronger than consensus print for today's US Retail Sales data.

After a big jump in May (revised up), June's Headline retail sales rose 0.2% MoM (as expected), with sales up 6.7% YoY (down modestly)...

Gasoline Stations sales saw the biggest decline (along with small drops in Health Personal Care and Food and Beverage). Nonstore Retailers saw the biggest jump in spend along with Motor Vehicle and Parts Dealers...

That was the biggest monthly drop in gasoline station sales since Dec 2022...

Nonstore Retailers, Gasoline Station, & Motor Vehicle sales are the biggest drivers of annual (NSA) growth...

Core (Ex-Autos) fell 0.2% MoM and Ex-Autos and Gas rose 0.4% MoM (so declining gas spend was notable), but annual growth in spend remains strong...

Most notably, the Control Group - which feeds directly into the GDP calc - jumped 0.5% MoM (as expected)

Interestingly, 'real' retail sales (admittedly crudely adjusted via CPI) continue to rebound from a negative print in December to its highest since March 2022...

Finally, the American consumer appears to still be spending despite survey-based catastrophic slump in sentiment...

Admittedly, lower-income households have indeed felt the pinch of the gas shock more: they’ve seen a larger increase in necessary spending, which has led to a widening of the “K” in discretionary outlays.

Will that start to ease now that gas prices are starting to tumble? (although rising in recent days).

Tyler Durden Thu, 07/16/2026 - 08:38

Futures Slide After Another Korea Rout, TSMA Results Revive AI Fears

Futures are lower, erasing much of yesterday's gain with both Nasdaq and Rusell lagging SPX, following a continued rollercoaster in Korea where stocks tumbled after the BOK hired rates for the first time in 3 years. As of 8:15am ET, S&P futures dropped 0.3%, while Nasdaq 100 contracts dropped 0.8%. In premarket trading, semis are weaker again while Mag7 is stronger (AMZN, GOOG, META, and MSFT all up are least 1.2%) with the market having "a defensive tilt as the AI theme is poised to move lower" per JPM. A strong earnings beat and raised sales outlook from TSMC failed to trigger fresh gains for the sector that has fueled most of this year’s stock market gains. Europe’s Stoxx 600 was down 0.6%. WTI trading in a tighter range into Trump’s speech, AI / Semis are driving mkts with TSM ADRs indicated -3.5% their print may not be enough to buoy the group. Korea moves to tighten rules around levered ETFs, so more near-term downside may ensue. US to set 25% tariff for Brazil on July 22, ex-beef / coffee / ethanol products. Pre-mkt, bond yields are +2bp with USD flat. Commodities are lower across all 3 complexes though base metals are bid. Today’s macro data focus is on Retail Sales where a stronger print may pull some inflows into consumer-related segments, which still have light positioning. 

In premarket trading, Mag 7 stocks are mixed (Alphabet +1.3%, Microsoft +1.3%, Amazon +0.7%, Meta +0.3%, Apple +0.4%, Tesla -0.2%, Nvidia -1.5%)

• AtaiBeckley (ATAI) leaps 34% as Eli Lilly is in talks to acquire the psychedelic drugmaker, according people familiar with the matter. Analysts are positive about the psychedelic sector; RBC singles out GH Research (GHRS +18%) for a direct read-across.
• GE Aerospace (GE) declines 4% after the world’s largest jet-engine manufacturer posted second quarter results and provided an updated forecast.
• United Airlines (UAL) falls 3% after the airline’s updated full-year adjusted EPS forecast trailed the average analyst estimate.
• UnitedHealth Group (UNH) is up 7% after the health conglomerate raised its outlook for the year and reported quarterly profit well ahead of Wall Street’s views, helping to solidify the company’s earnings recovery after a historic collapse. Shares of peer insurers are up on the news: Humana (HUM) +5%, Centene (CNC) +3%.

In other corporate news Hyundai Motor is moving to acquire SoftBank’s remaining stake in Boston Dynamics, securing full ownership of the robotics pioneer at a steep discount. ABB agreed to buy British industrial components company Rotork for an enterprise value of around $5.5 billion to expand its electrification and automation businesses. Japan is planning to buy 27,500 next-generation Rubin chips from Nvidia to build a homegrown foundational AI model for robots. Jensen Huang said Nvidia’s next-generation AI accelerator systems were in production and on track for delivery. The AI frenzy is showing up in Asia airlines’ cargo bays helping to mitigate the surge in jet fuel costs. 

TSMC hiked sales and spending projections for the year, signaling its confidence in the demand for chips and data centers holding up through 2027 and beyond. However, American depositary receipts for the firm are down 4.6% during premarket trading, while peers like Micron, Marvell and Nvidia also declined.  With TSMC’s results, concern around AI — and the capital spending behind it — has been brought back to the forefront. Traders have become more critical over AI this year, rotating out of stocks linked to the technology on the basis that the spending has failed to produce meaningful returns.

Chipmakers’ leading role in this year’s equity advances is increasingly coming under strain as traders grapple with lofty stock valuations and whether AI hyperscalers are building more capacity than they will need. Investors are also looking for opportunities to rotate to other sectors within the AI trade that will benefit from the global buildout at more attractive prices.

The latest rout in Korean stocks (full discussion in a subsequent post), sparked selling in tech names, even after Taiwan chip giant TSMC raised its spending and revenue projections for the year, reflecting its confidence that torrid growth in demand for chips and data centers will extend into 2027. TSMC also plans to spend an additional $100 billion to expand US chipmaking capacity. Still, such strong earnings alone aren’t sustaining the momentum trade, signaling that investors are reducing risk. Indeed, as Goldman noted yesterday, we have now seen the worst monthly plunge in high beta momentum since the Global Financial Crisis.

With signs of memory capacity expansion, and Chinese competition ramping - investors might begin to look through perceived low P/E multiples and focus on a more cyclical measure of price/book, which paints a contrasting picture.  

Korea’s Kospi was hit particularly hard, down 6.4%, as its two main heavyweights, Samsung and SK Hynix both fell more than 10%. Korean authorities moved to curb volatility, announcing a temporary halt on new listings of single-stock leveraged exchange-traded products tied to the chipmakers.

“There’s been a lot of concentration in the market and that means there’s little room for error,” said Richard Flynn, managing director at Charles Schwab UK. “Global geopolitical risk is elevated and so there’s a relative tone of caution fundamentally looking at the macro outlook.”

“There’s been a lot of rotation within the AI trade, and a small rotation more broadly,” said Toni Meadows, head of investments at BRI Wealth Management. “It’s probably a healthy thing to have consolidation. The further things go, the more stretched they get and then the reaction is bigger.”

After two days in which softer-than-expected inflation data saw traders dial back their expectations for Federal Reserve interest rate hikes this year, June retail sales numbers will put the spotlight on the strength of American consumers.

In geopolitics, the IEA boss warned the global economy is in peril if the Hormuz crisis persists. US Trade Representative Jamieson Greer offered praise for Switzerland’s stance in trade negotiations and its investments in the US, a positive sign for the European nation as it looks to secure a 15% tariff and avoid further confrontation with Trump. The US will begin charging a 25% tariff on imports of certain goods from Brazil following an investigation alleging that the country engaged in unfair trade practices.

In hedge fund news, King Street Capital Management told clients it’s significantly restricting withdrawals from its main hedge fund, moving investors who want to exit to a separate vehicle that will sell off the assets over time. 

European equities edged lower on Thursday with the Stoxx 600 down 0.4%, as utilities and telecommunications shares led declines, while the biggest outperformers are media and banking stocks. Here are the biggest movers Thursday

• Indutrade shares surge as much as 14% after the Swedish flow control equipment firm’s second-quarter results beat estimates. Analysts at SB1 Markets said the company is poised to win consensus upgrades
• Diploma shares rise as much as 5.4%, the most in nearly two months, as the equipment supplier upgrades full-year guidance again
• Publicis shares rise as much as 4% after the advertising agency raised the low-end of its organic revenue growth guidance, saying new business wins are contributing about 2 percentage points of extra growth on FY basis
• De’Longhi rises as much as 4.9% in Milan, the most since May, after Goldman Sachs initiated coverage with a buy rating, citing the household appliance maker’s exposure to the growing espresso coffee market
• Dunelm shares rise as much as 5.6%, hitting a four-month high, after the homeware retailer reported better sales growth in the fourth quarter compared to the exit rate coming out of the third
• Telenor shares fall as much as 13%, the steepest drop since October 2008, after the Nordic telecom operator reported second-quarter results that missed estimates and lowered its full-year guidance
• ABB falls as much as 4.1%, erasing an initial gain of 1%, after the industrial group reported second-quarter results with focus on the company’s announcement that it would buy Rotork for $5.5 billion
• Partners Group shares fall as much as 8.2%, the most in six weeks, after the Swiss alternative asset manager’s first-half net inflows disappointed analysts
• Experian shares fell as much as 7.1%, as the credit checking company’s first-quarter organic revenue growth moderates. Analysts say the results were largely expected
• Frasers shares drop as much as 5.9%, underperforming the FTSE 250 Index on Thursday morning, after the UK retailer reported weaker-than-expected adjusted pretax profit for the year
• Ocado shares slide as much as 17%, to the lowest price since 2013, after the online grocery firm confirmed further delays to multiple customer fulfillment centers

Asian stocks slumped as investors accelerated semiconductor selling, dragging down sector‑heavy markets and souring broader sentiment. The MSCI Asia Pacific Index slid as much as 2% before paring some losses, as the stock markets in South Korea, Japan and mainland China registered losses. Korea’s Kospi was hit particularly hard, down 6.4%, as its two main heavyweights, Samsung and SK Hynix both fell more than 10%. Korean authorities moved to curb volatility, announcing a temporary halt on new listings of single-stock leveraged exchange-traded products tied to the chipmakers. Hong Kong’s Hang Seng Index bucked the trend to gain 1.3%, as investors rotated into the Chinese internet giants such as Alibaba and Tencent. Most Southeast Asian markets, such as Thailand, Malaysia and Indonesia, also traded higher. 

Korea, Taiwan and Japan have been among the global leaders this year, but face mounting scrutiny as investors question whether the AI rally can last. A gauge of Asian chipmakers fell as much as 4.6%. Still, Taiwan Semiconductor Manufacturing Co. provided more signs of sustained AI demand, when it raised its spending and revenue projections for the year. With leading Korean chip names down, investors are rotating out of the country, said Yi Ping Liao, portfolio manager at Franklin Templeton. “But interestingly it doesn’t look like a broad based rotation out of tech as Taiwan tech and China tech remain well supported.”

“Now that selling momentum builds in the Korean semis, investors are returning to China where valuations are depressed,” Vey-Sern Ling, managing director at Union Bancaire Privee, said, adding China’s tech performance has been inversely correlated with high-flying Korean memory names recently.

 

In FX, the Bloomberg Dollar Spot Index is near flat with muted moves across the G-10 complex.

In rates, treasuries fall despite a pullback in oil prices that correlations suggest should be accompanied by gains for bonds. That’s not been the case however with US 10-year yields rising 2 bps to 4.57%. UK and German government bonds are nursing similar sized declines. Long-end yields cheaper by around 3bp and the curve slightly steeper, amid similar moves in European bonds. The price action unwinds a portion of the sharp rally over the past two days spurred by soft CPI and PPI prints. Treasury yields are 2bp-3bp cheaper across the curve with 5s30s spread steeper by around 1bp, adding to its sharp widening since Tuesday. 10-year is around 4.57% with bunds and gilts similarly cheaper. IG dollar issuance slate includes a couple of deals. JPMorgan and Morgan Stanley headlined a $23.6 billion slate Wednesday with $9 billion offerings. Issuers paid an average of about two basis points in new issue concessions on deals that were 4.1 times covered. Focal points of US session include June retail sales data and several Fed speakers. 

In commodities, Brent crude futures fall 0.8% to around $84.30 a barrel even after the US struck Iran for a fifth straight day. European natural gas futures are down 1%. Bitcoin falls over 1% while precious metals are also in the red.

US economic data calendar includes July New York Fed services activity, weekly jobless claims, July Philadelphia Fed business outlook index, and June retail sales (8:30am), July NAHB housing market index, May business inventories and June pending home sales (10am). Fed calendar includes Dallas Fed’s Logan (12:30pm), Kansas City Fed’s Schmid (1:25pm) and Vice Chair Jefferson (7pm)

Market Snapshot

Top Overnight News

• The US struck Iran for a fifth straight day overnight and hit a sanctioned oil tanker near the country’s main export terminal. Iran fired at US bases in Kuwait and Jordan. BBG
• Iran allowed an American citizen to go free after preventing her from leaving the country for a year and a half, a move President Trump called a “gesture of good will” amid a deepening standoff between the two foes. WSJ
• The Trump administration said on Wednesday that it would impose a new 25 percent tariff on Brazil next week, arguing that the country had adopted a range of unfair trade practices against the United States. The tariff will apply to thousands of Brazilian products, but will exempt several major categories of exports, including oil and gas, beef, coffee, oranges, and aircraft parts. The tariff will apply to Brazilian ethanol, and take effect next Wednesday. NYT
• South Korea’s central bank raised interest rates for the first time in over three years, joining its global peers to tighten policy in the face of inflation fueled by the U.S.-Iran conflict. Bank of Korea Gov. Shin Hyun-song said that the bank would tighten policy further in coming months, citing stronger-than-expected economic growth and inflation. WSJ
• South Korea’s top financial regulator unveiled measures to curb risks from single-stock leveraged exchange-traded funds, seeking to stabilize a local stock market that has seen wild swings, as individual investors use debt to chase profits amid artificial-intelligence-related jitters. The Financial Services Commission said Thursday that it would suspend new listings of single-stock leveraged ETFs, ban securities firms and asset managers from advertising or marketing such products. WSJ
• Baidu plans to pursue a dual primary listing in the US and Hong Kong, a move that will allow it to tap mainland Chinese investors. BBG
• UK economic data for May was mixed, with modestly better GDP and manufacturing production while industrial production fell slightly short . BBG
• Smoke blanketed parts of the Northeast, Midwest and Great Lakes as hundreds of wildfires burned across Canada. New Yorkers face unhealthy air again today and are advised to stay indoors, according to state data. BBG
• The dip in SpaceX's shares below its blockbuster IPO price of $135 a share is an ominous sign ‌for Elon Musk's internet and rocket company as it faces more potential volatility in early August, when the number of shares available for trading on the Nasdaq stands to increase significantly from the lockup expiration. Reuters
• The market has priced a large US growth upgrade and more hawkish policy views versus before the war. Goldman
• BofA week-to-July 11th total card spending +4.5% (prev. 4.8%); spending growth slowed but remains solid.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were ultimately mixed, albeit with a mostly negative bias in the major indices, as risk sentiment was dampened by a sell-off in semiconductor stocks. ASX 200 was subdued with the index pressured by losses in miners after BHP reported lower output. Nikkei 225 slid below 67,000 with chip-related stocks over-represented in the list of worst performers. KOSPI triggered sidecars as Samsung Electronics and SK Hynix slumped alongside the semiconductor sell-off, while the BoK also raised its key rate by 25bps to 2.75%, as expected, and signalled further action. Hang Seng and Shanghai Comp were mixed with the mainland in the red following disappointing loans and financing data, while the Hong Kong benchmark rallied amid strength in hyperscalers following reports that US companies were increasingly adopting open-weight Chinese AI models and that Alibaba's Qwen AI would be integrated into Apple Intelligence in China.

Top Asian News

• South Korea Financial Regulator said they are to revise rules on single-stock leveraged ETFs to temporarily halt new single leveraged products from listing. The minimum required investor deposit is to be raised to KRW 30mln from KRW 10mln.
• Japanese Finance Minister Katayama reiterated they will take appropriate action on FX anytime as needed, although she won't comment on specific FX levels, and stated they will monitor market developments and economic indicators to achieve fiscal sustainability.

European bourses (STOXX 600 -0.3%) begin Thursday’s trade entirely in the red, with underperformance in the SMI (-0.9%) after earnings from Partners Group and ABB. On the data front, UK GDP M/M printed 0.1% M/M, in line with expectations, while the 3M ticked down to 0.7%, from 0.8%, but beat the 0.5% consensus; no reaction seen in the FTSE 100. Sectors highlight the negative bias, with Media (+0.6%) the only sector printing modest gains after earnings from Publicis (+2.1%), raising its FY revenue guidance. Underperformance is seen in Utilities (-1.1%), followed by Industrial Goods & Services (-1.0%) and Financial Services (-1.1%). US equity futures follow their European peers, trading entirely in the red, despite strong TSMC earnings and an Nvidia announcement. For TSMC, the Co. reported Q2 metrics that beat estimates and raised its Q3 revenue guidance. Additionally, the Co. is to add another USD 100bln of US investment. For Nvidia, the Co. announced that Japan, through Noetra, will buy 27,500 Rubin chips to build AI models for robots.

Top European News

• Italy PM Meloni’s electoral reform has been approved by Italy’s lower house in a vote.

FX

• G10s lack direction against the Buck in light newsflow. GBP, CHF and NOK all lower after recent gains.
• DXY is marginally firmer, but USD gains are mixed against other G10 peers. Today’s calendar sees a few Fed speakers, Logan, Schmid and Jefferson, and the data slate features Retail Sales and weekly jobless claims.
• NOK and CHF are the worst performers against the Greenback, which attempts to retrace lost ground with energy prices weighing on NOK, and USD/CHF garnering support around 0.8050.
• Not too much was learned from the UK GDP reading for May, which rose but fell short of expectations. On Wednesday, GBP rallied after a number of outlets reported that Mahmood was set for the Chancellor role. Currently, GBP/USD is holding onto gains just above the 1.35 mark.
• EUR is flat against the USD and slightly firmer against GBP, with bloc-specific newsflow light. For now, EUR trades within a narrow 1.1460-74 range. EZ calendar light with ECB on its quiet period ahead of its policy meeting next week.

Fixed Income

• Global fixed income benchmarks are modestly softer across the board, with a lack of clear drivers, and as US-Iran strikes continue to stoke fears of prolonged inflation.
• Gilts (-15 ticks) trade at the lower end of its 87.15-87.60 range, giving back some of Wednesday’s gains. This morning, UK GDP printed 0.1% M/M, in line with expectations, while the three-month gauge ticked down to 0.7% (from 0.8%), but still beat the 0.5% consensus. Politics remain front and centre: reports on Wednesday suggest that incoming PM Andy Burnham is likely to appoint Home Secretary Mahmood as the next Chancellor. Markets have taken this as a positive as she is seen as fiscally conservative, though many still seek clarity on her broader positions. Polymarket gives Mahmood a 63% chance vs Miliband's 9% to become the next Chancellor. The UK had a decent auction, however demand did fall from the prior auction
• OATs (-22 ticks) follow their European peers lower. Politics remains in focus; recently, RN's Le Pen was found guilty of embezzlement by the Paris court, but given the timing of the first round of the Presidential Election, she is eligible to run for President. Since then, she announced she would appeal the court's decision and has launched her Presidential campaign. Polls show that Le Pen has extended her lead, with support rising to above 35% from 33% before she announced her bid. Today’s auctions came broadly in line with priors, with demand holding near 3x.
• USTs (-7 ticks) look ahead for more Fedspeak, with Logan, Schmid and Jefferson all set to speak on the economy and economic outlook today (note: Jefferson is after hours). On the data front, initial jobless claims and retail sales are the highlights.
• The UK sells GBP 4.25bln 4.875% 2036 Treasury Gilt: b/c 3.13x (prev. 3.46x), average yield 5.040% (prev. 4.858%), tail 0.1bps (prev. 0.1bps).
• France sells EUR 13.999bln vs exp. EUR 12-14bln 2.40% 2029, 1.50% 2031, 3.25% 2032 and 3.50% 2033 OAT.
• Spain sells EUR 5.974bln vs exp. EUR 5-6bln 2.35% 2029, 3.55% 2033 and 3.95% 2056 Bono.

Commodities

• The situation between the US and Iran remains volatile. Overnight, the US completed another round of strikes on various parts of Iran, targeting military capabilities. Tehran responded with its own attacks on Kuwait and Jordan.
• The path to peace currently remains uncertain. President Trump said that strikes would expand next week; a recent report via the WSJ suggested that Trump is leaning toward expanding US military operations in Iran after days of briefings from top aides. If this proves to be the case, then the risk is that Iran responds with a harsher response against its regional peers. Thus far, Iran has generally avoided energy infrastructure across Gulf nations, but a US expansion could see Iran begin to target Gulf energy facilities, posing risks for oil supply. In the immediate term, the Strait remains shut and near-term flows have been slowed; longer-term, severe facility damage could see halts to production for several months/years, analysts say.
• Despite these risks, crude benchmarks are trading lower this morning; Brent Sep’26 (-0.5%) trades within a USD 84.30-85.55/bbl range. Price action was lacklustre overnight and into the European morning. However, some modest upticks (c. USD 0.30/bbl) were seen after an Iranian Top Military Commander stated that the Strait of Hormuz is a red line and added that all infrastructure in the region will be "crushed" if the US continues its interference.
• Spot gold (-0.6%) moved lower throughout the APAC session. The subdued action filtered through into London hours; currently holding at session lows of USD 4,024/oz (vs peak of USD 4,064/oz). Action, which is a bit of a paring back from the gains seen in the past couple of sessions. Elsewhere, base metals hold a modest positive bias. 3M LME Copper (+0.3%) holds within a USD 13,541-13,648/t range.
• Crude oil flows were suspended at all Iraqi oil loading terminals following a drone crash into an oil tanker at Iraq’s Basra terminal; no damage or fires were reported, security sources said.

Trade/Tariffs

• The US is to set a 25% tariff on some Brazil goods from July 22nd, with coffee and beef exempted.
• USTR Greer said that Canada offers no concessions and that Mexico is pragmatic in USMCA talks.

Central Banks

• BoK raised its 7-day Repo Rate by 25bps to 2.75%, as expected. BoK said the rate decision was unanimous and growth rate this year is expected to considerably surpass the May forecast of 2.6%. Will assess timing of further increase in inflation pressure, improvement trend in the economy and financial stability.
• BoE's Breeden said it is important firms are stress testing AI valuations. The Iran war shock is less likely to become embedded and lead to inflationary dynamics that members might need to lean against.
• NBP's Zarzecki said the base case is for rates to remain unchanged until the turn of 2026/27, with rates likely to rise in 2027.
• SNB Minutes (Jun): Although inflation risks have increased in recent months and stronger second-round effects are possible, there is no immediate need for action.

Geopolitics

• US President Trump posted that Iran allowed a US citizen who was wrongly detained in December 2024 to leave the country. Trump added that the citizen is now safely outside of Iran and in good condition, while he stated that the US appreciates the gesture of goodwill by Iran.
• US VP Vance said Israel is more effective than most at influencing the US, and that some people in the Israeli government want war indefinitely. Furthermore, Vance said they are not going to send ground troops for regime change and that the US will not simply engage in endless bombing of Iran.
• US CENTCOM said forces conducted operations for a second wave of strikes on Wednesday against Iran and that US forces disabled a non-compliant vessel in the Arabian Gulf, while it denied Iranian claims that US forces struck a civilian wheat storage facility in Hoveyzeh on July 14th and described the reports as false.
• Explosions were heard in Iran's Khorramabad, and US air strikes targeted areas in Tehran. Explosions were also heard in Iran's Qeshm and Bandar Abbas, while US projectiles hit near Sirik.
• Iran attacked economic interests and US facilities in Kuwait, while at least 10 explosions were heard at the US Navy's Fifth Fleet Headquarters in Bahrain, and Iran also targeted Jordan.
• Kuwait said its armed forces intercepted four cruise missiles and 21 drones from Iran on Wednesday, while Iranian aggression targeted a number of vital facilities, resulting in material damage, although no injuries were reported.
• Iran's Top Joint Military Command said the Strait of Hormuz is a red line and added that all infrastructure in the region will be "crushed" if the US continues its interference.
• Houthis were reportedly laying the groundwork and quietly extending their reach to the Horn of Africa, according to the Telegraph citing sources in Yemen, with Houthi rebels reportedly preparing to shut the Bab el-Mandeb Strait on behalf of Iran. Furthermore, sources said the effort was a deliberate Iranian attempt to control "the other side of the Red Sea" and create a situation similar to its grip on the Strait of Hormuz.
• Israeli Defence Minister said US operations against Iran was discussed in the phone call with the US Secretary of State Rubio, and said Israel will remain in security zones in Syria, Gaza and Lebanon. 
• Ukraine's security service said it struck two Russian shadow fleet tankers in the Black sea and hit six more tankers and two tug boats in the Sea of Azov and Black sea. 
• US and Iraq to announce USD 60bln in commercial deals as Trump pivots US-Iraq ties towards commerce over military, according to Semafor.

US Event Calendar

• 8:30 am: Jul Philadelphia Fed Business Outlook, est. 12.5, prior 10.3
• 8:30 am: Jun Retail Sales Advance MoM, est. 0.2%, prior 0.9%
• 8:30 am: Jul 11 Initial Jobless Claims, est. 217k, prior 215k
• 8:30 am: Jun Retail Sales Ex Auto MoM, est. -0.1%, prior 0.8%
• 8:30 am: Jul 4 Continuing Claims, est. 1817.5k, prior 1814k
• 10:00 am: Jun Pending Home Sales MoM, est. -0.5%, prior 3.8%

Central Bank speakers

• 12:30 pm: Fed’s Logan Speaks on the Economy and Monetary Policy
• 1:25 pm: Fed’s Schmid Speaks at Kansas City Fed Economic Forum
• 7:00 pm: Fed’s Jefferson Speaks on Economy and Monetary Policy

DB's Jim Reid concludes the overnight wrap

As hearts were broken in England, markets continued to shrug off the recent escalations in the Middle East and have mostly had a positive last 24 hours. Admittedly, there’s been some weakness among chip stocks in Asia this morning, but otherwise, markets benefited from a soft US PPI print which continued to drive a dovish repricing. Indeed, the probability of a Fed rate hike in a couple of weeks’ time now stands at just 10% this morning, the lowest it’s been since the Fed’s last meeting that led to the imminent hike speculation in the first place. Moreover, oil prices finally stabilised after their jump earlier this week, with Brent crude (+0.26%) up only marginally yesterday, and they’ve since fallen back -0.22% overnight to $84.76/bbl. Meanwhile, risk appetite also remained resilient, with the S&P 500 (+0.38%) closing just half a percent from its record high last month, and futures for the index are up another +0.13% this morning.  

As on Tuesday, that US inflation print really cemented investor confidence in the dovish narrative this week. Notably, headline PPI was down -0.3% in June (vs. unch expected), but we also had a big downward revision to the May reading, which fell half a point to +0.6%. So the recent inflation picture was softer than originally thought, with the year-on-year PPI reading down to +5.5% (vs. +6.2% expected). And significantly for investors, there wasn’t any obvious alarm either from the components that feed into PCE inflation (the Fed’s target measure). See our US economists’ inflation recap here.

That backdrop meant investors continued to dial back the chances of a Fed hike, with US Treasury yields coming down across the curve. For instance, the 2yr yield (-5.9bps) was down to 4.14%, whilst the 10yr yield (-4.2bps) fell to 4.55%. We also heard from Fed Chair Warsh once again, who was appearing before the Senate Banking Committee. The new Chair said he “repeatedly” told Trump that he would be independent, but there were no major policy headlines from his session and little to point towards an imminent hike. Separately, Fed Governor Cook maintained a hawkish-leaning tone, saying that the FOMC can take its time to observe more data but that “If we do not see signs of disinflation soon, I am prepared to act”.

As all that was happening, oil prices fluctuated amidst the competing headlines out of the Middle East, but they ultimately stabilised after their sharp jump earlier in the week. In terms of the latest developments, oil prices initially eased back yesterday but then edged higher as US forces conducted new strikes overnight and the WSJ reported that Trump was leaning towards expanding military operations against Iran. But overall, Brent crude has been broadly flat, with a modest +0.26% increase yesterday to $84.95/bbl, and overnight it’s since fallen back -0.22% to $84.76/bbl.  

For US equities there was another decent performance as well yesterday, aided by the dovish repricing. Moreover, the latest earnings results added further support, with BlackRock (+6.63%) as the second-best performer in the S&P 500 yesterday after its results beat expectations. So that helped the S&P 500 (+0.38%) to post a second daily increase, despite a drag from chip stocks, as the Philly semiconductor index fell -2.08%. But other tech stocks fared better, with the NASDAQ up +0.62%. Moreover, the Mag-7 rallied +2.31%, led by Apple (+4.01%) after it received government approval to roll out Apple Intelligence in China.  

Those themes have continued overnight, with weakness among chip stocks dragging down some of the major indices in Asia. For instance, it’s been another volatile day for the KOSPI (-6.55%), which is currently on track for a two-month low as it stands, having shed over -25% since its peak less than a month ago. And we’ve seen weakness in Japan as well overnight, with the Nikkei down -2.48%, and in mainland China the CSI 300 (-0.91%) and the Shanghai Comp (-0.82%) have also fallen. The one exception to that is the Hang Seng, which is up +1.93% this morning.

In other news overnight, the Bank of Korea delivered their first rate hike since 2023, with a 25bp hike that took the policy rate to 2.75%. The move was in line with consensus, and their statement said that “inflation is expected to remain above the target level for a considerable time”, and they said that growth this year “is expected to considerably exceed the May forecast of 2.6%.” Meanwhile, they also signalled further hikes ahead, saying that “it is judged that it will be necessary to continue a policy stance consistent with further rate hikes”.

Staying on central banks, we also heard from the Bank of Canada yesterday, who kept rates unchanged as the consensus expected. There was some optimism however, as their statement said that the economy was “showing signs of improvement”. But the market reaction was pretty muted, and the decline in 10yr Canadian bond yields (-4.3bps) was almost exactly in line with that for 10yr US Treasuries.

Earlier in Europe, there was also a weaker performance yesterday, with yields moving higher as concern grew on the inflation side. The problem was that even as oil prices fell back, natural gas prices continued to tick higher, with European futures hitting a fresh 3-month high yesterday of €54.35/MWh. So that backdrop saw yields on 10yr bunds (+0.7bps), OATs (+1.8bps) and BTPs (+2.6bps) all move higher, although the STOXX 600 (+0.10%) managed to eke out a modest gain, even as the DAX (-0.59%) and FTSE-MIB (-0.85%) saw larger declines.

Finally, with Andy Burnham set to become UK Prime Minister next week, the FT reported that the next Chancellor of the Exchequer was likely to be Shabana Mahmood, the current home secretary. This had been a key focus for UK markets in recent days, and the pound strengthened on the headlines, ending the day up +1.12% against the US dollar at $1.3540. Moreover, gilts also extended their outperformance after the news, with the 10y yield (-3.8bps) down to 4.94%, the opposite direction to yields in continental Europe.

Looking at the day ahead, US data releases include retail sales and pending home sales for June, the NAHB’s housing market index and the Philadelphia Fed’s business outlook survey for July, and the weekly initial jobless claims. Meanwhile in the UK, we’ll get the monthly GDP print for May. Otherwise, central bank speakers include the Fed’s Logan and Schmid. Finally, today’s earnings releases include Netflix, Morgan Stanley and Johnson & Johnson.

Tyler Durden Thu, 07/16/2026 - 08:25

The Big Pharma Psychedelic Buyout Spree Has Begun

Submitted by QTR's Fringe Finance

Massive validation for psychedelics…not as drugs, but as investments could be moments away. Just months after I argued for the millionth time that psychedelic drug developers were likely to become acquisition targets as the sector gained legitimacy, it looks like the first major domino may finally be falling.

According to a Bloomberg report published moments ago, Eli Lilly is in talks to acquire AtaiBeckley, one of the leading developers of next-generation psychedelic therapies. While nothing is finalized, Bloomberg reports a deal could be announced as soon as this week, with Lilly negotiating at a premium to AtaiBeckley’s roughly $2 billion market value.

If this transaction gets across the finish line, I don’t think it’ll be remembered as an isolated acquisition. I think it’ll be remembered as the moment Big Pharma officially entered the psychedelic arms race.

I’ve been writing for well over a year that investors were dramatically underestimating how this story would unfold. Most people focused exclusively on whether psychedelic drugs would work. I was far more interested in what would happen once they did.

Back in January when absolutely no one was talking about the sector, I officially hung my balls out there and name it my “Best Idea” sector for 2026. I argued that these companies didn’t need everything to go right. They simply needed legitimacy. Once regulators, clinicians and large pharmaceutical companies accepted these therapies as real medicine instead of fringe science, today’s tiny clinical-stage companies could quickly become strategic assets.

That thesis suddenly looks a lot less theoretical. According to Bloomberg, Lilly has been quietly evaluating the psychedelic space for some time. The acquisition target makes perfect sense.

While the company has become synonymous with obesity drugs over the last several years, many investors forget Lilly built one of the most successful antidepressants in history with Prozac and has continued investing heavily in neuroscience, Alzheimer’s disease and non-opioid pain therapies. Psychedelics are simply the logical next frontier…and I’ve constantly argued they could be a threat to antidepressants.

None of this should come as a surprise to longtime readers.

Just weeks ago, one of my “26 Stocks to Watch for 2026,” Definium Therapeutics, exploded higher after reporting successful Phase 3 results for its LSD-based treatment for major depressive disorder.

The stock surged more than 60% in one session and roughly tripled from where it began the year. When I wrote about those results in June, I reminded readers that my bullish thesis on psychedelics had never been based solely on clinical efficacy. It was based on legitimacy.

I’ve been pounding the table on psychedelic companies since early 2025 because I believed the science was continuing to improve while Washington’s posture toward the sector was quietly changing underneath the surface.

I was writing about these stocks 18 months ago, first in January 2025, calling the psychedelic names “stocks to watch” for the year. Then, in July 2025, urging patience in these positions: Being Early—And Patient—In Psychedelics

Earlier this year I argued that Robert F. Kennedy Jr.’s Department of Health and Human Services would likely help accelerate institutional acceptance of these therapies, particularly for veterans suffering from PTSD, addiction and depression.

In April, after the administration’s executive order supporting psychedelic research, I reiterated my bullish stance and argued that we were moving from the phase where these therapies were ignored into the phase where institutions would be forced to engage with them seriously. That transition appears to be underway.

The administration has publicly supported psychedelic research, federal agencies appear increasingly willing to engage with the field, states continue building regulatory frameworks around treatment programs and the stigma surrounding these compounds has steadily eroded.

Back in January, I wrote that the market was dramatically underpricing one simple reality. These weren’t speculative science projects anymore…they were organized, capitalized pharmaceutical development programs.

As I wrote earlier this year, these companies don’t necessarily need dozens of approvals. They need legitimacy. Once legitimacy arrives, capital follows.

Today we’re beginning to see exactly what that looks like.

I've also remained a believer that the AdvisorShares Psychedelics ETF (PSIL) is one of the best ways to gain diversified exposure to the theme. Earlier this year, I even reiterated what many people thought was a ridiculous prediction when I first made it: that PSIL could eventually trade north of $100 if psychedelic medicine evolves into a mainstream investment theme.

That isn't a forecast for next month and it certainly isn't a guarantee. It's simply a reflection of what can happen when an entire sector goes from being dismissed and ignored to becoming institutionally accepted. Markets have a long history of dramatically underpricing paradigm shifts before ultimately overshooting in the opposite direction. If psychedelics follow a similar path, I still believe the long-term upside for the broader sector could be substantially larger than most investors currently imagine.

Importantly, I don’t think Lilly will be the last major pharmaceutical company knocking on these doors.

If psychedelic therapies continue producing successful Phase 3 data, larger drugmakers will increasingly face a choice. Either spend years and billions attempting to build internal psychedelic programs...

...or simply acquire companies that have already done the difficult clinical work.

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History suggests acquisitions usually become the preferred option.

Large pharmaceutical companies routinely buy innovation rather than inventing everything themselves. Oncology, gene therapy, obesity drugs and biotechnology more broadly have all gone through similar acquisition waves as promising clinical data accumulated.

There’s little reason to believe psychedelics will prove different.

In fact, the economics may become even more compelling. Many of these companies still carry relatively modest market capitalizations despite owning potentially valuable intellectual property and late-stage assets. For a pharmaceutical company generating tens of billions in annual revenue, paying several billion dollars for a differentiated neuroscience platform may ultimately prove inexpensive if these treatments become standard of care.

That’s exactly why I’ve been saying for more than a year that investors shouldn’t think only about FDA approvals. They should think about strategic value.

Clinical success doesn’t just create future revenue, it creates scarcity. And scarcity is exactly what fuels acquisition premiums. I’ve long believed the market was dramatically underestimating this possibility.

Today’s Lilly-AtaiBeckley news doesn’t prove the entire thesis. But it certainly looks like the first major piece of evidence that the industry’s next phase has arrived.

If anything, I think the acquisition race is only beginning. As more late-stage trial results emerge, more regulatory milestones are reached and institutional acceptance continues expanding, I expect the list of potential buyers to grow rather than shrink.

For years, psychedelic investing has been on the fence. Lilly just legitimized it. And my readers we were at the party first.

---

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Tyler Durden Thu, 07/16/2026 - 08:05

New Poll Shows American Voters Overwhelmingly Reject Communism, Dealing A Blow To DSA

The Democratic Socialists of America are intensifying their consolidation of power within the Democratic Party, winning low-turnout local elections as establishment Democrats struggle to contain the spread of socialism and Marxism within their DEI kingdom.

DSA leaders and politicians have openly embraced anti-American rhetoric centered on dismantling capitalism and calling for revolution, while their unofficial spokesperson, Hasan Piker, has amplified inflammatory calls to "kill capitalists."

Hasan Piker calls on his followers to kill capitalists:

“Yeah kill them! KiII those motherfuckers and murder those motherfuckers in the streets. Let the streets soak in their fucking red capitalist blood, dude.”

Democrats are campaigning with him. pic.twitter.com/YiZxGgRkgc

— Eyal Yakoby (@EYakoby) April 9, 2026

The larger question is whether mainstream America is prepared to follow DSA revolutionaries toward a violent revolution from within the nation to sow chaos, as federal investigations grow over the group's alleged links to foreign subversion networks connected to Cuba and China.

Convincing average voters to embrace a far-left agenda, especially one wrapped in revolution and anti-capitalist rhetoric, will be an extraordinarily difficult sell to folks who just want to live life and own property.

Frank, Aaron, Hank and Sam are Communist insurgents, radicalized marxist revolutionaries hiding behind personal ideologies to justfy their 1A expressions of the right to promote the insurrection of the Constitutional Republic of the United States of America pic.twitter.com/XLzzjisOqd

— AnimalFarm1945 (Moshe) (@Farm1945A) July 6, 2026

Washington, DC-based research and polling firm Echelon Insights has captured a new sentiment snapshot of voters from a poll last week that showed just how unpopular DSA, socialism, and communism are... 

The clearest takeaway is that voters strongly prefer market-oriented ideas:

• Free-market economy: 53% favorable, 12% unfavorable, a +41 net rating
• Capitalism: 49% favorable, 29% unfavorable, +20
• MAHA: 39% favorable, 33% unfavorable, +6
• Social democracy: 36% favorable, 31% unfavorable, +5

Most political parties, figures, and left-wing movements are underwater, with socialism and communism ranking the worst:

• Democratic Party: 43% favorable, 52% unfavorable, -9
• JD Vance: 39% favorable, 53% unfavorable, -14
• Republican Party: 40% favorable, 56% unfavorable, -16
• Democratic Socialists of America: 25% favorable, 46% unfavorable, -21
• Donald Trump: 38% favorable, 61% unfavorable, -23
• MAGA: 32% favorable, 57% unfavorable, -25
• Socialism: 23% favorable, 52% unfavorable, -29
• Communism: 5% favorable, 78% unfavorable, -73

Echelon Insights: Net Favorability Ratings

🟢 Capitalism: +20
🟢 MAHA: +9
🟤 Free Palestine movement: -14
🟤 DSA: -21
🟤 MAGA: -25
🟤 Socialism: -29
🟤 Communism: -73https://t.co/GtGphxr02l pic.twitter.com/iUMiPRucZz

— InteractivePolls (@IAPolls2022) July 14, 2026

The survey suggests that Americans remain strongly supportive of free markets and very negative toward socialism and communism, even as both major political parties and many top political figures suffer from plunging ratings.

Nate Silver's January 2026 ratings gave Echelon an A- score, with its predictive score indicating that the polling firm is expected to outperform the average pollster. Echelon also performed well during the 2024 election cycle, recording an average polling error of roughly 2 percentage points.

The polling data help explain why establishment Democrats have become increasingly alarmed by the rise of DSA, which they view as derailing the party in future elections because revolution is just not popular with the average voter.

Even a former Bill Clinton adviser wrote in a Wall Street Journal op-ed last week calling for investigations into DSA for possible foreign influence and subversion networks.

Ultimately, DSA is making a massive political gamble that it can persuade enough Americans and migrants to embrace class struggle and pursue a revolution. The problem is that such a move risks provoking a federal response, particularly as U.S. officials increasingly examine whether elements of DSA's revolutionary movement are intertwined with foreign influence and subversion networks.

After all, DSA has admitted that it is a "partner" of the sanctioned ICAP…

Perhaps that helps explain why the group is so eager to pursue Marxist revolution.

Tyler Durden Thu, 07/16/2026 - 07:45