At The Money: Building a Bond Ladder with ETFs (July 2, 2026)

How can fixed-income investors create diversified, inexpensive bond ladders using Exchange Traded Funds?

Full transcript below.

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About this week’s guest:

Steve Laipply is Global Co-Head of iShares Fixed Income ETFs. Previously, he was Head of U.S. iShares Fixed Income Strategy. He helps to oversee more than a trillion dollars in bond ETFs. Each week,

For more info, see:

Masters in Business

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TRANSCRIPT:

At the Money: Building a Bond Ladder with ETFs
Steve Laipply, Managing Director, BlackRock; Global Co-Head of iShares Fixed Income ETFs 

BARRY RITHOLTZ: Investors who are looking for yield, especially in an uncertain rate environment, used to need millions of dollars to build out a bond ladder in a separately managed account. It wasn’t easy. There were issues of credit quality, duration, and risk. It made it kind of complex to do. But today, you can create a simple ladder using inexpensive ETFs.

I’m Barry Ritholtz, and on today’s edition of At the Money, we are going to explain how and when to build your own bond ladder.

To help us unpack all of this and what it means for your portfolio, let’s bring in Steve Laipply. He’s Managing Director at BlackRock and Global Co-Head of iShares Fixed Income ETFs. Previously, he was Head of U.S. iShares Fixed Income Strategy. He helps to oversee more than a trillion dollars in bond ETFs.

Let’s start with the basics: What’s the problem that a bond ladder is supposed to solve for investors?

Steve Laipply: This gets to a very popular, longstanding practice that advisors and investors have used for years, which is this idea of: I’m not going to be able to really predict the evolution in interest rates, and so what I’m really interested in is cash flows. I’m interested in trying to line up some certainty with income, and I don’t really want to take a lot of interest rate risk.

A comfortable thing is to create a ladder, which means you buy some amount of bond exposure in every year going out to, say, five years. And if you’re worried that interest rates are rising, you could always just not reinvest and let that ladder roll down, get your par value back at maturity, and then you could take that cash and go elsewhere.

And so that’s always been a comfortable thing — this idea that I’m in control; if rates rise, I don’t have to worry about a perpetual loss from having an open-ended exposure. I can just let the bonds roll down to maturity and I’m done. That’s sort of the idea.

Now, in practice, many, many advisors and investors simply roll over and over again and just keep putting bonds into that last rung. However, it’s this idea that they have control, and I think that is a very attractive thing.

If you contrast that, for example, with a mutual fund or an SMA or an ETF, that may be more of a perpetual, open-ended exposure, and then there’s a sense that, well, maybe I’m less in control of managing that. So the attractiveness of ladders: cash flow, and you have some certainty and control over how it evolves and plays out. And that’s why they’re so popular.

BARRY RITHOLTZ: So let’s delve into that a little bit for people who are not familiar with the ladder. Let’s say we’re building a seven-year ladder: We’re going to have different duration holdings for each of those seven years, because we have no idea what rates will be in year three, in year six, and however far out you want to go. And so if you’re doing a 10-year bond ladder, well, you’re only taking a risk with one-tenth of that portfolio each year. And when it comes up, you get to decide: Do you want to just roll it over to more of the same? Do you want to adjust your credit risk, your duration, even where you’re investing? So you’re always locking something in. If rates go up, you get to reinvest higher. If rates go down, well, the rest of your portfolio is now worth a little more, but you’re going to get a lower yield.

Tell us about the products that exist so that you could either do this in, let’s call it, seven separate holdings, or just one holding with the ladder built in.

Steve Laipply: Yeah, and this is what’s fascinating. There are a couple of things to unpack here. So investors can ladder by going out and buying individual bonds, and that’s what they’ve done for many, many years. The downside of that is that depending on the amount you have to work with, you might end up being fairly concentrated if you start out with a smaller amount of proceeds, because, as you know, bond face value is a thousand dollars, and so you may not be able to build out as many holdings per year as you’d like to be diversified. But the advantage of that is: Okay, I know each individual bond and I can watch it mature, et cetera.

Another approach would be something that we pioneered back in 2010, which is what we call an iBond, which is meant to be sort of like an individual bond exposure that matures in a given year, but it can hold hundreds of bonds within that year.

BARRY RITHOLTZ: So fully diversified, in other words.

Steve Laipply: So you’re diversified tremendously relative to just trying to pick individual bonds for a certain year.

Let’s say you buy a five-year corporate iBond: All those bonds will mature in year five, but you may have upwards of 300 bonds, and so that gives you comfort in terms of the credit risk.

Now, the trade-off with that is that it doesn’t quite look like an individual bond, because you have many bonds, and so your cash flows won’t quite be as fixed or certain as they would be by holding an individual bond. But it’s roughly the same idea. It’s more akin to holding a portfolio of bonds maturing the same year.

BARRY RITHOLTZ: What are some of the other advantages of building a ladder with ETFs? Clearly, diversification is one. What about pricing, execution, and complexity? What are the other advantages?

Steve Laipply: And these are the trade-offs.

 

You have sort of the standard ETF features and benefits: You have exchange transparency, you know the price, you can sell out of it at any time.

Just to put this into context, imagine if you were holding a five-year ladder of individual bonds, and let’s just say you had the proceeds to build a pretty diversified portfolio for each year. Imagine trying to sell all those bonds if you decided you needed to raise cash. That would be a non-trivial exercise, and it might be quite costly.

With something like an iBond — let’s just say you decided to liquidate the entire ladder — you get the benefit of the ETF liquidity, just as you would in a traditional investment-grade ETF like LQD or what have you. There are varying degrees of liquidity, of course; some things may not trade as liquid as others. But the point is that that’s an ETF feature.

The other part of it is just really understanding what you own, and the ability to trade cheaply relative to individual bonds. ETFs trade for bid-ask spreads of pennies on exchange; individual bonds can be multiples of that. So that’s sort of the final thing — it’s about cost. Of course, ETFs have expense ratios, so you have to do that trade-off, but generally, the math is going to work out in your favor.

BARRY RITHOLTZ: The expense ratio, especially for iShares, is really quite reasonable. But let’s talk about maturity selection. You could build out a ladder almost as far as you want. How should people be thinking about why five years or seven years or 10 years? What goes into that selection process?

Steve Laipply: A couple of things. If you look at the tools — for example, we have tools on iShares.com that allow you to build a ladder — it shows you how to build out to get a certain yield, or if you want a certain duration profile, et cetera. So it really gets down to a couple of things: What sort of overall yield and income profile are you looking for? The other part is, what kind of cash flow profile are you looking for? Is there a particular reason that you want to go out to five years or greater? Do you want to be inside of three years because you may want that cash sooner?

Let’s take a simple example. Let’s just say you have a life event coming up in three years. You want the last cash flows to be coming due in those three years for sure. You can have cash flows coming due past that, but it’s far more comfortable to know that you’re getting that cash back in year three, because at that point you’re going to take a big trip, you may have college tuition due, etc. And so it makes it really easy to think of it in that way: When do I need that cash? Let’s just work backwards from there and build it from there.

BARRY RITHOLTZ: Let’s talk a little bit about the tool you have on your website, the iShares ladder builder with iBonds ETFs. It’s really kind of fascinating. You put in a dollar amount, what type of bonds you want — corporates, Treasuries, TIPS, munis, high yield — and you could go out as far as 2056. That’s amazing — that’s a 30-year bond ladder — and it gives you a whole bunch of different data on this. Are people using this sort of tool to construct their own ETF bond ladders?

Steve Laipply: They are. It’s proven to be a very popular tool. And that’s one of the, I think, interesting and neat things about having these products at your disposal. Again, when you’re building these ladders — let’s just say you build a pretty robust multi-year ladder — you’re effectively buying thousands of bonds, depending on the sector, let’s say corporates. And so that would be very, very hard to do just doing it in individual bond space, and it would be more expensive. And so the tool is something that allows you to visualize that and play with it. You can mix different exposures, et cetera. And so I think that’s something that investors have found to be really, really interesting.

BARRY RITHOLTZ: Let’s talk a little bit about credit quality. I’m old enough to remember when we used to refer to high-yield bonds as junk bonds. If you’re putting together a bond ladder, how do you think about juicing the returns a little bit with some high-yield paper?

Steve Laipply: This gets to, investor preference?

High yield by definition is what it sounds like. However, it comes at a cost, which is you may not get all of that money back, because some of it may default. And so that’s the rub, right?

I think investors are going to do sort of a calculated risk assessment on what they’re willing to tolerate risk-wise. If you put all of your money into a high-yield ladder, the yield will most certainly be higher than investment grade. However, the overall performance may not match that initial yield, because over time, some of those companies may default, and you may not realize exactly the initial yield you did — it’ll be something less. And so that’s just with any high-yield bond, right? I think what makes it attractive in the ETF space is that at least you’re diversified. And so that’s an important point, because if you’re trying to do this in individual bond space, you have a lot more risk to those individual companies than if you did it in ETF space.

BARRY RITHOLTZ: Right. You get to hold so many more individual bonds within the ETF than even a million-dollar portfolio is going to be able to do. One of the things that’s always interesting is when bonds begin to approach maturity, sometimes the trading is a little counterintuitive. What should investors expect in the final year of any particular bond ETF in their ladder? How should they expect this to trade? What happens on maturity?

Steve Laipply: Yeah, and this is, I think, something that investors are very, very interested in, because with an individual bond, it’s pretty easy just to watch, right? You know, okay, it’s one year left, it’s three months left, and then on the final day I’m going to see the thousand dollars hit my account. With a bond ETF, what’s going to happen is not all those bonds mature on the same day or in the same month. So let’s take a full calendar year. You may have some of those bonds start maturing in January. What happens to those? Well, they eventually get reinvested into cash accounts. In some cases they may get reinvested in very, very short corporate paper, as an example. But ultimately, as bonds keep maturing throughout that year, they’re all going to be reinvested in cash. And so by the end, you have cash in the bond ETF portfolio. What’ll then happen is the bond ETF delists, it gets liquidated, and that cash then hits your brokerage account. And that’s basically it.

BARRY RITHOLTZ: So, final bond ladder question: What do you think are the biggest mistakes investors tend to make when they build bond ladders? I see all the time people chase yields, they take a little too much credit risk, they don’t really think about duration — although I guess you don’t have to if it’s a fixed-year ETF — and then the other risk is the money hits as cash and then it just sits in the account too long. What do you see as the biggest problems?

Steve Laipply: I think some of it might be the reaching for yield. Because, again, why are you laddering? What are you trying to accomplish? And so I think the best thing to do is always really sit down, figure out what your goals are, and then work backwards. So as an example, that life event that we were using as an example earlier: Let’s just say you have to have that cash — you’re probably not going to want to do a high-yield ladder, right? You may want to do a Treasury ladder or a TIPS ladder, an inflation-protected ladder. You’re probably not going to want to swing for the fences on that one. The other one would be really just trying to understand the reinvestment part of that. What do you do when you get one of the rungs maturing? Do you go out and put it into a longer rung? Are you going to take that cash and reinvest it in a money market account? That’s investor preference, but it matters for your total return. So that’s going to be up to you. But I really do think working backwards from your financial goals is the best way to build a ladder. And then you can do that across the different asset classes. If you can earn more income, by all means, you might want to tilt more towards more credit-intensive assets. Safety is Treasuries and TIPS. And so I think that’s kind of it.

BARRY RITHOLTZ: So Steve, some people just like to go out and buy the entire Agg, the entire index. What are the differences you see between buying the whole index versus doing a ladder?

Steve Laipply: Well, you know, Barry, this is really interesting, actually, and it’s kind of a math question. But if you look at the behavior of index funds compared to just, say, a very simple ladder — where the investor takes the maturing proceeds and goes back out to the longest rung and reinvests, and they just do that over time, over and over and over again — that does not actually look too different than an index fund. It really doesn’t. And there has been academic research on this, and we can make it complicated, but the bottom line is perpetual laddering is kind of like indexing. And I think that’s sort of fascinating. And so if somebody knows they want to do that, they could also look at an index fund as well. But I always thought that was a really interesting thing if you line them up side by side.

BARRY RITHOLTZ: Huh, that’s really kind of surprising. I would imagine the ladder gives you a little more certainty into what your yield is going to be, whereas with the index, you’re just taking a wild guess.

Steve Laipply: I think both give you some level of certainty. The ladder is about control, right? Because you can decide at any time whether to stop reinvesting, and I think that’s why they’re really popular.

BARRY RITHOLTZ: Hmm, really interesting stuff. So to wrap up: In an uncertain rate environment, investors who have either future financial needs or liabilities that they know can manage around that by using a bond ETF ladder and reinvesting continuously over the cycle of that ladder. I’m Barry Ritholtz. You are listening to Bloomberg’s At the Money.

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The post At The Money: Building a Bond Ladder with ETFs appeared first on The Big Picture.

Yen Surges As Jittery Traders Expect Imminent Intervention After Japan Reveals New Strategy To Wipe Out Shorts

After plunging to a fresh 40 year low overnight, the yen strengthened sharply against the dollar amid rising speculation that the currency’s continued weakness may prompt a fresh round of intervention by Japan. The yen then surged again after the June US jobs report showed a much weaker picture than expected.

But let's focus on the first, more unexplained move, which took place just after 2:30am ET, when the Yen rose as much as 1% against the greenback, the most since Japan intervened on April 30. The currency later trimmed the advance, before surging again after the jobs report. Earlier in the week, the yen touched its weakest versus the dollar since 1986.

Traders were already on edge ahead of both the jobs report and the Friday holiday in the US, which creates thin trading conditions that would likely amplify the impact of any yen intervention.

“Liquidity is expected to decline during the afternoon session in New York on July 3, when US markets will effectively be closed for the Independence Day holiday,” said Masayuki Nakajima, senior currency strategist at Mizuho Bank in London. “If major US economic releases, such as the employment report, were to come in weaker than expected and trigger broad dollar selling, intervention could become tactically more effective.”

Talking to Bloomberg, Neil Jones, a managing director of FX trading at TJM FX in London, recommended buying bearish dollar-yen options. The strategy assumes “a no-warning scenario this time,” he said. While it’s difficult to time any potential intervention, he’s increasingly convinced that it will ultimately happen.

Meanwhile, South Korean Second Vice Finance Minister Huh Chang said Thursday that the government is closely exchanging information with the US and Japan regarding the forex market.

Reuters earlier reported that Japanese officials may abandon telegraphing their intentions to the market, which would be unlike the case with the intervention that happened on April 30 following ample warnings. Such a new tactic could be effective in wiping out ‌speculative bets against the currency, according to the report.

The shift reflects a more aggressive approach by the MOF, which is using silence as a policy tool to keep traders guessing. That raises the risk of a surprise intervention driven by an accumulation of speculative short-yen bets rather than by the currency crossing a publicly understood threshold, the sources said.

The MOF's approach and the Bank of Japan's continued hawkish rhetoric ​signal a coordinated effort to keep yen bears at bay, two other sources said.

Of course, leaking this trial balloon effectively eliminates the surprise aspect, although it does force speculative shorts to cover ahead of what may come next. 

In an interview with Bloomberg on Wednesday, Japan’s top currency official, Atsushi Mimura, refrained from spelling out the finance ministry’s standard currency stance, including its readiness at any time to take “bold action”, meaning intervention.

The challenge for traders is that Mimura’s silence may on the one hand be an attempt to retain a degree of surprise, but it could also suggests that authorities may be willing to let the currency fall further before acting. Many traders had expected that the BOJ would have intervened as soon as the USDJPY hit 161. Instead the pair rose just shy of 163 before there was a notable move lower. 

Intervention “has always carried an element of surprise,” said Rodrigo Catril, a strategist at National Australia Bank. “The MOF is seemingly trying a new tactic of reverse psychology, but in practice there isn’t a great deal of difference between what they have been doing in the past.”

Meanwhile, Bloomberg reports that options traders are ramping up hedges against sharp yen swings, with a gauge of one-month dollar-yen butterfly spreads at an elevated level, suggesting that concerns about possible market intervention are increasing.

Japan spent a record ¥11.73 trillion ($72.2 billion) in the month through May 27 to prop up the yen, according to Finance Ministry figures. The ministry first stepped into the market on April 30, according to people familiar with the matter, when Japan’s currency was approaching the 161 threshold. The yen initially strengthened, moving to around 155 per dollar, but then steadily and fully retraced those gains even after the Bank of Japan raised its benchmark interest rate to the highest in 31 years on June 16.

In a note from Goldman FX traders this morning, the bank mused whether the sharp move lower was a "rate check/intervention." It laid out four points from the GS FICC & Equities desk:

• Volume was small. The spike in EBS volumes was "only" ~$1.5bn over the window — trivial versus prior confirmed interventions.
• Looks like a stop-run, not official flow. It coincided with a move back through 162, and there appeared to be a LHS TWAP flow already in the market beforehand — the desk's read is this may have simply triggered stop-losses into an air pocket.
• Range too shallow. Today's spot range was well under previous intervention days, and spot rebounded rather than seeing repeated waves of selling volume pushing lower — atypical of real intervention.
• The one caveat. There are reports that MoF is changing its intervention practice — less telegraphed, more of a "targeted campaign to squeeze speculators."

Separately, the bank also echoed the Reuters report noting that "Japanese officials warning us we won't get a warning by delivering a warning." The desk says this actually increases their comfort running a ratio USDJPY short vs. dollar length elsewhere into today's NFP, especially after the sizeable XXXJPY rally into month-end (they were correct).

Goldman's bottom line: they'd normally chalk this up to a panicky market with spot near the highs (based mainly on the light EBS volume), but point 4 raises the risk that we're in a different intervention regime and can't fully dismiss it.

“The prospect of surprise intervention should make speculators think twice before adding to bearish yen positions,” said Carol Kong, a strategist at Commonwealth Bank of Australia. “However, US yields remain the dominant driver of USD/JPY. If tonight’s US payrolls report surprises to the upside again, the pair could still push to fresh highs despite the risk of intervention.”

The payrolls report surprised to the downside instead, and USDJPY was last trading just under 161, a two-week low. 

 

Tyler Durden Thu, 07/02/2026 - 10:30

Core Durable Goods Orders Soar Most In 4 Years

US durable goods orders plummeted 4.5% MoM in May (as expected), dragging orders down 4.3% YoY - the worst annual decline since Nov 2024...

Source: Bloomberg

However, ex-transports, orders rose 1.4% MoM - up for the 14th straight month - with orders soaring over 10% YoY, the strongest annual surge since May 2022...

Adding more confusion, US factory orders fell 1.3% MoM in May (better than the 2.0% MoM decline expected) but dramatically divergent from the 4.8% MoM surge in April (revised down from +5.3%).

...but factory orders ex-transports rose 1.9% MoM - the seventh straight month of gains - with core orders up 9.5% YoY, the best since Sept 2022...

So, take your pick.

Tyler Durden Thu, 07/02/2026 - 10:24

US Adds Only 57K Jobs, Missing Estimates, As Unemployment Rate Slides On Plunge In Workers

In our jobs preview post we quoted Goldman Delta One head, Rich Privorotsky, who said that "equities marginally want something weaker than consensus: with no forward guidance, hot NFP means hikes in play, which is unfriendly for pockets of equity risk." Well, they got it because moments ago the BLS reported that in June the US added just 57K workers, half the 113K expected, and the worst monthly print since the big February drop. 

Except for an outlier 25K forecast from Citi, the jobs print was below all forecasts, a 2 sigma miss to estimates.

And yes, negative revisions are back:

• April jobs revised down by 31,000, from +179,000 to +148,000
• May jobs revised down by 43,000, from +172,000 to +129,000. 

With these revisions, employment in April and May combined is 74,000 lower than previously reported as Trump once again goes back to using the Biden playbook. 

Remarkably, while the number of payrolls rose by 57K, the number of actually employed people plunged by 507K to 162.264MM, which means the staggering gap between workers and payrolls is once again blowing out.

Just as ominously, the labor force participation rate plunged from 61.8% to 61.5%...

... driven by a massive 720K drop in the civilian labor force, which dropped to 169.358K from over 170 million...

... and which pushed the unemployment rate lower to 4.2% from 4.3%. 

By race, the unemployment rate saw a modest increase in Latino unemployment rate. Among the major worker groups, the unemployment rates showed little or no change in June for adult men (3.9%), adult women (3.7%), teenagers (14.6%), and people who are White (3.6%), Black (6.6%), Asian (3.9%), or Hispanic (5.2%), although those have increase for 3 months in a row now.

Looking at wages, there were no surprises here, with a 0.3% increase in average hourly earnings, as expected, resulting in a 3.5% increase in annual hourly earnings, also as expected.

Broken down:

• Average hourly earnings for all employees on private nonfarm payrolls rose by 13 cents, or 0.3 percent, to $37.64. Over the year, average hourly earnings have increased by 3.5 percent. In June, average hourly earnings of private-sector production and nonsupervisory employees rose by 7 cents, or 0.2 percent, to $32.38. 
• The average workweek for all employees on private nonfarm payrolls was unchanged at 34.3 hours in June. In manufacturing, the average workweek edged down to 40.3 hours, and overtime edged up to 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls declined by 0.1 hour to 33.7 hours. 

Some more details from the jobs report:

• The number of long-term unemployed (those jobless for 27 weeks or more) changed little at 1.9 million in June but is up by 286,000 over the year. The long-term unemployed accounted for 27.3 percent of all unemployed people in June. 
• The labor force participation rate decreased by 0.3 percentage point to 61.5 percent in June, and the employment-population ratio edged down by 0.2 percentage point to 59.0 percent. Both measures changed little over the year after accounting for annual population control adjustments. 
• The number of people employed part time for economic reasons changed little at 4.7 million in June. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
• In June, the number of people not in the labor force who currently want a job changed little at 6.0 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
• Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.8 million in June. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was essentially unchanged in June at 477,000. 

Taking a look at the composition of jobs,  

• Employment in professional and business services continued to trend up in June (+36,000). The industry has added 172,000 jobs since a recent low in October 2025.
• Social assistance added 25,000 jobs in June, primarily in individual and family services (+17,000). Over the prior 12 months, social assistance had added an average of 16,000 jobs per month.
• In June, employment in health care continued its upward trend (+22,000) but at a slower pace than the average monthly gain over the prior 12 months (+38,000). In June, hospitals added 9,000 jobs.
• Leisure and hospitality employment declined by 61,000 in June, reflecting weaker than usual seasonal hiring. Thus far in 2026, employment in the industry has shown little net change.
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; other services; and government.

And visually:

Last but not least, the most damning aspect of the jobs report was once again below the surface, where we find that that while part-time jobs dropped by 53K in June to 28.626MM, the number of full-time workers collapsed by a whopping 514K, confirming once again that the composition of the US labor market remains terrible.

This means that the number of full-time jobs is now at levels last seen in 2024...

... and down more than 2.2 million from their Jan 2025 highs.

The market reaction: in response to the weaker than expected number, odds of a rate hike dropped notably...

... although with no forward guidance from the Fed, it will be largely unclear how Warsh will interpret the data.

Tyler Durden Thu, 07/02/2026 - 10:15

'Something Has Gone Completely Wrong': Palantir's Alex Karp Goes Ballistic On OpenAI, Anthropic

On Wednesday, Palantir CEO Alex Karp delivered a blistering critique of frontier AI labs, accusing them of having an "effing insane" business model that leaves enterprises paying escalating token costs for limited value while risking their proprietary data and intellectual property. He said that top AI labs such as Anthropic and OpenAI were misleading corporate partners - "overselling" the risks of AI while at the same time offering their most powerful models to companies and governments worldwide. 

When CNBC host Becky Quick said "You sound pretty angry," Karp replied: "This is the voice of American business that is being channeled through me," he told CNBC, joking later that he might "get kicked out of the room."

Karp's comments come amid a "revolt" against U.S. AI labs - driven by a combination of high costs, questionable ROI, and increasing regulatory headwinds which have driven some major U.S. companies to cheaper Chinese alternatives, creating multiple pressure points for OpenAI, Anthropic, and others.

"Something Has Gone Completely Wrong"

Karp slammed the token model used by Anthropic and OpenAI - saying "I'm not throwing shade at them, but something has gone completely wrong," he said. "The basic view among enterprises in this country is I'm going to chillax and waste my time with tokens."

He argued that that labs were overselling risks while simultaneously pushing powerful models, and that companies were effectively paying a "wealth tax" that transferred their "alpha" (competitive advantage) to third parties. On national security, he warned: "Are we really going to outsource the battlefield of this country to the consensus view in Silicon Valley? That is effing insane."

Palantir CEO Alex Karp on what customers actually want, the real business of frontier labs, and the importance of open source models:

“What the technical customers want is control over their compute, their models, their data stack, and their alpha. They want to know they own the… pic.twitter.com/2hvTx7VSyj

— Palantir (@PalantirTech) July 1, 2026

The remarks aligned with a 9-point "AI sovereignty" manifesto Palantir posted on X the day before, which criticized "tokenmaxxing" for incentivizing disposable scripts over robust systems and urged institutions to retain control over their data, model weights, and competitive edge.

Via X: 

Our thoughts on the importance of AI sovereignty.

1. Your AI sovereignty dictates your institution’s future. Sovereignty is the precondition for choice. Relinquishing sovereignty transfers the future choices of your institution to others, who are likely to exploit it for their gain and your loss.

2. Data retention is your treasure. Transfer it at your own peril. Your ability to win is dictated by your ability to recognize and use your unique edges, and you keep winning by compounding the underlying data to generate new insights. Transferring that data hands over access to your pre-existing winning plays and yields the means of production for new ones.

3. Tokenmaxxing hijacks your value orientation and decreases your institutional fortitude and intelligence. The pursuit of high token usage incentivizes disposable scripts over robust software — with the addictive feeling of false progress. There is a reason why those selling tokens refuse to charge based on value.

4. Controlling your weights is controlling your fate. Weights are the distilled form of hard-won, accumulated institutional knowledge. If you let others control your weights, you are allowing them to migrate the alpha of your business to theirs.

5. There is no contradiction between sovereignty and alpha. The architecture that maximally preserves sovereignty is one that enables institutions to own their tribal knowledge, and to compound it as alpha.

6. Politicizing the technical issues involving sovereignty is what your adversary wants. Techno-politicization is the wellspring of false sovereignty. Techno-politicization drives decisions that seem to reduce dependency, but ultimately limit agency — especially on the battlefield in the West.

7. Real expertise is existential. Allowing politics or favoritism to determine your technical decisions rewards whoever is best at politics, not whoever is right. Listen to those closest to the problems, not those speaking most compellingly about them.

8. Learn from institutions that are winning or that have consistently delivered. Institutions facing existential threats do not have the luxury of making technical decisions based on political preferences.

9. Only listen to institutions, countries, and people who have a proven record of being right. A track record of correctness is the best and only signal for future correctness. Judging something as right or wrong based on who you like is exceedingly misguided.

"Controlling your weights is controlling your fate," the manifesto stated. "If you let others control your weights, you are allowing them to migrate the alpha of your business to theirs."

Karp noted Palantir's expanded Nvidia partnership, which enables custom, sovereign AI deployments where customers retain control over compute, models, data, and weights - a direct counter to the metered frontier API model.

Watch CNBC's full interview with Palantir CEO Alex Karp

The Cost-Driven Shift To Chinese Models

As we've been noting, high token prices and mixed returns have prompted several U.S. companies to adopt or explore Chinese open-weight models:

• Microsoft is considering a Microsoft-hosted, fine-tuned version of China's DeepSeek V4 (or another open-source model) as a lower-cost engine for its Copilot Cowork agentic tool, as it moves toward usage-based pricing.
• Coinbase CEO Brian Armstrong revealed the company cut internal AI spending by nearly 50% by defaulting engineers to Chinese open-weight models (Zhipu AI's GLM 5.2 and Moonshot AI's Kimi series) via an internal gateway, while maintaining high usage.
• Cursor, a fast-growing AI coding startup, built its Composer 2 model on top of Moonshot AI's Kimi K2.5 (backed by Alibaba).

Data from OpenRouter shows Chinese models capturing a rapidly growing share of global token consumption - in some periods exceeding 60% among top models - as enterprises seek cost relief without fully sacrificing capability.

Karp had warned against underestimating China's progress; these examples illustrate the trend in real time.

Watch the entire interview below:

here is the entirety of Palantir CEO Alex Karp's televised nervous breakdown this morning on CNBC pic.twitter.com/gzD8debrKB

— Aaron Rupar (@atrupar) July 1, 2026

Tyler Durden Thu, 07/02/2026 - 10:15

Buried On The 4th Of July: Mediators Pledge Quiet Between US, Iran To Allow For Ayatollah Khamenei's Funeral

President Trump by mid-week told reporters that the "denuclearization of Iran is moving along well" and that "very good meetings" are being held in Doha - even though no direct talks have taken place, but only an exchange of messages via mediators. On Wednesday US officials told regional media that no frozen Iranian funds have been released, nor will they be until Iran complies to what's been laid out in the MoU. And so each side continues accusing the other of refusal to conform with agreed-upon terms.

Regardless, the Qatari Ministry of Foreign Affairs as well as Pakistan's foreign ministry also previously released positive assessments of where things stand: "Qatar and Pakistan mediators concluded separate meetings with the US and Iranian negotiators in Doha today, with positive progress made on issues related to the Islamabad Memorandum of Understanding, building on the outcomes of the Lake Lucerne Summit," they said in a joint statement on social media.

Apparently things are going to be 'quiet' heading into the weekend, to allow time for the mass funeral events of slain Ayatollah Ali Khamenei. Crucially the Qatar-Pakistan statement indicated, "The parties agreed to continue discussions over the coming period, with the next meeting to be scheduled at the earliest possible time following the funeral processions of the former Iranian Supreme Leader." Other sources say a diplomatic 'pause' is on for the moment, as is presumably military action.

via AFP

It just so happens that Khamenei, who was targeted and killed at the very opening of Trump's 'Operation Epic Fury' in coordination with Israel, will finally be buried on the 4th of July (or at least that's when the days-long funeral ceremony will start). On the other side of the globe, Americans will at the same time be celebrating the 250th anniversary of the founding of the United States, ironically enough in terms of timing.

Iran's chief negotiator Mohammad Bagher Ghalibaf has meanwhile on Thursday called for a massive turnout at the late Supreme Leader's funeral. He said "the nation's call for vengeance must ring in the ears of the whole world." Iran "is preparing to experience one of the most significant moments in its history," Ghalibaf emphasized.

"I invite all the Iranian people ... to write a glorious page in the history of Islamic Iran through your presence" at the funeral ceremonies starting Saturday, Ghalibaf continued. According to commentary from the NY Times:

The emblem of the funeral, shared by the official planning body, is Mr. Khamenei’s closed fist alongside a slogan: “We must rise.”

The ceremonies will also be an opportunity for the government to demonstrate Iran’s regional influence and transnational religious ties, with plans for large-scale mourning events in Iraq, which also has a large population of Shiite Muslims and is home to Shiite militias backed by Iran.

Officials cited in CBS have said they expect the ceremonies to draw between 15 and 20 million mourners, which would put it at the largest state funeral in the Islamic Republic's history. The government hopes to unify and rally the populace around the burial of a 'martyr' - at a moment American and Israeli officials have held out hope for a crumbling and fragmentation of support for Tehran leadership.

Iranian President Masoud Pezeshkian has also urged Iranians to turn out en masse: "Your widespread presence will be a decisive response to the logic of terrorism, violence, and bullying, and a clear message to the world that the Iranian nation stands united and in solidarity in defending its independence and dignity," he said in a statement Thursday. Authorities have declared an official holiday running for three days starting Saturday.

Khamenei's son and successor, the current Ayatollah Mojtaba - said to have been severely wounded and recovering after a US-Israeli airstrike in the opening days of the war - has still not been seen or directly heard from in public. Whether or not he'll attend public funeral events for his father this weekend remains a huge question mark - one which will be closely watched by foreign intelligence agencies. 

Technically, while the funeral events will start Saturday, Khamenei's body won't be buried until Monday following a casket procession through Tehran's most important streets.

The NY Times further has this interesting commentary revealing how unusual it is for Iran to have delayed a state funeral this long:

It is highly unusual in Muslim culture for burial to be delayed for so long after death. That in itself was an indicator of the extraordinary circumstances that Iran faced after Mr. Khamenei’s death, amid weeks of heavy bombardment. Officials have denied rumors that Mr. Khamenei’s body was temporarily buried and have said that it was kept in accordance with religious requirements.

Now, Iran’s government is seeking to present the funeral as a moment of national unity and shared grief, a display of bureaucratic competence and a show of resistance against an outside enemy. The emblem of the funeral, shared by the official planning body, is Mr. Khamenei’s closed fist alongside a slogan: "We must rise."

The ceremonies will also be an opportunity for the government to demonstrate Iran’s regional influence and transnational religious ties, with plans for large-scale mourning events in Iraq, which also has a large population of Shiite Muslims and is home to Shiite militias backed by Iran.

Government representatives from some 30 countries are expected to be in attendance. Most important among these will be Pakistan's Prime Minister Shehbaz Sharif. "The Prime Minister, Muhammad Shehbaz Sharif, will go to Iran and Turkey from 3-5 July ... he will go to Iran first for (the) supreme leader's funeral," foreign ministry spokesman Tahir Andrabi told reporters. One the one hand this could be awkward from Washington's point of view, but Pakistan has also been a key top mediator in peace talks alongside Qatar.

Among other notable attendees will be senior Chinese parliamentary official He Wei – who is the vice chairman the Standing Committee of the National’s People Congress, which is the country's top lawmaking body. India's deputy foreign minister Shri Pabitra and the state governor of Bihar, Syed Ata Hasnain, will also attend, the Indian foreign ministry has indicated.

Iranian officials are strongly warning Israel not to commit any military aggression amid the proceedings, and have also called on Washington to 'muzzle' the Israelis. 

Tyler Durden Thu, 07/02/2026 - 09:40

Tesla Reports 480,126 Q2 Deliveries, Crushing Estimates

Tesla delivered a much stronger-than-expected second quarter, reporting 480,126 vehicle deliveries, well ahead of Wall Street forecasts of roughly 406,600. The company also produced 451,758 vehicles during the period, signaling a meaningful improvement after a slow start to the year, according to CNBC.

Shares were volatile on the news and have settled near unchanged into the cash open…

The delivery total marked a sharp increase from 358,023 vehicles in the first quarter and was also significantly higher than the roughly 384,000 deliveries Tesla recorded in the same quarter last year. As has been the case in recent years, the vast majority of deliveries came from the Model 3 and Model Y, which accounted for 467,762 vehicles.

The results provide a boost for Tesla as it looks to regain momentum following consecutive annual declines in vehicle sales. The company has faced growing pressure from intensifying EV competition, the loss of U.S. federal EV tax incentives, and controversy surrounding CEO Elon Musk that has weighed on demand in some markets.

Beyond its automotive business, Tesla’s energy storage segment also posted a strong quarter, deploying 13.5 GWh of battery storage, ahead of analyst expectations of 13.3 GWh and well above the 9.6 GWh deployed in the year-ago period.

Days ago, we pointed out that the market may have been underestimating Tesla’s second-quarter delivery numbers after highlighting a research note from Deutsche Bank that called for a stronger-than-expected quarter. At the time, the firm projected roughly 416,000 deliveries, above the company-compiled consensus and ahead of many estimates on Wall Street.

While Tesla’s actual results ended up blowing even that forecast out of the water, the broader takeaway was the same: expectations appeared too low heading into the report. Deutsche Bank argued that improving international demand, particularly in Europe, was driving a meaningful rebound after a weak first quarter, and the company ultimately delivered an even larger upside surprise than many investors anticipated.

With 480,126 deliveries versus consensus expectations near 406,000, Tesla didn’t just beat estimates, it exceeded them by a massive margin. The results suggest demand was far stronger than the market had priced in and should help ease concerns that had weighed on the stock in recent months.

Whether this marks the beginning of a sustained recovery remains to be seen, but for now, Tesla has delivered one of the biggest positive surprises of the earnings season…

Tyler Durden Thu, 07/02/2026 - 09:30

The post Trump’s Factory Boom Keeps Going in Reverse appeared first on CEPR.

Egg Producers Reach State And Federal Settlement Over Price-Fixing Allegations

Authored by Bryan Hyde via American Greatness,

Three major egg producers have reached a $3.3 million settlement to resolve allegations of price fixing after being sued by the Justice Department (DOJ) and 17 U.S. states’ Attorneys General.

Just the News reports that the complaint—filed in Iowa’s Northern District Court—contends that the defendants conspired to artificially inflate the daily price quotations of market reporting company Urner Barry Publications.

According to the DOJ Office of Public Affairs, a civil lawsuit was filed against Cal-Maine Foods Inc. (Cal-Maine); Hickman’s Egg Ranch Inc. (Hickman’s); and Centrum Valley Holdings LLC, Versova Holdings LLC, and Versova Management Cooperative (Versova) for unlawful coordinated manipulation of egg prices.

The Attorneys General of Arizona, California, Colorado, Connecticut, Florida, Hawaii, Iowa, Maryland, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Texas, Utah, Vermont, and Wisconsin joined the Department in the complaint and proposed settlements.

“No product more quintessentially represents affordability than the price Americans pay for eggs,” said @ASGWoodward. “These actions prove this Department’s continued commitment to protecting competition and providing real relief for everyday Americans’ pocketbooks.” https://t.co/BU8Hm5Q9HF

— U.S. Department of Justice (@TheJusticeDept) June 30, 2026

The DOJ also filed proposed settlements that will, if approved by the court, prevent these companies from engaging in such coordinated manipulation in the future.

According to the complaint, the defendants conspired to inflate Urner Barry’s price quotations by agreeing to: submit a lot of bids, submit bids that were unlikely to result in executed trades, cause several defendants to bid to alert Urner Barry that market participants needed to buy eggs and deliver trades at premium prices.

The defendants, along with other egg producers, also bid to obtain eggs on spot markets, including the Egg Clearinghouse, an exchange that helps determine and establish the market value for eggs and egg products.

In the press release, Former Acting Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division affirmed:

“Food affordability is a top priority of the Antitrust Division. These settlements resolve years of conduct that dragged on Americans’ finances and their everyday lives. I thank and recognize the dedicated work of the Division’s talented staff and state partners.”

Under the terms of the settlement, producers will pay a combined $3.3 million in monetary recovery to the participating states.

Meanwhile, CBS News reports that, in a unique deal, the companies must donate 53 million eggs to food banks and community organizations in the affected states.

The companies are also barred from communicating with competitors about pricing strategies, bids, or market information for five years, according to the DOJ press release.

Tyler Durden Thu, 07/02/2026 - 09:20

Initial Jobless Claims Continue To Signal No Labor Market Stress

The number of Americans filing for unemployment benefits for the first time dipped last week to 215k (218k exp), continuing to show labor market resilience in the face of slumping sentiment.

...basically unchanged in five years.

Continuing claims ticked higher but remains well off cycle highs from last fall...

So once again, claims data shows no signs of the pain that sentiment surveys suggest...

...even though payrolls data suggests deterioration.

Tyler Durden Thu, 07/02/2026 - 08:53

Ukrainian Capital Suffers 'Night Of Hell' In 11-Hour Russian Assault That Kills At Least 20

Just hours after Ukrainian President Volodymyr Zelensky warned of an impending "massive" escalation by Moscow, the skies over the Ukrainian capital erupted in a flurry of inbound drone and missile activity.

At least 20 people were killed and several dozen injured in the overnight multi-wave Russian missile and drone assault that overwhelmed Kiev's air defense umbrella. The sheer scale of the bombardment indicates a significant ramping up of Moscow's retaliation strategy, after Russian territory has in turn suffered many weeks - even months - of significant drone attacks particularly targeting oil refineries and energy infrastructure.

The capital's Mayor Vitali Klitschko confirmed that six floors of an apartment building had partially collapsed after a direct hit from a Russian projectile. "Kyiv is under attack from ballistic missiles and UAVs," Klitschko wrote on Telegram in the night hours.

via Associated Press

Officials also noted that at least two children were among the injured and three dozen locations across the city had been damaged in the attacks, according to AFP. Klitschko also said it marked the "most massive" attack night on the capital to date. BBC explains:

Although previous attacks have killed more people, this latest barrage deployed the largest number of weapons on the capital and hit locations over a very wide area of Kyiv.

Several neighbourhoods were evacuated as strikes rocked buildings throughout the city, hours after Ukrainian President Volodymyr Zelensky warned Russia was preparing an attack.

The Ukrainian Air Force released a fiery Telegram statement in the wake of the assault: "We express our condolences to all the victims, families who lost their relatives and loved ones in this terrible terrorist attack. We will take revenge!" the statement said.

Residents says that such attacks are becoming more intense, cover a wider area of the capital region, and last longer. "The attack on Kyiv lasted more than 11 hours and came in several waves starting with a drone strike on Kyiv's historic quarter, setting off a fire in a hotel in the city center," BBC additionally reports.

WATCH: Massive overnight Russian missile and drone attack on Kyiv.

Raw footage shows explosions, air-defense interceptions, and fires across the capital as residential buildings were struck.

Zelensky cut short his visit to Ireland in the wake of the attack. pic.twitter.com/pSrR578is8

— Clash Report (@clashreport) July 2, 2026

NBC separately details: 

Damage was recorded in 30 locations across the city, mainly residential buildings and civilian infrastructure, said Tymur Tkachenko, head of the Kyiv City Military Administration. Interior Minister Ihor Klymenko said 20 residential buildings were damaged across the city. The Emergency Service says it deployed nearly 500 personnel and 100 units of specialized vehicles, including a helicopter, to deal with the aftermath of the attack.

Foreign Minister Andrii Sybiha called on Ukraine’s allies to strengthen the country’s air defenses following what he described as a “night of horror” in Kyiv, urging partners not to delay decisions on supplying air defense systems and missiles. Writing on X, Sybiha said the death toll after the attack may rise as the rescue teams continued their work.

As for numbers of projectiles, Ukraine's air force tallied that Russia launched 74 missiles and 496 drones during the attack. This is an immense amount to be concentrated on the capital alone. The military claimed its air defense units downed most of those, but still 25 ballistic missiles and 12 drones struck 33 locations - per the statement.

A raw, high-quality footage via DRM News of last night's Russian large-scale aerial attack on Kyiv.

The activity of Ukrainian air defenses, impacts of Russian drones and missiles, as well as fires starting in the city can be seen, among other things.

According to the Ukrainian… pic.twitter.com/eiGdJczhSg

— Status-6 (War & Military News) (@Archer83Able) July 2, 2026

Neighboring Poland indicated that the attack was so large that it briefly scrambled fighter jets on Thursday as a preventive measure to monitor any potential air space violations for inbound missiles, drones, or interceptors. It said the warplanes returned to base once it became clear there were no violations.

Tyler Durden Thu, 07/02/2026 - 08:40

Futures On Edge As Sliding Chips Spark Another Korea Crash, Payrolls On Deck

US equity futures have reversed all overnight losses which were driven by the latest crash in South Korean stocks, which plunged 8% and closed at LOD, driven by a plunge in memory stocks. Still, the Nasdaq is still lower with tech stocks depressed on news that Sam Altman's OpenAI is seeking to offer a 5% stake to Trump in what is clearly an attempt to incentivize the government to backstop the company whose revenues are clearly below budget. As of 8:00am ET, S&P futures are up 0.1%, while Nasdaq futures drop 0.2% after semiconductors and high beta momentum led Wall Street lower in the previous session; the latest bout of tech volatility entered a second day, with chipmakers in South Korea bearing the brunt of the selling. SK Hynix and Samsung Electronics lost a combined $290 billion in value to drive a 7.9% slump in South Korea’s Kospi index. In Europe, the Stoxx 600 rose 0.6%, with technology among only two of the 20 index sectors to lose ground. Elsewhere, the dollar fell, as USDJPY suffered a sudden plunge on intervention concerns, and US 10-year yields +2bps at 4.50%, WTI -1.49% @ $67.55. All eyes on NFP later this AM (consensus at +113k, see our preview) and subsequent Fed pricing (market currently pricing in ~30% chance of a hike at July meeting) following yesterday’s Momentum drawdown (High Beta Momo finished -9.62%, second worst day YTD, top 5 worst days over last 5 years). So far the spillover from overnight price action has been limited, with KOSPI -7.89%, NKY -2.5% as yesterday’s META headlines continue to drive anxiety around overcapacity fears. 

In premarket trading, Mag 7 stocks are mixe: ( Microsoft +0.7%, Apple +0.4%, Tesla +0.5%, Amazon +0.6%, Meta +0.3%, Alphabet -0.6%, Nvidia -0.5%)

• Cloud and other AI infrastructure stocks (CRWV -1.1%, IREN -2.2%, AMD -1.4%, INTC -1.3%) are extending losses as Meta’s plan to develop a business that would sell access to AI computing power raised worries about overcapacity.
• Adobe Inc. shares (ADBE) are up 2.8% after HSBC upgraded the software company to buy from hold.
• Chevron Corp. shares (CVX) rise 0.6% after Wolfe Research raised its recommendation on the energy company to outperform from peerperform as it sees free cash flow driving growth.
• Honeywell Aerospace Inc. shares (HONA) are up 0.3% after BMO Capital Markets started coverage on the company with an outperform rating and $276 price target.
• Infleqtion Inc. (INFQ) rises 3.7% after Canaccord Genuity initiated coverage with a recommendation of buy.
• Palantir Technologies Inc. shares (PLTR) rise 3.7% after DA Davidson & Co raised its recommendation to buy from neutral as it sees the technology company having a competitive advantage to artificial intelligence companies that have been at odds with the US government.
• Waystar Holding Corp. shares (WAY) are up 1.9% after KeyBanc Capital Markets started coverage on the healthcare software company with an overweight rating and $30 price target.

The frequent swings in the market’s biggest drivers come as traders react to any sign that a near-parabolic rally in chipmakers, the biggest beneficiaries of the vast outlays on AI infrastructure, has run too far (spoiler alert: it has). In the latest instance, Meta’s plan to sell computing power raised questions about a glut of capacity. The Kospi, the poster child retail-driven momentum chasing idiocy and the AI trade, fell 7.9% after memory heavyweights Samsung and SK Hynix were rattled by news that Apple is in talks to buy chips from two Chinese semiconductor makers on a Pentagon blacklist to help reduce the impact of a global memory shortage. 

Meanwhile, investors are rotating into laggards that stand to benefit from a strengthening economic outlook just as money-market bets on tighter monetary policy recede. Consumer-orientated stocks led gains in Europe on Thursday, tracking Wednesday’s US moves when a majority of S&P 500 stocks advanced. By contrast, memory, storage and processing names were again among the biggest decliners in US premarket trading. Sandisk, Seagate and Dell were all down 3% or more.

“The market recognizes the risks associated with a potential overvaluation in the tech sector,” said Guillermo Hernández Sampere, head of trading at MPPM. “Whether a major shift away from the tech sector is underway will become apparent by the next round of quarterly earnings reports.”

Investors will also focus on the US jobs report at the end of a holiday-shortened week. The data will offer fresh clues on the path for interest rates after comments Wednesday by Federal Reserve Chair Kevin Warsh dampened speculation of a hike this year.

For jobs report at 8:30am New York time, Bloomberg’s crowd-sourced whisper number for nonfarm payrolls change is 138k vs median economist estimate of 113k; unemployment rate is expected to remain at 4.3%.Bloomberg Economics anticipates a hot payrolls report will show the US economy added 200,000 jobs in June. That would be a third straight extremely strong print, with the three-month average job increase likely clocking in at 183,000.  

“A strong payrolls report — particularly if we see healthy gains in hourly wages — would likely increase market bets on rate hikes this year,” according to Bloomberg Economics’ Anna Wong.

Our full preview is here; in its preview Goldman estimates nonfarm payrolls rose by 130k in June, above consensus of +115k. On the positive side, the bank estimates that the World Cup could boost payroll growth by 40k in June. Additionally, June payrolls have exhibited a consistent positive bias in initial prints over the last decade which has been particularly pronounced in state and local government education services payrolls. On the negative side, GS expects a 10k decline in government payrolls outside of state and local government educational services. 

The options market is pricing in a roughly 0.5% move for the S&P 500 in response to NFPs, according to Bloomberg calculations, broadly in line with last month’s muted expectations despite the June release triggering a 2.6% selloff.

European stocks rose as investors looked for alternatives to expensive tech shares in more defensive sectors. Technology significantly underperforms, while personal care, food and beverage stocks outperform. The Stoxx 600 index rises 0.5% to 642.64 with 422 members up, 167 down and 11 unchanged. Here are the biggest movers Thursday:

• Sodexo rises as much as 10%, the most since April 2023, after the French food services company reported third-quarter results ahead of expectations and raised its organic revenue forecast for the full year
• CTS Eventim rises as much as 6.1% after Oddo BHF upgrades the stock to outperform, saying its de-rating of about 50% over the past year leaves the live events company trading at deeply discounted multiples and an appealing valuation
• SKF shares rise as much as 5.9%, the most since June 15, after the Swedish ball-bearings group signed an agreement with Leaderdrive to establish a venture in China
• Carrefour shares rise as much as 5.1%, the most in just under a year, after UBS upgrades the French grocer to buy from neutral, calling the stock “too cheap to ignore”
• Amplifon rises as much as 5.5% in Milan trading after Equita raised the Italian hearing-aid company’s stock to buy from hold, citing its competitive position, visible synergies and the discount at which the shares trade
• Cloetta shares rise as much as 8.5%, the most since early May, after the Swedish confectioner announced a deal with US grocery chain DeCicco to introduce Swedish pick-and-mix-style candy in its New York stores
• Hemnet gains as much as 13%, the most in almost two years, as JPMorgan flagged improving June listings data. Today regulatory filings also showed Hemnet’s third-biggest shareholder, GCQ Funds Management, has increased its stake
• Currys shares drop as much as 5.3% after the electronics and appliance retailer signaled it’s comfortable with the analyst consensus, which may signal limited upside to estimates for the time being
• Baltic Classifieds Group shares drop as much as 12%, the most in seven months, after the online classifieds operator issued weaker-than-expected fiscal 2027 guidance and reported a slight revenue miss for 2026
• European semiconductor stocks fall, tracking an overnight selloff in US peers 

Asian stocks headed for the lowest close in three weeks as concerns over excess AI capacity and intensifying competition sparked a selloff in high-flying chip shares. The MSCI Asia Pacific Index slid 1.4%, with South Korea’s Kospi tumbling almost 8% to lead regional declines. Samsung Electronics and SK Hynix lost at least 9% each to be the biggest drags on the regional benchmark, while TSMC and Japan’s Kioxia also slumped. The moves followed losses in US semiconductor shares that saw Micron Technology and Sandisk plunge more than 10%. The selloff came as Meta Platforms’s reported plans to build a cloud infrastructure business that would sell access to AI computing power and models fueled concern the company may have overbuilt its capacity. Separately, Apple is in talks to buy chips from two Chinese semiconductor makers, according to people familiar with the matter, which would hurt South Korean manufacturers. The iPhone maker late last month raised prices of all Macs, iPads, home devices and the Vision Pro, stoking concern that rising costs may start to curb demand and spurring a broad rout in global tech shares at the time. Equities in India and Southeast Asia bucked the regional selloff while stocks in Hong Kong also rose on return from a public holiday.

In FX, USD/JPY has been on the move with the pair down around 130 pips. The move was set in motion by comments from South Korea that is was closely communicating with the US and Japan on FX intervention, before experiencing a much steeper decline. Reporting via Reuters notes that Japan could shift to surprise Yen intervention tactics. The Bloomberg Dollar Spot Index is down 0.3%, enabling EUR/USD to return to a 1.14 handle.

In rates, treasuries are under slight pressure ahead of the release of June employment data with potential to alter the outlook for a Fed rate hike at the end of the month. US long-end yields are 1bp-2bp cheaper with front-end tenors little changed, steepening 2s10s spread by 2bp. 10-year is near 4.49%, 1.4bp higher on the day, with bunds and gilts in the sector lagging by 3bp and 4bp. About 8bp of Fed tightening is priced in for the July 29 policy decision, 35bp by the end of the year. European benchmarks are being sold to a greater extent with 10 year yields in Germany and the UK up 4 basis points each.  With US markets closed Friday, jobs report is being released a day earlier than normal, and Sifma recommended 2pm close for cash trading.

In commodities, WTI crude is lower for a third consecutive day, back below $68 a barrel, as flows through the Strait of Hormuz improve and there are signs of progress in indirect talks between the US and Iran. Precious metals are building on yesterday’s gains with spot gold and silver up 1% and 1.4% respectively. Bitcoin adds 0.7%. 

Today's US economic data calendar also include weekly jobless claims (8:30am) and May factory orders with durable goods orders revision (10am), Fed speaker slate includes Daly at 7:45am in moderated discussion at a Banco de España conference.

Market Snapshot

Top Overnight News

• OpenAI has discussed giving a 5% stake to the US government as the $852bn AI start-up seeks to clear political obstacles by securing financial buy-in from the Trump administration. FT
• The definition of circular funding: Nvidia is using its balance sheet to help more companies buy its expensive AI chips: The Information 
• Iran’s struggling to find buyers for its oil before a 60-day window granted by the US expires. More than 58 million barrels of its crude and condensate was on the water as of July 1, but over 90% has no clear destination. BBG
• At least five supertankers carrying a total 10 million barrels ‌of Saudi oil loaded from Ras Tanura have exited the Strait of Hormuz, with Saudi Aramco switching to spot pricing to speed sales in Asia, according to trade sources and shipping data. RTRS
• Sales of cars, air conditioners and TVs fell rapidly in China last month as the impact of government subsidies faded, raising pressure on policymakers to stimulate the economy. Nikkei
• Power demand across New York is expected to peak today as heat strains the grid ahead of the July 4 weekend. The New York Independent System Operator forecast demand of 32,410 MW, just shy of the record set in July 2013. BBG
• The yen climbed amid speculation of a fresh round of interventions. Japan may shift to surprise tactics to wipe out ‌speculative positions. BBG
• Russian missiles and drones pounded Kyiv and other Ukrainian cities overnight and early Thursday morning, killing at least 17 people and wounding more than 80, according to Ukrainian officials. WSJ
• US nonfarm payrolls probably rose 113,000 in June, with the jobless rate holding steady at 4.3%, consensus shows. Bloomberg Economics predicts a 200,000 gain, helped in part by the World Cup and bolstering expectations for rate hikes this year. BBG
• The US government is in advanced talks with AI companies to create voluntary standards for the release of new models after intervening in the rollout of state of the art tools from Anthropic and OpenAI. FT
• The Trump administration is reportedly ready to launch "Trump Accounts" next week, but not allow firms to host children's savings accounts on their own systems, Semafor reported citing sources.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed but with the major indices predominantly in the red following the tech-related losses on Wall St, while participants also brace for the incoming Non-Farm Payrolls report in a holiday-shortened trading week stateside. ASX 200 was rangebound as strength in the top-weighted financial sector was offset by losses in the utilities, tech, energy and consumer sectors, while sentiment was also not helped by weak Australian trade data. Nikkei 225 retreated at the open amid tech selling and recent upside in yields, although the index then staged a partial rebound, before selling resumed later in the session. KOSPI slumped amid the pressure in memory chip stocks, and triggered a sidecar in early trade. Hang Seng and Shanghai Comp traded mixed with the mainland conforming to the broad risk-off mood, while the Hong Kong benchmark bucked the trend amid strength in local tech, biopharmaceutical and auto names on return from the holiday closure.

Top Asian News

• Japan's Government Panellist Nagahama said that the BoJ should raise rates once every six months; this would not hurt domestic investment.

European bourses (STOXX 600 +0.5%) initially started Thursday's trade on a softer footing but have climbed off their lows, with all indices in the green, outside of the AEX (-0.3%). Sentiment overnight was on the softer side, following another tech selloff in South Korean stocks (Samsung -9.1%, SK Hynix -14.6%) after Meta plans to sell excess AI compute to build a cloud business, raising questions over excess in AI capacity. However, with Europe lacking the big AI giants, this seems to support the Euro area. European sectors point to a positive bias. Optimised Personal Care (+2.1%) tops the sector pile, followed by Food, Beverages & Tobacco (+2.0%) and Health Care (+1.5%). As expected, Technology (-1.9%) is the clear sector laggard and the only sector in the red.

Top European News

• Germany's ruling coalition unveiled a package of reforms, including EUR 10bln in annual tax relief for lower-income earners, changes to the pension system and building more affordable housing.
• Germany's VDMA reported May industrial orders -1% Y/Y, driven by weak domestic demand and a general decline across the EZ.

FX

• DXY trades lower this morning, and trades at the bottom end of a 100.95 to 101.43 range. Pressure which comes after the lack of hawkish remarks from Fed Chair Warsh at Wednesday's policy panel, and with the move further exacerbated by a hefty move in the JPY this morning.
• On that front, this morning saw large and immediate selling pressure in USD/JPY, where the pair fell from 162.20 to a trough of 161.12. The pair then pared back about a third of that move, stabilising around 161.80, before then taking another beating towards the session low of 160.89 – now trading at levels not seen since 18 June.
• Given the sheer size of the move lower, it does appear to be the case that this is potentially intervention, rather than a rate check. Details of whether they enacted a form of intervention will be released in the monthly release, which is released on the last business day of every month.
• The move comes after Reuters reported that Japan would abandon its habit of warning the markets of intervention. The aim of this is to squeeze speculators and increase the cost of betting against the JPY.
• The potential intervention comes ahead of today’s NFP report; a USD positive report could see some of the “potential intervention” move be pared back. To preview the report in brief, US non-farm payrolls for June are expected to print 110K (prev. 172K), with the unemployment rate seen unchanged at 4.3%.
• Other G10s are stronger against the USD this morning. JPY unsurprisingly outperforms, followed by the GBP and CHF. For the latter, Switzerland reported in-line/cooler-than-expected inflation metrics, which broadly play in favour of keeping rates on hold for the foreseeable future.

Fixed Income

• Global fixed income benchmarks trade on a softer footing ahead of the US payrolls data while Germany announces a new set of reforms.
• USTs (-3 ticks) are lower by a handful of ticks, trading just shy of Wednesday's low of 109-12+. Looking ahead to the June jobs report; NFP expected at 110K (prev. 172K), unemployment to hold steady at 4.3%, average hourly earnings Y/Y expected at 3.5% (prev. 3.4%). In terms of technical levels, downside levels include 109-16 (prior week's low), 108-27 (key support level) and 108-10 (worst low seen due to Iran conflict). 110-00+ is the key level to the upside.
• Bunds (-38 ticks), unlike USTs, have extended on Wednesday's trough, currently trading at the lower end of its 126.78-127.06 range. German Chancellor Merz's coalition unveiled a package of reforms earlier, which included EUR 10bln in annual tax relief for lower-income earners, changes to the pension system and building more affordable housing. The overall aim is to restore competitiveness in Europe's biggest economy. Although the move lower in German debt has not been excessive, it could be a potential reason for the downside in German debt, as it brings growth back into the economy.
• OATs (-34 ticks) follow their German counterpart. In the upcoming months, French debt will be more in focus as the Presidential elections near. Political uncertainty continues to remain. More recently, the Green Party announced that it would put forward a motion of no confidence over the government's handling of the recent heat wave. However, this attempt to bring down PM Lecornuʼs government is likely to fail without the support of other opposition parties. The preference for German debt over OATs is clearly shown in the spread, currently trading at 75bps, up from the 58bps seen at the start of June.
• The UK sells GBP 3.25bln 4.625% 2037 Green Gilt: b/c 3.31x (prev. 3.63x), average yield 4.934% (prev. 4.975%), tail 0.2bps (prev. 0.2bps).
• France sells EUR 14.0bln vs exp. EUR 12.5-14bln 1.25% 2036, 3.70% 2036, 4.50% 2041 and 4.10% 2046 OAT.
• Spain sells EUR 5.958bln vs exp. EUR 5-6bln 2.60% 2031, 3.25% 2034 and 3.40% 2036 Bono and EUR 0.695bln vs exp. EUR 0.25-0.75bln 1.15% 2036 I/L Bono.
• Japan sells JPY 1.96tln 10yr JGBs, b/c 3.13x (prev. 3.53x), average yield 2.729% (prev. 2.649%).

Commodities

• Crude benchmarks are on the backfoot, after mediators suggested positive progress was made in the US-Iran indirect conversation. Conversely, gas benchmarks continue to rise with Dutch TTF above EUR 44/MWh as the European forecast points to renewed heat.
• Brent down to a USD 70.38/bbl base, though it has reverted back towards the USD 71.00/bbl but remains in the red. The mentioned base is the lowest print since the end of February, when USD 70.20/bbl printed for the September contract. ,
• For today, US NFP will dominate the macro narrative, with a full Newsquawk preview available. Specifically for energy, we await any further update from the US-Iran talks, and while the mediator-led exchange has now concluded, we could still see updates as the parties agreed to continue talks over the “coming period”.
• Spot gold at a USD 4080/oz peak. In a recovery from the move below USD 4k/oz seen in the last two sessions. Upside today is a function of a weaker USD and relatively steady UST action. As above, impetus will come from the US NFP report.
• Base peers are under pressure, despite the constructive European risk tone and the mentioned USD pressure. As the complex follows the downbeat performance seen in mainland China overnight, and despite Hong Kong seeing strength on its holiday return.
• US President Trump posted that oil prices are plummeting fast and gas prices at the pump are dropping too, but not as fast as they should be, while he announced the Freedom Fuel Network will be lowering gas prices at 25 “FREEDOM FUEL” stations across the Greater Philadelphia Area.
• Venezuela's oil production was expected to recover to 1.1mln-1.2mln BPD by the end of Q2 2026 as the US expands export authorisations, allowing more companies to transport and market Venezuelan crude
• Saudi Aramco has reportedly increased its exports from the Ras Tanura port and have shifted to spot sales, according to sources.
• Hengli Petrochemical has reportedly cancelled its recent purchases of West African and Middle East oil purchases and also cut refinery operations, according to Reuters sources.
• Dubai spot crude's discount to swaps widened to more than USD 4.00/bbl, the largest gap since May 2020, according to Refinitiv data.
• UBS cuts its end-2026 gold forecast to USD 5k/oz, due to elevated interest rates.

Trade

• China's MOFCOM said China and the EU agreed to up to two annual ministerial trade talks and have invited EU's Trade Commissioner Sefcovic to visit in the Fall.

Geopolitics: Iran

• US official said the US is hopeful that Iran will come to the table to negotiate seriously, but is prepared to walk away if they do not, according to a New York Post reporter on X
• US has informed Iran that changing the status quo around the Strait of Hormuz would be a violation of the current understanding and would be unacceptable, according to Al Arabiya sources.
• Iran said it will respond to US interventions in the Strait of Hormuz, Fars reported.
• Qatar's Foreign Ministry said Qatar and Pakistan mediators concluded separate meetings with US and Iranian negotiators in Doha, while it added that positive progress was made on issues related to the Islamabad MoU. It also stated that the parties agreed to continue discussion over the coming period, with the next meeting to be scheduled at the earliest possible time following the funeral processions of the former Iranian supreme leader.
• Iranian Parliament Speaker Ghalibaf said the claim that inspectors of the IAEA have access to the sites that were bombed is false, while he added that under no circumstances will access be granted to sites that were bombed and damaged.
• Iran's Deputy Foreign Minister Gharibabadi said Doha talks focused on US violations of the MoU and frozen assets. Gharibabadi separately commented that the Strait of Hormuz is defined under Iran's command, not CENTCOM, as well as stated that regional security is ensured by the end of interference and the departure of the US from the region, respect for the sovereignty of countries and acceptance of new geopolitical realities, not under the military umbrella of the US.
• Senior source told Al-Hadath that Iran is allowed to purchase American agricultural products using a portion of its frozen funds, but noted that no cash payments are to be dispersed to Iran
• Lebanon's PM said negotiations with Israel lack a deal framework, and the government seeks a timeline for Israel's withdrawal and insists on exclusive state control of weapons
• Israeli drones struck Al-Dir in southern Lebanon and Israeli shelling was also reported on the outskirts of Quneitra in Syria, while Israeli forces conducted night raids in Jenin and Ramallah, in the West Bank.

Geopolitics: Ukraine

• Russian Armed Forces said it hit a Kyiv plant that produces control systems for specific missiles, RIA reported.
• Russian Defence Ministry said it shot down 327 Ukrainian drones overnight.
• Air defence systems were reportedly repelling a Russian drone attack on Kyiv, while it was separately reported that multiple explosions were heard in Ukraine's capital which was under ballistic missile attack.
• Ukrainian military said it has struck the Kstovo oil refinery in Russia.

Geopolitics: Other

• China warned two Japanese Coast Guard survey vessels to stop conducting maritime surveys in the disputed East China Sea, prompting Japan to lodge a formal diplomatic protest.

US Event Calendar

• 8:30 am: United States Jun Change in Nonfarm Payrolls, est. 112.5k, prior 172k
• 8:30 am: United States Jun Change in Manufact. Payrolls, est. 3k, prior 7k
• 8:30 am: United States Jun Unemployment Rate, est. 4.3%, prior 4.3%
• 8:30 am: United States Jun 27 Initial Jobless Claims, est. 218k, prior 215k
• 8:30 am: United States Jun 20 Continuing Claims, est. 1820k, prior 1821k
• 9:30 am: Canada Jun S&P Global Canada Manufacturing PMI, prior 52.9
• 10:00 am: United States May Factory Orders, est. -2%, prior 4.8%
• 10:00 am: United States May F Durable Goods Orders, est. -4.5%, prior -4.5%
• 10:00 am: United States May F Durables Ex Transportation, est. 1.3%, prior 1.3%

DB's Jim Reid concludes the overnight wrap

Markets have had a rocky start so far to Q3, with global bonds and equities losing ground over the last 24 hours. The main culprit has been another slide in chip stocks, with the Philly semiconductor index down -6.27%. And those losses have continued overnight, with South Korea’s KOSPI down -5.06% this morning. Moreover, an underwhelming batch of US data hasn’t helped matters, with the S&P 500 (-0.22%) and the STOXX 600 (-0.38%) both pulling back as well yesterday.

Yet despite those negative headlines, the performance actually hasn’t been so bad if you look beyond the tech slump. Indeed, the equal-weighted S&P 500 (+0.24%) hit a new record as markets dialled back the chance of an imminent Fed rate hike. In addition, positive geopolitical headlines pushed Brent crude oil (-1.85%) to a 4-month low of $71.57/bbl, and this morning that’s continued, with Brent down another -1.06% to $70.81/bbl. So even as the headline numbers pointed towards fresh losses, there was still a fair amount of optimism among investors.

Those glimmers of positivity have been reflected overnight, where both US and European equity futures have stabilised. For instance, futures on the S&P 500 (+0.09%) and the DAX (+0.27%) are both in positive territory. And even though many indices in Asia have lost ground this morning, they’ve recovered from their lows earlier in the session. Indeed, the Nikkei is down -1.61%, but it had been down -2.55% in the first hour of trading. Similarly, the CSI 300 is down -1.85%, but had been down -2.45% earlier on. And several indices are still higher, including the Hang Seng (+1.19%), and Japan’s TOPIX index (+0.63%).

One of those positive catalysts was headlines from Fed Chair Warsh yesterday, who spoke at the ECB’s Sintra forum. He declined to offer any forward guidance, but markets latched onto his comment that “inflation risks have come down”, even as he reiterated his commitment to price stability. So that meant investors priced out the chance of a July hike, with the futures-implied probability falling from 34% on Tuesday to just 27% by the close. And looking further out, the number of hikes priced by December fell -1.4bps on the day to just 36bps.

That dovish repricing then got further momentum from the latest batch of US data, which was generally a bit softer than expected. For instance, the ADP’s report of private payrolls came in at 98k in June (vs. 120k expected). And shortly after, the ISM manufacturing fell to 53.3 in June (vs. 53.9 expected), with the prices paid component down to a 4-month low of 73.0. So collectively that pushed back against the hawkish narrative and led markets to price out the July hike. Nevertheless, longer-dated Treasury yields still inched higher, with the 10yr yield (+1.4bps) up to 4.48%.

Looking forward, US data will stay in the spotlight today, as the June jobs report is out at 13:30 London time. As a reminder, the last three jobs reports all surprised on the upside, pushing the 3-month average of payrolls to a two-year high of +188k. So that’s been a crucial factor behind the hawkish repricing in recent weeks. For today, our US economists forecast payrolls to come in at +75k, largely reflecting expected payback from strong government and leisure/hospitality hiring last month. Meanwhile, they think the unemployment rate will stay at 4.3%, where it’s been for the last 3 consecutive months.

Over in the Euro Area, yesterday also brought some dovish headlines after the flash CPI print surprised on the downside. It showed headline CPI falling more than expected to +2.8% in June (vs. +3.0% expected), with core CPI also down to +2.4% (vs. +2.5% expected). So that led markets to price in a more dovish path for the ECB over the months ahead, with just 19bps of rate hikes priced in by the December meeting at the close, down -4.3bps on the day. And overnight that’s continued, with just 18bps of hikes now priced in this year. Indeed, with fewer than 25bps now priced by the December meeting, it means investors are pricing in around a one-in-four chance that the ECB might not hike at all again this year.

In the meantime, ECB President Lagarde also spoke on the same panel as Warsh, although her comments didn’t obviously push markets in either direction. She said that the upside inflation and downside growth risks “are probably more broadly balanced than they were a few weeks ago”. But there wasn’t anything that dominated the headlines. So front-end yields fell back in line with the dovish repricing, with the 2yr German yield down -1.6bps. But as in the US, there was a bigger push higher at the long end of the curve, with yields on 10yr bunds (+2.0bps), OATs (+2.9bps) and BTPs (+3.3bps) all rising.

As all that was happening, the dovish momentum got further support from the latest decline in oil prices, with Brent crude (-1.85%) falling to a 4-month low of $71.57/bbl. That followed positive headlines on the US-Iran talks, after Jared Kushner and Steve Witkoff were in Qatar on Tuesday. For instance, Trump said that “They’ve had very good meetings”, and AFP reported yesterday that US and Iranian officials were holding indirect lower-level technical talks with mediators. Ongoing talks were then later confirmed by Vice President Vance, who said that the “negotiators are sitting down with the Iranians, with the Qataris, and with others in Doha, talking about some of the details here”. So the newsflow helped to bring oil prices down and ease investor concern about inflation.

When it came to equities, the dovish momentum was countered by a fresh selloff in chip stocks, which saw the Philly semiconductor index fall -6.27%. So that dragged down US equities more broadly, with the S&P 500 (-0.22%) pulling back after gains on Monday and Tuesday. Nevertheless, there were still broader gains, and the equal-weighted S&P 500 (+0.24%) hit a new record. Moreover, there was a big jump for Meta (+8.81%), which was the third-strongest performer in the S&P 500 yesterday, after Bloomberg reported they were developing plans for a cloud infrastructure business. However, European equities struggled in the meantime, with the STOXX 600 (-0.38%) pulling back as well.
In other news, the US has said they won’t renew the USMCA trade deal but will instead conduct annual reviews. The original deal said that the countries could unanimously agree on a 16-year extension, but US Trade Representative Jamieson Greer said they were “not prepared to rubber stamp the agreement”, and that “there are substantial issues.” The deal is still in place for another decade if no one leaves, but this now begins a 10-year countdown to expiry in 2036 if an agreement isn’t reached.

Looking at the day ahead, data releases include the US jobs report for June, the weekly initial jobless claims, factory orders for May, and the Euro Area unemployment rate for May. Otherwise from central banks, we’ll hear from the Fed’s Daly, the ECB’s Escriva and Cipollone, and the BoE’s Mann.

Tyler Durden Thu, 07/02/2026 - 08:26

"Set Your AC To 78F": NYC Socialist Pleads With Residents As Fragile Grid Faces Blackout Risk

"Set your AC to 78 degrees, turn off lights/electronics you're not using, and unplug what you can," New York City Socialist Mayor Zohran Mamdani wrote on X late Wednesday.

New Yorkers are now getting a real-world lesson in what Mamdani's recent "warmth of collectivism" comments actually mean: shared sacrifice, including being told to dial back air conditioning during blistering heat as the risk of power blackouts rises.

New York: it's hot out there, and the power grid is working overtime to keep us cool.

Set your AC to 78 degrees, turn off lights/electronics you're not using, and unplug what you can.

Our City is doing its part too: maintaining the 78 degrees rule in our buildings,…

— Mayor Zohran Kwame Mamdani (@NYCMayor) July 1, 2026

The deeper issue here is that years of left-wing climate policies and poor grid management have left the metro area and the broader region increasingly vulnerable during peak-demand hours.

Temperatures are forecast to top 100F across NYC and large parts of the Mid-Atlantic and East Coast beginning today. The extreme weather is set to sharply drive up cooling demand, just as power grids are already under pressure from failed climate-change policies colliding with the era of data centers.

On Tuesday, the Energy Department issued emergency orders allowing PJM Interconnection power plants to bypass certain environmental limits to keep electricity flowing. Backup generators have been placed on standby on the grid serving 67 million people across 13 states.

New York City power prices climbed above $1,100 per megawatt-hour by late Wednesday afternoon. PJM expects to break its all-time peak load record of 165.5 gigawatts later today.

Tyler Durden Thu, 07/02/2026 - 08:00

Sam Altman's OpenAI Discusses Handing Trump Admin A 5% Stake

The U.S. government's equity portfolio could be expanding again, this time with a potential 5% stake in Sam Altman's OpenAI at an $852 billion valuation, according to a new report. The proposed stake would mark another step toward taking direct financial positions in tech giants. For OpenAI, buy-in from the Trump administration could ease mounting political pressure ahead of an IPO.

The Financial Times reports that Altman has floated giving the U.S. government a 5% stake in OpenAI, modeled after the Alaska Permanent Fund, a state-owned sovereign wealth fund created to invest a portion of Alaska's oil revenue for the long-term benefit of Alaskans.

The FT noted that the proposal would spur other tech giants, including Anthropic, Google, and Meta, to follow suit by handing over stakes to the federal government.

The discussions remain early and "conceptual," and any arrangement could require congressional approval, the report said, adding that the idea stems from mounting pressure in the Trump administration over AI's impact on jobs and the localized blowback against data center buildouts nationwide.

Earlier this week, Elon Musk's xAI Memphis rolled out a 'data center dividend' for the surrounding community, offering free Starlink kits and half-price service to quell any dissent against AI. This move suggests that data center operators nationwide may offer other forms of dividends in the future to appease surrounding communities.

Back to the FT report, Altman has reportedly discussed public ownership with Trump, Commerce Secretary Howard Lutnick, Treasury Secretary Scott Bessent, and Sen. Bernie Sanders.

Sanders, a crazed socialist, has argued for the public stake in AI companies to exceed 50%. The socialist and far-left lawmakers who make up the Democratic Socialists of America have even signaled a questionable data center moratorium - a move that would only cede compute power to China.

In recent months, Altman's chatbot company proposed a "public wealth fund" that "provides every citizen — including those not invested in financial markets — with a stake in AI-driven economic growth."

"The goal is not only to support people through economic change after decisions have already been made, but to give them a stake and a voice in shaping how that change unfolds," OpenAI said in a blog post.

The talks come after the Trump administration took a 10% stake in Intel, 15% in MP Materials, and ...

For OpenAI, a government stake could ease tensions with the Trump administration ahead of an IPO (delayed until 2027), while offering a political answer to concerns that AI is financially wrecking low-income folks.

Meanwhile, The Information's earlier report that Nvidia has been renting back its own compute capacity from neocloud providers raises one obvious question...

Yeah I’m sorry the only reason that NVIDIA is renting back its own capacity from neoclouds is that the demand doesn’t exist to sell it https://t.co/QXS0wVbkB1 pic.twitter.com/LXvgZCRhFX

— Ed Zitron (@edzitron) July 2, 2026

... is there really enough end-user compute demand to absorb the AI buildout? 

Tyler Durden Thu, 07/02/2026 - 07:30

Japan Takes Next Step In $2.3 Trillion Plan With Domestic AI Model And 10M Robots

The Japanese government has unveiled plans to create a domestically developed artificial intelligence model and put roughly 10 million AI-equipped robots into operation across 18 sectors by 2040 - building on a 14-year growth strategy announced last month, which targets ¥370 trillion ($2.3 trillion) in combined public and private investment across 17 priority areas, including physical AI, semiconductors, quantum technology, and nuclear fusion.

Kawasaki Kaleido

The initiative will receive up to 1 trillion yen (approximately $6.1 billion) in government funding over the next five years. Crucially, the funding is tied to annual milestone reviews - making the trillion-yen figure a ceiling rather than a guarantee, with Tokyo retaining the ability to pull back if early targets are missed.

The AI model will be developed by Noetra, a consortium formally commissioned by Japan's Ministry of Economy, Trade and Industry (METI) and its innovation agency NEDO. Noetra is majority-owned by SoftBank, NEC, Sony Group, and Honda, with Fujitsu and Rakuten reportedly weighing whether to join. The consortium is also working alongside AIST, Japan's national research laboratory. Noetra's investor base is expected to grow to 44 participating companies spanning automotive, electronics, manufacturing, finance, and logistics. The technical goal is a multimodal foundation model capable of processing language, images, video, and sensor data simultaneously - giving robots the ability to interpret a physical environment and act within it, rather than simply executing pre-programmed instructions.

The effort reflects a broader global push by countries to build "sovereign AI" capabilities and reduce reliance on dominant U.S. and Chinese technologies.

A key focus of the strategy is physical AI - the application of artificial intelligence in real-world environments rather than just on screens. This includes self-driving vehicles, factory automation, and humanoid robots designed for practical tasks.

On Tuesday, the government released an updated national AI robotics strategy. Industry Minister Ryosei Akazawa said the plan aims to "vigorously promote social implementation across a total of 18 fields," including newly added sectors such as restaurants, food manufacturing, and medicine.

"We will build and grow data infrastructure for physical AI and robots that capitalize on Japan's strengths," Akazawa told reporters.

Those strengths are considerable. Japan is home to some of the world's leading industrial robotics manufacturers - including FANUC, Yaskawa Electric, and Kawasaki Heavy Industries - and produces roughly half of all industrial robots globally by volume, according to the International Federation of Robotics. The country already deploys more robots per manufacturing worker than any other nation, making it the natural proving ground for physical AI at industrial scale.

The push comes as Japan grapples with a rapidly aging and shrinking population. More than 29% of the Japanese population is now aged 65 or older - the highest proportion of any country in the world - and the working-age population has been in decline since 1995. Policymakers see advanced robotics as a critical tool to fill widening labor gaps across industries rather than a supplement to an adequate workforce.

Can they make it happen?

Japan has announced a $2.3 trillion startup tech strategy just after South Korea’s $1.3 trillion pledge

The numbers are just as ridiculous as what they promised Trump for US investment in 2025

— zerohedge (@zerohedge) July 1, 2026

FANUC factory floor Tyler Durden Thu, 07/02/2026 - 07:00

My morning train WFH reads:

• Will AI Make Companies Outsource More, or Less?: Noah Smith on how AI might redraw the boundaries of the firm — Coase for the model era. A genuinely interesting question most coverage skips. (Noahpinion)

• We Crunched the Data: There’s a Grocery Price Emergency in America: A data-driven case that the supermarket squeeze is worse than the headline CPI suggests. More grist for the sentiment-versus-numbers debate. (New York Times)

• Reverse Engineering the Met’s Bobby Bonilla Deal: My own July 1 tradition: the math behind baseball’s most famous deferred-payment contract. The discount rate is everything. (The Big Picture)

• UBS Global Wealth Report 2026: nearly 1 million new millionaires. Global personal wealth rose 10.8% last year, the fastest pace in years, yet median wealth fell in most markets (Quartz)

• Mega takeovers drive record $2.8tn in dealmaking: Companies and investors turn to M&A as they adjust to economic shifts driven by the rise of AI. (Financial Times)

• Remote Work Is Making It Harder for Grads to Find (and Keep) Jobs: New research argues that frustration among employers over remote work may be leading them to cut back on hiring young workers (Wall Street Journal)

• Decision Fatigue: Why You Feel Exhausted Without Having “Done” Anything Physically: The brain is just like any other muscle. It gets tired. On why choosing all day drains you as much as labor. A tidy explainer with practical implications for how you structure a workday. (Facile Things)

• Even the Internet’s Favorite Pool Guy Doesn’t Know How to Fix the Reflecting Pool: Algae blooms, peeling paint, and a host of fixes from hydrogen peroxide to nanobubblers have made it hard to diagnose what’s wrong with the Reflecting Pool—let alone how to clean up the mess. A funny, telling sidebar to a story that refuses to drain. (Wired)

• Trump’s second-term windfall: $1.4B in crypto earnings: The president’s latest financial disclosure underscores how central the cryptocurrency industry has become to his business empire. Disclosures reveal a staggering crypto haul. The through-line of this week’s reads: the presidency as a revenue center. (Politico) see also Trump’s Moneymaking Run: Unrivaled in Presidential History: The Times tallies the scale of presidential self-enrichment against the historical record. Read it with this week’s crypto and mining-deal stories. (New York Times)

• European Soccer Fans Marvel at the Splendor of America’s Suburbs: World Cup visitors discover the cul-de-sac, the strip mall, and the enormous parking lot. A charming outsider’s-eye view of American sprawl. Dutch fans in Missouri see a nation that is risky and expensive, but vast and bountiful: ‘Everything is three times the size’ (Wall Street Journal)

Video of the day: The Genius of Mechanical Time

Be sure to check out our Master’s in Business next week with McKeel Hagerty, CEO/Chairman of Hagerty Specialty Insurance. He transformed a family specialty-insurance agency into an enthusiast-driven platform focused on collectible cars, events, valuation data, and auctions. HGTY is now a public company that insures everything from classic cars to boats, trucks, tractors, and military vehicles for over 2.8M collectors.

 

Record labels no longer dominate which artists get radio airplay

Source: Bloomberg

 

Sign up for our reads-only mailing list here.

 

The post 10 Thursday AM Reads appeared first on The Big Picture.

Why Bernie Sanders' AI Bill Is Fascistic And Dangerous

Authored by Amirhossein Eshtiaghi via The Mises Institute,

Bernie Sanders is a socialist populist. His unfamiliarity with the fundamentals of economics explains why he considers Denmark to be socialist. A former Danish Prime Minister once implicitly addressed such claims, noting that Denmark’s economy is not socialist, but rather a market economy. But the truth does not matter to American leftists.

He has now made headlines again with a bill that would expand state participation in the AI sector—a plan that, contrary to the claims of his supporters, could have disastrous consequences. In the following, these consequences are briefly examined.

This Is a Fascist Policy

Fascist Italy and Nazi Germany, after the Soviet Union, were among the countries with the highest levels of state ownership and state control over the economy. In both Germany and Italy, the state controlled many companies, while private firms operated under strict state supervision and intervention. The Nazis nationalized nearly half of the economy and then used extensive regulations to bring the private sector under state control. Mussolini followed a similar approach. The state determined what goods would be produced, how they would be produced, and in what form they would be supplied.

Sanders says that artificial intelligence does not belong to billionaires but to the people. Fascists and Nazis used the same argument—that the private sector should be organized in line with the public interest—to justify extensive intervention in the market. In fact, Hitler and Mussolini were able to control the means of production in much the same way without removing corporate managers.

Comparing Sanders to fascism may seem unusual, but it should not be forgotten that the main leaders of Italian fascism, including Mussolini, were initially socialists before they became fascists. In fact, as Thomas DiLorenzo argues in his book The Problem with Socialism, fascism had socialist origins.

Regarding state ownership and state influence over AI, Sanders and Trump take similar approaches. Trump himself has admitted that the economic views of his voters and Sanders’s voters “aren’t that far apart”—and that may be one of the few honest statements Trump has made in his life. In fact, both are populists and seek to expand state power and weaken the free market economy.

Therefore, Sanders’s proposal, or similar proposals, could allow the state to gain control over the AI industry while preserving the appearance of private ownership. In that sense, such proposals can reasonably be described as fascistic, since they enable state control over production without formally abolishing the private sector.

A Threat to Civil Liberties

States have always used intelligence agencies and affiliated institutions to restrict social freedoms, silence opponents, and monitor users online. They also pressure various platforms to hand over user data so it can be used to suppress dissent. If the state becomes the owner of artificial intelligence companies, it will be able to collect users’ information freely and without any obstacles.

Sanders’s supporters might privately believe that this would be a useful tool for monitoring opponents, allowing the state to identify and silence those who oppose their leftist ideology. However, it must be remembered that this power is being granted to the state, not to a specific political party. If figures like Trump—or any other authoritarian personality—come to power, this authority will fall into their hands, allowing them to suppress those very same leftists. It empowers states to monitor anyone they deem an “undesirable element.” Ultimately, this could pose a serious threat to liberty.

Politicians already possess considerable power; control over artificial intelligence would multiply that power many times over—and more power brings more corruption.

Weakening Innovation

This policy threatens innovation. State favoritism can make it difficult for new and creative players to enter the market and can slow the process of “creative destruction.” It should also be noted that the managers of AI companies might even welcome such a situation, since it could allow them to eliminate new competitors in the industry and reach a monopolistic position.

After all, once the state enters the field, companies could rely on the support of politicians so they no longer have to compete with non-American companies. They might even use the argument that the state is a shareholder in AI companies to justify banning the use of AI systems from other countries in the United States.

The support of some AI companies’ executives for proposals that would lead to state involvement in this industry is highly suspicious. We will have to wait and see what happens, but it is possible that Sanders’s bill could actually help those same billionaires eliminate their competitors.

Technology Should Not Be Held Back

Obstructing technological growth is both foolish and harmful. The claim that artificial intelligence destroys jobs is a deceptive and misleading argument. Opposing AI in order to preserve certain jobs is just as irrational as trying to stop the spread of the internet because the use of email caused some postal workers to lose their jobs.

By the same logic, we should have banned the light bulb because it led to job losses in the candle-making industry. Likewise, we should have abandoned modern textile machinery because it allowed the same amount of clothing to be produced with fewer workers.

If we follow this line of reasoning to its logical conclusion, we would have to return to the Stone Age. Innovation should not be stopped. Technological advancement and innovation are the primary engines of productivity growth and rising living standards. Just as old jobs disappear, new employment opportunities emerge. For example, many workers from traditional industries can find work in newer and more productive sectors of the economy. We should not hinder the growth of industries that can improve the lives of billions of people merely to preserve the jobs of a limited number of individuals.

A Populist Claim

Artificial intelligence, like any other industry, is built by entrepreneurs and producers, and its products are exchanged in the marketplace. The assertion that, “AI does not belong to billionaires; it belongs to the people” is akin to claiming that potatoes do not belong to their farmers but to “the people,” and that therefore, 50 percent of all farmland must be seized by the state.

Sanders is a master of slogans like “Billionaires shouldn’t exist,” and he is strategic in this choice. Were he to replace “billionaires” with “millionaires,” the slogan would inevitably implicate him and leftist celebrities. It benefits him to funnel jealousy toward billionaires, thereby shielding himself from public outrage.

If wealth is inherently evil, then being a millionaire is equally so. In that case, the left would be forced to chant slogans such as “Millionaires should not exist”—or perhaps even say, “Damn Sean Penn, Oprah, and Sanders.” After all, they are all millionaires.

The benefits of AI do not accrue solely to billionaires; billions of people worldwide utilize these tools—in medicine, education, and thousands of other fields. If private companies, absent rent-seeking or government handouts, earn profits through innovation and creativity, there is nothing inherently wrong with that. No one is forced to use AI; those who choose to do so effectively vote with their dollars to reward the companies that provide these services. One can only hope that Sanders has not used these tools or maintained an AI account himself—because if he has, he has been lining the pockets of the very capitalists he claims to despise.

The Abuse of a Public Wealth Fund

Politicians can abuse national wealth funds. In Russia, Vladimir Putin has leveraged the National Wealth Fund to bankroll the war in Ukraine. The US state could just as easily exploit such a fund to finance war or violate human rights. In this scenario, revenues generated from AI would be diverted away from vital investments in innovation and instead channeled into the production of bombs to be dropped on innocent people.

Conclusion

Regrettably, politicians from both major American parties seem determined to undermine the free market and the values of classical liberalism. From Trump’s foolish tariffs to Sanders’s socialist and demagogic policies, both are actively eroding the foundations of economic freedom.

Americans should not feel compelled to choose between economic nationalism and socialism, just as they were never truly forced to choose between fascism and socialism in the twentieth century. There is only one path worth pursuing: the defense of libertarian values.

The real solution to improving living standards lies in the state’s complete withdrawal from all economic and social spheres. Unless the American public shifts its focus toward the ideals of classical liberalism or libertarianism, we will continue to witness a cycle of populism from both parties, as well as state obstruction of growth and innovation.

Tyler Durden Thu, 07/02/2026 - 06:30

Treasure Hunters Recover $100K Silver Bar From Legendary 1622 Shipwreck Treasure hunters searching the waters off the Florida Keys have uncovered a 22-pound silver bar believed to have come from the wreck of the Spanish galleon Nuestra Señora de Atocha, according to a new report from SlashGear.

The artifact, estimated to be worth about $100,000, is the first silver bar recovered from the legendary wreck site in nearly three decades. It was discovered by divers working with Mel Fisher's Shipwreck Expeditions during a routine recovery mission.

The Atocha was part of a Spanish treasure fleet that was destroyed by a powerful hurricane in September 1622 while returning to Europe. Loaded with silver, gold, and other valuables collected from Spain's colonies in the Americas, the ship went down in relatively shallow water, taking nearly its entire crew with it and scattering its cargo across the ocean floor.

The report says that the wreck remained one of history's great lost treasures until famed salvager Mel Fisher finally located its main debris field in 1985 after a 16-year search. That breakthrough yielded hundreds of millions of dollars in treasure, but archaeologists and recovery teams have continued to uncover new artifacts from the sprawling debris field ever since.

Experts believe the site is still far from exhausted. Mel Fisher's organization estimates that more than $120 million worth of silver, copper ingots, bronze cannons, and other cargo may still remain buried beneath the seabed, waiting to be uncovered by future expeditions.

The latest recovery also serves as a reminder that some of history's greatest discoveries don't happen all at once. Centuries of shifting sand, storms, and changing ocean currents continue to expose artifacts that were hidden for generations, giving modern explorers fresh opportunities to recover pieces of one of the world's most famous shipwrecks.

While the silver bar's estimated value is impressive on its own, discoveries like this are about more than money. Each recovered artifact helps historians better understand the scale of Spain's colonial trade network, the enormous wealth transported across the Atlantic, and the risks that came with moving treasure by sea during the Age of Exploration.

Tyler Durden Thu, 07/02/2026 - 05:45

KKR And SK Launch South Korea's Largest Renewable Energy Platform

By Tsvetana Paraskova of OilPrice.com

Global investment firm KKR and South Korea’s industrial conglomerate SK Inc are launching the single biggest renewable energy platform in South Korea to help meet growing power demand from AI and chip manufacturing.

KKR and SK Inc are creating the platform, valued at about $1.3 billion, or 2 trillion South Korean won, to combine 1.7 gigawatts (GW) of clean energy capacity in operation and a pipeline of projects in development that would boost the platform’s total capacity to 10 GW, the investment firm said in a statement. 

The renewable electricity will help meet South Korea’s surging clean-power demand from AI data centers and semiconductor manufacturing, according to the global investor.  

The 10 GW capacity targeted by the platform would be capable of simultaneously and continuously powering 100 large-scale, 100MW-class data centers, KKR said.

“At this scale, the Platform is well positioned to become a reliable, large-scale source of clean power for Korea's most demanding industrial users, from AI data centers to global semiconductor production lines, and more,” the global investment firm said.

KKR will have management control of the platform in its initial phase, while SK will participate as an equity investor and retain the flexibility to pursue control rights through future discussions.

“Korea is one of Asia’s most attractive renewable energy markets, underpinned by strong corporate demand for clean power from the semiconductor, data center, and manufacturing sectors,” said Keith Kim, Partner at KKR.

“Together, we are establishing a leading, scaled renewable energy platform that can supply reliable clean power to Korea's most demanding industrial users.”

In April, while South Korea was scrambling for oil supply not passing through the Strait of Hormuz, the Korean Ministry of Climate, Energy, and Environment said the country would target to generate at least 20% of its power supply from renewables by 2030, up from about 11% now.

“We will swiftly implement the energy transition plan to make sure that South Korea remains resilient to external shocks, such as the ongoing conflict in the Middle East,” Climate Minister Kim Sung-whan said in April.

Tyler Durden Thu, 07/02/2026 - 05:00

The Collapse Of Schengen... Over 1 Million Illegal Migrants Apply For Spanish Citizenship

Via Remix News

When the socialist-communist government of Pedro Sánchez first announced he was going to begin the mass legalization of migrants in his country, his government claimed this would amount to 500,000 people. Now, twice as many people are being legalized than first claimed, and importantly for the rest of Europe, those migrants now have the right to freely move through the Schengen zone.

Due to his mass amnesty, The New York Times has now labeled Spain a "beacon of the global left."

In April, the socialist-communist government in Madrid first issue the decree, giving illegal migrants three months to submit their application.

According to the New York Times, more than 1 million applications had already been submitted by illegal immigrants.

Vox party leader Santiago Abascal has accused Prime Minister Pedro Sánchez of taking the long-term move of naturalizing millions of foreigners to give himself and left-wing parties an electoral advantage in upcoming elections.

"Pedro Sánchez is willing to rob us of the next general elections by manipulating the census and handing out Spanish nationality," wrote Abascal. "And it is necessary for us to mobilize to prevent him, after everything he has stolen, from also stealing the elections from us."

Pedro Sánchez está dispuesto a robarnos las próximas elecciones generales manipulando el censo y regalando la nacionalidad española.

Nos alegramos de que la denuncia de Santiago Abascal haya sido escuchada.

Lo peor de Pedro Sánchez ya ha llegado.

Y es necesario que nos... pic.twitter.com/85F4CTumFn

— VOX ?? (@vox_es) June 30, 2026

Across Europe, conservative and right-wing politicians are reacting with shock to the huge legalization numbers Spain is now reporting.

"The decision to legalize them means that they will be able to move and settle freely in any place in Europe. Left-wing governments are bringing about the collapse of the Schengen Area and mocking the safety of Europeans. Not only does Spain, under the Migration Pact and in full accordance with the law, have the power to offload illegal immigrants to other countries, but it is also legalizing their stay," wrote Polish MEP Anna Bry?ka.

Premier Hiszpanii Pedro Sanchez poinformowa?, ?e ponad milion imigrantów z?o?y?o wniosek o zalegalizowanie pobytu w Hiszpanii.

Decyzja o ich legalizacji oznacza, ?e b?d? oni mogli nieskr?powanie porusza? si? i osiedla? w dowolnym miejscu w Europie. Rz?dy lewicy doprowadzaj? do... https://t.co/KfAXPP7qL8

— Anna Bry?ka (@annabrylka) June 30, 2026

Sánchez has also been accused of passing the law with no democratic legitimacy. He announced that the Council of Ministers approved the decree initiating the implementation of this decision into the state legal order. Notably, this mass legalization was never formally voted in by parliament. Instead, Sánchez forced through an emergency decree.

The politician marketed the decree by talking about people who are in Spain in an "irregular situation" and noted that "again, I feel proud to be Spanish."

Calls to the European Commission demanding the immediate removal of Spain from the Schengen Area have been met with silence. Illegal arrivals enter Europe through this country every day.

As predicted and warned by both the Spanish opposition and many other political and media outlets, it turns out that there are many more newcomers willing to legalize their stay than the Spanish authorities announced.

The program on legalization of status stems from a citizens' initiative from 2024, which was supported by over 700,000 people. The measure was also supported by hundreds of organizations that describe themselves as humanitarian, along with business groups and the Catholic Church. To count on approval of the application, the newcomer must have been in Spain for at least five months and have no criminal record.

Read more here...

Tyler Durden Thu, 07/02/2026 - 03:30