Bezos' Blue Origin Seeks $10 Billion In First-Ever Outside Funding Round

Fresh off Elon Musk's SpaceX IPO, it appears that, for the first time, Blue Origin is preparing to raise outside capital in a deal that would value Jeff Bezos' rocket company at about $130 billion.

Andrew Ross Sorkin, financial columnist for The New York Times and a co-anchor of CNBC's Squawk Box, wrote in a DealBook report, "I've got a scoop on Blue Origin closing in on a big fund-raising round, which is expected to value Jeff Bezos' spaceflight company at about $130 billion."

"It would be the first time that outside investors buy a piece of Blue Origin in its 25-year history," Sorkin said.

Blue Origin is seeking $10 billion in a new funding round, with Coatue Management expected to lead with a $4 billion commitment. Bezos is preparing to contribute $2 billion, while the remaining $4 billion is expected to come from outside investors.

The fundraising would give Blue Origin a $130 billion valuation as it ramps up spending and tries to narrow the gap with SpaceX - yet that gap remains massive in terms of launch capacity.

In recent days, NASA Administrator Jared Isaacman said investigators have found that a "potential engine issue" was the cause of the catastrophic Blue Origin New Glenn rocket explosion that damaged part of a launch pad at Cape Canaveral on May 28.

Here's our video of the explosion at Launch Complex 36. It happened about 9 pm ET (0100 UTC) as Blue Origin was beginning a static fire test of its New Glenn rocket.

Watch live views: https://t.co/tm2wZQmAVD pic.twitter.com/PmbgQC6Qmq

— Spaceflight Now (@SpaceflightNow) May 29, 2026

Blue Origin has relied heavily on Bezos' personal wealth for years, including proceeds from Amazon stock sales. Bringing in outside money will accelerate spending and allow for more competition in America's space race, which the Trump administration has said is necessary to create a robust space industry.

Musk's SpaceX went public last month and raised $85 billion. SpaceX is now valued at nearly $2 trillion, despite a pullback in shares, currently trading around $150 in the premarket session.

A flurry of Wall Street analysts are turning incredibly bullish on SpaceX, with 12-month price targets ranging from Raymond James' $800 to Arete Research's $401 and Morgan Stanley's $300. That's because SpaceX has a launch moat that will be maintained for years - its launch capacity surpasses not just Bezos' rocket company, but entire nation states such as China and Russia combined. Read the report.

Tyler Durden Wed, 07/08/2026 - 13:45

The Great Migration: What The Dow-To-Gold Ratio Is Telling Us

Authored by Bryan Lutz, Editor at Dollarcollapse.com,

It takes about 13 ounces of gold to buy the Dow Jones Industrial Average. The Dow-to-gold ratio prices the entire American stock market. And it does it in the one currency no central bank can print. Over the past century, it tells the same story.

It measures when the US stock market is overvalued… when it’s promising too much.

And there are a lot of promises that don’t look as good as they should these days.

A bond pays only if the issuer stays solvent.

A dollar holds its value only if the people who print it show restraint.

Yet, tangible wealth answers to no one. An ounce of gold is worth an ounce of gold whether a single counterparty keeps their word, which is what makes gold an honest denominator in the Dow-to-Gold ratio.

The ratio goes up, and it comes down. During the great manias of the twentieth century, paper looked invincible: 18 ounces to buy the Dow in 1929, 28 in 1966, 41 at the top of the dot-com boom in 2000. Then the tide went out, bubbles popped and the markets turned to commodities over equities.

As the ratio goes down, eventually it hits a bottom.

The same Dow cost almost nothing in metal, barely 2 ounces in 1932 and close to a single ounce in 1980. So, greed priced the top. Fear, and sound money, priced the bottom.

A century in one line:

Every peak in paper has been repriced in gold.

Each top marked a moment the market trusted claims more than the things behind them, and each was followed by a long migration back toward metal that ran for years, not months.

Here is where we correct the record. The move off the 2000 top has been anything but tidy. The ratio fell to roughly 6 by 2011, then the long everything-rally, cheap money layered on cheap money, hauled it back above 19 by 2021. The 2026 equity melt-up has lifted it again, to about 13, even with gold sitting near record highs.

The same story, up close:

However, the long-term trend since 2000 points down. The path has been a bit of a switchback. Anyone waiting for a clean glide toward gold got a decade of reversals instead, which is why we distrust anyone selling a date for gold.

Gold’s historic floor sits between 1 and 2 ounces. From 13, most of that move is still ahead, whenever the switchback resolves. In my opinion, this is not the time to wager a standard 60/40 portfolio as a wager that the denominator stays at or around 13. Stocks, and bonds are unlikely promise-keepers, and believing the dollar behind them holds is just as risky. The denominator is not sitting still. Every deficit the Treasury runs and every dollar the Fed prints wears down the promises the old 60/40 portfolio depends on. For most of the past forty years, it paid anyway. This time it will not.

“All roads, in other words, lead to trouble of some sort, which makes year-ahead asset allocation pretty easy: you just own everything that protects you regardless of which road gets traveled.”

~ John Rubino, The Money Bubble

After twenty-five years, the score still reads the same. Paper is expensive, and gold is patient.

Tyler Durden Wed, 07/08/2026 - 13:25

Stellar 10Y Auction Stops Through, With 3rd Highest Foreign Demand On Record

Following yesterday's stellar 3Y auction, moments ago - with yields surging to the highest level since mid-May - the Treasury completed the sale of $39BN in a 9 Year 10 Month reopening of 10Y cusip QQ7, in what was another spectacular auction.

The note sale, which priced just after 1pm ET, stopped at a high yield of 4.580%, up from last month's 4.538%, and stopped through the When Issued 4.586% by 0.6bps, the biggest stop through since Sept '25.

The bid to cover rose to 2.593 from 2.565, which was the highest BtC also since last September, and obviously well above the six-auction average of 2.46.

The internals were also some of the best on record: foreign buyers (i.e., indirects) were awarded 81.5% of the auction, up from 78.21% in June and the 3rd highest on record.

And with Directs sliding to 10.73%, the lowest since April 25, Dealers were left holding just 7.8%, down from 9.5% in June and the lowest since January.

Overall, this was an extremely strong auction, perhaps the best 10Y of 2026, and with yields surging today, it shows that not only retail traders, but bond investors are also willing to buy the dips. 

Tyler Durden Wed, 07/08/2026 - 13:24

Russia Bans Diesel Exports, Assuring Even Higher Prices

As was widely speculated in recent days, Russia banned exports of diesel in order to avoid domestic shortages after a flurry of attacks by Ukrainian drones on the nation’s refineries.

“Today we introduced ban on exports of diesel,” Deputy Prime Minister Alexander Novak said at the government’s meeting with President Vladimir Putin.

The decision will further squeeze global fuel markets, which are already under pressure due to the supply disruption caused by the Iran war. Russia's decision means that the recent surge in the diesel margins to record highs, which have completely disconnected with oil prices, are set to rise even more. 

Last year, Russia accounted for about 11% of global supplies of diesel, according to data compiled by Bloomberg from analytics firm Vortexa.

The logical corollary is what the DOE reported earlier today, namely that US product exports - which include diesel and other refined products - surged to a record high.

Exports of the fuel were previously banned only for traders and other sellers in Russia that don’t make their own fuel.

The diesel ban comes on top of existing restrictions on most shipments of gasoline and jet fuel. Russia has been struggling to ensure domestic oil-product supplies and to contain prices at the pump after drone attacks damaged several refineries. 

Ukraine’s intensified strikes pushed Russia’s crude-processing rates to multi-year lows. Many regions have been forced to impose some degree of fuel rationing because of the disruptions. 

Even before the ban, Russia’s diesel and gasoil exports were dropping significantly. During the first three weeks of June, its exports of diesel and gasoil averaged about 490,000 barrels a day, only slightly more than half of what the nation shipped to foreign markets in 2025, according to data compiled by Bloomberg from Vortexa.

Tyler Durden Wed, 07/08/2026 - 13:10

George Soros Angers Hamptons Residents After Massive Land Purchase

Authored by Luis Cornelio via Headline USA,

George Soros has long used his billions to influence politics, but now his family appears to be using that wealth to reshape its own backyard through a massive land grab in the Hamptons.

The Soros family has purchased 18 plots of land on Shelter Island, a Hamptons community, angering residents who are concerned that the billionaire’s presence in the area will trigger rising costs.

Soros’s shopping spree, reported by the New York Post on July 2, makes him and his sons, Alex and Gregory Soros, the largest private landowners on the approximately 8,000-acre island.

According to the Post, the massive purchases are not the first time the Soros family has angered residents. In 2020, Gregory snatched a 22-acre property on a quiet street.

However, the quiet atmosphere turned into chaos when construction trucks began arriving to build one of the island’s largest swimming pools.

Local plumbers and maids are required to sign non-disclosure agreements before being allowed to work on the Soroses’ properties, residents alleged.

Surveillance cameras have reportedly been installed on local streets, raising privacy concerns among residents of the island, which is only accessible by boat.

At one point, the Soros family reportedly purchased multiple homes along a single road and sought approval from local officials to install a fence to block access from other residents.

However, Shelter Island resident Steve Lenox is concerned that Soros will soon get his way.

“We can’t keep up with the lawyers that these millionaires have and they seem to build whatever they want,” Lenox told the Shelter Island Town Board during a meeting on June 29, according to the Post.

“That’s what’s ruining the island.”

Another resident, Mike Gaynor, echoed those concerns during the meeting, pointing to other communities that became unaffordable at the arrival of millionaires.

According to the Post, residents first noticed the Soros family’s presence on the island when the family installed a deer fence around one of its properties, allegedly in violation of local zoning rules.

Tyler Durden Wed, 07/08/2026 - 12:55

FOMC Minutes Preview: Scrutiny For Hawkish Bias

Today's FOMC minutes will be scrutinized for further insight into policymakers' appetite for additional rate hikes and the thinking behind the Committee's hawkish shift at last month's meeting. The minutes are an account of the June 17th meeting and therefore will not reflect subsequent developments, including the softer-than-expected June nonfarm payrolls report or Chair Warsh's appearance at the ECB's Sintra Forum.

Nonetheless, as Newsquawk writes in its FOMC Minutes preview, the June meeting, Warsh's first as Fed Chair, marked a significant shift under his leadership. The Committee unanimously overhauled the policy statement, removing all forward guidance and placing greater emphasis on its commitment to price stability. While the statement changes were unanimous among voting members, it will be interesting to see whether non voting participants also supported the removal of forward guidance and the stronger inflation-focused language.

On forward guidance, Waller spoke about the tool on July 6th - after the FOMC. He noted that it can speed the impact of monetary policy, calling it a valuable tool. However, it can be a hindrance if it is too strong or rigid, and also problematic when policy makers expect different economic outcomes all with a significant probability of occurring, adding in some cases, it is best not to use it at all. We will be looking to see the views among the whole FOMC around the use of forward guidance.

Anecdotally, Rabobank wrote that "Fed's Waller has joined new Chair Warsh in wanting to shake up Fed communications to do so less: ahead of the FOMC minutes today, one wonders if they could just be a truncated, "We talked about stuff," leaving analysts to... well, analyze, rather than being spoon-fed."

Traders will also be watching for any discussion surrounding the broader policy reviews announced by Warsh. During the FOMC press conference, he revealed plans to establish five task forces covering Fed communications, the balance sheet, data sources, productivity and jobs, and the Fed's inflation framework. While the reviews are not expected to conclude until year-end, the minutes may provide an early indication of how policymakers view these topics, although it may still be too early for any meaningful discussion. As this is the first set of minutes under Chair Warsh, there is also some scope for changes to the presentation or structure of the document, given the broader changes already made to the FOMC statement.

Meeting Recap

• Kevin Warsh's debut as Fed Chair delivered a clear hawkish shift. While the Committee left rates unchanged at 3.50-3.75%, as widely expected, the policy statement was significantly revised, removing all forward guidance and reaffirming the Fed's commitment to restoring price stability.

• The statement reiterated that inflation remains elevated but updated its description to reference supply shocks affecting specific sectors, including energy. The Committee also upgraded its assessment of the labour market, noting that job gains were keeping pace with workforce growth rather than remaining subdued. Economic activity continued to be described as expanding at a solid pace despite uncertainty surrounding the Middle East, while policymakers added new language highlighting strong productivity growth and capital investment.

• Regarding the Summary of Economic Projections, inflation forecasts were revised higher, GDP growth projections for 2026 were trimmed modestly, and the unemployment rate was revised lower. Warsh did not submit his own forecasts due to his distaste for forward guidance, but he made it clear he is focused on price stability.

• The dot plot shifted materially, representing a hawkish shift. The median 2026 projection rose to 3.8% from 3.4%, implying one 25bp rate hike compared with March's median projection for one rate cut. The 2027 median increased to 3.6% from 3.1%, while the 2028 projection rose to 3.4% from 3.1%. The distribution of projections was equally notable: nine participants now expect at least one rate hike this year (one sees three hikes, five see two hikes and three see one hike), compared with none in March. Meanwhile, eight participants now expect rates to remain unchanged through year-end (previously seven), while only one still projects a rate cut (previously seven).

• Following the meeting, analysts broadly concluded that the statement, economic projections and Warsh's press conference reinforced the view that policymakers are placing greater emphasis on inflation risks than labour market concerns.

• Since then, Warsh has reiterated many of those themes during his appearance at the ECB's Sintra Forum. He again rejected the use of forward guidance, stressed that interest rates should remain the Fed's primary policy tool and reaffirmed the Committee's commitment to price stability. He acknowledged that inflation expectations had eased during his first month as Chair but maintained that inflation running above the Fed's 2% target remains unacceptable.

• On the balance sheet, he again avoided providing specific guidance, reiterating only that he favors a smaller balance sheet and that the newly established review committees will inform future discussions.

• Although subsequent data will not feature in these minutes, it is worth adding that the softer June payrolls report has led markets to pare some of the hawkish repricing seen after the June meeting. Money markets now fully price one 25bp rate hike by December rather than October, meaning traders will be assessing the minutes against a policy outlook that has evolved modestly since the meeting took place.

Tyler Durden Wed, 07/08/2026 - 12:25

Southern Poverty Law Center Pleads Not Guilty To Federal Fraud Charges

Authored by Matthew Vadum via The Epoch Times,

The Southern Poverty Law Center (SPLC) on July 7 entered not guilty pleas again to 11 criminal counts alleging it defrauded donors by sending millions of dollars to informants who infiltrated white supremacist and so-called hate groups that it publicly opposed.

The fresh arraignment of the nonprofit organization under a new superseding indictment took place via videoconference before Montgomery, Alabama-based U.S. Magistrate Judge Kelly F. Pate.

The charges, announced on April 21 by FBI Director Kash Patel and acting U.S. Attorney General Todd Blanche, sparked political backlash amid growing questions about the group, which the federal government had previously used to track extremist groups with its “Hate Map” and other online resources.

The original indictment by a federal grand jury charged the SPLC with wire fraud, making false statements to a federally insured bank, and conspiracy to commit money laundering.

The group was alleged to have surreptitiously transferred more than $3 million in donated funds to leaders and organizers of racist groups, including the Ku Klux Klan, the Aryan Nation, and the National Alliance, between 2014 and 2023.

The government said the SPLC sent donations to bank accounts of fake entities that had names such as “Rare Books Warehouse” and “Tech Writers Group.” The accounts were then used to funnel money to alleged informants in the racist groups that it claimed to strongly oppose.

One of the informants allegedly helped to organize the “Unite the Right” protest in 2017 in Charlottesville, Virginia, that turned deadly.

SPLC interim president and CEO Bryan Fair appeared in person on May 7 to plead not guilty to the same charges on behalf of the group.

On July 7, an attorney for the organization appeared by videoconference to enter 11 not guilty pleas to the superseding indictment issued last month that added more details and specifics. The new charging document did not add new charges.

The original indictment alleged $3 million in donor funds was funneled to individuals associated with extremist groups, but the new indictment increases the figure to $4.1 million.

The new indictment provides additional details such as a claim that funds were used by recipients for buying materials for cross burnings and Ku Klux Klan robes and hoods.

The SPLC has filed a motion to dismiss the indictment for vindictive prosecution. The group claims it is being targeted by the Trump administration for political reasons. It is unclear when the court will rule on the motion.

The SPLC is known for its successful fundraising campaigns. According to its most recent publicly available IRS filing, it had gross receipts in tax year 2023 of $339.3 million and assets of $822.2 million.

The FBI severed its relationship with the SPLC in October 2025 after conservatives criticized the group for including slain conservative activist Charlie Kirk’s organization on its list of hate groups. The FBI had previously used SPLC intelligence on domestic extremist groups.

Patel said the organization has turned into a “partisan smear machine” instead of a civil rights advocate.

“Their so-called ‘hate map’ has been used to defame mainstream Americans and even inspired violence,” he said at the time, without elaborating.

The SPLC’s Hate Map lists almost 1,400 groups, including Kirk’s Turning Point USA, categorizing it as an “antigovernment” group.

Critics have long said the Montgomery-based SPLC unfairly labels conservatives as racist as a matter of policy, treats opposition to illegal or legal immigration, open borders, and multiculturalism as hate, and political expression of those views as hate speech.

The Alliance Defending Freedom, a legal organization that defends religious freedom and free speech, says the SPLC “did good work decades ago fighting segregation in the South,” but has since it has become a “far-left activist organization that attacks anyone who disagrees with its narrow political agenda.” Targets have included conservative, libertarian, anti-tax, immigration reductionist, and other groups.

In a statement issued in May, the SPLC called the charges against them “provably wrong” and “based on inaccurate facts and a misapplication of law.” The nonprofit said its informant program has been successful at preventing threats and attacks, stopping criminal activity, and gathering information used to dismantle hate groups.

“There is no question that the information the SPLC shared with law enforcement saved lives,” the statement reads.

It also stated that it was no stranger to legal threats and would continue its mission “no matter what.”

The Epoch Times reached out to the SPLC for comment. No reply was received by publication time.

Tyler Durden Wed, 07/08/2026 - 12:05

63 Million Barrels Of Iranian Oil Stuck At Sea After US Pulls Iran Sanction Waiver

Tehran's oil export troubled just got worse. 

One week after we reported that Iran was already struggling to sell its crude to buyers in Asia (including China, which appears to now prefer UAE exports instead), overnight the US rescinded the sanctions waiver that allowed Tehran to sell its oil without penalties, making sales of Iranian crude to international buyers even more challenging. 

The Iranian attacks on three commercial vessels in the Strait of Hormuz on Tuesday prompted immediate US reaction with the USmilitary striking multiple targets in Iran and the Treasury canceling the waiver on Iran’s oil sales that was supposed to be in place until August 21.

Iran’s oil sales could be constrained again even before they resume, OilPrice reports. Since the memorandum of understanding was signed in mid-June, Iran has rushed to load cargoes from its key export sites at Kharg Island, and move its tankers out of the Gulf as soon as possible, after weeks of virtually no exports because of the U.S. blockade that began in mid-April.

The surge in Iranian shipments out of the Gulf and into waters near the Malacca and Singapore Straits gave Iran a lifeline to boost its exports that had suffered from the U.S. blockade.

China has remained Iran’s key customer as other buyers are reluctant to commit to purchases. But in recent weeks, we learned that even Chinese purchases of Iran oil have slowed dramatically, and now that the US has ended the waiver and sanctions are in place again, buyers in India that were considering potential purchases have likely backed out. 

Additionally, one could go so far as to argue Iranian oil in tankers is once again subject to US seizure.

Looks like the US has a license to seize Iranian tankers, especially those off Asia and waiting for Chinese teapot buyers to emerge. https://t.co/e9hxCwuOUx

— zerohedge (@zerohedge) July 7, 2026

Iran is thus left with millions of barrels of crude oil on tankers moving or idling in a large area from the Persian Gulf to the Strait of Malacca. Most of the laden tankers do not broadcast destination or broadcast they are for orders, according to vessel-tracking data compiled by Bloomberg.

Currently, as many as 63 million barrels of Iranian oil are either in transit or idling in tankers, per Bloomberg’s estimates based on data from Vortexa, which also notes that oil on floating storage in the Gulf has more than doubled in the past week to over 41 million barrels.

“Iran managed to ship out 60 million barrels of crude oil since the US Navy blockade paused in mid-June 2026,” TankerTrackers.com said late on Tuesday, after the U.S.-Iran tensions escalated again.

“If the blockade were to resume now due to escalating tensions, Iran would be stuck with ~50 million barrels of crude oil and refined products.”

Tyler Durden Wed, 07/08/2026 - 11:45

Trump Greenlights Patriot Missile Production In Ukraine, Praises Deep Strikes Into Russia

President Trump just prior to entering the Oval Office vowed to quickly achieve peace in the Russia-Ukraine war, which is currently in its fifth year. The MAGA base got energized by Trump's earlier repeat statements that he'd bring peace to major global flashpoints and hotspots, but instead of anti-interventionism he started a new war of choice in the Middle East, and is now tripling down on military support to Kiev.

While in Turkey for the annual NATO summit, President Trump commented on the issue of Ukrainian drone strikes deep into Russian territory on its oil refineries and defense manufacturing facilities, which has unleashed a fuel crisis in various parts of Russia and especially Crimea.

"It's an escalation but it’s also an escalation that can help lead to an end [of the war]," the US President told the NATO summit.

via AFP

After heaping lavish praise on Ukraine forces for supposedly turning the tide of battle and momentum in Kiev's favor, Trump also said, "We have a lot of pressure on President Putin. I don’t think he likes what’s going on." He added: "But I talked to President Putin a lot. He wants to end the war."

The Wall Street Journal comments in the wake of Trump's remarks:

President Trump said he supported Ukraine striking targets deep inside Russian territory, calling it an escalation that could help end the war.

...In a marked contrast to past meetings between the two leaders, Trump opened his press conference with President Volodymyr Zelensky by offering warm words and fresh promises of military cooperation with Ukraine, providing a major boon for Kyiv and its supporters in Europe. Trump praised Ukraine’s bravery, signaled he would consider granting Kyiv a license to produce U.S. Patriot missile interceptors and said he would consider travel to Kyiv at the right time in peace talks.

On this, Trump said Washington would give Ukraine "the right to make Patriots" - after Zelensky has for at least six months been relentless in requesting this, framing it as urgent and for the protection of cities and civilians.

"We’ll show them how to do it," Trump stated, describing the system as "very complex" - though he also said the Ukrainians would "figure out the complexity quickly."

Trump continued by saying that American defense firms are already building "four plants" and claimed that "all of our companies will be able to do this in two to three months."

However, there have notoriously been immense backlogs when it comes to Patriot production, and there's said to be great global demand among US allies, especially given depletions which have come as a result of the Iran war.

Trump: (Pointing to Zelensky)

Do you have a question for President Putin? pic.twitter.com/91EQv8kw2h

— Clash Report (@clashreport) July 8, 2026

It's hard to know of this is just more bluster - and what will actually materialize as far as this promises - but Moscow will only see this as another US step up the escalation ladder. Earlier this week, Kremlin spokesman Dmitri Peskov said the Ukraine conflict is no longer just a "special military operation" but a real war, because Kiev is backed by Berlin, Paris, The Hague, Oslo, and Washington - complete with Western weapons, satellites, and infrastructure helping direct strikes.

"In these conditions, we must be clear-eyed: the Kiev regime is capable of anything," Peskov said in an interview.

Tyler Durden Wed, 07/08/2026 - 11:05

WTI Extends Gains As Crude Exports Slide, SPR Drain Continues, 'Tank Bottoms' Hit

Oil prices spiked overnight to three-week-highs after President Trump said that he thought the Iran cease-fire was “over” amid a volatile 24 hours in the Persian Gulf region.

The Trump admin launched a series of strikes on Iran and revoked a waiver that had allowed Iran to sell oil in retaliation for attacks on tankers this week in the Strait of Hormuz.

Daniela Hathorn, an analyst at Capital.com, a broker, said that investors had viewed the cease-fire as “fragile but ultimately durable,” until Mr. Trump’s comments called that into question.

“Any suggestion that negotiations have collapsed raises the risk of renewed supply interruptions or tighter sanctions,” Ms. Hathorn said in a statement.

Overnight saw across the board inventory draws reported by API (but admittedly the draws were on the smaller side).

API

• Crude -399k

• Cushing -100k

• Gasoline -2.92mm

• Distillates -1.80mm

DOE

• Crude +2.998mm (-1.4mm exp) - biggest build since April 3rd

• Cushing -52k

• Gasoline -1.904mm

• Distillates -4.98mm - biggest draw since Jan 26th

While the decline in crude stocks was expected to slow, the 3mm barrel build is entirely unexpected. Product stocks are seeing big draws with distillates dominating the flows (amid record crack spreads)...

Source: Bloomberg

Stocks at the critical Cushing hub are stuck at 'tank bottoms'...

The Strategic Petroleum Reserve continues to see sizable draws...

...drooping the total SPR level to fresh post-1983 lows...

US crude production pushed back up to record highs...

US crude exports, which have been running hot since April, have tumbled back to 'normal' levels...

But product exports exploded to a new record high...

WTI front-month futures were hovering around three-week highs around $74.50 ahead of the official data (back above its 50DMA), and extending gains after...

While the physical crude market remains reasonably supplied, refined products continue to tighten.

Crack spreads remain elevated (potentially providing more crude demand pull from refiners), and ongoing strikes on Russian refining infrastructure are keeping product markets tight.

And that's why pump prices are not falling in line with crude...

...as President Trump demands!!

Tyler Durden Wed, 07/08/2026 - 10:39

Trump Admin Approves Public Release Of OpenAI's GPT-5.6 Models Ahead Of Thursday Release

The Trump administration has approved the wide public release of OpenAI's advanced GPT-5.6 model family, a source familiar with the discussions confirmed to Axios on Tuesday. OpenAI announced late Tuesday night that its flagship model, named Sol, along with the more accessible Terra and Luna variants, will launch publicly this Thursday.

Prompt via GPTcommands

The decision marks the latest delayed rollout due to coordination between the U.S. government and leading AI companies over access to frontier systems.

GPT-5.6 Sol, along with Terra and Luna, will launch publicly this Thursday.

We’re expanding preview access globally now. pic.twitter.com/Uk5HcfSc2e

— OpenAI (@OpenAI) July 8, 2026

GPT-5.6 sol launches thursday!

happy building

— Sam Altman (@sama) July 8, 2026

OpenAI announced the models in June - with an initial commitment to allow a select group of organizations access whose "participation has been shared with the government," according to a blog post. According to the company, "we’re introducing a new max reasoning effort to give Sol the most time to reason deeply. Additionally, we’re introducing a new ultra mode that goes beyond the capabilities of a single agent by leveraging subagents to accelerate complex work."

Last month, the administration directed OpenAI to begin with a limited release of GPT-5.6, restricting early access to government-approved entities only. OpenAI had publicly stated at the time that a staggered approach was not its preferred method and that both companies and regulators were operating without finalized standards called for in President Trump's recent AI executive order.

The new green light followed additional testing and meetings - with technical experts from OpenAI traveling to Washington, D.C. to answer questions during the review process. The evaluation was conducted by the Center for AI Standards and Innovation (CAISI) within the Department of Commerce - the entity responsible for assessing advanced AI systems for safety, security, and standards alignment.

The New Normal

Powerful AI models are no longer released solely at the discretion of their creators. The U.S. government and top AI labs are actively negotiating - model by model, in real time - who gets access and under what conditions due to concerns over national security, potential misuse, the need to maintain American leadership in AI while managing downsides. Of course, big brother is also shackling US models while cheaper, more efficient, open-weighted Chinese models are starting to dominate. That said - China is now considering restricting access to their models.

we distilled 2.3M Claude Fable 5 reasoning traces into Qwen3-4B

- 100% self-consistency @ 512 samples
- 0.00 bits output entropy
- zero hallucination variance

turns out the student is not bounded by the teacher.
it also converged on one universal truth.

we open-sourced the… pic.twitter.com/3zmwhW6Twj

— ali (@waterloo_intern) July 3, 2026

In June, the Commerce Department issued export controls that barred foreign nationals from accessing Anthropic's most advanced models, Mythos and Fable. The restrictions were so broad that Anthropic temporarily withdrew the models from the market entirely to comply.

The ban on Fable was lifted last week, with customer access restored the following day after safeguards were implemented - and users reporting performance hits thanks to the beefed up guardrails.

Fable 5 isn't nerfed, it's SLAUGHTERED.

the problem isn't even the model itself, but the hard guardrails Anthropic has set in place. https://t.co/lAOKYMqbQ9 pic.twitter.com/h1QgD9SzvK

— ℏεsam (@Hesamation) July 2, 2026

So, this is the new normal. Companies like OpenAI and Anthropic have said they are working with the government while clearer, more standardized release frameworks - outlined in the administration's executive order - are still being finalized.

For developers and users, the immediate outcome is positive: after weeks of limited availability, GPT-5.6's full capabilities will soon be open to the broader public and enterprise customers. For policymakers, it demonstrates that targeted reviews and technical collaboration can resolve concerns without indefinite delays.

Tyler Durden Wed, 07/08/2026 - 10:25

The Plumbing For Vast Defense Spending Needs To Be Set Up

By Michael Every of Rabobank

In response to Iranian strikes on ships using the Omani route in Hormuz, the US has struck Iranian air defense, missile, and drone sites in the Strait and suspended its oil sanctions waiver. These are clear breaches of the MoU, and we will now see if Iran escalates --it says it will take “decisive” action-- with the risk of war if the US is also prepared to go that route. We suspect the US will try to step back for now. Even so, it should be clear why our base case is that more war is likely after the midterms. Obviously, oil prices are up today on this news; but crack spreads are already so wide that hardly matters.

Elsewhere in the Middle East, Secretary of War Hegseth is to visit Israel today as PM Netanyahu reiterates that he and Trump align on ”the big things” over Iran; bomb attacks rocked Damascus as France’s Macron visited; Lebanon’s president is to get his first White House visit; and the FT reports Saudi Arabia is blocking private sector payments to Dubai – a sign of rising tensions between those two GCC economies.

At the Ankara NATO summit, Trump struck a friendlier tone towards Turkey than many in Europe, removed sanctions over its purchase of the S-400 Russian antiaircraft system, and saying he’ll “certainly consider” selling them F-35s – setting off alarms in Jerusalem and Athens.

The summit has already seen Secretary General Rutte say, “Admit it - Trump was right.” Yes, Trump just reiterated he could pull all his troops out of Europe (no: Congress wouldn’t allow it) and still wants to control Greenland, which implies fission. But NATO announced joint economic projects to counter Russia and China, ranging from critical minerals to drones to missile shields, aimed at building up a joint military-industrial base: that implies fusion. So does South Korea and NATO agreeing to open procurement talks as President Lee Jae Myung calls for a higher-level defence partnership, something Japan is also pushing for; and as Japan, South Korea, and the US announced cooperation over a new US breakthrough in small modular nuclear reactors. If we count Australia in too at some point, that all seems like a potential building ‘bloc’.

That still comes at a very high price. Ankara has already seen $50bn in defense deals, but that’s a tiny fraction of what’s needed to rearm. Indeed, as European and Canadian defence spending growth is expected to slow this year, and the UK’s new plan falls far short of what’s required, there’s chatter of a ‘World Bank for Defence’, as the UK Chancellor also calls for rival international defense schemes to merge. In short, the plumbing for vast spending needs to be set up.

In that light, yesterday saw the BOE float easing bank capital rules despite what Bloomberg calls “mounting risks,” following new Fed Chair Warsh’s stance: will the BOE also encourage lending into the physical economy, i.e., the military-industrial complex, rather than just holding financial assets; and could it follow a potential US lead on a new inflation measure, as our US strategist plots here? Moreover, the BOE’s new crypto framework regulates GBP stablecoins but allows foreign ones, i.e., USD, to operate under US legislation, opening the door to their adoption.

Not in the same arena (yet), the RBNZ today hiked rates 25bps to 2.50%, as both we and the market had expected. The Bank said that more tightening is needed to bring inflation sustainably back to the 2% midpoint of its target, and RaboResearch maintains a forecast of two more 25bp rate hikes in 2026, with an additional 25bp hike in Q1 next year to bring the OCR to 3.25%.

Meanwhile, German business leaders warned Chancellor Merz that far more is needed to prevent the country experiencing a ‘lost decade’; Airbus is to make its first foray into engine manufacturing with a hydrogen project; and EU border chaos has prompted a delay to a planned pre-authorized travel system.

In the Americas, the White House is pressuring retailers over beef prices; and Canada told the UAE it’s not ready for a planned C$70bn of FDI as it doesn’t have any projects on hand(!)

In Asia, a Chinese policy advisor stated that China has the potential to become the world’s largest consumer market by 2041 – as data show its housing market has reversed 20-years of price gains (not always a bad thing in terms of consumer spending power), and a report has it that hundreds of millions of workers are now in the gig economy. That would imply China’s huge trade surplus will be very hard to eliminate, as a trade war with Europe looms alongside tariffs from the US and an emerging bloc-based NATO architecture.

Indeed, as the IMF appoints former BOE advisor Tenreyro as its next chief economist, the old establishment is on the back foot. See the op-ed today in the New York Times from Mohamed El-Erian arguing ‘America was being played. The Bessent Doctrine says those days are over’, which says economic statecraft has taken over and the global leaders of tomorrow need to learn that “considerations of national security, domestic politics, and geopolitics no longer play second fiddle to traditional business interests in determining corporate and economic outcomes. Those business interests are now being sidelined.” This will be a shock to anyone who didn’t read Grand Macro Strategy in November 2024, which made the same arguments and showed how it would happen.

Contrast that with the argument made by Adam Tooze in the Financial Times that the USD is no longer a global reserve FX but just a “profit dollar” backed by rising asset prices. There’s a vast realpolitik difference between financialisation and production but arguing one shouldn’t hold dollars because US assets appreciate is rather odd absent a counterargument for Hamiltonian neomercantilism which many, if not all, critics of the US also reject as the solution.

But back to “domestic politics.” The US Democratic Party candidate for a Maine Senate seat is being pressured to step down over a serious criminal allegation, opening a tug-of-war not just for that seat but within the Democrats between the mainstream and populist wing. That’s after President Trump used an Independence Day speech to rail against “communism.”

In France, Le Pen was given the legal all clear to run for president in 2027, while wearing a police ankle tag. Does this open the door to populists winning or is this an Establishment tactic to put forward a hobbled Le Pen rather than her nimbler (and more popular) deputy Bardella?

Reform UK leader Farage resigned his parliamentary seat over allegations he should have reported a large personal gift and possible party financial support before becoming an MP. He wants to fight a “two-fingers up to the Establishment” by-election, which Labour and the Tories will not contest. One view is Farage is now a farce, as when he wins the pointless by-election the parliamentary investigation into the gifts will just continue. Yet if it concludes there was wrongdoing, he faces suspension from Parliament for 30 days… and another by-election. Another view is Farage is a force and White Van Man will see the Establishment as the farce, just as happened with Trump. Mirroring that episode, the Guardian are pushing a criminal component to the gifts: but Channel 4 interviews of ‘pub-ulists’ in Farage’s seat of Clacton, even with leading questions, saw that as a stitch-up.

Indeed, the Establishment can lose: Prince Harry and other claimants could face a £50m(!) legal bill after losing a phone-hacking court case. Expect a slew of new streaming specials on how to make cupcakes soon?

It’s not only the IMF, central banks, and NATO, who need to get baking, perhaps.

Tyler Durden Wed, 07/08/2026 - 10:05

South Korea Falls Into Bear Market As Memory Euphoria Fizzles

It started off with the usual morning rush by retail momentum chasers into the handful of massive, market-moving names (read Samsung Electronics and SK Hynix), but as has been the case over the past two weeks, the initial euphoria quickly reversed and the Kospi rolled over, closing down 5.4%, 9.99% over the past two days, and down 22% from the all time high of 9385 hit just over 2 weeks ago on Jun 18.

... officially entering a technical bear market as investors express growing concerns about the long-term prospects of the AI chipmakers that have driven a world-beating rally.

To be sure, the Kospi is still the world’s top-performing major stock index this year, having returned more than 70% in local currency terms. but the momentum is clearly to the downside, and finding dip buyers who are willing to hold more than just a few minutes is becoming especially difficult. 

On Wednesday, the market’s two largest constituents, Samsung Electronics and SK Hynix, fell 6.3% and 5.7%, respectively. Shares of the two companies have surged as a result of demand for their memory chips, although attention is increasingly turning to cheaper Chinese-made memory alternatives made by such companies as CXMT (DRAM) and YMTC (NAND).

Sure enough, sentiment has started to turn. Samsung’s shares tumbled as much as 10% on Tuesday, even though the company projected a third straight quarter of record operating profit.

According to the FT, analysts attributed the recent declines to a lack of clarity on how South Korean chipmakers would enforce long-term agreements with customers over chip purchases, echoing a joke we first made just a few days ago. 

Expect a surge in AI tokens for contract breach research https://t.co/G1qolxhkVr

— zerohedge (@zerohedge) July 1, 2026

US competitors such as Micron have shifted their business model to include longer-term purchasing agreements, but it remains unclear whether Samsung and SK Hynix have been able to secure similar contracts.

“At the moment we have not heard officially from the Korean peers how they plan on executing on these long-term contracts,” said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas. Lui said South Korean chipmakers could see their price-to-earnings ratio rise “if they can move to longer-term contracts”.

“Given the fundamentals of how strong the Korean market has been over the past two years it’s challenging to call it a bear market,” he said.

Volatility in the South Korean market is being exacerbated by the proliferation of leveraged exchange traded funds that magnify gains and losses. On Tuesday the head of South Korea’s financial regulator warned of “excessive” leveraged stock investments among retail investors.

S. Korea's Deputy PM Koo Yun-Cheol said at the National Assembly's Planning and Finance Committee plenary meeting that he is discussing supplementary measures in response to concerns that single-stock leveraged ETFs are amplifying stock-market volatilityhttps://t.co/1O4dXYuPVF

— zerohedge (@zerohedge) July 8, 2026

Some fund managers welcomed the move downwards, saying it was inevitable.

“This is a necessary correction because the rise was too steep and fast,” said Chan Lee of Petra Capital Management. “There are possible buying opportunities outside of AI as well.”

Jongmin Shim, Korea equity strategist at CLSA, said: “I don’t think this story is over. It’s just a bit of a correction on the way up. Nothing goes up forever.”

The correction comes just days before SK Hynix plans to list shares on US exchanges for the first time in a $29bn offering that is expected to be the largest-ever share issuance by an Asian company.

Tyler Durden Wed, 07/08/2026 - 09:45

Zelensky In Ankara Still Insistent On Ukraine Joining NATO: 'Alliance For The Future'

President Volodymyr Zelensky is in full court press mode while being present in Ankara for the annual NATO summit, amid Western leaders including President Trump. He has predictably renewed his argument for Ukraine to join the North Atlantic alliance, while also touting some momentum on the battlefield as Russia comes under repeat long-range drone attacks. 

Zelensky thanked leaders "who have clearly stated Ukraine belongs in NATO, because NATO with Ukraine is the alliance for the future" - and then posed in Tuesday remarks, "I have a question for you. Do you really believe it? Do you really believe it would be right to leave outside NATO, a country and a people with this level of defensive capability?"

He argued further: "If we already have these capabilities, if Ukrainians already know how to fight like this, then it does make sense for these capabilities to become a part of the alliance's collective defense that would make all of us stronger."

Source: Ukrainian Presidency/Anadolu via Getty Images

Ukraine has been boasting of its premier drone capabilities, which it says is now clearly proven on the battlefield, but has also admitted that Ukraine needs assistance matching Russia's ballistic capabilities.

Zelensky said "Europe urgently needs its own capability to produce anti-ballistic systems and the missiles they require." He added: "The one thing we still need to do here in Europe is build a strong defense against Russia's ballistic missiles. It's a big challenge… this is Russia's last major advantage."

It's interesting that Zelensky is arguing that his country should become a full-fledged NATO member based on already in effect being militarily integrated.

This was one of the Kremlin's very rationales for launching the 'special military operation' in Ukraine in the first place. Also interesting is that Moscow is now referencing it as a 'war' on a much more official level...

Peskov via Russian state media sources:

Dmitri Peskov says this is no longer just a “special military operation” but a real war, because Kiev is backed by Berlin, Paris, The Hague, Oslo, and Washington — with Western weapons, satellites, and infrastructure helping direct strikes.

“In these conditions, we must be… pic.twitter.com/oe0TMttCqO

— Margarita Simonyan (@M_Simonyan) July 6, 2026

Russia still has as a main front-and-center demand that Ukraine definitively and permanently reject aspirations to join NATO. Moscow also still requires full political recognition over the four eastern annexed oblasts, as well as Crimea. 

Western officials have still been reluctant to fully back some kind of rapid NATO membership track for Ukraine, knowing it would take the Ukraine crisis from more of a proxy war situation strait into WW3-style direct war between Russia and NATO.

Tyler Durden Wed, 07/08/2026 - 09:25

Higher Electricity Rates In Blue States Linked To Renewable Energy Policies

Authored by AG News Staff via American Greatness,

A new analysis by Always On Energy Research and the Institute for Energy Research concludes that renewable energy mandates and net-zero policies have contributed to higher electricity prices in states that adopted them, while states with fewer climate-related mandates generally have lower electricity costs.

The analysis examined electricity pricing data from the U.S. Energy Information Administration and found that most states with electricity rates above the national average voted for the Democratic presidential nominee in the 2020 and 2024 elections.

According to the report, 86 percent of states with above-average electricity prices supported the Democratic nominee in both elections. By comparison, 80 percent of the 10 states with the lowest electricity prices voted for the Republican nominee.

Researchers said the study focused on identifying policy differences between states with higher and lower electricity rates.

Last year, the organizations highlighted California, New York, Florida, Kentucky and Louisiana as examples of how renewable portfolio standards, net-zero targets, net-metering programs and other climate-related policies may affect electricity prices.

The groups have now expanded the project, releasing detailed profiles of the original 13 colonies on the Fourth of July. Additional state profiles are expected to be published in phases.

"We wanted to have a one-stop shop where people could kind of get a feel for what's the energy mix in their state, what policies are being implemented, and what's the impact of those policies on what they're paying at the plug," Isaac Orr, vice president of research for Always On Energy Research, told Just the News.

The report evaluates whether states require utilities to obtain a minimum share of electricity from renewable sources, have utility net-zero commitments, offer net-metering programs for rooftop solar customers, impose carbon-pricing or cap-and-trade systems, restrict natural gas infrastructure or have policies related to electricity demand from data centers.

"The map shows these kinds of subtle distinctions in the price of electricity for each of these states, and we wanted to be able to demonstrate why that is from a policy perspective," Orr said.

The researchers noted that political affiliation alone does not explain electricity prices. Oregon and Washington, both Democratic-leaning states, have relatively low electricity costs because of their extensive hydroelectric generation.

According to the report, utilities may benefit financially from net-zero commitments because they can earn greater returns by investing in new infrastructure.

The organizations said they hope the project will serve as a resource for voters and policymakers evaluating the impact of state energy policies.

Alex Stevens, manager of policy and communications for the Institute for Energy Research, said the report has generated significant interest, including discussions with state officials and testimony before the Maryland Legislature on the relationship between energy policies and electricity prices.

Tom Pyle, president of the Institute for Energy Research, cited federal data showing electricity prices increased 27 percent between January 2021 and January 2025, followed by an additional 11 percent increase from January through September 2025.

Under the Federal Power Act, states have primary authority over electricity generation portfolios, retail pricing and resource planning.

"Americans deserve transparent information on how state decisions directly affect their wallet," Pyle said. "The bottom line is that the decisions that states make, good or bad, have consequences for American families and businesses when it comes to electricity affordability."

Tyler Durden Wed, 07/08/2026 - 08:45

Futures Slide, Oil Jumps After Trump Declares Iran Ceasefire Over

Markets are on the backfoot this morning with equity futures and macro credit under pressure, bond yields spiking, the USD higher, and oil jumping after President Trump thrust geopolitical risks back into focus by declaring the ceasefire between the US and Iran to be over calling it “a waste of time” after the US launched strikes against Iran in response to attacks on ships transiting the Strait of Hormuz. As of 8:00am, S&P 500 futures slid 0.7% and Nasdaq futures slumped 1% dragged lower by memory and chip stocks after the latest kinetic volley.  The latter takes place in the context of mixed tech trade in Asia with the Hang Seng Tech Index up 5%, whilst the South Korean Kospi lost 5.4%. Pre-market semis and Mag7 are being sold as Energy and Staples are the two best sectors; everything else is flat to down. The drawdown in momentum and the broader AI infrastructure trade (~85% correlation between these two cohorts) remains heavily in focus, with the GS High Beta Momentum basket (GSPRHIMO) now surpassing -20% over the past 5 days. This morning, global price action is pointing towards “more of the same” with the primary Momentum tone-setters (Hynix -6% in Korea, SNDK -6%, MU -5%) lower across the board.  Brent crude advanced 5% to around $78 a barrel while WTI breached $75/bbl (+6%) before declining as the Energy complex leads commodities higher. Precious metals are getting hit with mixed bids to Ags and Base metals. Treasury yields are up around 2-3bps across the curve (10Y yield rising to 4.56%) with the market needing to digest a $39bln 10 year note auction ahead of the FOMC minutes. USD is higher.  Higher energy prices feed into inflation expectations and Fed minutes this afternoon take on added significance in the tighter-lipped Warsh era. Gold fell and the dollar wavered.

In premarket trading, all Mag 7 stocks are lower (Meta -1.8%, Nvidia -1.6%, Microsoft -1.4%, Amazon -1.7%, Tesla -1.6%, Alphabet -1.3%, Apple -0.4%). 

• Chipmakers and other AI-linked names are set for more declines on Wednesday as traders continue to rotate out of the sector.
• Energy stocks rally, while airlines and cruise lines slide, after Trump said a tentative ceasefire with Iran is “over,” raising the prospect of an end to peace negotiations and a potential renewal of fighting between the two countries. Chevron (CVX) climbs 2%, while Exxon (XOM) gains 2%.
• Alibaba ADRs (BABA) surge 8% after investors turned optimistic on its earnings and shifted capital into major Chinese internet companies.
• Bath & Body Works (BBWI) falls 4% after Goldman Sachs analyst Kate McShane cut her recommendation on candle and soap retailer to sell. Sentiment on the company is “trending below historical levels,” including Reddit trends and with younger consumers, Goldman’s analyst writes.
• Beazer Homes USA (BZH) climbs 12% after Dream Finders Homes said it has submitted a revised all-cash proposal to acquire the company.
• FuelCell Energy (FCEL) falls 21% after the company priced its upsized underwritten public offering of 10.7 million shares of its common stock.
• MasTec (MTZ) inches 2% higher after the construction company entered into a pact to buy Electrical Specialists for about $1.65 billion, consisting of about $475 million in MasTec stock and about $1.175 billion in cash.
• Navitas (NVTS) is down 7% after Wolfspeed filed a patent infringement lawsuit against the company in the US District Court for the District of Delaware, alleging that a broad range of Navitas products infringes multiple Wolfspeed patents.
• Universal Health Services (UHS) slips 2% after Barclays downgraded the hospital operator to equal-weight, saying the fundamental and regulatory backdrop is turning more negative.

Overnight sentiment was hammered when a retaliation by the US on Iranian targets overnight was followed up by remarks just after 4am ET from US President Trump that the ceasefire with Iran is over, saying that "as far as I’m concerned it’s just a waste of time." The dollar and yields spiked, while WTI crude jumped back above $75 a barrel, Trump's comments, made on day two of the NATO summit in Turkey, followed the US revocation yesterday of a waiver allowing sales of Iranian oil and subsequent strikes against more than 80 targets. Trump meets Ukraine’s Zelenskyy later. A handful of oil carriers appeared to transit through the Strait of Hormuz early Wednesday, even after a spate of strikes on ships rattled owners and prompted at least one supertanker to turn around midway through its crossing.

Trump’s declaration “marks the most serious rupture yet in an agreement that has been fraying for weeks,” said Violeta Todorova, senior research analyst at Leverage Shares. “Markets had been treating the June memorandum of understanding as a durable de-escalation. That complacency now looks fragile.”

Trump overnight also slammed Spain for not contributing enough to NATO and threatened to cut off all trade with the country. 

That said, JPM tried to calm nerves with comments this morning, writing that the situation has not materially changed with neither US / Iran showing a desire for an extended conflict. On the US side, Trump had argued that the ceasefire paused the 60-day limit before he is required to get Congressional approval to extent military hostilities. He was facing resistance to secure additional funding for the war and next year’s military budget during the ceasefire, so another spike to fuel prices adds to that political headwind. On the Iran side, they want legal control of SoH but likely want higher oil prices to pressure Trump and to maintain revenue given the lack of demand for their unsanctioned oil.

“My first read is that investors will not immediately price this as a full return to war, but they also cannot go back to the clean ‘peace dividend’ trade,” said Charu Chanana, chief investment strategist at Saxo Markets. “The bigger point is that any path from ceasefire to durable peace now looks much longer and much more fragile.”

Today's 2 p.m. ET release of the Fed’s June meeting minutes takes on added significance after Warsh shortened the policy statement and declined to contribute to rate forecasts. Bloomberg Economics’ Andrew Sacher expects the account to reinforce the committee’s focus on above-target inflation and its preference to preserve the option of further tightening. The options market is signaling that investors may be overestimating how much the Fed will raise rates this year. Since Warsh said last week that inflation risks have eased, flows in options linked to the Secured Overnight Financing Rate have tilted toward positions that would benefit if the swaps market pares back expectations for further rate hikes.

Elsewhere, China lifted refined fuel export restrictions for the rest of July and allowed a private refiner to resume shipments after a four-month halt. In New Zealand, the RBNZ raised rates by 25bps (expected) with guidance still leading toward hikes, though with a softened tone. Looking ahead, we will receive wholesale inventories for May and the June FOMC meeting minutes. 

In Europe sentiment was hammered with the Stoxx 600 down 1.9% and all sectors ex-energy lower. Energy is the only rising sector, while autos and construction fall the most. Here are some of the biggest movers on Wednesday:

• Jet2 shares surge as much as 17%. Analysts see strong booking momentum amid ebbing geopolitical risks and lower jet fuel prices.
• TGS shares rise as much as 9.6% after the Norwegian geophysical consulting and services firm reported better-than-expected 2Q results.
• Repsol shares gain as much as 4.8% after the Spanish oil company reported a stronger refining margin in 2Q.
• Hikma Pharmaceuticals shares rise as much as 6% after a Betaville report regarding possible takeover interest in the UK pharmaceutical company.
• Kuros Biosciences gains as much as 12% after Berenberg initiated coverage on the stock with a buy recommendation, saying the Swiss company’s growth is “poised to reach an inflection point.”
• Lufthansa drops as much as 6.4% after Citi downgraded the stock to sell from neutral, saying the valuation seems “less compelling” following the recent rally.
• Man Group shares drop as much as 3.4% after UBS downgraded the investment management firm on valuation grounds following strong gains.
• Rio Tinto falls as much as 3.6% in London to its lowest since March after Morgan Stanley cut the stock to underweight from equal-weight, saying the miner’s valuation is stretched given weaker iron ore fundamentals and limited copper exposure.
• Castellum shares drop as much as 4.9% after UBS downgraded the Swedish property firm to neutral from buy, saying “much of the near-term value creation is now reflected in the share price.”
• Vistry shares fall as much as 12% after the homebuilder warned of first-half losses.
• Boku shares plunge by a record 35%, slumping to their lowest level since 2022, after the payments company warned its results for 2026 will be below market expectations.
• Belimo shares fall as much as 7.4% after the Swiss maker of heating, ventilation and air conditioning equipment was cut to sell at Van Lanschot Kempen, which sees a potential increase to guidance as already priced in.

Asian equities fell further after the US President Donald Trump declared the ceasefire between his country and Iran over, escalating geopolitical tensions in the Middle East.  The MSCI Asia Pacific Index fell as much as 1%, after swinging between a loss of 1% and gain of 0.4%. Indian stocks reacted adversely to Trump’s comments, with the benchmark Nifty 50 gauge dropping over 2% and a gauge of volatility spiking 30%. Stocks also extended their decline in Indonesia, which relies heavily on oil imports, while futures on Japanese stocks fell 1.3%. The fresh bout of weakness follows a selloff in technology stocks in South Korea, where Samsung Electronics and SK Hynix were among the major drags. South Korea’s benchmark Kospi fell 5.4%, taking its drop from last month’s all-time high to about 20%. Shares also fell in Japan and Australia, while those in Hong Kong and Singapore advanced. Bucking the trend, a key gauge of Chinese shares listed in Hong Kong climbed 4% earlier in the day, as the AI rotation trade gathered pace in Asia. Investors are pulling money from the chipmakers that powered this year’s rally and hunting for cheaper ways to play the technology boom. Elsewhere, Indonesian equities fell after S&P Dow Jones Indices signaled the country could eventually lose its emerging-market status if concerns over its stock market persist. New Zealand stocks fell as the central bank raised its key interest rate for the first time in three years.

In FX, the Bloomberg Dollar Spot Index is up 0.1%. However, performance versus peers is mixed with Kiwi dollar near the top of the leaderboard after a hawkish hike from the RBNZ

In rates, treasuries extended their late-Tuesday selloff as oil prices mounted sharply after US President Donald Trump said the tentative ceasefire with Iran is over. 2-year yields topped 4.20%, approaching this year’s high, while 10-year exceeded 4.58%, cheapest since May 22. US front-end and belly yields are 2bp-3bp higher on the day, flattening 5s30s spread by around 1bp. 10-year, higher by 2bp, trails steeper increases for German and UK counterparts as they catch up with Tuesday’s US yield surge that occurred after European markets had closed. European bonds tumbled as traders added to wagers that central banks will have little choice but to raise interest rates this year. The yield on 10-year gilts jumped 10 basis points to 4.95%, the highest level in nearly a month. This week’s Treasury auctions continue with $39 billion 10-year reopening at 1pm New York time and conclude with $22 billion 30-year reopening Thursday. Demand was strong for Tuesday’s 3-year new issue, which stopped through by 0.6bp and had a record low dealer allotment. WI 10-year yield near 4.575% is ~4bp cheaper than the June auction, which stopped through slightly in a solid result. Focal points of US session include a 10-year reopening auction and publication of minutes of June FOMC meeting. IG dollar issuance slate includes a KfW $6 billion 2-part offering. Amazon’s $25b offering headlined a six-issuer US investment-grade new issue session Tuesday. Issuers paid about 10bps in new issue concessions on deals that were 2.8 times oversubscribed.

In commodities, Brent crude futures are higher by 6.7% and just above the $79/bbl mark as tensions in the Middle East ratchet higher. Oil extended its gains on renewed US-Iran tensions, raising the prospect of a fresh round of conflict in one of the world’s most important energy-producing regions. This came after the US military launched fresh air strikes in Iran and revoked a waiver that allowed it to sell oil globally. Precious metals are on the back foot with spot gold and silver down 1.2% and 2.5% respectively. Bitcoin has slipped over 3%.

US economic data calendar includes May wholesale inventories (10am) and consumer credit (3pm). Fed calendar empty for the session apart from FOMC minutes release at 2pm

Market Snapshot

Top Overnight News

• US President Donald Trump said a tentative ceasefire with Iran has ended, raising the prospect of an end to peace negotiations and a potential renewal of fighting between the two countries. “For me, I think it’s over. As far as I’m concerned it’s just a waste of time.” BBG
• President Trump slammed Spain for not contributing enough to NATO or spending enough on defense. “Spain is a terrible partner in NATO. They don’t participate. They don’t pay. I don’t want anything to do with Spain. Cut off all trade with Spain,” Trump said at a press conference in Ankara, Turkey. CNBC
• South Korean stocks have entered a technical bear market as investors raise concerns about the long-term prospects of the AI chipmakers that have driven a world-beating rally. The Kospi index is down more than 20 per cent from its record high in June after slipping more than 5 per cent on Wednesday. FT
• China has lifted refined fuel export restrictions for the rest of July and allowed a private refiner to resume shipments after a four-month halt, trade sources ‌said on Wednesday, as the world’s biggest refiner returns towards normal after disruptions from the Iran war. BBG
• The AI rotation trade is gathering pace in Asia as investors pull money from chipmakers and hunt for cheaper ways to play the technology boom. Investors are rotating into one of Asia's most unloved markets, with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. rising after the Kospi Index was pushed to a technical bear market. BBG
• The Reserve Bank of New Zealand raised interest rates Wednesday in what appeared to be a tentative move by policy makers to combat nagging inflation pressures. The official cash rate was raised by 25 basis points to 2.5%. WSJ
• OpenAI said its new AI model GPT-5.6 will be made available to the public tomorrow. The White House lifted restrictions on the model after government-approved entities were given a preview. Axios
• Nvidia’s stock is the cheapest it’s been since before the AI boom, after losing roughly $1 trillion in market value in under two months. BBG
• Wildcatters are racing to secure oil deals in Venezuela, moving faster than Big Oil despite earthquake damage and political uncertainty. Whether the country’s vast reserves can overcome the current challenges remains an open question. BBG
• South Korea's Foreign Ministry said they have signed an MoU with the US and Japan on cooperation to deploy small modular reactors: RTRS.
• The sell off in the Goldman High Beta Momentum (GSPRHIMO) has now surpassed 20% over 5 days, exceeding short term expectations for a summer slump in the factor. This magnitude of sell off at such velocity has not been seen since 2020 when the stay-at-home vs go outside narrative shifted meaningfully towards reopening. It is notable that the current drawdown does not have the same strength of catalyst. Fingers have pointed towards SK Hynix raising and META cloud business.

Iran War

• Trump stated he "thinks" the ceasefire with Iran is "over":  Trump said the Iran ceasefire is over "I think"; as far as I am concerned, it is a waste of time dealing with Iran. On the MoU, "think it is over". Adds, "I do not want to deal with Iran", they are a "bunch of liars".
• US President Trump said (on Iran) he will allow US negotiators to continue to talk if they want. But, "I think this is a waste of time".
• US CENTOM announced that it completed a new round of offensive strikes, hitting over 80 targets with precision munitions. CENTCOM added that forces remain postured and prepared to hold Iran accountable when the agreement is not adhered to or obeyed.
• Several explosions have been heard in Bushehr, Iran, according to Mehr news; Mehr's journalist on Kharg Island denies reported of an attack on Kharg, despite some reported of an incident being published.
• In response, Iran's IRGC said they hit 85 important US military installations in Port Salman, Bahrain's 5th Maritime Zone and Kuwait's Ali Salem Air Base.

A more detailed look at global markets courtesy of Newqsuawk

Asia-Pac stocks traded mixed, with Chinese indices the only region in the green amid multiple IPOs and strength in China's tech space. Sentiment from the US session carried over in the Asia-Pac session, as energy prices surged amid the re-escalation of US-Iran tensions. ASX 200 continued to be weighed on by metals, with the Metals & Mining sector the worst performer, with Materials followed. Energy topped the sector pile Nikkei 225 started on the softer side, briefly returned to the unchanged mark before returning to the downside. KOSPI traded choppy, as the initial weakness briefly reversed to print modest gains. However, weakness returned as the session continued, resulting in the Korea Exchange activating the sidecar on the KOSPI and KOSDAQ. As a result, the KOSPI extended its losses from June peak to 20%, indicating a bear market. Shanghai Comp. and Hang Seng. were the only indices printing gains, with outperformance in the Hang Seng following strength in tech names. The strength can be attributed to two reports: 1) From Reuters, DeepSeek developing its own chip to power AI systems, and 2) from the Information, Zhiphu considering designing its own AI chip.

Top Asian News

• China's MIIT has issued a risk warning regarding the potential security backdoors in the AI programming tool Claude Code.
• South Korean Government said companies with consolidated assets of over KRW 10tln will be required to disclose information on their ESG performance and risks, starting 2028.
• South Korean Finance Minister said they are to watch risk factors around stock market volatility, will enhance FX monitoring system to respond to night-time volatility.
• Japan is considering a change to monetary policy wording in the Honebuto, Asahi reported.

European bourses (STOXX 600 -1.8%) began the session lower amid renewed US-Iran developments which spurred energy benchmarks higher. The move then extended after US President Trump suggested that he thinks the ceasefire with Iran is "over".
European sectors in Europe are entirely negative (excl. Energy +2%) as they react to elevated energy prices.

Top European News

• US President Trump said he is not happy with NATO when it comes to Greenland. Spain is a wasted cause, they do not want to do trade. Cutting off all trade with Spain and all visits. "Do not want to do any more trade with them (Spain)". Treasury Secretary Bessent has been told to cut off all trade with Spain. US is paying too much into NATO. UK and Italy were both terrible in not allowing the US to use military bases. Greenland is not important to Denmark.

FX

• G10s are mostly lower against the Buck excl. commodity exporters CAD and NOK, which are resilient vs. the USD.
• USD rose throughout the morning in reaction to energy strength alongside sour equity sentiment after US President Trump said he thought the Iran ceasefire was over. To briefly summarise developments, yesterday the US Treasury revoked the June 21st Iran-related waiver, General License X, which had allowed Iran to produce, deliver and sell its oil; and US President Trump’s remarks this morning accelerated the move higher in USD/oil with “Iran ceasefire is over "I think" the kicker.
• Kiwi was the clear outperformer post RBNZ, but reversed gains against the Buck after the aforementioned Trump remarks. To briefly recap, the RBNZ hiked rates by 25bps in a unanimous decision, signalling further hikes to bring inflation to the 2% target mid-point; this saw some participants unwind bets for a hold. AUD/NZD appears the preferred vehicle to express the in-line/hawkish decision, now the Buck has picked up.
• JPY continues to underperform amid carry/Terms of Trade implications. USD/JPY remains on a 162.00 handle and has essentially pared that downside seen on potential intervention fears last week having risen throughout the London morning. Reporting overnight via Asahi and Nikkei noted that the Japanese government may tweak a reference to monetary policy in its annual policy agenda to avoid the appearance that it is putting pressure on the BoJ.

Fixed Income

• Fixed income started on the backfoot, as benchmarks gradually moved lower as energy continued to move higher overnight given the US revoked Iran’s oil waiver and then conducted strikes on 80 Iranian targets in retaliation to Iran targeting various cargo vessels on Tuesday.
• The early morning saw modest additional pressure, with Bunds and USTs lower by roughly 40 and five ticks, respectively, at first. The scheduled docket ahead featured supply and a few data points, but we were primarily awaiting comments from the US and/or Iran after the overnight action.
• US President Trump then spoke in Ankara, in a relatively short but packed interview where he said the ceasefire with Iran is over “I think” and specifically on the MoU said, “think it is over”. An update that sparked a marked and continuing move higher in energy, with crude firmer by over 6% and Dutch TTF by over 5%. As such, yields across the curve have jumped, benefiting the short-end most, and curves are bear-flattening globally, though with the US belly faring almost the same as the short-end.
• USTs down to a 108-29 base, lower by 13 ticks. We now look to the US 10yr note auction after Tuesday’s 3yr, and thereafter Fed Minutes for June, which will be scoured for further insight into how the first meeting led by Warsh went and how any discussions/disagreements among the board were presented; with particular reference to any mention around Warsh’s view on forward guidance.
• Bunds went down to around 125.30 following the above energy action and Trump language, lower by over 80 ticks. Energy-related action aside, the main focus point was a dismal first tap of a 2036 Bund, drawing a b/c of just 1.03x. Results of this sent Bunds lower by nearly 10 ticks, to a 125.23 base.
• Gilts opened lower by 57 ticks, acknowledging the US waiver removal yesterday and the tit-for-tat strikes overnight. Thereafter, as Trump spoke, further downside was seen, sending Gilts lower by 130 ticks in total to an 87.16 base. As usual, Gilts underperform amid periods of pronounced energy upside given the sensitivity of the UK market to global benchmarks.
• Germany sold EUR 3.902bln vs exp. EUR 6bln 3.00% 2036 Bund: b/c 1.03x, average yield 3.09%, retention 35%.
• UK sold GBP 1.5bln 0.125% 2028 Treasury Gilts via Tender: b/c 4.97x (prev. 4.28x), average yield 3.989% (prev. 4.219%), tail (prev. 0.3bps).
• Jefferies (JEF) to sell EUR-denominated 7yr noted; guidance seen +175bps to MS.
• Spain has reportedly proposed the EU issue an annual EUR 850bln in bonds to save countries billions of euros in interest costs, POLITICO reported.
• Australia sold AUD 900mln 4.25% 2036 AGBs: b/c 4.55x (prev. 3.86x), average yield 4.8745% (prev. 4.9735%).

Commodities

• Following Iran’s decision to hit Saudi and Qatari tankers, the US struck various sites in Iran. As a result, Iran then hit regional partners, including Bahrain and Kuwait.
• US President Trump, who was speaking at the NATO Summit in Ankara, berated the Iranian regime. He stated that it is a waste of time dealing with Iran, and ultimately stated that he thinks the ceasefire and MoU is “over”. The mention of he “thinks”, gives the US a little bit of optionality on whether the deal is actually over; he stated that he will allow US negotiators to continue to talk. Nonetheless, the risks of a wider escalation remain; markets now await clarification on whether the MoU has officially ended, the Iranian response and also how Qatari/Pakistani mediators react to the comments made by Trump.
• WTI and Brent started the European session with gains in excess of 2%, but surged higher following the Trump comments; currently +5.6%. WTI Aug’26 holds at the top end of a USD 71.75-75.30/bbl range, whilst Brent Sept’26 sits near peaks of USD 75.44-79.26/bbl range. The latter remains well below the levels seen following the initial signing of the Islamabad MoU (USD 85/bbl), which signals some hopes that a) the Strait will remain open, b) the current MoU holds. On this theme, markets remain in backwardation, with front-month Brent prices still higher than second-month; should this flip, it would indicate that traders expect another large-scale supply glut.
• Spot gold (-1.2%) trades lower this morning, and at the bottom end of a USD 4,050-4,133/oz range. Much of the pressure came following the Trump comments, given the USD strength and the inflationary implications of the ceasefire being over. Base metals are broadly lower, given the risk-tone; 3M LME Copper trades at USD 13,190-13,396/t range.
• Kuwait’s Ministry of Electricity said power lines were damaged by shrapnel in recent attacks.
• European Commission, on the ETS revision, said they are still considering how and whether to add international carbon credits. Revision will include permanent domestic carbon removal. Will propose further investment.
• Russia’s Gazprom said Ukraine attacked facilities of gas exports to Turkey; supplies not affected.
• China reportedly lifts restrictions on refined fuel exports for the rest of July, according to sources.
• China purchases at least 5 more US soybean cargoes, Bloomberg reported.
• Japan aluminium premiums for Jul-Sep shipment set at USD 395/t, +12-13% Q/Q.
• US Private Inventory Data (bbls): Crude -0.399mln (exp. -1.5mln), Distillates -1.801mln (exp. +1mln), Gasoline -2.929mln (exp. -1.55mln), Cushing -0.069mln.

Trade/Tariffs

• Spanish PM Spokesperson said the trade comments from US President Trump are business as usual.
• USTR Greer said Canada and Mexico have not lived up to everything.

Geopolitics: Iran Commentary

• Iranian Parliament Speaker Ghalibaf said the US has violated major parts of the MoU, citing US attacks on southern Iran, reinstating oil sanctions and threats of further strikes as MoU violations.
• Iran's Foreign Ministry states that the US activity overnight has "rendered important and fundamental parts of the Memorandum of Understanding on the End of the War ineffective".
• Iranian President Pezeshkian said the US, whether as World Cup host or in its foreign policy, manipulates the rules and resorts to deception, and that Iran rejects such tactics.
• Iran's top joint miliary command said Iran will give a crushing response to America's aggression and terrorist action, and under no circumstances will they allow them to interfere in the affairs of the Strait of Hormuz and its management.
• Advisor to Iran's Supreme Leader said US President Trump intends to attack again and we are fully prepared.
• Iran's Foreign Ministry condemns the US Treasury's move to revoke the temporary suspension of sanctions on Iranian oil sales, will take any measure it deems necessary to safeguard its interests and national security. Iran holds the US government responsible for the consequences of the breach of the Memorandum of Understanding.

Overnight Attacks

• Several explosions have been heard in Bushehr, Iran, according to Mehr news; Mehr's journalist on Kharg Island denies reported of an attack on Kharg, despite some reported of an incident being published. Elsewhere, sirens were reported in Bahrain once again.
• Renewed explosions sounds heard around Iran's Qeshm and Sirik, Mehr reported.
• Iran's army said it targeted the Sheikh Isa Base in Bahrain and warns of more attacks if the US repeats strikes on Iran, Mehr reported.
• Iran's IRGC said that, in response to the US aggression, they hit 85 important US military installations in Port Salman, Bahrain's 5th Maritime Zone and Kuwait's Ali Salem Air Base.
• Iran's IRGC said they downed a US Mq9 drone in the south of Iran, Press TV reported.
• Iran fires several anti-ship missiles and drones towards US Navy warships in the Sea of Oman, Fars reported citing the Middle East Spectator.
• A US official said the strike on Iran was a punitive action, not a proportional response, and that the operation will not end in the short term, CNN reported.

US Commentary

• US President Trump said the Iran ceasefire is over "I think"; as far as I am concerned, it is a waste of time dealing with Iran. On the MoU, "think it is over". Adds, "I do not want to deal with Iran", they are a "bunch of liars".
• US President Trump said (on Iran) he will allow US negotiators to continue to talk if they want. But, "I think this is a waste of time".
• US President Trump said have had some great meetings; attacked very powerfully against Iran last night. Have wasted a lot of time with Iran. Iran does not know what it is doing. Iran shot rockets at the ships, which is why the US shot back. Iran is a "dirty" player, "are scum".
• US President Trump approved the Iran strike plan and ordered it while in Turkey, a US official tells Axios' Ravid; the official said it is still unclear how long the strikes are going to continue.
• US Secretary of Defence Hegseth has cancelled his visit to Israel, N12/Ynet report.

Others

• Turkish President Erdogan said Europe must take more responsibility when it comes to NATO.
• US President Trump said China is attempting to takeover the Panama Canal, will not let this happen. China has been treating the US right. Big fan of Chinese President Xi.
• Ukrainian Armed Forces said Kyiv is under missile attack.
• Israeli fighter jets carried out attacks in Barachit and Beit Yahoun in southern Lebanon.
• A Pakistani Boeing (BA) plane flying to Karachi has crashed, with sources stating the plane was mistakenly targeted by the US, IRIB reported.
• Chevron’s (CVX) Yasa Polaris oil tanker, used for CPC shipments, was attacked by drones off Russia’s Black Sea coast, according to sources.
• Russia’s Gazprom said Ukraine attacked facilities of gas exports to Turkey; supplies not affected.
• Ukraine's Military said it struck two oil refineries, six tankers, bridges and the Borisoglebsk airfield; AIF-NK oil refinery in Nizhny Kamsk was also damaged.

US Event Calendar

• 7:00 am: United States Jul 3 MBA Mortgage Applications, prior 0%
• 10:00 am: United States May F Wholesale Inventories MoM, est. 0.3%, prior 0.3%
• 2:00 pm: United States FOMC Meeting Minutes

DB's Jim Reid concludes the overnight wrap

Asian equity markets are largely lower this morning as investors digest a significant escalation in US-Iran tensions overnight. American forces launched strikes against more than 80 targets in Iran, including air defence systems, command-and-control networks, coastal radar installations, and anti-ship missile capabilities, in response to recent attacks on commercial shipping in the Strait of Hormuz. The strikes were accompanied by the US Treasury’s decision to revoke a waiver that had allowed new Iranian oil sales, a move that threatens to undermine the fragile US-Iran interim peace agreement reached last month.

The developments have reignited concerns about energy supplies and geopolitical risk, helping Brent crude rise more than 2% and trade near $76/bbl this morning after rising more than 5% yesterday, driven by the fresh attacks on ships in the Strait of Hormuz, with Monday seeing the most incidents since the US-Iran interim agreement came into effect on June 17. Iran has condemned both measures as violations of the agreement and vowed a response, raising concerns that the fragile peace process reached last month could unravel before negotiations on a permanent settlement are completed. While US officials have stressed that talks towards a longer-term accord continue, the latest escalation represents the most serious test yet for the ceasefire.

Against this backdrop, risk sentiment across Asia is weak but not as much as you may have imagined given the attacks. S&P, Nasdaq and Stoxx futures are all pretty much flat with the rest of Asia down or up depending on which side of the tech stack they sit on.
The KOSPI losses have accelerated as I'm typing, currently down -5.57% in what seem very fast markets with the Nikkei -0.96%, and the S&P/ASX 200 down -0.49%. In contrast, mainland Chinese equities are firmer ahead of tomorrow’s June inflation report, with the CSI 300 (+0.61%) and Shanghai Composite (+0.52%) moderately higher, whilst the Hang Seng (+2.38%) is outperforming as technology stocks there recover. However, they are just reopening after their lunchtime break as I type so given the vol elsewhere this could change by the time you read. 

Ahead of the overnight moves, markets struggled to gain traction yesterday, as the jump in oil prices revived familiar fears about stagflation. That led to clear pain for US Treasuries. For instance, the 10yr yield was up +8.2bps on the day to 4.55%, whilst the 30yr yield (+7.13bps) closed above 5% for the first time in nearly a month, at 5.06%. And on top of the oil moves, those trends got a fresh push from the NY Fed’s latest Survey of Consumer Expectations. It showed 1yr inflation expectations up to 3.7%, the highest since September 2023, whilst 3yr expectations were up to 3.3%, the highest since June 2022. So that leant in a hawkish direction and meant investors dialled up their expectations for Fed rate hikes, with the amount priced by the December meeting up +5.1bps on the day to 34bps.

As all that was happening, there wasn’t much respite for equities either, as chipmakers saw a renewed slump that took the Philly semiconductor index (-4.65%) to its lowest in nearly a month. Indeed, the index is now -15.95% beneath its highs in mid-June, after just posting its best quarter ever in Q2. To be fair it wasn’t all bad news, and US equities saw a rotation into defensive sectors. Energy (+3.02%), healthcare (+1.55%), consumer staples (+0.99%) and utilities (+0.91%) all had a strong performance. Moreover, a majority of the S&P 500’s constituents were still higher, with 283 companies rising on the day. But the chip declines still dragged on the overall performance, with the S&P 500 ultimately down -0.45%.  

Over in Europe, political developments were in focus yesterday in both France and the UK. In France, Marine Le Pen said she’d be a candidate in the 2027 French presidential election, after appeal judges shortened a ban on her running for office. The first round isn’t happening until April 18, with the run-off then two weeks later on May 2, but today’s news means that the outlines of the campaign are coming into view. 

Meanwhile in the UK, Reform UK leader Nigel Farage resigned as an MP, forcing a by-election that Farage himself is going to stand in. His resignation follows questions around a £5m gift from a Reform UK donor, which had triggered a parliamentary standards probe. Moreover, last weekend the Sunday Times reported that he hadn’t declared benefits from a long-time ally, George Cottrell. So with Farage under growing scrutiny, calling a by-election was seen as a way for him to regain momentum, particularly after Reform UK underperformed polls in the recent Makerfield by-election won by Andy Burnham. However, all the main political parties have said they won't stand a candidate, effectively calling it a political charade. So it'll be interesting to see if it backfires. Tomorrow will also see nominations open for the Labour leadership contest that will decide the next PM, although former Greater Manchester Mayor Andy Burnham remains the only declared candidate.  

Amidst all the political developments, there wasn’t too much of a market reaction in Europe, with bond yields moving higher across the board because of the oil price rise. So yields on 10yr bunds (+4.6bps), OATs (+5.6bps) and BTPs (+5.8bps) all moved higher on the day, with the STOXX 600 (-0.65%) also falling back as well.  

The NATO leaders’ summit will continue for a second day today, with President Trump saying yesterday that the US “could remove all our soldiers out of Europe” and reiterated his desire for Greenland to be under US control. Otherwise, there were multiple reports of defence industry deals that had been agreed, with Bloomberg reporting that was over $50bn.  

Shifting back to Asia to close, and the Reserve Bank of New Zealand (RBNZ) has implemented its first key interest rate hike in three years, raising the official cash rate to 2.50% from 2.25%. This move, which was expected, signals the central bank's intention to transition to a less stimulatory monetary setting in an effort to curb inflationary pressures. The decision follows a split vote at the bank's previous meeting in May, where Governor Anna Breman had used her casting vote to maintain the cash rate. Following the decision, the New Zealand dollar strengthened by +0.42% to just above 57 cents against the US dollar, with the yield on the policy-sensitive two-year notes increasing by +4.5bps, now trading at 3.37%, amidst reinforced expectations for additional rate hikes this year.

Looking at the day ahead, the highlights will include the minutes of the FOMC’s June meeting, along with remarks from the ECB’s Kocher, Moulin, Nagel and Dolenc. Otherwise there isn’t much data, although we’ll get Sweden’s CPI for June, France’s current account balance for May, and US consumer credit for May.

Tyler Durden Wed, 07/08/2026 - 08:32

NATO Chief Backs Renewed US Strikes On Iran As 'Absolutely Necessary' 

Even if most individual NATO members are still reluctant to jump on board Trump's Iran war, NATO Secretary-General Mark Rutte is busy praising American military action there amid the annual summit in Ankara.

Rutte has freshly described the overnight fresh US military strikes on Iran in response to Tehran attacking multiple international shipping vessels "absolutely necessary". Rutte voiced agreement with Trump that Iran's actions violated the MoU ceasefire agreement with the US, which required a response.

Getty Images

"When you have a ceasefire and Iran ​is basically violating the ceasefire, I think it is totally ​crucial that the US forcefully react," Rutte told reporters.

The new US actions resulted in a swift Iranian response, in the form of Iranian drones and missiles on Kuwait and Bahrain, which the latter country decried as a "dangerous escalation".

"The era of bullying and extortion is over," Iran’s Parliament Speaker Mohammad Bagher Qalibaf wrote on X. "It leads nowhere. We don’t fold."

As we reported earlier, President Trump has called the Iranians "scum" and declared the ceasefire "over": "To me, I think it's over. I don't want to deal with them anymore; they're scum," Trump told reporters. 

All this naturally brings up the question of 'what's next?'

Certainly the Iranians seem in the mood for a fight, and Washington feels it can't let attacks on international shipping slide - so all for this could portend a return to all-out war.

Reporter: What is your reaction to the recent U.S. attacks on Iran?

NATO's Rutte: I think it was absolutely necessary. Iran is violating the ceasefire. pic.twitter.com/kd6Nr9Dtwx

— Clash Report (@clashreport) July 8, 2026

It's been 129 days since the start of Operation Epic Fury - a conflict which US officials had promised would be 'fast' - and the public has been 'assured' it is not a quagmire. Yet here we are.

As for Rutte, it's unclear what his strategy for Iran, if any, might be. He's clearly trying to keep Trump happy, playing Trump whisperer in Turkey, vis-a-vis the NATO alliance and its continued funding. Here was some Trump commentary on NATO 'unity' in Ankara:

“Spain is a terrible partner in NATO. They don’t participate. They don’t pay. I don’t want anything to do with Spain. Cut off all trade with Spain, please, including visits,” he said at a press conference in Ankara with NATO Secretary General Mark Rutte.

Trump also reignited inter-alliance tensions when he resurfaced his desire to take control of Greenland, a territory of NATO member Denmark.

The NATO chief has also newly stated could be no doubt over the "complete commitment of the United States to NATO" - which he claimed also defends the United States and is thus invaluable.

via CNBC

"But there's ​also the expectation ​that the ⁠Europeans and the Canadians will equalize their spending with the United States, which I ​think is completely fair," he added.

"The good ​news ⁠is that this is the big win today. It's the loss for Putin, it is a win for President ⁠Trump ​that the Europeans and the Canadians ​are doing exactly that," Rutte said.

Tyler Durden Wed, 07/08/2026 - 08:25

The post The Sanders-Trump Plan for an AI Sovereign Wealth Fund: Don’t Buy It appeared first on CEPR.

Senate Defense Bill Would Establish Fund For Government To Buy Into Private Companies

Authored by Kevin Stocklin via The Epoch Times,

A new bill in Congress would enshrine into law the ability of the executive branch to buy into private companies, and create a fund to finance the purchases.

The Pentagon in Arlington, Va., in this file photo. Carolyn Kaster/AP

The current Senate version of the National Defense Authorization Act gives the Defense Department explicit authority to take ownership stakes in companies. A provision titled "Equity Investments and Related Matters" establishes a new "Department of Defense Equity Investment Account" within the Treasury Department, which the Defense Department can use to make equity investments in critical minerals, materials, chemicals, and batteries.

While administration officials say this move allows the Defense Department to better align its goals with the private sector and for taxpayers to earn a return if the companies do well, critics have raised concerns about establishing a legal basis for government expansion into the private sector.

Government investments in companies under this bill would be limited to a 50 percent stake, non-voting shares, and a dollar cap of $500 million.

Michael Duffey, under secretary of defense for acquisition and sustainment, stated in January that the Trump administration is "fundamentally shifting our approach to securing our munitions supply chain."

"By investing directly in suppliers we are building the resilient industrial base needed for the Arsenal of Freedom," Duffey said.

The Pentagon has been actively buying stakes in private companies over the past year, including a $400 million investment in MP Materials, a rare-earths mining company, in 2025, and a $1 billion investment a L3Harris Technologies, a rocket motor manufacturer, in April, as well as a 10 percent stake in chipmaker Intel.

"Equity ownership can align incentives in ways that grants and subsidies cannot," Carliss Chatman, a law professor at Southern Methodist University, told The Epoch Times.

"If taxpayers are assuming significant financial risk to help develop strategically important industries, an equity stake allows the public to participate in the upside if those investments succeed," she said. "Equity may also provide the government with governance rights, access to information, or long-term alignment that grants generally do not."

Potential For Conflicts Of Interest

Critics, however, say this initiative marks a new expansion of the state into private industry. While the U.S. government has taken stakes in banks, insurers, and carmakers in the past, those have been short-term measures to rescue companies from bankruptcy, and typically done with congressional approval and oversight.

"The problem begins with creating the statutory architecture for a Pentagon stock portfolio in the first place," Cato economist Tad DeHaven stated in a June 16 report. "That means Congress would not merely be tolerating a one-off emergency action but would instead provide the Pentagon with a standing legal pathway to acquire ownership stakes in private companies."

The Defense Department can legitimately support strategic industries through grants, loans, and government contracts, DeHaven states, but "ownership means continuing federal financial interest in a company's valuation, which is precisely what creates the favoritism, conflict of interest, and political pressure risks Congress should be avoiding."

Duffey stated at a March 4 House Armed Services Committee hearing that these equity investments "create a partnership with industry, an opportunity, not only for government to provide capital to lead to the kind of growth such as in the L3 deal, but it also crowds in additional private capital."

However, the purchases have drawn scrutiny. Critics say that the Defense Department's investment in L3 Harris Technologies could create a conflict of interest, with the government's role as L3's largest customer and decision-maker regarding procurement, as well as a shareholder that will benefit if the company performs well.

This raises questions about whether procurement decisions will be truly impartial, analysts say, given that companies such as Northrop Grumman and Anduril Industries, in which the state has no stake, also manufacture rocket motors and compete in the same markets as L3.

"More money can help, but we also don't want to discourage fair competition that encourages people to get into this space," Rep. Adam Smith (D-Wash.) stated at the House Armed Services Committee hearing. "If they think the government's going to come in and just put their their thumb on the scale, it could discourage some of the investment we've seen."

State ownership raises other issues, as well.

Corporate Governance

"Equity ownership introduces governance questions that grants typically avoid," Chatman said.

"Once the government becomes a shareholder, questions arise regarding voting rights, fiduciary expectations, political influence over corporate decision-making, and eventual exit strategies," she said. "The legal design of the investment therefore matters as much as the decision to invest itself."

Federal ownership of private companies is becoming popular on both sides of the political aisle. Sen. Bernie Sanders (I-Vt.) recently proposed the American A.I. Sovereign Wealth Fund Act, in which the government would take a 50 percent stake in America's largest artificial intelligence companies.

"This would guarantee that the trillions created by AI are used to improve the lives of all of us - and block oligarch decisions that harm the American people," Sanders posted on X on June 1.

Critics, however, say this is a slippery slope to more government control over Americans' private lives. They point to attempts by the Biden administration to pressure private companies to censor Americans and to fire employees who refused COVID-19 injections, as well as the Canadian government's use of private banks and insurance companies to crush truckers' protests of that country's COVID-19 policies.

"Consider the Biden administration's pressure applied to social media firms during the COVID lockdowns," Jeffrey Degner, a policy expert at the American Institute for Economic Research, told the Daily Signal. "Imagine the silencing of free speech if the government had already taken ownership stakes in these firms!"

Reuters contributed to this report.

Tyler Durden Wed, 07/08/2026 - 08:05

My mid-week morning reads:

• The 20 highest-paying jobs in America? Doctors, doctors, more doctors. Doctors earn more than any other broad category of worker, according to federal data: More than engineers. More than computer scientists. More, even, than lawyers. To find a better-paid group than doctors, economists say, you have to drill down to elite subcategories, such as corporate CEOs and law partners. The average partner at a large firm earns more than $1.4 million a year. The typical S&P 500 CEO pulled down $17 million in 2024. Med school remains the trade of kings. (USA Today)

• This Will Have Been a Golden Age for Investors: Kyla Scanlon makes the case that we’re living through an extraordinary period for capital markets—and most people are too anxious to notice. (Kyla Scanlon) see also Active vs. Passive Fund Performance: When Do Active Managers Win? While passive funds dominated in 2025, strong active investing opportunities still exist. (Morningstar)

• Chevy built an all-American EV truck — why is nobody buying it? The Silverado EV drives, well, almost like a car. Yet the bed is massive, its frunk, cavernous. The back seat has enough room for me to cross my cursedly long legs, and the cabin is quiet. It’ll power your house in case of a hurricane, and it’ll haul, tow, and navigate down the freeway without a finger on the steering wheel. Plus it travels over 400 miles on a charge. That should be a dream combination for an American pickup lover. What happens when product, price, and politics collide. (TechCrunch)

• About Those High Egg Prices (The Washington Monthly Was Right):  Much of the press believed The 2022-25 spike in egg prices was mere supply and demand. Now that the industry has settled with DOJ and state AGs, our suspicions proved warranted.  that dominant egg corporations may be manipulating a price index tied to most commercial egg contracts. On Monday, the Department of Justice and a group of bipartisan state attorneys general agreed. They concluded a months-long investigation into companies like Cal-Maine, alleging that these corporations colluded to exploit the bird flu crisis and drive up egg prices, cheating consumers. Cal-Maine, Hickman’s Egg Ranch, and Versova will donate 53 million eggs to food banks and pay up to $3.3 million to state attorneys general. (Washington Monthly)

• Always-On AI Is Coming: Quiet, My Exoself : Someday real soon, most of us — starting with young adults — will carry an always-on AI. This agent will help us navigate our journeys, answer our questions, tutor and teach us new skills, remember people we have met before, remind us of what we once knew before, offer advice and recommendations, do simple errands, and remember everything we say and do. Before long, it will know us better than we know ourselves. It will be our exoself. Kevin Kelly on quieting the exoself — the digital shadow that follows us everywhere and won’t shut up. (Kevin Kelly)

• This little blue dot on your phone is revolutionary: U.S. policy used to jam up GPS. Now, those signals beam into your pocket. WaPo on the little blue dot: GPS on your phone is quietly one of the most revolutionary technologies ever shipped. (Washington Post)

• What’s inside the one bill Trump most desperately wants to become law: A sweeping set of national requirements for voters. An empowered DHS. What would happen if the SAVE America Act passed? (Vox) see also Supreme Court’s dramatic moves will reshape elections — and give the GOP a midterm boost: The timing and speed of the justices’ moves are all but unprecedented in recent years, legal experts said. Republicans are expected to reap the most rewards. WaPo on the Supreme Court’s election-law rulings and how they tilt the midterm map toward one party. Structural advantages compound. (Washington Post)

• As the Pentagon stays quiet, AP reconstructs a US strike that killed over 100 Iranian children: The Feb. 28 attack on a primary school in southeastern Iran was the deadliest reported strike in the U.S.-Israeli war against Iran (Washington Post)

• Six Years After the First COVID-19 mRNA Vaccines, Billions of Doses Clarify Their Protection and Rare Risks: Learn how mRNA vaccines work, why serious risks remain rare, and how the technology could be used beyond COVID-19. (Discover) see also CDC Won’t Publish Report Showing COVID Shots Cut Likelihood of Hospital Visits: A CDC report on vaccine effectiveness, previously delayed by agency leadership, is now being blocked from publication entirely. (Washington Post)

• The United States’ dream didn’t die. It was overturned: The red card wasn’t overturned; that would have required admitting an error. The suspension was put on suspension, through the magic of a clause buried in the organization’s disciplinary code. Initially, FIFA announced the decision in such a skeletal manner that the world knew it was hiding a body. On match day, Trump stood before reporters at the White House, and after trying to deflect his role, he talked until it was clear that he applied pressure. The Athletic on the U.S. World Cup exit to Belgium — the dream didn’t die, it was overturned. (The Athletic)

Video of the day: Mystery Billionaire Builds $425 Million Estate in Hamptons.

 

Be sure to check out our bonus episode of Master’s in Business with David Risher, CEO of Lyft, one of North America’s largest ride-sharing networks. He joined Lyft’s board in 2021 when the firm was burning cash and losing ground to Uber. Lyft has returned to profitability, with its stock rising more than 75% since Risher took the reins as CEO in 2023. In Q1 2026, the firm had 28.3 million active riders and did $4.9B in gross bookings, with $1.7B revs, and $132.8m in EBITDA. Previously, he held senior roles at Microsoft and Amazon.

 

America at 50, 100, 150, 200 & 250

Source: Bruce Melhman

 

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