For The First Time Since COVID Crash, Credit-Card Debt Shrinks For Second Month

On the surface, there were no major surprises in today's consumer credit report: after last month's $5.1 billion increase, consensus expected a sequential increase of $7.5 billion and it got almost exactly that: an increase of $7.37 billion to $3.758 trillion, up from $3.749 trillion in May. 

However, taking a closer look at the components reveals something troubling.

While boring non-revolving credit increased by $8.4 billion or more or less in line with what it has done in recent months...

... an increase that in Q2 was driven in roughly equal part from contribution in student loans (+8.2BN) and auto loans (+$5.1)...

... the surprise was in the amount of revolving loans, i.e. credit card debt, which declined by just over $1 billion in June, which was the second consecutive monthly drop in the series...

... which is very notable because that would make it the first time since the economic collapse at the peak of the covid crash.

Which begs the question: is the a cause - i.e., will the economy now suffer a sharp slowdown with consumers clearly hunkering down and no longer charging it - or effect - has the economy already stalled and this is just the consequence. If indeed this is the latter, then expect a dramatic downward revision of all recent economic data, similar to what we saw last week with payrolls, as the US economy enters its new glideslope to a recession.

 

Tyler Durden Thu, 08/07/2025 - 16:40

VDH: The Cincinnati Cop-Outs

Authored by Victor Davis Hanson via American Greatness,

Recently, a large group of black youths began pummeling several white adults in downtown Cincinnati.

The original altercation apparently broke out between a black and white male in he-said/he-said fashion.

But that dispute soon turned into a virtual free-for-all.

Numerous male and female black youths sucker-punched a middle-aged woman and a man. Others continued to kick or body slam the victims, who were sprawled on their backs and seemingly unconscious.

There were many disturbing aspects to the beat-downs.

One, the violence broke out along racial and age fault lines. After the initial one-on-one dispute, groups of black youths swarmed solitary older white bystanders to pound them.

Two, the surrounding assembled group of black youths not only failed to intervene to restrain the bullies. They also recorded the beatings for social media and were heard cheering on the one-sided violence.

Three, there was neither a police presence nor any timely Good Samaritan interventions.

Instead, what ended the attacks was simply the fact that at least two of the targets appeared nearly comatose. So their assailants apparently concluded that their agenda of beating whites into unconsciousness was mostly complete.

Four, oddly few of the usual black spokespeople who habitually comment on interracial violence were to be seen.

During the fake Jussie Smollett attack, self-appointed leaders from Al Sharpton to Kamala Harris immediately issued warnings about so-called systemic white racism that had reared its ugly head to victimize Smollett.

Yet when it was revealed Smollett had concocted the entire charade—and even hired his own assaulters—there were few if any retractions from those once so eager to shout “racist!”

Such demagoguery is a well-known pattern dating back to the days of the Tawana Brawley rape hoax, the Duke Lacrosse charade, the Covington kids ruse, the Michael Ford “Hands-up-Don’t Shoot” fabrication, the “pseudo-transformation of George Zimmerman into a ‘white Hispanic,’” or the NASCAR noose fable.

Racialists too often concoct white racist attackers and go silent when the evidence proves fabricated—only to be primed to manipulate the next hoax.

Five, the media and authorities did their best to either hide or play down the violence.

City leaders, the chief of police, and the media variously blamed the mass black-on-white violence on 1) social media, 2) the original one-on-one dispute, 3) alcohol, 4) the lack of civilian intervention to stop the violence, and 5) a festival atmosphere—anything except endemic racial hatred shown toward whites from the crowd of black youths.

Six, had a gang of white toughs beat middle-aged African-Americans senseless, recorded it, and cheered on the violence, there would have been immediate national outrage.

Nor did anyone wish to raise the taboo topic of inordinate black crime rates, disproportionate to respective demographic realities. In rare interracial violent crimes, the asymmetrical ratio of black-on-white versus white-on-black assaults ranges from three to five times greater.

Seven, the quiet of the left-wing media to the reprehensible violence stands in marked contrast with their usual rush-to-judgment racialism in two near-simultaneous incidents.

When a shooter of mixed African-American heritage recently entered a New York City corporate headquarters and executed four innocents, CNN falsely raised the speculation that a “white male” was perhaps responsible—despite the photograph of the suspect, who was as clearly male as he was not white.

Media and municipal officials jumped to explain the violence as due to the killer’s alleged past traumatic brain injury or because of his access to a semi-automatic weapon—or anything other than his hate-filled plan to murder an NFL executive.

Actress and model Sydney Sweeney just cut a jeans commercial in front of a poster that said, “Sydney Sweeney has great genes”—with “genes” crossed out and replaced with “jeans.” The left then exploded, alleging the ad was a supposed Hitlerian reference to white eugenics.

Yet the eugenics movement in America was mostly a product of left-wing progressives, from Planned Parenthood founder Margaret Sanger to Democrat president Woodrow Wilson.

And the ad’s sponsor, American Eagle, had previously used all sorts of models from all racial backgrounds. All might agree that the ad simply shows both tight, sexy jeans and a naturally attractive wearer—period.

The country is descending into a tribal morass of double standards and racial fixations.

The diversity/equity/inclusion industry, the Defund-the-Police madness, and the perpetual left-wing hunt for “white racism/white privilege/white rage”—from the prior Pentagon hierarchy to the lunatic fringe of Jasmine Crockett, Joy Reid, and Zohran Mamdani—have all legitimized double standards while lowering the bar of the once unacceptable.

When our careerist left-wing elites seek to divide us by race and make it essential, not incidental, to our identities, that tribalist message filters throughout communities.

The ensuing signal is that “payback” violence is okay—on the expectation that there are no consequences for interracial violence—as long as the victim is white and the assaulter is not.

Tyler Durden Thu, 08/07/2025 - 16:20

Trump Appoints Stephen Miran As Fed Governor, Replacing Kugler: Dollar Dumps, Gold And Crypto Surge

Update: Trump just confirmed that Miran will serve on the Board until Jan 31, 2026, as replacement for outgoing governor Kugler.

* * * 

The dollar dumped, and gold and crypto jumped on a bloomberg report that Trump is preparing to nominate Stephen Miran, current Chair of the Council of Economic Advisers, to serve as a Federal Reserve governor. 

Miran, who has already been confirmed by the Senate before taking over as chairman of the Council of Economic Advisors thus speeding up the process, is only expected to serve a term that expires in January, according to the person, who requested anonymity to discuss internal deliberations. As such the nomination is expected to fill the short-term void in the seat vacated by Governor Kugler.

Trump said Wednesday he would likely nominate a temporary governor to fill the seat, rather than a successor-in-waiting for Jerome Powell, who - let's face it - can't wait for his term to be officially over.

The dollar, which was already having a bad session, dumped on the news...

... while gold

... and crypto jumped...

... on expectations that Miran will push for Trump's dovish agenda. 

Tyler Durden Thu, 08/07/2025 - 15:46

Trump Orders New Census To Fix 2020's Rigged-Count Favoring Democrats

Authored by Matt Margolis via PJ Media,

President Trump is putting America first again. This time, he’s going after the rigged system that counts illegal aliens in the U.S. Census, skewing congressional representation and rewarding sanctuary states with more power. On Thursday, Trump announced he’s directing the Department of Commerce to conduct a new, corrected census - one that actually counts American citizens and excludes those here illegally.

“I have instructed our Department of Commerce to immediately begin work on a new and highly accurate CENSUS based on modern day facts and figures and, importantly, using the results and information gained from the Presidential Election of 2024,” Trump announced in a post on Truth Social. “People who are in our Country illegally WILL NOT BE COUNTED IN THE CENSUS. Thank you for your attention to this matter!”

Naturally, the mainstream media isn’t thrilled. CNN described Trump’s proposal as “a dramatic shift from longstanding census practices” while insisting that the census “has historically counted all residents regardless of immigration status.”

But, this is hardly just about illegal immigration. In fact, this move is long overdue. 

The 2020 Census, overseen by the Biden administration and its Deep State allies, was an unmitigated disaster - and the fallout is still being felt. Even the Census Bureau itself - hardly a bastion of conservative thought - admitted that its 2020 Census was incorrect in at least 14 states.

According to the Bureau’s own Post-Enumeration Survey (PES), eight states were overcounted while six were undercounted. But here’s where it gets truly absurd: The Census Bureau claims it can’t identify which groups were miscounted or where the errors occurred, citing “sample sizes within most states do not support such estimates.” Translation? They know it was wrong, but they can’t — or won’t — say how or where.

This isn’t just bureaucratic bungling; it’s a dereliction of duty. And it’s exactly why President Trump is right to call for a new, citizen-focused census. If the federal government can’t even tell us who they miscounted or where, how can anyone trust the results?

These weren’t random clerical errors, either. They were systemic failures that just so happened to benefit Democrats. Florida was robbed of not one, but two congressional seats. Texas lost out on another. Meanwhile, blue states like Minnesota and Rhode Island held onto seats they should have lost — and Colorado was gifted a seat it was never entitled to. The fix was in.

The Heritage Foundation:

To put the scope of these mistakes into perspective, contrast the errors in the Census Bureau’s latest recount (the 2020 Post-Enumeration Survey, or PES) with the recount from a decade ago (the 2010 Post-Enumeration Survey)—in which there was a net overcount of a mere 0.01 percent (36,000 people), a statistically insignificant error.

“The harms flowing from these mistakes impact more than just congressional representation, which also affects the number of electors from those states since they are calculated by the number of Senators and Representatives in each state,” explains the Heritage Foundation. “Because the Treasury and other federal departments will continue to use the original, official Census numbers (and not the new numbers contained in the PES), these errors will affect $1.5 trillion in funding received by states in federal appropriations during the next decade in disbursements that are distributed based on the population of each state.

When the system cheats the American people, someone must blow the whistle. President Trump’s new census directive takes on the rigged counting of illegal aliens that the mainstream media buries. PJ Media uncovers the truth no one else will run. Join PJ Media VIP with promo code FIGHT for 60% off to get exclusive stories and unrestricted commenting. Join today and help us keep America honest!

Tyler Durden Thu, 08/07/2025 - 15:25

Israel To Take Control Of All Of Gaza, But Netanyahu Claims Not Forever

There have been reports all week which have said that Israel is now intent on conquering and occupying the whole of the Gaza Strip, and when asked about it Tuesday Presdient Trump responded, "It is going to be pretty much up to Israel."

In a fresh Thursday report, Axios writes that Trump "does not oppose Israeli Prime Minister Benjamin Netanyahu's plan to launch a new military operation to occupy the entire Gaza Strip, U.S. and Israeli officials say." There's been some nuance in Netanyahu's position, however, as he's sought to distance himself from claims that he's planning a permanent occupation by Israeli forces.

Source: Israeli army via Reuters

"We intend to," Netanyahu affirmed to Fox News when asked if he aims to take over the whole the strip. But then he said it would eventually be given over to a responsibly governing entitiy. 

"We don’t want to keep it. We want to have a security perimeter. We don’t want to govern it. We don’t want to be there as a governing body," he said.

Also, Netanyahu's office has told Axios, "We are not willing to remain in the current limbo and we are not willing to surrender to Hamas' demands — so essentially only one option is left, to take a drastic step. This is the last card we have left."

Critics and skeptics have said Israel has long been deceptive at many points about its war aims. The whole counter-Hamas operation was launched with limited goals initially articulated, centered on taking out Hamas leadership and gaining the liberation of all captives - but the scope of operations have clearly shifted and been extended.

Military leadership has taken a more cautious approach, warning that efforts to permanently control Gaza would be falling into a "trap" - as we reported earlier.

Kan News public broadcaster previously stated "The prime minister's direction is to go and conquer the Gaza Strip." 

The Israeli military's (IDF) chief of staff, Lt.-Gen. Eyal Zamir, has argued in a closed-door cabinet meeting that this "will significantly endanger their lives and cause the army to burn out." 

Aerial view showing utter destruction of the Gaza Strip...

The past year has seen Netanyahu clarify to political allies and opponets alike that he's opting for a military solution. Criticis have said he's putting the remaining hostages in danger.

As for what group might one day take over, it is entirely doubtul that any Palestinian body - such as the Palestinian Authority - will actually be allowed to step in and govern by Israel. This is indeed a recipe for permanent occupation and annexation. 

Tyler Durden Thu, 08/07/2025 - 15:05

Trump Admin Throws Maryland Democrats A Lifeline To Halt Power Blackout Threat After Green Policies Backfire

Maryland Governor Wes Moore and the Democratic Party in Annapolis have managed to spark a 'manufactured power crisis' in the Mid-Atlantic state through failed green energy policies, which have driven power bill costs up more than 1,000% over several years and are now financially crushing working-class households and mom and pop businesses. The Democrats' promise of a progressive 'utopia' in the imploding state has failed to materialize - and frankly, never will. 

Now, the Trump administration is throwing Governor Moore and the far-left Democrats, who are running the state into the ground, a massive lifeline to prevent a power grid collapse in the Baltimore region.

According to Fox Baltimore reporter Gary Collins, U.S. Energy Secretary Chris Wright has granted a 90-day emergency waiver allowing the H.A. Wagner power plant to exceed pollution limits to avoid rolling blackouts in the Baltimore metro area. 

Traditionally coal-fired, but also capable of burning oil and natural gas, the Wagner power plant is owned and operated by Talon Energy and is located near Curtis Bay, Maryland. It provides hundreds of megawatts, playing a key role in supplying on-demand baseload power to Baltimore Gas & Electric (BG&E) Zone, part of the PJM Interconnection grid (Goldman spotted this power crisis from a mile away). 

Democrats who run the state have placed strict pollution controls on the Wagner power due to its coal usage, often reaching emissions caps during peak demand hours. Trump's lifeline for Democrats will help prevent rolling blackouts - like a third-world country - that would ultimately spark more doom for Gov. Moore's 2028 presidential ticket - if he ever had one.  

But apparently he does, because the Democratic Party has fired up its NGO complex and has been buying air time on local radio stations - and one state lawmaker told us the propaganda has shifted to purchasing social media influencers, all to quell growing dissent as the power bill crisis crushes everyone. 

We no longer need to explain how Maryland is becoming the epicenter of the Democratic Party's imploding policies - all on display for the nation to see, especially on the green issue.

• "Another Reason To Leave": Top Maryland Power Official Warns Of Regular Rolling Blackouts

• Maryland Democrats Scramble As Green Energy Agenda Sparks Power Bill Hyperinflation

• Democrats Spark "Manufactured Power Crisis" In Maryland As Left Begins To Panic

• "You're Welcome": Pennsylvania Boasts About Saving 'Green' Maryland From Near Power Grid Collapse

• Far-Left Panic: Dark Money NGO Floods Baltimore Airwaves With Propaganda To Save Governor

Maryland must undergo an urgent course correction on its power grid policies or face a harsh winter of darkness.

Tyler Durden Thu, 08/07/2025 - 14:25

"Every F**kin' Day Bro" - A Glimpse Into The Life Of A Hedge Fund Manager Under Trump 2.0

To paraphrase Kermit The Frog, 'It's not easy making green" and under Trump 2.0, that has never been more true for the 'average' hedge fund manager dealing with 24/7 headline risk from the current resident of The White House.

For those who may not be in the seat, or have a clue as to just what the daily roller-coaster has been like for the last seven months and counting, Harris Kupperman, CIO of Praetorian Capital posted the following on X, which although a little tongue in cheek, is awfully close to the reality of anyone trying to trade this chaos. Brace yourself, as Kuppy says "Every fuckin' day bro... every one!":

6:00 - Wake up, check what Trump tariffed overnight. Cambodia up +200%, Paraguay -3% (they said thanks).

6:05 - Brew some coffee.

6:10 - Trump tweets that the laws are rigged, since he cannot tariff Arizona. Mentally scroll the portfolio for exposure…

6:15 - Check what happened in Asia and Europe. 6:22 - Trump announces that hot dogs will join the food pyramid. Bans hot dog exports. Fortunately our book dodged that one.

6:30 - Drink some coffee, talk to wife, pray Trump will spend the morning golfing so I can do some actual work... 

6:31 - Trump announces that oil at $65 is too high. Threatens anyone who isn’t producing more oil.

6:32 - Top 5 position announces earnings, want to join the earnings call at 7am, but Trump just scheduled a press conference then, and he’s looking unpredictable.

7:02 - Trump announces that Japan can now export golf balls tariff-free, in honor of Abe letting him cheat at golf. Join the earnings call instead.

7:06 - Futures plunge 65 handles in a single tick, frantically leave the earnings call and go back to whatever Trump is still yapping about in his press conference.

7:10 - Scroll through premarket quotes. NVDA and PLTR are both up 5% b/c it’s a day ending in ‘Y’ but SPZ are now down 80 handles.

7:15 - Trump changed his mind and SPZ are now up 25 handles as everyone rushes to cover their short. (I re-join the earnings call)

7:30 - Some broker I’ve never heard of just downgraded a top 5 position and it’s down 15% on 300 shares traded. I’m pretty confident it will close around there too. (I crack open a beer as I skim his downgrade report, realizing that nothing productive will happen today…)

8:00 - An LP calls to remind me of some ShitCoin he recommended that’s now up 1800% since he recommended it.

8:09 - 10-yr bonds gap down 17 bps, but all I can find is a tweet from Bessent about how great Main Street is doing.

8:15 - Some sell side asshole cold-calls me to see if I want a copy of his upgrade report on the AI sector. Tells me that “it’s going to be big and you don’t want to miss it.”

8:20 - Check my email, do 10 minutes of actual work.

8:30 - Trump threatens Brazil, I realize our BZ exposure is gonna get thumped on the open. (Crack open a 2nd beer)

8:33 - Reminisce about how productive I was, since Biden wouldn’t even wake up until noon.

8:40 - Chat with my CFO for 19 mins about some new compliance form we need to file.

8:59 - Trump Tweets about how stupid Powell is. Futures are back down 30 handles.

9:04 - Join a call 4 mins late with an endowment that wants an update, but 100% will never invest. “BTW - we need you to update the DDQ as we’ve changed our format”

9:29 - Casino is opening. Let’s see what happens.

9:32 - I’m bored. Go back to reading emails. Turns out the govt created another new form we ALSO need to fill out…

10:00 - We’re actually up 50bps.

10:03 - Now down 175bps. Trump just threatened to bomb Europe.

10:06 - Tweets he was just joking about Europe. But those guys need to get their shit together bc he might still bomb them.

10:08 - Ready for bourbon. Beer won’t cut it…

10:30 - EIA oil inventory shows yet another massive draw. Oil drops 5% anyway.

10:40 - Don Jr’s latest SPAC rallies 300% on rumors it may launch a new ShitCoin

10:45 - Friend calls to cry about how cheap all his names are. We both agree we were idiots to invest in businesses with earnings.

11:22 - Trump reminds everyone about how much Putin likes him.

11:40 - Realize I’m now too tweaked to sit in the office. Turn off the machines and go get lunch with a friend who’s also gonna bitch about how stupid markets have become.

12:05 - Hostess at restaurant pitches me some ShitCoin. Claims she’s up a few million on it

12:07 - Friend starts bitching about how stupid it is to be an investor under Trump, and how we all made money under Biden. I agree with him, but we both agree it would be even stupider under Kamala…

For more from Harris, visit Kuppy’s Korner blog at http://pracap.com

Tyler Durden Thu, 08/07/2025 - 13:45

Yields Spike After Very Ugly, Tailing 30Y Auction Sparks Steepening Fears

After two decidedly ugly auctions, including a poor 3Y on Tuesday and a very poor 10Y yesterday, moments ago the Treasury concluded the week's trio of refunding auctions when it sold $25BN in 30Y paper. And this particular auction may have been the worst of the lot. 

The final refunding auction priced at a high yield of 4.813%, which while lower than July's 4.889% was not low enough, and with the When Issued at 4.792%, the auction tailed the When Issued by 2.1bps, the biggest tail since last August. 

The bid to cover was just as ugly: dropping to 2.266% (from 2.383) it was the lowest since November 2023 (and obviously far below the six auction average).

The internals were not quite so fire, although here too the picture was bad: Indirects dropped again, sliding from 59.8% in July to 59.5%, the lowest since May - which was a major outlier - and the second lowest going back all the way to 2021. And with Directs awarded 23.03%, down modestly from 27.40% last month and below the six-auction average of 24.2%, Dealers were left holding a whopping 17.46%, the highest August 2024 when they were left holding 19.18%.

Bottom line: the last coupon auction of the week was also the ugliest, and the bond market saw right through it, sending 10% yields surging to session highs, just around 4.25%. What is more ominous, is that today's auction is a harbinger of what will happen when Powell finally does cut, and the market immediately reprices inflation expectations, sending long end yields exploding higher in a steepening move that will make your nose bleed. 

Tyler Durden Thu, 08/07/2025 - 13:33

What Triggered The Upcoming Putin-Trump Summit?

Authored by Andrew Korybko via Substack,

One of them must have offered more concessions to the other...

Kremlin aide Yury Ushakov confirmed on Thursday that Putin and Trump could meet as soon as next week following Special Envoy Steve Witkoff’s “highly productive” three-hour-long meeting with his boss.

A venue has already been agreed upon too.

This comes a day before the expiry of Trump’s shortened deadline to Putin.

It’s still unclear whether Trump will impose more sanctions on Russia and up to 100% tariffs on its trading partners, however, but he just doubled India’s tariffs to 50% on the same day.

In any case, the question on everyone’s mind is what’s responsible for the upcoming Putin-Trump summit, namely which of them offered the most concessions to the other and why. Coming right before the expiry of Trump’s deadline to Putin, some observers believe that the latter is therefore capitulating, but it’s also possible that the “TACO” (“Trump Always Chickens Out”) theory will be proven. There are several arguments for and against each of these two schools of thought.

This analysis here from early March enumerated the five reasons why Putin might agree to a ceasefire and the five reasons why he might not.

As for why he might:

• Russia wants to avert disproportionate dependence on China;

• it also wants to beat China to the chase with the “New Détente”;

• the “New Détente” could geopolitically revolutionize the world;

• additional (and even secret) terms might be attached to the ceasefire;

• and Putin might really believe that Trump is serious about further escalating.

At the same time, he might still hold firm in his opposition to a ceasefire unless his terms from June 2024 are first met because:

• Russia wants to liberate all occupied territories;

• the front lines might soon collapse to Russia’s benefit;

• Russia wants to scare away Western peacekeepers from deploying to Ukraine;

• some of the Russian public don’t want a ceasefire;

• and Putin might really believe that Trump is bluffing about further escalating per the “TACO” theory.

This segues into the reasons why Trump might offer the most concessions to Putin. Briefly, this could be because he:

• soberly assessed the resultant escalation risk and wisely decided against it;

• accordingly shook off the pernicious influence of the warmongers around him like Lindsey Graham;

• is finally willing to coerce Zelensky into Putin’s demanded concessions for peace;

• expects that he’ll succeed and neither his new EU vassals nor the UK will sabotage this;

• and hopes to win the Nobel Peace Prize as a result.

On the other hand, he might still hold firm in his opposition to coercing Zelensky into Putin’s demanded concessions for peace because he:

• believes that any further escalation would be manageable;

• is still under the influence of warmongers like Lindsey Graham;

• believes that he can coerce concessions from Putin;

• expects that his new EU vassals and the UK will contribute to his potential escalation plans;

• and hopes that he’ll win the Nobel Peace Prize if he gets Putin to agree to a totally lopsided deal.

Everyone will soon discover whether it was Putin or Trump who miscalculated by not ending the conflict earlier, but they shouldn’t forget that while “China Might Not Want Russia To Lose, It Might Not Want Russia To Win Either”.

As such, China might try to beat Russia to the chase in clinching a “New Détente” with the US, which could decelerate or even offset Trump’s “Pivot (back) to (East) Asia”.

All that’s known for sure is that the coming week will reveal a lot about the factors that drive those three’s policies.

Tyler Durden Thu, 08/07/2025 - 13:25

Chinese Exports Hotter Than Expected On Surge In Transshipments To Evade Trump Tariffs

China’s exports rose faster than expected last month the latest customs "data" showed, ahead of next week's expiration of a tariff truce with the US which threatens to reignite trade tensions between the world’s economic superpowers if it is not extended, although it now appears another 90 days extension is pretty much assured. 

Exports added 7.2% in July on a year earlier in US dollar terms, the fastest rate of growth since April, while imports added 4.1% the strongest reading in a year. The country’s trade surplus was $98.2bn last month, below $114.7bn in June due to the jump in imports. 

The recent strength in Chinese exports is almost entirely due to continued frontrunning of the tariff deadline (which incidentally is always TACOed 3 month forward), and has resulted in 4 of the past 5 months of Chinese exports printing above expectations.

The data released on Thursday by China’s customs administration came as Donald Trump’s sweeping new tariffs came into effect for US trading partners from India to Switzerland, pushing Washington’s levies to the highest level in a century.

The latest wave of US tariffs did not directly affect China, which has been locked in close negotiations with Washington for months over tariffs and trade flows of goods ranging from rare earths to semiconductors.

The sides had agreed to a 90-day truce that reduced tariffs from levels as high as 145% in April, as initial agreements raised hopes of a longer-term deal. That ceasefire, and associated reduced tariff levels, was set to expire on Tuesday but as this Bloomberg headline indicated, that is likely to be extended once again:

• *LUTNICK: US LIKELY TO EXTEND CHINA DEADLINE FOR ANOTHER 90 DAYS

Yet even with the fate of China tariffs still TBD, trade between the two countries has already been hit substantially, and the July figures showed China’s exports to the US declined 22% on a year earlier, after having previously sunk in May by the most since the start of the Covid-19 pandemic.

China’s exports to south-east Asia, which have by contrast continued to grow at double-digit rates in recent months, have drawn scrutiny over so-called “transshipment” of goods through third-party countries before reaching their final destination.

Indeed, for the clearest example of how China is bypassing US tariffs, look no further than Chinese exports to Vietnam - a regional transshipment hub - which then reships the Chinese products onward to the US. 

The surge in Chinese exports to countries that are tariffed less explains Trump's latest tariff salvo which included a blanket 40% levy on transshipped goods, though it did not offer further detail on how those shipments would be defined.

“We think simple transshipment is less attractive now,” analysts at Citi wrote, pointing to “tighter US enforcement to prevent tariff evasion”. Yet one wouldn't think that by looking at exports to Vietnam. 

China’s exports have been a crucial growth driver for policymakers in the world’s second-largest economy, given a four-year property sector slowdown that has weighed on consumer confidence. Authorities have targeted GDP growth of about 5% for 2025.

Trump’s administration in April introduced steep levies globally, but the measures had largely been paused to allow for bilateral negotiations with trading partners.

The president on Wednesday also pledged to introduce a 100% tariff on semiconductor imports, however once again with huge loopholes exempting companies that that invested in the US. The news sent foreign chipmakers soaring, while such domestic icons as Intel tumbled, after Trump unleashed a tirade on Truth Social demanding INTC CEO Lip-Bu Tan resign. 

Tyler Durden Thu, 08/07/2025 - 13:05

How Ethereum Treasury Companies Could Spark 'DeFi Summer 2.0'

Authored by Andrew Fenton via CoinTelegraph.com,

Since they emerged from stealth mode two months ago, a dozen Ethereum treasury companies have bought 2 million ETH between them, with Standard Chartered analysts estimating they’ll add another 10 million to that pile over time.

There’s growing excitement that billions worth of that ETH could flow into DeFi protocols as firms compete to chase yields greater than the 3%-5% on offer from staking and re-staking.

Etherealize’s Vivek Raman tells Magazine “healthy competition” between treasury companies for yield could light a fire under the DeFi sector before the end of the year.

"I’m actually pretty excited to see it. This could be the stimulus needed for DeFi Summer 2.0 — but on the institutional scale and bigger and better.”

GameSquare Holdings, BTCS, BitDigital, The Ether Machine and ETHZilla have all announced plans to juice ETH yields via DeFi, while Tom Lee’s BitMine Digital and Joe Lubin’s SharpLink Gaming are staking and restaking their ETH for now, while they refine their DeFi plans.

John Chard, vice president of operations for SharpLink, tells Magazine that he sees “selective DeFi participation as a natural next step beyond staking, leveraging Ethereum-native infrastructure not only to preserve value but also to grow it.”

“We also feel that, as more companies adopt ETH as a balance sheet asset, they will realize, sooner than later, DeFi isn’t just a curiosity — it’s a competitive edge,” he says.

This is how they make Ether. (The Ether Machine)

GameSquare targets up to 14% return from ETH in DeFi

GameSquare Holdings is a successful digital media, entertainment and technology business that’s currently sixth on the ETH treasury leaderboard. It’s partnered with Ryan Zurrer’s Swiss crypto investment firm, Dialetic, to help grow its ETH treasury 5x its current size to $250 million.

Rhydon Lee, from GameSquare’s advisory board, tells Magazine that the 3% return from staking ETH can be considered the risk-free rate of return — akin to buying treasuries in traditional finance. But GameSquare is setting its sights much higher.

"We’re targeting 8%-14% yield generation on just our Ether alone — whether it’s other theses within Ethereum, such as digital NFTs, Web3 gaming, prediction markets, digital identity, stablecoins.”

Unlike parking money in an ETH ETF, investing in some of the more aggressive Ether treasury firms is more like hiring a DeFi portfolio manager to try and grow your holdings. The more successful they are at doing so, the more attractive their stock becomes to investors.

Dialectic uses an algorithmic trading system called Medici that monitors the activity of successful yield farmers to find the best risk adjusted returns across different liquidity pools and protocols. It can automatically enter and exit hundreds of positions at a time. 

“There’s a whole team of devs that operates that for Dialectic that’s programmatically allocating to specific pools based on specific parameters or based on even things like watching smart money wallets and where they’re going into it.”

GameSquare even swapped equity for a CryptoPunk, which Lee believes can multiply returns, given blue chip NFT prices tend to go up in ETH, even as ETH goes up in USD terms.

“If we have 10 Ether, I hope we can have 11 Ether next year,” Lee says. “And based on the returns that Dialectics has had over the last four years, I think that’s achievable.”

ETH treasury companies are more than they seem

ETHZilla, which emerged on Ethereum’s 10th birthday with a $425-million raise, is pursuing a similar strategy. It partnered with DeFi asset manager Electric Capital on a “differentiated, onchain yield generation program” to generate between 3% and 10% annually.

Let’s just hope the flywheels don’t come off. (Charles Allen)

BTCS, meanwhile, is the oldest listed crypto company in the US, having gone public in 2014. It shifted from Bitcoin mining to Ethereum infrastructure in 2017-2018 and now runs validators, analytics and block building.

BTCS CEO Charlie Allen told “The Milk Road Show” podcast that running its own solo ETH validator nodes or via Rocket Pool provides “about a 40% increase on the earnings” it could make using third-party staking. It’s also employing some arcane strategies in DeFi that may seem risky to some.

Allen revealed the company recently deposited $100 million in ETH to Aave for its flywheel strategy. It borrows USDT against the ETH collateral and uses it to buy more ETH, which is then staked via “solo or Rocket Pool nodes to kind of maximize yield.”

Bit Digital’s “alphamaneuvers”

Another former Bitcoin miner, Bit Digital operates a cloud infrastructure business for generative AI with $100 million in contracted revenue, as well as blockchain validator infrastructure and custody services.

CEO Sam Tabar said on “Bankless” that Bit Digital is already looking at “more alpha maneuvers” and intends to be “a little bit more aggressive on the risk curve to make sure that our yields are above average.”

He also committed to publishing Bit Digital’s monthly returns on its website.

“I would like to call out the other companies and see if they could show their yields… and see who is generating more yield for their ETH.”

Tabar believes that only a handful of top ETH treasury companies will survive over the long term, with valuations based on their ability to acquire more ETH.

Ethereum treasury of The Ether Machine

The Ether Machine takes its very name from its mission “to produce additional Ether,” says founder Andrew Keys, formerly of Consensys.

Its head of DeFi is Dairus Pryzdzial, a core contributor to the OG DeFi protocol Synthetix. 

At this stage, it’s not YOLOing into weird strategies in DeFi, preferring instead to stake and restake most of its ETH. Keys characterizes the firm’s “eventual” DeFi strategy as being “measured” and focused on “battle-tested blue chip DeFi protocols.”

This will be out of date by the time you read this. (Strategic ETH Reserve)

Risks and opportunities with staking and DeFi

However, brokerage firm Bernstein cautions that even just staking ETH to secure the network is more difficult to manage and riskier for treasury companies than simply holding Bitcoin. 

It can cause liquidity issues due to the uncertain length of the staking exit queue, and the further companies get into DeFi, the riskier things become.

“More complex yield optimization such as restaking (such as Eigenlayer restaking model) and DeFi-based yield generation would involve managing smart contract security risk,” Bernstein’s analysts noted.

As a result of the additional risks, Raman expects the majority of Ether raised will simply be staked.

“3% on $1 billion of treasury is $30 million a year,” he says. “So, I feel like they don’t have to take as much risk.”

But he believes that up to 30% could move into DeFi as firms compete to grow their Ether holdings per share.

The leverage part is the risky bit of the flywheel. (MilkRoad)

The risk of ETH treasury companies blowing up chasing yield in Defi

Chasing higher yields in DeFi means taking on higher risks, says Lee.

“Higher rates of return maybe require more automation, more esoteric markets and a kind of better understanding. The more efficient a market is, maybe the less return that’s possible there,” he says.

But he says a well-run company with good DeFi risk management strategies wouldn’t allocate more than 0-30 bps of its assets to a single pool, mitigating the risk to the treasury company from a loan getting liquidated or a protocol getting hacked. In that case, he says:

"I would think that the likelihood of a blow up would, you know, hopefully be low.”

BTCS’s Allen anticipates there will “definitely be companies to go out of business” but plans to minimize the risks to his own firm by keeping the loan-to-value ratio below 40% and sticking to battle-tested platforms like Aave. 

“I don’t think we’re overleveraged, but we’re definitely leveraged,” he said.
Lee argues the bigger threat to listed treasury companies is raising significant amounts of money on the stock market as USD debt but having the firm’s crypto assets crashing in price below the value of the dollar denominated debt.

"So, if you have a mismatch, you know, dollar-crypto liability-asset, I mean, to me, that is the bigger scenario of a blow up then hopefully single-digit bps in liquidity pools.”

Will DeFi tokens pump as a result of ETH treasury companies?

To what extent all this new activity will help pump the prices of DeFi tokens is debatable. 

DeFi lending and borrowing giant Aave already has more than $50 billion in total value locked, which is greater than Standard Chartered’s prediction for the total amount of ETH that treasury companies will eventually amass.

If simply sticking extra billions into Aave pumped prices, Aave’s token wouldn’t be languishing at number 30.

But over and above the raw numbers, treasury companies will also play an important role in introducing Wall Street to the potential of DeFi.

SharpLink’s Chard says the ETH treasury companies will demonstrate in real time “that onchain finance can outperform legacy rails.”

“We’re talking about sustained, long-term liquidity from institutionally driven actors. If the first cycles of decentralized finance were driven by innovation and grassroots experimentation, this next evolution will be shaped by regulatory clarity, security frameworks and the integration of traditional financial infrastructure onchain,” he says.

“We believe treasury participation can anchor the next evolution of onchain growth, bringing legitimacy, volume and new forms of capital coordination.”

And as Keys points out, every quarterly report and earnings call for The Ether Machine will advertise DeFi to TradFi analysts.

“When we have quarterly guidance calls with the public markets, we’re going to be educating: ‘What is DeFi?’ And we’re going to explain ‘What is Aave?’ and ‘What is staking?’ and ‘What is restaking?’” he said. “Half of this is the ability to explain what Ethereum is, institutionally.”

Etherealize’s Raman says the institutional legitimacy bestowed on Ethereum will be priceless. 

“I think it’s legitimacy and by funneling more assets and just showcasing those use cases, it’s shown that these protocols are pretty battle-tested and resilient. They can have real volume and scale,” he says. “That’s going to be really powerful.”

"I’m sure all the DeFi tokens will start doing well as well.”

Goff Capital’s Lee also believes it could provide a nice price bump for DeFi protocols.

“I would think it would be positive for prices. But I think it has to be enduring activity.”

Tyler Durden Thu, 08/07/2025 - 12:45

Zelensky Says 'It's Time To End The War' - But Won't Identify Any Concessions

Given the rapid movement on a Trump-Putin face to face meeting, to be held within the 'coming days' - according to both sides, Volodymyr Zelensky is speaking up, and seeking to ensure Ukraine's position isn't sidelined.

Apparently Washington during Steve Witkoff's visit to Moscow Wednesday pushed the idea of a trilateral meeting involving Trump mediating between Zelensky and Putin, but this has been firmly rejected by Moscow. Instead Russia is taking the reputational and diplomatic 'win' of a bilateral Trump-Putin meeting, which would be a huge first of the war and a first of Trump's second term in office.

Ukrainian Presidential Press Service/AFP

Russia's Putin stipulated Thursday that "conditions" for a potential future meeting with Zelensky had not been met.

"I have nothing against it in general, it is possible, but certain conditions must be created for this. But unfortunately, we are still far from creating such conditions," Putin told reporters.

These conditions without doubt center on territorial concessions, and things like sovereignty on Crimea. Additionally, Russia's position is that Zelensky is in power illegally, long past his mandate after canceling elections.

Putin's remarks on a Zelensky meeting were in response to the Ukrainian leader saying he's open to such a sit-down.

In a Thursday Telegram post, Zelensky said he had spoken with German Chancellor Friedrich Merz to discuss ending the conflict in what he called "a dignified peace” that would "determine the security conditions for Europe for decades."

"Ukraine is not afraid of meetings and expects the same bold approach from the Russian side. It is time to end the war," he said, using words which Trump has also repeatedly proclaimed.

Putin earlier this summer made clear he's willing to meet Zelensky, but only during a "final phase" of negotiations.

This would necessitate that the terms for ending the war would already be outlined and on the table, and tentatively agreed to and drawn up in their details.

Putin has in effect indicated that he would only show up to sign on to Zelensky and Ukraine's surrender. But as it stands, Kiev is still unwilling to make territorical concessions or compromises, and won't even take to more obvious first step of at least offering to relinquish Crimea.

Putin says conditions are far from a meeting with Zelensky. If he gets a summit with Trump without Zelensky, and without a Ukraine ceasefire deal — that’s a Kremlin dream come true. They will be ordering tacos by the bucket.

— Yaroslav Trofimov (@yarotrof) August 7, 2025

The last six months, and especially the devastation wrought by drone and missile fire on both sides' territory, has caused positions to harden - despite the immense and tragic manpower losses. Ukraine is also wholly reliant on continued Western support, despite a general war weariness having long ago set in among the European and American publics.

Tyler Durden Thu, 08/07/2025 - 12:25

New Study Raises Concerns Over Universal Basic Income Plans

Authored by Jonathan Turley,

In my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, I explore how the American republic can survive in the 21st Century given unprecedented economic, technological, and political changes.

The book addresses the increasing calls for a universal basic income (UBI). Various Democratic cities are already implementing UBI systems.

Now, a new study finds (as did some prior studies) that UBI systems have not achieved significant improvements and may actually have some negative consequences for recipients.

A working paper with the National Bureau of Economic Research shows that UBI recipients did indeed spend more money, including a 13 percent increase on child-related expenses. There was also a slight increase in parental supervision of children.

However, there was no improved school performance and a slight increase in reported developmental and stress-related problems with children.

Stanford’s Basic Income Lab is tracking more than 160 UBI projects in the U.S..

So far, the results are at best mixed.

One study in Compton showed that many recipients of the $500 monthly payment quit working part-time jobs.

Likewise, reports indicate that “a $400 monthly payment in Chelsea, Massachusetts, increased food spending and did not measurably reduce work, but it failed to produce results for the research team’s “primary downstream outcomes”—namely self-reported health and child school attendance.”

This follows earlier reports about the OpenResearch Unconditional Income Study (ORUS), an experiment in which lower-income Americans were given $1,000 a month for three years.

The result was a reduction in work and an increase in leisure activities.

There was also an increase in spending on health care but not an increase in health outcomes.

It is still early in studying these outcomes but these programs are not showing the downstream benefits predicted by some. Indeed, they may be impacting work hours negatively for recipients in some areas.

As various cities like New York move toward socialist candidates and programs, these studies offer a cautionary tale as officials push UBI payments.

Tyler Durden Thu, 08/07/2025 - 12:05

Trentadue, Schweizer, Roberts: OKC Bombing And The Federal Government's Role

On the anniversary of the Oklahoma City Bombing earlier this year, we covered swampy John Ashcroft’s involvement in the coverup and shocking evidence regarding government foreknowledge.

Achieved by lone actor with a truck and ammonium nitrate?

Tonight at 5 PM ET, ZeroHedge will host a panel on the OKC cover-up and the new book Blowback by Margaret Roberts. 

Grand juror: “We were never allowed to see the photo evidence from the cameras on the Murrah Building that would have shown the truck being parked and the people who got out of the truck. That’s all on tape, and we were authorized to see all of that, but we weren’t allowed to see… pic.twitter.com/Zp4iZJLoft

— Margaret Roberts (@BlowbackBook) April 12, 2025

The conversation will be moderated by Peter Schweizer, investigative journalist and president of the Government Accountability Institute.

Joining the panel:

• Margaret Roberts, author of Blowback, which investigates evidence suggesting federal foreknowledge and possible complicity in the 1995 Oklahoma City bombing. The book draws on court records, whistleblower testimony, and previously unreleased documents to argue that Timothy McVeigh may not have acted alone—and that elements within federal law enforcement may have played a more complex role than officially acknowledged.
   

• Jesse Trentadue, a lawyer whose brother, Kenneth Trentadue, died in federal custody shortly after the bombing under suspicious circumstances. Jesse has spent decades pursuing FOIA litigation that has uncovered contradictions in the FBI’s narrative and raised questions about the possible existence of additional suspects and withheld surveillance footage from the Murrah Building.

Tucker’s Theory About the Oklahoma City Bombing and How Bill Clinton is Connected pic.twitter.com/RE6WuECGYi

— Tucker Carlson Network (@TCNetwork) August 5, 2025

The discussion will center on the growing body of evidence challenging the official story, including:

• McVeigh’s known associations with Elohim City and federal informants.

• Allegations that ATF agents were warned in advance and absent from the building the morning of the bombing.

• The suppression of surveillance footage from cameras around the Murrah Building.

• The FBI’s handling of evidence and failure to investigate leads pointing to additional conspirators.

The goal tonight is to lay out the documented facts, legal findings, and unanswered questions that continue to fuel public skepticism 30 years after the deadliest act of domestic terrorism in U.S. history.

Watch live tonight at 5 PM ET on the ZH home or X page.
 

Tyler Durden Thu, 08/07/2025 - 11:45

Despite Bostic Fearmongering, Fed's Own Inflation Survey Shows No Signs Of Tariff Tantrum

Well, this is going to become a little awkward...

While some on The Fed believe that tariffs will unleash the worst parts of stagflationary hell on the average American (and therefore they should not cut rates), it appears the 'Americans' themselves are far less concerned.

This morning we heard Atlanta Fed President Raphael Bostic reiterate that there are reasons to be skeptical that the inflationary effects from tariffs will be temporary.

“This question about whether tariffs are a one-time thing, or whether they’re going to be more persistent in their effects and might even cause structural changes, I think is perhaps the most important question that we have today,” Bostic said Thursday during a virtual discussion organized by the Florida Institute of CFOs.

He further argued that the Trump administration’s aim in imposing tariffs is to reshape US supply chains. The structural changes that result, he said, also raise the risk of a persistent impact.

Governor Christopher Waller (who appears to be the front-runner to replace Powell) has argued the Fed can “look through” the inflation impact of tariffs as transitory.

Waller favored a quarter-point cut last week when his colleagues voted to hold rates steady.

According to the latest data from The New York Fed's Sentiment Survey, Americans (on average) agree with Waller with households' inflation expectations barely moving in July, and still below the levels pre-Liberation Day...

Compare NYFRB's survey to that of UMich's Democrats and one could be forgiven for believing there is a partisan nature to this farce...

Even more risible is the fact that all the underlying cohorts that affect everyday Americans are seeing price fears trend lower...

Furthermore, consumers expect smaller growth in their tax payments and are more optimistic about their household financial situations...

So, the next time The Fed tells you that they are worried about inflation expectations (and the knock on impact to consumer spending) - and that is what is holding them back from rate-cuts - perhaps ask them about their own data... and the fact that it shows no fear among Americans.

Tyler Durden Thu, 08/07/2025 - 11:35

Waller Said To Emerges As Trump's Fed Chair Favorite As Polymarket Odds Soar

For the past 6 months we have repeatedly told our readers that, contrary to media reports that it will be one of the "Two Kevins", Trump would pick current governor Chris Waller as the next Fed chair, to wit:

Waller Puts In Bid For Next Fed Chair, Says Powell Should Cut "As Early As July" https://t.co/uiN1Umb49j

— zerohedge (@zerohedge) June 20, 2025

*TRUMP: I LOVE SCOTT, BUT HE WANTS TO STAY AT TREASURY

Waller it is

— zerohedge (@zerohedge) August 5, 2025

... and of course, our reco from June to trade Waller's odds as next Fed chair on Polymarket where he was only added thanks to us, and whose odds were virtually nil back on June 20... when we said to buy. 

Future Fed Chair Waller has been added to Polymarket and his odds are amazing https://t.co/hm9mZ2BSNA pic.twitter.com/pOkqYddhEY

— zerohedge (@zerohedge) June 20, 2025

So fast forward to today when anyone who listened to our reco from late June just made a lot of money, as Waller's odds are exploding this morning to record highs - and pushed him in the top position...

... following a Bloomberg report that - as we have been saying all along - Fed governor Christopher Waller "is emerging as a top candidate to serve as the central bank’s chair among President Donald Trump’s advisers as they look for a replacement for Jerome Powell."

According to the report, Trump advisers "are impressed with Waller’s willingness to move on policy based on forecasting, rather than current data, and his deep knowledge of the Fed system as a whole."

Of course, we told our readers precisely this months ago.

Shadow Fed Chair Waller? https://t.co/8NkawsDjp5

— zerohedge (@zerohedge) June 26, 2025

Waller, a career economist, reportedly attracted the attention of Trump’s economic advisers over the past year as the president talked about the economy while on the campaign trail.

Needless to say, Waller's odds jumped last week when he was one of two Fed board members to vote against the central bank’s decision to hold its benchmark rate steady for a fifth consecutive time. He and his colleague Michelle Bowman, both Trump nominees, preferred a quarter-point reduction, citing growing signs of labor-market weakness. 

The report goes on to note that Waller has met with the president’s team about the role, but has yet to meet with Trump himself. Last month, Waller told Bloomberg Television that he hasn’t yet directly heard from the president about the Fed chair role.  

“If the president contacted me and said, ‘I want you to serve,’ I would do it,” he said in July. “But he has not contacted me.”

He will. 

What about the usual suspects? Well, they are still in the running...

Kevin Warsh, a former Fed official, and Kevin Hassett, currently Trump’s National Economic Council director, also remain in contention for the job, the people said, which will open up when Powell’s tenure as chair expires in May 2026. 

Hassett has met with Trump to discuss the chair job and has also impressed both the president and the team, Bloomberg News has reported. Warsh interviewed for the job in 2017 but was ultimately passed over for Powell. In November, he was also considered to serve as Treasury secretary.

“President Trump will continue to nominate the most competent and experienced individuals,” White House Spokesman Kush Desai said in a statement. “Unless it comes from President Trump himself, however, any discussion about personnel decisions should be regarded as pure speculation.”

News of Waller's fast-tracking through the ranks were viewed as clearly dovish by the market, and while 2025 rate cut odds remained flat, expectations for more 2026 rate cuts are now rising.

Tyler Durden Thu, 08/07/2025 - 11:00

Eli Lilly Shares Crash Most Since Dotcom On Disappointing Obesity Pill Data

Update (1050 ET):

Eli Lilly shares plunged the most since the Dotcom bust after the drugmaker's oral obesity pill, orforglipron, met its primary endpoints but fell short of Wall Street's expectations. Not even a strong earnings report (detailed in an earlier update) was enough to lift the stock in the early New York cash trading session. 

As of 10:15 ET, Lilly shares were down as much as 14%, marking the worst decline since a 29% crash on August 9, 2000. To record the sharpest decline in 25 years, shares needed to close over 12.35%, a level last seen on October 9, 2008. 

Here's Goldman analyst Asad Haider's first take on Lilly's second-quarter results and the trial data for orforglipron: 

Overshadowing a strong 2Q earnings results, LLY announced results of the ATTAIN-1 trial for oral obesity pill orforglipron which met the primary endpoints but underwhelmed by coming at the lower-end of our and Street expectations, delivering 12.4% weight-loss at 72 weeks (vs. our 12-15% base case). Offsetting this, to some extent, the company delivered a strong set of 2Q25 results, and raised 2025 revenue guidance to $60-$62bn (vs. prior $58-$61bn).

More commentary from Wall Street desks (courtesy of Bloomberg):

Cantor, Carter Gould (overweight)

• "The stand-out 2Q print – particularly Mounjaro OUS – and a $1.5 billion raise at the mid-point of the top-line will be overshadowed this morning by disappointing weight-loss seen in the ATTAIN-1 study of its oral orforglipron"

• Says study data "looks a tier below that achieved with semaglutide, and comes in below the 13-15% we and the Street had expected"

• Adds that "how much it will grow the market / franchise is now in doubt"

JPMorgan, Chris Schott (overweight)

• Notes weight loss for the pill "was slightly below expectations (11% vs 13-15% expectation) with tolerability in line"

• "While we expect some debate on the efficacy from today's results, it is not clear to us that ~2 pct point lower weight loss meaningfully changes the use case for orforglipron"

• Sees stock's weakness as a buying opportunity

BMO Capital Markets, Evan David Seigerman (outperform)

• Says study results likely underperform investor expectations but still shows a profile worthy of uptake 

• "Overall, this hits our bearish scenario, but we still see a path forward with orforglipron's profile still usable for many patients"

Citi, Geoff Meacham (buy)

• Says the 2Q quarter "had a solid print, though shares are weighed by conflicted opinions over orforglipron's commercial opportunity given ATTAIN data"

• "We continue to see immense growth in the space and are buyers on weakness"

*   *   * 

 

Eli Lilly shares plunged in premarket trading after disappointing results from its new weight-loss drug (a pill, rather than an injection) overshadowed strong second-quarter results and raised full-year guidance. 

Starting with the bad news: The topline data from the 72-week trial of orforglipron was underwhelming. Patients on the highest dose lost 11.2% of their body weight, compared to 2.1% for placebo. For comparison, Novo Nordisk's Wegovy demonstrated an average of 15% weight loss over 68 weeks in late-stage trials, while Lilly's Zepbound was around 20%. 

Orforglipron's results fall short of the current standard set by Wegovy and others, overshadowing strong second-quarter results and an increased full-year guidance.

Here's a summary of Lilly's second-quarter results:

• Adjusted EPS: Came in at $6.31, a sharp increase from $3.92 a year ago. This shows strong profit growth.

• Revenue: Tops $15.56B, up 38% year-over-year, and beat the $14.7B Bloomberg Consensus estimate.

Product Highlights:

• Zepbound (obesity drug): Generated $3.38B, up 46% quarter-over-quarter, and beat the estimate of $3.07B.

• Verzenio (cancer drug): Revenue was $1.49B, up 12% y/y, slightly misses the $1.52B estimate.

• Mounjaro (diabetes/obesity): Brought in a massive $5.20B. It remains a blockbuster.

Other Notables:

• R&D Expenses: Spending rose to $3.34B, up 23% y/y, slightly above the estimate of $3.2B, indicating continued high investment trends in pipeline development.

In markets, Lilly shares in New York plunged as much as 12% in premarket trading. If the losses hold through the cash session, sustaining at least a 12.35% decline (last seen on Oct. 9, 2008), then it would mark the largest single-day drop since the 29% crash on August 9, 2000. 

Wall Street also overlooked Lilly lifting both sales and profit forecasts for the year: 

• Revenue: Lilly now expects to bring in $60B to $62B this year, up from its previous forecast of $58B to $61B. Bloomberg Consensus estimate: $60.07, so the new guidance is slightly more optimistic than what Wall Street was expecting.

• Adjusted EPS: Raised to $21.75 to $23.00, up from $20.78 to $22.28, signaling higher expected profitability.

Lilly's decline sparked a bid in Novo shares.

Tyler Durden Thu, 08/07/2025 - 10:50

Trump To Allow Crypto In 401k Retirement Plans For US Workers; White House

US President Donald Trump will sign an executive order that could open the door for cryptocurrencies to be included in 401(k) retirement plans, potentially reshaping how Americans invest their savings.

The White House Press Office confirmed to Cointelegraph on Thursday that the order directs the US Labor Department to reevaluate restrictions around alternative assets in defined-contribution plans, including digital assets, private equity and real estate. 

A senior White House official said the order instructs the Secretary of Labor to clarify the department’s stance on alternative assets and provide guidance on fiduciary processes for offering these types of investments in retirement portfolios.

Trump will allow crypto exposure for $12.5 trillion 401(k) market

Once implemented, Cointelegraph's Ezra Reguerra reports that the order could grant Americans access to digital assets through their 401(k) plans — part of a $12.5 trillion retirement market and a sought-after opportunity for crypto firms aiming to reach more retail investors.

The move would be a significant step forward for the crypto industry, which has long sought broader retail exposure and financial system legitimacy.

Despite institutional investors increasing crypto allocations, everyday savers have been restricted due to fiduciary risk, regulatory uncertainty and volatility concerns. 

The White House official said that Trump’s directive would call for inter-agency coordination with the US Treasury and the Securities and Exchange Commission (SEC) to explore rule changes that may support the adoption of alternative investments like crypto in retirement products. 

Bitcoin is rallying this morning on the report...

And yesterday saw a reversal of the recent outflows from ETFs...

Trump has final say on the executive order

On July 18, the Financial Times cited anonymous sources saying that the president is eyeing alternative investments like crypto assets for American 401(k) retirement plans.

In a previous statement to Cointelegraph, White House spokesman Kush Desai said that nothing should be deemed official unless it comes from Trump himself.

Desai said Trump is committed to restoring prosperity to everyday Americans and safeguarding their economic future. “No decisions should be deemed official, however, unless they come from President Trump himself,” Desai said. 

During a Bloomberg interview, US SEC Chair Paul Atkins said education on the risks associated with crypto as an investment is crucial.

Atkins said disclosure is key and that people should be made aware of what they are getting into. He added that he’s looking forward to what the president will do. 

Earlier this year, the Labor Department rescinded an earlier guidance for crypto in 401(k) plans. On May 28, the Labor Department revoked a 2022 guidance that urged fiduciaries to be “extremely cautious” when eyeing crypto for 401(k) retirement plans. 

Tyler Durden Thu, 08/07/2025 - 09:05

DOGE Impact Accelerates As 'Deep TriState' Jobless Claims Hit 4 Year High

The number of Americans filing for jobless benefits for the first time rose very modestly last week (from 219k to 226k) but remains basically unchanged for the last four years...

Continuing Claims jumped last week to its highest since Nov 2021...

But, the 'Deep TriState' region sees the trend of continuing claims keep rising (at its highest since Dec 2021)...

Source: Bloomberg

Of course, comparing initial jobless claims to the BLS' payrolls print is 'interesting'...

Source: Bloomberg

But if we zoom in, the relationship is tighter, BUT claims data suggests we will see significant UPWARD revisions for payrolls soon... that will be awkward for some!

Source: Bloomberg

The labor market data remains a 'choose your own adventure' playground for data-miners.

Tyler Durden Thu, 08/07/2025 - 08:40

US Futures, Global Markets Jump On Tariff Exemptions, Renewed Hopes For Ukraine Ceasefire

US equity futures are - what else - higher, and rapidly approaching a new all time high, boosted by exemptions in Trump’s plans for 100% tariffs on chips that are seen as bullish ways for most big tech firms to avoid levies. The mood was also cheered by a report that Trump and Putin are expected to meet for summit talks in the next few days while
hopes for a rate cut rise some more as additional  Fed officials have dovish pivots. As of 8:15am ET, S&P futures are up 0.6% and Nasdaq 100 futures gain 0.7% with Mag7 higher led by AAPL while Semis are the global standout. Eli Lilly & shares plunged after the drugmaker reported underwhelming study results for its weight-loss pill. Shares of its main European rival, Novo Nordisk A/S, soared. Cyclicals are poised to rip, although as JPM notes "today appears to be setting up for an ‘Everything Rally’." Bond yields are down 1bp across the curve but 10Y is +1bp; USD is flat but has erased ~25bp of overnight losses. Today’s macro data focus is on Jobless Claims, 1Y Inflation Expectations, Nonfarm Productivity, Labor Costs, Consumer Credit, and Inventories. While none, ex-Claims, are market moving it will help sharpen the macro picture on the labor market and consumer. At 12pm, Trump will sign an executive order that aims to allow private equity, real estate, cryptocurrency and other alternative assets in 401(k)s. 

In premarket trading, Mag 7 stocks are all higher (Apple +2%, Nvidia +1.4%, Meta +0.9%, Alphabet +0.6%, Microsoft +0.6%, Tesla +0.5%, Amazon +0.1%).. 

• Airbnb (ABNB) is down 6% after warning that growth rates may not keep up later this year due to tough year-ago comparisons.
• Aris Water Solutions (ARIS), which helps manage water produced from oil drilling, climbs 20% after the company agreed to be bought by Western Midstream Partners in a ~$1.5b equity-and-cash transaction.
• Corning (GLW) gains 5% after Apple said it’s planning to onshore 100% of iPhone and Watch cover glass production to the US as part of an expanded $2.5 billion partnership with the high-tech glassmaker.
• CRH (CRH) jumps 8% after the building materials company narrowed its full-year adjusted Ebitda guidance to the high end of its prior range.
• Crocs (CROX) falls 13% after forecasting that 3Q revenue will be down about 11% to 9%.
• DoorDash (DASH) gains 8.9% after the food-delivery company reported second-quarter results that beat expectations and gave a positive forecast for Marketplace gross order value.
• Duolingo (DUOL) soars 23% after the language-learning software company reported second-quarter results that beat expectations on key metrics and raised its full-year forecast.
• Dutch Bros (BROS) is up 18% after the restaurant chain lifted its total revenue forecast for the full year.
• Eli Lilly & Co (LLY) plunges 12% after the company gave disappointing data from a late-stage trial of its new weight-loss pill.
• Fortinet (FTNT) tumbles 21% after the software company gave an update to its firewall refresh cycle. At least three analysts downgraded their rating on the stock saying the product refresh cycle is now looking like a “much smaller catalyst than expected.”
• Intuitive Machines (LUNR) gains 2% after the space services company said it would buy privately held aerospace company KinetX, expanding its deep-space navigation and flight dynamics capability.
• Peloton Interactive Inc. (PTON) gains 12% as the company preached confidence in a turnaround plan under new management.
• Sarepta (SRPT) is up 7% after the drugmaker reported second quarter revenue that beat the average analyst estimate.
• SharkNinja (SN) rises 5% after the home-appliance maker boosted its adjusted earnings per share forecast for the full year.
• Sunrun (RUN) jumps 18% after the solar energy company reported second-quarter revenue that beat the average analyst estimate.
• Upwork (UPWK) shares are up 12% after the online recruitment company reported second-quarter results that beat expectations and raised its full-year forecast.
• Vistra Corp. (VST) falls 7% after the residential electricity provider operating posted revenue for the second quarter that missed the average analyst estimate.

Market sentiment got a boost earlier after Trump announced that companies producing goods in the US, such as Apple, would be eligible for exemptions from his proposed 100% levy on chip imports. Increasing bets on a Federal Reserve interest-rate cut are also fueling optimism in stocks as sweeping new tariffs to reshape global trade officially took hold Thursday. Ironically the only major US semiconductor stock, Intel, plunged after Trump sa id on Truth Social CEO its has to resign.

“Risk sentiment is positive with a focus on peace deal hopes for Ukraine,” said Bob Savage, head of markets macro strategy at Bank of New York Mellon. “Also supporting the dollar down/stocks up narrative is ongoing September rate cut expectations for the FOMC. However, investors still face a pushback from the uncertainty over tariffs ahead.” 

This morning, the BoE delivered a hawkish 25bps cut, with the vote split 5:4 for 25bps vs hold, and the statement noting that timing/extent of further cuts will be based on continued improvements in underlying inflation. The vote was the first ever revote in 28 years after the 4:4:1 vote in the first round failed to reach a majority.

Europe’s Stoxx 600 benchmark advanced more than 1%, with the the travel and leisure sector outperforming. A basket of equities exposed to Ukraine rose, while defense shares dropped, after the Kremlin said that presidents Vladimir Putin and Donald Trump will meet for summit talks within the next few days. Upbeat earnings from some of the region’s biggest companies helped boost sentiment, even after German industrial production suffered its biggest drop in almost a year in another setback for Europe’s largest economy.  Here are the biggest movers Thursday:

• InterContinental Hotels jumps as much as 9.2%, to the highest level since March, after the company reported that revenue per available room for the first half of the year increased 1.8%. Pretax profit topped the analyst consensus
• Maersk gains as much as 6%, the most since May, after the Danish shipping and logistics giant boosted its full-year guidance and beat second-quarter estimates. Analysts say the guidance raise, while somewhat expected, is welcome
• Allianz gains as much as 4.3%, the most since April, after the German insurance group posted a strong second-quarter showing, with operating profit coming in ahead of expectations
• KBC jumps as much as 6.1%, trading at their highest level since 2007, after the Belgian bank beat expectations in the second quarter and improved its guidance for the full year, which analysts say will lead to consensus upgrades
• Harbour Energy shares rise as much as 21%, the steepest gain since December 2023, after the UK oil and gas company boosted guidance for production and cash flow, while announcing announcing a $100m buyback
• LINK Mobility gains as much as 9.7% after DNB Carnegie “significantly” raised its estimates for the Norwegian communications technology firm and reiterated its buy rating, while nearly doubling its price target
• Serco shares jump as much as 8.8%, to the highest since November 2014, after the outsourcing company reported earnings ahead of expectations and a strong order intake, accompanied by a new £50 million share buyback
• European defense stocks slump, while stocks with exposure to Ukraine and Russia gain, as traders take a cue from President Donald Trump’s diplomatic push to end the Ukraine war and US efforts to punish buyers of Russian crude. Rheinmetall shares fall as much as 7.2%, the most in two months, after analysts described the German defense firm’s results as weak. Jefferies points to soft orders and sales below expectations
• Carl Zeiss Meditec shares plunge as much as 14% to the lowest since August 2017 after analysts said the German health-care supplier’s 3Q Ebita miss was weighed down by its microsurgery business
• Hikma shares drop as much as 10% in London, the most intraday since February, after the pharmaceutical company missed core Ebidta estimates and lowered the margin guidance for its Injectables division for the full year
• Freenet shares fall as much as 9.5%, the most since May, after the German-listed mobile communications service provider cut its average revenue per user. Analysts at Berenberg note a marginally disappointing set of results
• Deutsche Telekom shares slide as much as 6.1% after the telecom operator reported sales and Ebitda that missed estimates in its home market Germany, with the company flagging intense rivalry in the local broadband market
• Siemens shares fall as much as 1.9% after the German industrial company posted what analysts called mixed results, highlighting a weaker performance in the Digital Industries division. Shares are still up almost 16% YTD
• Scout24 shares drop as much as 6.1% after the classifieds company reported detailed 2Q results. The shares had gained earlier in the week when the company raised its full-year guidance in a pre-release

Earlier in the session,  Asian stocks rose, led by technology stocks as some of the region’s largest chipmakers were expected to win exemptions from Donald Trump’s threatened 100% chip tariff. The MSCI Asia Pacific Index advanced 1%, rising for the fourth straight day. Taiwan’s benchmark rose more than 2%, with notable gains in most other markets around the region. Thailand’s key index was on the brink of entering a bull market.  Chipmakers TSMC and Samsung were among the biggest boosts to the MSCI index as investors saw their US manufacturing operations as freeing them from Trump’s newest levies. A gauge of regional tech stocks climbed by the most since June 24. Meanwhile, Indian equities fell after the US moved to double the tariff on imports from the South Asian nation to 50%. The higher rate is seen further hurting sentiment on a market already underperforming Asian peers on disappointing corporate earnings.

In FX, the Bloomberg Dollar Spot Index falls 0.1%. The Antipodean currencies outperform their G-10 peers, rising 0.4% each against the greenback. EUR/USD briefly extended gains on news that Putin and Trump would meet within days, hitting a session high of almost $1.17, before falling back to $1.1648. GBPUSD rose, putting it on track for a fifth day of gains against the dollar, its longest winning streak since April. 

In rates, treasuries are steady, with yields broadly within one basis point of Wednesday’s close, despite slide in gilts which sharply underperform following a 4-4-1 Bank of England vote to cut rates by 25bp. US yields steady, marginally cheaper on the day with 10-year near 4.245%, outperforming gilts by around 4bp in the sector. UK 2-year yields higher by around 6bp on the day up to around 3.88% following the announcement. Bunds outperform, pushing German 10-year yields down 2 bps to 2.63%. In the US, focus turns to early data and then a $25 billion 30-year new-issue bond sale at 1pm New York time, which follows a 1.1bp tail on Wednesday’s 10-year note auction.

In commodities, oil prices erase an earlier drop following the Putin-Trump meeting news, with Brent now up 0.5% near $67.22 a barrel. Gold rises $8 to around $3,377/oz. 

Looking ahead today, Trump will sign an executive order that aims to allow private equity, real estate, cryptocurrency and other alternative assets in 401(k)s. Data-wise we have 2Q preliminary nonfarm productivity and unit labor costs and weekly jobless claims (8:30am), June final wholesale inventories (10am), July NY Fed 1-year inflation expectations (11am) and June consumer credit (3pm). Fed speakers scheduled include Bostic in a virtual fireside chat on monetary policy (10am)

Market Snapshot

• S&P 500 mini +0.6%
• Nasdaq 100 mini +0.7%
• Russell 2000 mini +0.8%
• Stoxx Europe 600 +0.8%
• DAX +1.7%
• CAC 40 +1.2%
• 10-year Treasury yield little changed at 4.23%
• VIX -0.6 points at 16.13
• Bloomberg Dollar Index -0.1% at 1202.97
• euro +0.2% at $1.1678
• WTI crude +0.6% at $64.73/barrel

Top Overnight News

• Trump said, regarding the Fed pick, that the interview process has started and it is probably down to three candidates, while he added that the two Kevins are very good, and a temporary governor is to be named in the next few days.
• U.S. trading partners are lobbying the White House for exemptions to sweeping new tariffs that went into force on Thursday, as countries seek ways to muffle the impact on their economies of President Trump’s push to reorder global trade. The diplomatic effort shows months of trade talks are far from over despite the run of agreements trumpeted by the White House in the past month. WSJ
• President Trump has claimed that his sweeping tariff regime will reshore American companies and revive manufacturing in the U.S. So far, that hasn’t happened. Economic activity tied to manufacturing has shrunk for most of Trump’s second term. From March to July, U.S. manufacturing activity contracted. The Manufacturing PMI last registered at 48, below the 50 score that differentiates growth and decline. WSJ
• The Kremlin said Thursday that a meeting between presidents Donald Trump and Vladimir Putin has been agreed in principle and will happen in the “coming days,” teeing up their first in-person encounter of Trump's second term. NBC
• Trump said he may punish China with additional tariffs over its purchases of Russian oil. Trade adviser Peter Navarro played down the likelihood, saying higher duties “may hurt the US.” BBG
• Trump will sign an executive order today that aims to allow private equity, real estate, cryptocurrency and other alternative assets in 401(k)s. BBG
• China’s exports grew at a faster clip in July, showing that U.S. tariffs so far haven’t curtailed China’s export machine, although trade with America has fallen. Trade numbers for Jul come in ahead of expectations, including exports (+7.2% vs. the Street +5.6%) and imports (+4.1% vs. the Street -1%). WSJ
• Japan cut its growth forecast for the current fiscal year as US tariffs and persistent inflation weigh on the economy. BBG
• Caught between rising costs from tariffs and belt-tightening consumers, big retailers are clashing with the producers of consumer brands such as Nivea-maker Beiersdorf and brewer Heineken as they look to avoid sticker shock that could hurt sales. The disputes - which have dented some brands' sales - underscore the challenge for consumer goods makers and sellers, with inflation and tariffs pushing up input costs and price spikes in commodities such as coffee. RTRS
• Fed's Daly (2027 voter) said there's cautiousness which is tempering growth but not stalling out, while she commented that they will likely need to adjust policy in the coming months and can't wait for perfect clarity to act. Daly also commented that tariffs are unlikely to boost inflation persistently in a way that monetary policy would need to offset. She also noted that the labour market has softened and additional slowing would be unwelcome. Furthermore, Daly said they need to recalibrate monetary policy to match risks to the Fed’s goals.

Trade/Tariffs

• US President Trump said they are going to be putting a very large tariff on chips and semiconductors, which will be at approximately 100%, but added "if you're building in the US, there will be no charge."
• US President Trump posted late on Wednesday that "RECIPROCAL TARIFFS TAKE EFFECT AT MIDNIGHT TONIGHT! BILLIONS OF DOLLARS, LARGELY FROM COUNTRIES THAT HAVE TAKEN ADVANTAGE OF THE UNITED STATES FOR MANY YEARS, LAUGHING ALL THE WAY, WILL START FLOWING INTO THE USA."
• US official said the 15% tariff will stack on top of pre-existing tariff rates applied to imports from Japan, unlike in the case of the European Union, according to Kyodo.
• South Korea claimed Samsung Electronics (005930 KS) and SK Hynix (000660 KS) will not be subject to 100% US tariffs, while Taiwan said TSMC (2330 TT) is exempt from US President Trump's 100% chip tariff.
• Apple (AAPL) suppliers are reportedly betting on a tariff carve-out for India-made iPhones, according to Nikkei sources.
• Maersk (MAERSKB DC): "The effective container-weighted import tariff on US imports is estimated at 24% as per the Presidential Executive Order dated 31 July, up from 5% in 2024"

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed as reciprocal tariffs took effect overnight and following the latest tariff threat from US President Trump who plans to impose 'approximately 100%' tariffs on chips and semiconductors unless manufacturers build in the US. ASX 200 pulled back from record highs despite the surprise growth of imports from Australia's largest trading partner. Nikkei 225 pared initial losses and briefly reclaimed 41,000 amid a busy slate of earnings and as markets shrugged off comments from a US official that the US will not exempt Japan from stacking 15% tariffs on top of existing levies. Hang Seng and Shanghai Comp ultimately kept afloat after the latest Chinese trade data which showed stronger-than-expected exports and surprise growth in the nation's imports.

Top Asian News

• BoK Governor Rhee said the US trade deal takes a huge burden off monetary policy at the August meeting.
• SoftBank Group (9984 JT) Q1 2025 (JPY): Net Sales 1.82tln (exp. 1.82tln), Net Income 421.82bln (exp. 158.23bln), sees FY dividend at 44.0 (exp. 44.00)
• Baidu (9888 HK) to launch new advanced reasoning model by end of month, according to WSJ.
• Magnitude 6.2 earthquake hits sea off Taiwan's north-eastern coast, according to central weather administration.
• Japan Government Official says, a private-sector member of Government Economic Council, says, are worried that the BoJ being behind the curve vs inflation, which is already affecting the livelihood of people.
• S&P affirms China's Sovereign rating at A+/A-; Outlook Stable. Overview: Strong fiscal stimulus will help keep China's economic growth resilient amid continued headwinds from the weak property sector and new pressures on external trade. "We affirmed our 'A+' long-term and 'A-1' short-term foreign and local currency sovereign credit ratings on China." The stable outlook on the long-term rating reflects our view that the Chinese economy will return to self-sustaining growth of above 4% over the next few years, paving the way for smaller annual increases in net general government debt. Downside scenario: "We could lower the ratings if we believe the government will continue with larger fiscal stimulus measures than we currently expect over the next three to five years. This would likely stem from more persistent downward pressure on economic growth than we currently expect. The resulting fiscal impact would cause the net change in general government debt to stay close to, or above, 6% of GDP annually." Upside scenario: "We may raise our ratings on China if fiscal consolidation is faster than what we anticipate, resulting in a persistent decline in net general government debt to below 30% of GDP, or government interest payments falling below 5% of revenue consistently, or both."

European bourses (STOXX 600 +0.9%) opened mostly higher, albeit with very modest gains. Since then, indices gradually edged higher, then followed by a more pronounced bid following commentary from a Russian Kremlin aide, who said an agreement had been made for a Presidential meeting between Trump and Putin, in the next few days.
European sectors opened mixed but now hold a slight positive bias. Insurance takes the top spot, lifted by post-earnings strength in the likes of Allianz (+2%) and Zurich Insurance (+1%). Elsewhere, Travel & Leisure has been buoyed by upside in IHG, after it reported strong H1 metrics; European gambling names are also broadly higher today, in tandem with upside in US-peer DraftKings which reported a record rev. and EBITDA. The Tech sector finishes off the top 3, benefiting from a) the risk tone and, b) US President Trump announcing that the US will slap 100% tariffs on imported chips, but will exempt those firms who manufacture in the US/have committed to do so. On this, ASML (+2%) has gained, given the proposition incentivises relocating to the US, which may boost demand for manufacturing units.

Top European News

• Germany's VDA says the EU-US trade deal has brought no clarity or improvement for the German auto industry.

FX

• DXY is down for a second day in a row and extending its move below its 200DMA at 98.21. The USD is continuing to be hampered as markets contemplate Trump's next move with regards to personnel at the Fed. Note, the USD may also be losing ground as geopolitical tensions recede a touch with the Russia and Ukraine conflict potentially nearing a conclusion. Today's data docket includes weekly claims data, the Atlanta Fed GDPNow Tracked and the NY Fed SCE release. Next downside target for DXY comes via the 29th July low at 97.49.
• EUR is a touch firmer vs. the broadly weaker USD in a week that has been lacking in incremental drivers for the Eurozone. Some positivity for the bloc may be gleaned from developments on the geopolitical front following Wednesday's discussion between the US and Russia, which was said to have made progress and with President Trump intending to meet Russian President Putin as soon as next week. EUR/USD has extended its rise on a 1.16 handle but is yet to crack the 1.17 mark with the pair topping out at 1.1698.
• In what has been an indecisive start to the week for USD/JPY, the Yen is eking out mild gains vs. the greenback. This comes in spite of comments from a US official that the now-effective 15% tariff will stack on top of pre-existing tariff rates applied to imports from Japan, unlike in the case of the European Union. USD/JPY delved as low as 146.70 overnight but has since made its way back onto a 147 handle.
• GBP is relatively steady vs. the USD as markets brace for the upcoming BoE rate decision, minutes and MPR. Analysts are virtually unanimous in expecting the BoE to lower the Base Rate by 25bps to 4.0% with markets assigning a 93% probability of such an outcome. The move would follow the MPC’s preference for cutting at a quarterly pace and alongside MPR meetings. With regards to the decision to lower rates, consensus looks for a 7-2 outcome. With the likes of Mann and potentially one of Pill or Greene to vote for an unchanged rate. However, when looking at the magnitude of the vote split, this could lead to a three-way split in the event that MPC dove Dhingra and one of Ramsden or Taylor backs a larger 50bps reduction.
• Antipodeans are both are building on the gains seen on Wednesday vs. the USD with upside today following on from encouraging Chinese trade data which showed a surprise growth in imports and a larger-than-expected increase in exports.
• PBoC set USD/CNY mid-point at 7.1345 vs exp. 7.1709 (Prev. 7.1409)

Fixed Income

• USTs are flat and ultimately awaiting today's risk events which include; jobless claims, unit labour costs, Atlanta Fed GDP Now and then a 30yr auction. As a reminder, the prior day saw a soft 10yr outing after a poor 3yr earlier. No further insight into the potential fat finger in USTs seen on Wednesday in the run-up to supply, where 30 minute volume spiked to over 300k from sub-100k throughout the session to that point. As a reminder, the move also occurred alongside a move in the implied odds (via Polymarket) for the next Fed Chair, with NEC Director Hassett’s jumping by just under bp and overtaking former Fed Governor Warsh as the front-runner. his morning, action (and volumes) has been much more minimal with USTs in a very narrow 112-03+ to 112-07 band.
• Bunds are a little lower. No reaction to the morning’s Industrial and Trade data from Germany for June. Though, Bunds did pick up a little bit a handful of minutes after the data came through. The soft set of Industrial data, to the lowest since May 2020, potentially influenced; a series that may have factored into the pressure seen in the DAX 40 future at the time. Since, newsflow has slowed a little but more recently Bunds have edged a little lower back towards lows.
• Gilts were flat but more recently some pressure has been seen. The BoE is expected to cut rates and likely via a 7-2 split to ease. However, the full vote breakdown could see a three-way split. Mann and potentially one other (possibly Pill or Greene) likely to vote for unchanged, while Dhingra and possibly the likes of Taylor and/or Ramsden voting for a 50bps cut. Leaving a majority of Bailey, Lombardelli, Breeden and then possibly one or more of Pill, Green, Taylor or Ramsden; depending on the above. Benchmark opened lower by 14 ticks before extending another six to a 92.45 trough. Since, it has reverted back towards Wednesday’s 92.65 close into the BoE.
• Spain sells EUR 5bln vs exp. EUR 4.0-5.0bln 2.40% 2028, 3.20% 2035 & 3.45% 2043 Bono and EUR 0.49bln vs exp. EUR 0.25-0.75bln 1.0% 2030 I/L Bono.
• France sells EUR 10.499bln vs exp. EUR 8.5-10.5bln 1.25% 2034, 1.25% 2036, 0.50% 2040, and 4.00% 2055 OAT.

Commodities

• Crude futures are firmer after choppy trade earlier. This follows the decline on Wednesday amid Russia/Ukraine optimism following the discussion between the US and Russia, which is said to have made progress and with President Trump intending to meet Russian President Putin as soon as next week. Russia's Kremlin this morning confirmed that US President Trump and his Russian counterpart, Putin, will meet, and preparations for a summit in the next few days are underway. WTI currently resides in a 64.12-65.08/bbl range while Brent sits in a USD 66.70-67.58/bbl range.
• Precious metals are rebounding following the prior day's losses, with spot gold marginally gaining after recent dollar weakness and as reciprocal tariffs took effect. Some pressure seen on the aforementioned Trump-Putin meeting announcement, which saw the yellow-metal swing from highs back towards overnight ranges. Currently in a USD 3,365.30-3,397.58/oz range.
• Copper futures are rangebound with a slightly firmer tilt amid the softer dollar, risk appetite in stocks, and the encouraging Chinese trade data overnight, which showed stronger-than-expected exports and surprise growth in the nation's imports. 3M LME copper prices reside in a USD 9,672.90-9,740.00/t range.
• Kuwait's oil minister expects crude prices to remain above USD 72/bbl; says the market is healthy with moderate demand growth.

Geopolitics: Ukraine

• Kremlin Aide Ushakov says an agreement has been reached to hold a meeting with US President Trump and Russian President Putin in the next few days. Meeting venue has been agreed and will be announced later. US Envoy Witkoff touched on an idea of a three-way meeting between Trump-Zelensky-Putin; Moscow left it without comment.
• US President Trump said they had very good talks with Russian President Putin and there's a good chance that there will be a meeting very soon, while he also commented that more secondary sanctions are coming regarding Russia.
• US Secretary of State Rubio said it was a good day regarding efforts to end the Ukraine war but there is still a lot of work ahead and many impediments to overcome.
• Ukrainian President Zelensky said he discussed Witkoff's visit to Moscow in a call with Trump and said that Russia should end this war, while he also commented that pressure on Russia is working and it's crucial they do not deceive them, as well as commented that it looks like Russia is more inclined to a ceasefire.
• Ukrainian President Zelensky calls on Russian President Putin to hold meeting to 'end war', via Al Arabiya.

Geopolitics: Other

• South Korean military said South Korea and the US are to conduct major joint military exercises beginning on August 18th although an official stated that some parts of the joint drills are postponed to September, while the military drills will test an upgraded response to a heightened North Korea nuclear threat.

US Event Calendar

• :30 am: 2Q P Nonfarm Productivity, est. 2%, prior -1.5%
• 8:30 am: 2Q P Unit Labor Costs, est. 1.5%, prior 6.6%
• 8:30 am: Aug 2 Initial Jobless Claims, est. 222k, prior 218k
• 8:30 am: Jul 26 Continuing Claims, est. 1950k, prior 1946k
• 10:00 am: Jun F Wholesale Inventories MoM, est. 0.2%, prior 0.2%
• 3:00 pm: Jun Consumer Credit, est. 7.5b, prior 5.1b

Central Bank Speakers

• 10:00 am: Fed’s Bostic Speaks on Monetary Policy

DB's Jim Reid concludes the overnight wrap

Tech stocks have continued to drive a buoyant mood in markets, with the Mag-7 (+1.93%) reaching a new all-time high. Momentum was also supported by strong earnings and rising hopes of imminent rate cuts as Fed speakers turned more dovish in response to last Friday’s weak payroll print. The upbeat tone has continued overnight despite Trump outlining a plan for 100% tariffs on semiconductors, with the impact of these mitigated by carveouts.

US equity markets had a strong day yesterday with S&P 500 (+0.73%) and Nasdaq (+1.21%) closing less than 1% from record highs, while the Mag-7 (+1.93%) was lifted by a +5.09% spike in Apple’s shares. That came as the company announced additional $100bn of investments into the US, particularly in new manufacturing. This comes on top of an earlier pledge of $500bn investment over four years and as the company has sought to reduce tariff risks. During a White House event with Apple CEO Tim Cook, Trump then said that “we’ll be putting a tariff of approximately 100% on chips and semiconductors”. However, he added that companies that are building, or “have committed to build”, capacity to move production to the US would face no charge. Imports of electronics have so far been exempt from tariffs.

While it’s not clear exactly how it will work, the new floated exemption has added a sense of relief for markets overnight, with Taiwan’s chip giant TSMC up +4.44% and Korea’s Samsung +1.74%. In terms of the major indices, the Nikkei (+0.68%) and the KOSPI (+0.72%) are visibly higher, while the Hang Seng (+0.52%) and the Shanghai Composite (+0.12%) are seeing more modest gains. Futures on both the S&P 500 (+0.27%) and the NASDAQ (+0.31%) are also higher overnight.

The other major tariff news yesterday was a new US executive order outlining an additional 25% tariff on India in response to its purchases of Russian oil, which would bring the total levies on Indian exports to 50%. India’s government called the latest tariffs “unfair, unjustified and unreasonable”. The executive order also leaves the door open for tariffs on other countries “directly or indirectly importing Russian Federation oil”. Trump said there could be “a lot more” secondary sanctions related to Russian oil, including potentially on China, but that this would depend on how talks proceed. Brent crude fell for a fifth consecutive session (-1.11% to $66.89/bbl) yesterday, the longest such run since May, though it is up +0.8% this morning. In addition to India being the only target so far, the sanguine oil reaction came as the additional 25% tariffs will kick in only after 21 days, leaving ample time for negotiations.

Later in the day we heard that Trump could meet Russia’s President Putin as soon as next week, with reports citing a call that Trump had with European leaders after his envoy Steve Witkoff met with Putin in Moscow. Trump himself said there was a “very good chance” he would meet soon with Putin and Ukraine’s President Zelenskiy to try and broker peace, though he was more ambiguous on the likely timing. Secretary of State Rubio said that “a lot has to happen” before Trump meets with Putin.

In the latest news on the Fed’s leadership, Trump said he will likely nominate a temporary Fed governor after Kugler’s departure on August 8, adding that the decision would come “over the next two, three days” and that there were “probably” three candidates for the role. A temporary replacement for the remainder of Kugler’s term until January would avoid the person being seen as a likely candidate for Fed Chair once Powell’s term ends in May.

Meanwhile, Fed officials on Wednesday struck a more dovish tone in response to Friday’s soft jobs report. Fed Governor Cook said the report was concerning, with significant downward revisions “somewhat typical of turning points” in the economy. Minneapolis Fed President Kashkari suggested that in case of a slowdown in the economy, a cut might be appropriate “in the near term”, whileSan Francisco President Daly said “we will likely need to adjust policy in the coming months” as additional labour market slowing was “unwelcome”. Pricing of a September Fed rate cut ticked up from 90% to 95% amid the shifting rhetoric, with 60bps of cuts priced by the December meeting (+2.0bps on the day).

In turn, 2yr Treasuries rallied by -1.0bps, but yields moved higher at the long end, with the 10yr up +1.5bps to 4.23%, and 30yr up +3.8bps to 4.82%. That came amid a soft 10yr auction that saw $42bn of bonds issued +1.1bps above the pre-sale yield, with the bid-to-cover ratio at its lowest level in 12 months. 10yr yields are another +1.5bps higher overnight.

Increased rate cut expectations saw the dollar index (-0.61%) fall to its lowest level in nearly two weeks. Meanwhile, the Swiss franc has been the worst performing G10 currency this week as Switzerland’s President Karin Keller-Sutter left Washington yesterday without securing any easing of the 39% US tariffs that came into force along with other new country rates overnight.

Back to yesterday’s equity moves, there was some softness beneath the headline gains with more than half of the S&P 500 constituents lower on the day, led by a decline in healthcare stocks (-1.52%). The Philadelphia semiconductor index (-0.20%) underperformed following underwhelming results from AMD (-6.42%) and Super Micro Computer (-18.29%). Other notable post-earnings movers included McDonald’s (+2.98%), whose same store sales grew more strongly (3.8% yoy vs. +2.6% expected), and Walt Disney (-2.66%), which saw profit guidance weighed down by its movie and TV businesses. Over in Europe, the Stoxx 600 (-0.06%) was again dragged down by another decline for Novo Nordisk (-5.36%) as it released its latest earnings. The pharma giant’s shares are now down -36% since its profit warning last Tuesday. However, most European indices gained with the DAX (+0.33%), CAC (+0.18%), FTSEMIB (+0.65%) and FTSE 100 (+0.24%) all in the green. In one of the more unusual stories, pharma conglomerate Bayer AG (-9.92%) was the worst performer in Stoxx 600 in part as it revealed that its earnings had been recently inflated by football player transfer receipts stemming from its ownership of Bayer Leverkusen. I will let Jim opine on whether Liverpool’s club record signing of Florian Wirtz in June which boosted Bayer’s bottom line was a good deal.

European government bonds saw a modest sell off on Wednesday, with yields on 10yr bunds (+2.7bps), OATs (+2.7bps) and BTPs (+2.1bps) all higher. Pricing of ECB rate cuts ticked lower, with amount of easing priced by year-end down -1.3bps to 15bps as outgoing Austria central bank governor Holzmann said he saw no reason for another rate cut.

Staying with central banks, today the Bank of England is expected to deliver a 25bp rate cut to 4.00%, which would mark the fifth cut in the BoE’s gradual easing cycle. Our UK economist Sanjay Raja expects divisions on the committee, foreseeing a 2-5-2 vote across no change, -25bp and -50bp options. You can see Sanjay’s full preview here.

Turning to the data, yesterday was quiet in the US but investors will be dissecting today’s jobless claims for whether evidence of US labour market deterioration is visible outside of payrolls. In Europe, June factory orders in Germany surprised to the downside at -1.0% mom (vs. +1.1% expected), with components such as transport equipment (-23%), autos (-7.6%) and fabricated metal products (-13%) slumping. The moves suggest a drag from tariffs with foreign orders weighing while domestic orders rose by almost 4%. On a more positive note, euro area retail sales pointed to a resilient consumer, rising by an expected +0.3% mom in June but with the yoy reading at a stronger +3.1% thanks to revisions (+2.6% expected).

In goods trade data out of China this morning, both exports (+7.2% yoy vs +5.6% exp.) and imports (+4.1% vs -1.0% exp.) grew more strongly than expected in July. So suggesting a resilient aggregate trade performance of the world’s primary manufacturing hub, even as China’s exports to the US fell by -22% yoy.

To the day ahead, the main highlight in Europe will be the Bank of England’s latest policy decision, along with the subsequent press conference with Governor Bailey. In terms of data, we'll have the initial and continuing jobless claims out in the US, while in Germany the highlight is June industrial production. Looking at earnings, the focus will be on Eli Lilly and Toyota

Tyler Durden Thu, 08/07/2025 - 08:30