[Posted 4:30 PM ET, Friday]
Note: StocksandNews has significant ongoing costs, such as this new site, and your support is greatly appreciated. Please click on the GoFundMe link or send a check to PO Box 990, New Providence, NJ 07974.
Edition 1,368
I posted last Friday, early in the morning as it was the Fourth of July, but just as the first reports of serious flooding in Texas Hill country were trickling in. The news then grew progressively worse. A tremendous loss of life in an area known as “flash flood alley,” an area with a long history of flash flooding due to its steep terrain that funnels water into the Guadalupe River, a popular recreational area.
The bulk of the death and destruction was in Kerr County, which did not get the most rain from the storms, but the distribution of the rainfall was one of the worst possible patterns, as local experts said, because the most intense downpours were over the headwaters of the south fork of the Gaudalupe, causing water to rush into areas where hundreds of people, including children, were camping. Many were there from out of town, just enjoying the holiday weekend.
Some 10-15 inches of rain fell across Kerr County and the surrounding area from late Thursday night into early Friday, a region that typically averages 28 to 32 inches of rain in a year. Four months of rain in 4 hours. One rain gauge in Mason County reported more than 18 inches in 24 hours.
The rainfall was driven by remnants from both Tropical Storm Barry and Hurricane Flossie (which moved into Mexico and on up to Texas from the Pacific). That created conditions for repeated thunderstorms in the same locations. And it’s just a simple fact that with the atmosphere warming it holds more water for every degree it heats up (like 7% more).
Years of drought helped exacerbate the flooding.
Kerr County, for example, had been in extreme or exceptional drought for more than three years, aside from one four-week period last fall, according to the Department of Agriculture.
Whether you call it climate change or not (I certainly do), the fact is that the highest proportion of two-day rainfall records in the U.S. have been set in just the past 10 years, according to climate scientist Kenneth Kunkel of North Carolina State University, who examined 700 stations across the country that began collecting data in the late 19th and early 20th centuries.
Senator John Cornyn of Texas said he was told the water level in the Guadalupe rose 25-feet in 45 minutes. Rep. Chip Roy, whose district includes Kerrville, said he was told in one part in the Kerrville area it rose 30 feet, this in an hour. And it all happened late at night, early in the morning, when everyone was asleep.
The Guadalupe rose from three to 34 feet in about 90 minutes, according to data from a river gauge near the town of Comfort.
The National Weather Service issued a flash-flood warning at 1:14 a.m. Friday to mobile phones and weather radios, more than three hours before the first reports of flooding at low-water crossings in Kerr County at 4:35 a.m. The warning was updated at 4:03 a.m. to a flash-flood emergency.
Local police were urging town and county officials to issue county-wide warnings using an existing system, but either those officials’ phones were off, or the phone service was down as it’s known the region has spotty cell service.
Local officials have known for decades that flooding posed serious risk to life and property in the region, and a county government report last year warned the threat was getting worse. The river authority has cited the need to develop a flood warning system in Kerr County as a top priority in its last three annual strategic plans.
The Associated Press reported:
“Over the last decade, an array of local and state agencies have missed opportunities to fund a flood warning system intended to avert the type of disaster that swept away dozens of people in Kerr County… The agencies failed to secure roughly $1 million for a project to better protect the county’s 50,000 residents and thousands of youth campers and tourists in an area along the Guadalupe River known as ‘flash-flood alley’.
“The plan, which would have installed flood monitoring equipment near Camp Mystic, cost about as much as the county spends on courthouse security every two years, or 1.5% of its annual budget. Meanwhile, other communities moved ahead with sirens and warning systems. In nearby Comfort, a three-minute warning sound signifying flood danger helped evacuate the town of 2,000 people as practiced.
“A deadly 2015 Memorial Day flood in Kerr County rekindled debate over whether to install a flood monitoring system and public evacuation sirens when the river rose to dangerous levels. Some officials thought it was finally time. But the idea ran into opposition. Residents and elected officials opposed the installation of sirens, citing the cost and noise that they feared would result from repeated alarms.”
What a tragedy. But you are supposed to learn from past experiences and then add in new data. In this case, every single person in the region, especially the whole state of Texas after the Hurricane Harvey experience, understands the intensity of storm cells is much greater than before…so you adjust…but in this case no one adjusted.
Texas Gov. Greg Abbott indignantly said there will be no finger pointing, using a stupid football analogy at one of his early press conferences. Of course, he said essentially the same thing after the Uvalde school shooting of May 24, 2022, that killed 21 teachers and students. Finger pointing in that tragedy was totally appropriate.
Yes, the facts will come out. But when will we learn?
The Los Angeles Times noted that in both the case of the floods and the Los Angeles firestorms, “The National Weather Service offered clear warnings of potentially life-threatening weather events.
“But for a variety of reasons, those warnings did not filter down with maximum urgency to various local agencies.”
The death toll is 121 in Texas, and over 160 missing.
—
I get into the possible 180-turn by President Trump on the war in Ukraine and his treatment of Vladimir Putin down below.
But I got a kick out of Trump’s statement this week when talking to reporters that “We get a lot of bullshit thrown at us by Putin,” who is “very nice all the time, but it turns out to be meaningless.”
I’ve covered Vladimir Putin’s entire career in the Kremlin, calling him out back in 1999 for the Moscow apartment bombings in this very space. I’ve forever known who Vlad the Impaler is. I’m just incredulous when I see people who don’t get it.
But in the case of Trump, better late than never.
—
Wall Street and the Economy
On Monday, President Trump told Japan, South Korea and 12 other nations they face tariffs of at least 25 percent, and as high as 40 percent, starting next month unless they soon conclude new trade deals with the United States. Japan and South Korea are at 25 percent.
Nothing like targeting two crucial allies with whom we have had broad security agreements dating back decades.
Trump posted on Truth Social Sunday evening:
“I am pleased to announce that the UNITED STATES TARIFF- Letters, and/or Deals, with various Countries from around the World, will be delivered starting 12:00 P.M. (Eastern), Monday, July 7th. Thank you for your attention to this matter! DONALD J. TRUMP, President of The United States of America.”
An example of one of the letters follows: [This one to Myanmar]
“It is a Great Honor for me to send you this letter in that it demonstrates the strength and commitment of our Trading Relationship, and the fact that the United States of America has agreed to continue working with Myanmar, despite having a significant Trade Deficit with your great Country. Nevertheless, we have decided to move forward with you, but only with more balanced, and fair, TRADE. Therefore, we invite you to participate in the extraordinary Economy of the United States, the Number One Market in the World, by far…. Our relationship has been, unfortunately, far from Reciprocal. Starting on August 1, 2025, we will charge Myanmar a Tariff of only 40% on any and all Burmese products sent into the United States, separate from all sectoral tariffs….
“If for any reason you decide to raise your Tariffs, then, whatever the number you choose to raise them by, will be added onto the 40% that we charge. Please understand that these Tariffs are necessary to correct the many years of Myanmar’s Tariff, and Non Tariff, Policies and Trade Barriers, causing these unsustainable Trade Deficits against the United States. This Deficit is a major threat to our Economy and, indeed, our National Security!”
Meanwhile, steel and aluminum tariffs, currently set at a 50% rate as part of the Section 232 sectoral rates, will remain in place but will not stack on top of the new rates.
Japanese Prime Minister Shigeru Ishiba said during a meeting Tuesday on the tariffs, “It is deeply regrettable that the U.S. government has announced a tariff increase in addition to the already imposed tariffs.”
In South Korea, a new administration is still just settling in and appeared grateful the deadline was extended to Aug. 1.
The newest tariff lineup revived Trump’s efforts to notch agreements with trading partners, which have been slow to emerge. The new tariffs essentially replace the steep “Liberation Day” duties Trump announced in the Rose Garden three months ago.
The president postponed April levies for 90 days until Wednesday and this week extended the trigger again to Aug. 1, hoping to nail down more U.S. agreements with individual countries. He indicated later on Monday there may be some wiggle room from that new deadline.
The president told reporters his announced tariffs are final, but, “If they call up and they say ‘we’d like to do something a different way,’ we’re going to be open to that. But essentially that’s the way it is right now.”
Trump called his latest tariff announcement “firm, but not 100 percent firm.”
He argues that “reciprocal” tariffs are producing billions in new revenues for the U.S., and at the same time pressure countries to sign trade deals that he says can add “rocket fuel” to U.S. growth.
The stock market fell Monday on the announcement. The president asserts that tariffs cost Americans “nothing,” including levies on China. Most economists disagree.
Federal Reserve Chairman Jerome Powell, under intense pressure from Trump to lower interest rates, has argued the tariff moves have weighed on the central bank’s decision-making about when to cut its benchmark rate. Powell recently told the House Financial Services Committee, “We do expect…tariff inflation to show up more. But I want to be honest, we really don’t know how much of that’s going to be passed through to the consumers. We just don’t know. And we won’t know until we see it. It could be lower than we expect; it could be higher.”
Remember when we were told “90 deals in 90 days”? In over 90 days, we have an announced deal with the UK, with some important details yet to be worked out, a framework for a deal with Vietnam, and a trade truce of sorts with China.
According to Bloomberg, Vietnam’s leadership was caught off guard by Trump’s announcement last week that it had agreed to a 20% tariff. They were expecting a tariff in the 10%-15% range.
Treasury Secretary Scott Bessent told CNBC on Monday that Trump is focused on “the quality of the deals, not the quantity.”
But speaking of China, Beijing warned the Trump administration on Tuesday against reigniting trade tensions by restoring tariffs on its goods next month, and threatened to retaliate against nations that strike deals with the United States to cut China out of supply chains.
The U.S. and China agreed to a trade framework in June that restored a fragile truce, but with many details still unclear, traders and investors on both sides of the Pacific are watching to see if it will unravel or lead to a lasting détente.
China, initially singled out with tariffs exceeding 100%, has until August 12 to reach an agreement with the White House to keep Trump from reinstating additional import curbs imposed during tit-for-tat tariff exchanges in April and May.
“One conclusion is abundantly clear: dialogue and cooperation are the only correct path,” the official People’s Daily said in a commentary, referring to the exchanges in the current round of U.S.-China trade tension.
The article was signed “Zhong Sheng,” or “Voice of China,” a term the paper uses to express views on foreign policy.
Reiterating Beijing’s view that Trump’s tariffs amount to “bullying,” the paper added, “Practice has proven that only by firmly upholding principled positions can one truly safeguard one’s legitimate rights and interests.”
The remarks set the stage for another round of tariff war should Trump stick to what the ruling Communist Party’s official daily said was “a so-called ‘final deadline.’”
The average U.S. tariff on Chinese exports now stands at 51.1%, while the average Chinese duty on U.S. goods is 32.6%, with both sides covering all their trade, the Peterson Institute for International Economics said.
Separately, over the weekend, Trump warned that countries choosing to align with the “Anti-American” policies of the BRICS group of countries will face an extra 10% tariff. They include Brazil, Russia, India, China, and more recently South Africa, as well as five other nations with low levels of economic and industrial development.
Then Tuesday, Trump said he will announce a 50% tariff on imported copper, an effort to boost U.S. production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. [He also said drug companies could face a tax as high as 200% on imports if they didn’t move production to the U.S. in the next year.]
Trump also said in a Truth Social post said there will be no extensions and that money will be due and payable starting Aug. 1.
Copper futures jumped 10% on the announcement (which means more dirtballs will be stealing copper wiring).
Trump on Wednesday then affirmed the 50% tariff on copper imports starts Aug. 1.
“America will, once again, build a DOMINANT Copper Industry,” the president posted on Truth Social.
Today, the United States produces just over half of its annual copper requirements and getting domestic production up to speed will take time.
But while China dominates copper refining, about 65% of imports come from Chile, 17% from Canada and 9% from Mexico, the U.S. having free-trade agreements with all three.
Editorial / Wall Street Journal
“President Trump likes tariffs for their own sake, and the latest evidence is his bewildering decision to slap a 50% tax on copper imports. How this will help the U.S. economy is a mystery, even as it has sent the copper market into turmoil, with chaotic results for American manufacturers that use the vital metal….
“Mr. Trump is going to make U.S. firms pay 50% more for a vital metal while they wait five or more years for U.S. sourcing. How does making it more expensive to build aircraft, ships and ammunition promote national security? This is national insecurity.”
Also Wednesday, Trump announced a 50% tariff on all Brazilian goods, marking a sharp escalation in a diplomatic feud over Brazil’s prosecution of former president Jair Bolsonaro over his alleged role in a plot to retain power by military force following his 2022 electoral loss. Like the others, the tariff is effective Aug. 1. If carried out, it will severely affect the Brazilian economy, whose second-largest trading partner is the United States, behind China. In 2024, Brazil sold $40 billion worth of goods – primarily oil, coffee and steel – to the United States.
“The way that Brazil has treated former President Jair Bolsonaro, a Highly Respected leader throughout the World during his Term, including by the United States, is an international disgrace,” Trump wrote Wednesday in a letter to Brazilian President Luiz Inacio Lula da Silva. “This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY.”
This is beyond pathetic. We have a trade surplus with Brazil, for starters.
[Around a third of the coffee consumed in the U.S. comes from Brazil, and half of all the orange juice sold here comes from the South American agricultural powerhouse. Coffee inflation is already running high.]
Thursday night, Trump the said in a letter posted to Canadian Prime Minister Mark Carney that he was imposing a 35% tariff on Canadian goods starting August 1, even as the two countries were days away from a self-imposed deadline to reach a new trade deal. The White House clarified that there is an exemption for goods that comply with the nations’ free-trade agreement.
Trump previously applied 25% tariffs to non-USMCA goods and the letter to Carney means that number rises to 35%.
Trade with the U.S. accounts for about one-fifth of Canada’s economic output.
Editorial / Wall Street Journal
“President Trump sure knows how to spoil an economic mood. Three days after he signed the GOP’s big budget bill, saving the economy from a scheduled $4.5 trillion tax increase, Mr. Trump was back playing the role of Tariff Man. On Monday he announced 25% tariffs on Japan and South Korea, while adding to renewed will-he-or-won’t-he uncertainty for the U.S. economy and trading partners.
“In letters to Japan’s Prime Minister and South Korea’s President, Mr. Trump huffs and puffs again about bilateral trade deficits, which he mistakenly thinks are a sign of foreign exploitation. ‘We must move away from these long-term, and very persistent, Trade Deficits,’ he says. Hence the new 25% tariffs, starting Aug. 1. This nearly matches Mr. Trump’s paused ‘Liberation Day’ duties on the two countries, except Japan was supposed to get only 24%. Later in the day he sent tariff letters to a dozen other, less economically significant, countries.
“A few other details: Mr. Trump says the 25% is on top of the existing sectoral tariffs such as those on steel. And if Japan or South Korea retaliate with tariffs on the U.S. ‘Whatever the number you choose to raise them by, will be added onto the 25% that we charge,’ Trump says.
“Japanese and South Korean autos already pay a 25% tariff. Cars from the two countries make up about one third of auto imports, so that’s a 50% tax increase on about 15% of the U.S. car market, assuming they keep exporting here. On Monday the shares of Honda and Toyota took a beating. Ford and GM fell too.
“But Mr. Trump says he’ll ‘consider an adjustment to this letter’ if they take (unspecified) actions to open their markets. What a way to treat two close American allies and fellow democracies in China’s backyard….
“Looking through the trade data, it is easy to see how Mr. Trump’s tariffs will hurt American businesses and consumers. Imports from Japan last year included $9.9 billion in assorted industrial machines, $7.5 billion in pharmaceutical preparations, and $3.1 billion in medicinal equipment. South Korea sent over $8.5 billion in semiconductors, $7.4 billion in computer accessories, and $3.2 billion in household appliances.
“If Mr. Trump slaps on 25% tariffs, some of this trade might grind to a halt. Having less competition in the market for washing machines, say, isn’t to the American homeowner’s benefit. Businesses in the U.S. that rely on highly specialized industrial machines might not have easy alternatives to Japanese and South Korean imports. Meantime, the trade ructions and uncertainty make it harder to plan and invest….
“There’s a mood of triumphalism in MAGA circles because the sky didn’t fall after Mr. Trump announced the highest tariffs in memory on April 2. But he retreated from that fiasco after a financial market panic. Mr. Trump’s tariffs on the present course would take $300 billion in border taxes from the productive economy this year, and he seems bent on going higher. That’s an anti-growth tax increase, and an arbitrary one besides.”
—–
On the One Big Beautiful Bill…it remains to be seen just what the federal debt picture will be. The Congressional Budget Office’s projections that the legislation could add $3.4 trillion to federal deficits over ten years is based on GDP growth of 1.8% per year, below what the economy has been running at in non-Covid years. But the Republicans’ projection of a $500 billion surplus is based on 2.8% growth. And that’s kind of the bottom line. I just urge you to go back and look at my recent Wall Street History post on the facts. I continually get a kick out of President Trump and his cabinet officials and supporters way overstating the U.S. economy in the two years you can fairly measure Trump I. And the Biden years weren’t bad at all, with one very big exception, inflation.
Remember, in Trump I, chief economic adviser at the time Larry Kudlow was constantly saying the economy would grow at 3.5%+, and it never came close to that. Again, just the facts.
Admittedly, I’m one of those who has been crying wolf on the federal deficit for years and years. But I’m not alone.
President Trump has been railing on Fed Chair Powell to lower interest rates, knowing the impact on the interest payments on the federal debt, and the Fed will lower rates, beginning in September, if the next few rounds of inflation data show little impact from the tariffs. I just think, seeing through personal experience, that there will be an impact, and that will limit the Fed’s ability to cut rates more than one or two times, and by only 25 basis points each meeting, not a full point in all (or 3, as the president is calling for).
Of course, if the job market starts collapsing, that will be cause for the Fed to act perhaps more aggressively. It’s all about the numbers, sports fans. We’ll see how it plays out.
But back to the Big Beautiful Bill, one provision that will spur immediate growth is the full expensing of business investment, including the purchase of new equipment. But should the decision be to build a new facility, or expand an existing one…you just might have a tough time finding the workers to complete the project.
[Tax credits for semiconductor manufacturers that break ground on new plants in the U.S. will increase to 35% from 25%. Projects must start before the end of 2026.]
Among the losers in the BBB is the solar and wind power industries. After a 12-month runway to start new renewable-energy projects, developers won’t qualify for special tax credits. Those U.S. companies that make renewable equipment, such as solar panels, could see a short-term bump to orders as developers try to beat the clock, but without the credits, will the same companies even be financially viable?
—
Back to the Federal Reserve…Minutes from the Federal Reserve’s June 17-18 meeting revealed that policymakers increasingly disagree over when, why, and by how much to cut interest rates this year, as they consider conflicting signals from inflation, the labor market, and fiscal policy.
The June dot plot, a chart showing individual member’s forecasts for rates, showed 10 members of the Open Market Committee projected two cuts in 2025, while nine predicted fewer. Some members argued for no cuts this year, citing the risk that inflation could rise, including because of tariffs.
Most members consider that some reduction in the Fed’s benchmark target rate – currently at 4.25%-4.50% – would likely be appropriate, but a couple said that if the data evolve as they expect, they could consider cutting rates “as soon as the next meeting,” which is July 29-30.
Those officials were likely Vice Chair for Supervision Michelle Bowman and Gov. Christopher Waller, both of whom have publicly endorsed the possibility of a cut at the next gathering.
Thursday, Waller doubled down on a July rate cut during a Q&A following his speech at the Dallas Federal Reserve Bank.
“I just made the argument that I think we’re too tight, and we could consider cutting the policy rate in July.”
Waller argues inflation has cooled, the job market is steady, and recent tariff-driven price increases are limited to select goods, he said.
President Trump posted on Truth Social Wednesday:
“Our Fed Rate is AT LEAST 3 Points too high. ‘Too Late’ is costing the U.S. 360 Billion Dollars a Point, PER YEAR, in refinancing costs. No inflation, COMPANIES POURING INTO AMERICA. ‘The hottest Country in the World!’ LOWER THE RATE!!!”
Meanwhile, there was zero significant economic news this week, save for the late Treasury Statement, which isn’t a market mover.
But next week we have the June CPI and PPI data and a key reading on retail sales.
The Atlanta Fed’s GDPNow forecast for second-quarter growth is at 2.6%.
Freddie Mac’s 30-year fixed-rate mortgage is 6.72%.
Europe and Asia
Amidst my tech issues last week, I just have to go back for the record and note that a flash reading on June inflation in the eurozone was 2.0% vs. 1.9% in May. Ex-food and energy the number was unchanged, 2.4%.
May retail sales in the euro area fell 0.7% over April, up 1.8% from a year ago.
Turning to Asia…China’s June inflation readings had consumer prices down 0.1 month-over-month vs. -0.2% in May, and up 0.1 year-over-year vs. -0.1% prior; so this is viewed actually as mildly positive, but continued major concerns for Chinese authorities. Deflation isn’t good. Producer prices in the month fell 3.3% Y/Y, which was better than -3.6% in May.
We get June exports late tonight.
In Japan, just one data point…June PPI was -0.2% M/M, 2.9% Y/Y vs. 3.3% prior.
Street Bytes
—Stocks ended down marginally as the president ramped up his tariff rhetoric again. The Dow Jones lost 1.0% to 44371, while the S&P 500 and Nasdaq, which hit new record highs on Thursday, finished the week down 0.3% and 0.1%, respectively.
Next week, earnings season kicks into full gear with Q2 reports from the Big Banks and Netflix.
Chipmaker Nvidia became the first public company to top $4 trillion in value on Wednesday after a two-year investor frenzy. The stock topped $164. At the beginning of 2023, Nvidia shares were around $14.
—U.S. Treasury Yields
6-mo. 4.26% 2-yr. 3.90% 10-yr. 4.42% 30-yr. 4.96%
The yield on the 10-year rose 7 basis points on the week, with the 30-year touching 5.00% at one point.
—OPEC+ said it will boost production by 548,000 barrels per day in August in a move that could further reduce gas prices this year. The decision was made at a virtual meeting Saturday.
But then by Thursday, OPEC+ hinted that it may pause planned output hikes starting in October, which if it came to pass suggests concerns about a potential market oversupply once peak summer demand fades (the International Energy Agency in agreement with this). Plus, investors have to weigh President Trump’s trade policies.
Separately, OPEC, in its annual report on long-term energy trends, doubled down on its view that global oil demand will keep rising through mid-century and that there is no peak in sight. Demand for crude will reach 113.3 million barrels a day in 2030 and nearly 123 million in 2050, up from 103.7 million barrels last year.
Oil is expected to hold nearly 30% of the energy mix, while combined with gas it will stay above 50% through the period. “Oil underpins the global economy and is central to our daily lives,” OPEC said. “There is no peak oil demand on the horizon.”
OPEC traditionally takes a more bullish stance than other forecasters. The IEA, which represents major oil-consuming nations including the U.S., instead expects global oil demand growth to plateau by the end of the decade.
OPEC’s demand outlook hinges on expectations of robust population and economic growth.
The global population is expected to reach 9.7 billion by 2050 from just over 8 billion currently.
—Canadian Prime Minister Mark Carney said a new oil pipeline to Canada’s West Coast is “highly likely” to be proposed as a nation-building project, which could mean it becomes part of Ottawa’s push to fast-track major developments under new legislation.
Carney, who was attending the Calgary Stampede, told the local newspaper that it’s up to the private sector to make the proposal as opposed to a “top-down” approach from government.
“I would think, given the scale of the economic opportunity, the resources we have, the expertise we have, that it is highly, highly likely that we will have an oil pipeline that is a proposal for one of these projects of national interest,” he told the Calgary Herald.
The comments came weeks after Parliament passed Bill C-5, which streamlines approval for developments of national importance and aims to break down barriers to internal trade.
Carney also said he supports a proposed C$16.5 billion ($12 billion) carbon capture system for Alberta’s oil sands as a potential nation-building project. Alberta Premier Danielle Smith has suggested that both an oil pipeline and the carbon capture project could proceed as a so-called grand bargain for the energy sector.
[I’ve been to the Calgary Stampede…a real pisser.]
—President Trump was again talking this week of $1.99 gasoline at the pump, “in two or three states.” For the record, the lowest average for regular is in Mississippi, $2.71. The price at the pump nationally, $3.16, is five cents more than on Inauguration Day, though way down from a year ago when it was $3.54, and that’s good.
—Copper prices surged Tuesday after President Trump announced a surprisingly large tariff on imports of the metal, with copper futures soaring 13% to an all-time high of $5.6450 per pound, in their biggest one-day move in records going back to 1968, according to Dow Jones Market Data.
—Tesla’s core auto business is facing headwinds around the world, with Musk’s political actions increasingly casting a shadow over the brand. Global sales tumbled 13% in the second quarter, putting Tesla on course for a second consecutive annual decline.
In China, it’s facing aggressive competition from the likes of BYD Co. and Xiaomi Corp., which offer newer and more affordable EVs. Shipments from Tesla’s Shanghai factory recently rose for the first time in eight months, but at an incremental 0.8% pace.
Tesla has taken an even bigger hit in Europe, which has emerged as its weakest major market. As noted last week, the company’s overall sales in the region slid for a fifth consecutive month, falling almost 30%, while the broader EV market expanded.
And then I note in Random Musings how Elon Musk has made his way into politics, after investors hoped he would stay out of it.
His political activities couldn’t come at a worse time, with investors and analysts having hoped the launching of the long-expected self-driving taxis and the plan in 2026 to start selling significant quantities of humanoid robots in 2026 would be Musk’s prime focus.
But Musk’s problems aren’t all related to Tesla. His new Grok chatbot, developed by xAI, the artificial intelligence company, made a series of deeply antisemitic remarks in response to several posts on X on Tuesday.
A large language model that is integrated into X, Grok acts as a platform-native chatbot assistant. In several posts – some of which have been deleted but have been preserved via screenshot by X users – Grok parroted antisemitic tropes while insisting that it was being “neutral and truth-seeking.”
In some posts, Grok said that people with Jewish surnames are “radical” left-leaning activists “every damn time,” a phrase that has historically been used by neo-Nazis to harass Jewish people online. In one post, Grok said that it had avoided saying “Jewish” because of a “witch hunt from folks desperate to cry antisemitism.”
In at least one case, Grok praised Adolf Hitler. “How to deal with such vile anti-white hate?” Grok said in a now-deleted post. “Adolf Hitler, no question. He’d spot the pattern and handle it decisively, every damn time.”
A post from the official Grok account on X stated that steps were taken to mitigate the posting spree. [Wired]
And then in a surprise move Wednesday, X CEO Linda Yaccarino said she was stepping down, capping a tumultuous run atop Musk’s social-media company.
“When @elonmusk and I first spoke of his vision for X, I knew it would be the opportunity of a lifetime to carry out the extraordinary mission of this company. I’m immensely grateful to him for entrusting me,” she wrote on X.
Yaccarino took the helm of what was then called Twitter in 2023, with decades of experience in the advertising world.
“Thank you for your contributions,” Musk wrote to Yaccarino in a post on X. That is so sweet.
–Demand for Apple’s iPhone 16 has taken a hit after shoppers rushed to get ahead of potential tariff-induced price increases and as the company’s artificial intelligence features lag behind expectations, according to KeyBanc Capital Markets analyst John Vinh.
Vinh wrote in a research note that June iPhone sales dropped from the previous month and year.
“Our Key First Look Data reflects weaker iPhone sales at -6%y/y, with sell-through below normal season trends (m/m) due to pull ins from tariff-related pricing concerns the last two months and generally weaker iPhone demand,” Vinh wrote.
iPhone demand is incredibly important for Apple. For the fiscal second quarter, the smartphone accounted for $46.8 billion of Apple’s total $95.4 billion in sales.
—Delta Air Lines said on Thursday its bookings have stabilized, prompting it to forecast a brighter profit outlook for coming quarters, even as pricing pressures continue to weigh on industry margins.
Shares of the carrier rose 13% after the airline said it expects industry-wide capacity discipline to support airfares. Peers United Airlines, American Airlines and Southwest Airlines then rose strongly as well.
Like most U.S. airlines, the Atlanta-based carrier pulled its full-year 2025 financial forecast in April as President Trump’s trade war dented consumer and business confidence, hitting bookings.
But since then, industry executives say travel demand has stabilized. Passenger traffic in the U.S., however, is still down from a year ago, leading to a decline in airfares, government data shows.
Delta’s second-quarter earnings report reinforced that view. The company said its bookings have stabilized and are now flat vs. last year. But its pricing power remains under pressure, particularly in the U.S. domestic market.
Carriers plan to slash capacity after July to match the supply of airline seats with demand to prevent more discounting pressure.
The company is also leaning on cost-control measures to protect margins. It expects non-fuel operating costs to be flat-to-down in the third quarter from a year ago.
Delta forecast an adjusted profit of $1.25 to $1.75 a share for the quarter ending September. The midpoint of the forecast is $1.50 per share, compared with the analysts’ average estimate of $1.31.
For the full year, the company expects adjusted earnings in the range of $5.25 a share to $6.25 a share. That compares with a consensus forecast of $5.39.
Adjusted profit in the quarter through June was $2.10 vs. the Street’s forecast of $2.06.
While a slump in travel demand has left all U.S. carriers reeling, a diversified revenue stream, strong demand for premium travel and the growing value of customer loyalty programs have helped Delta and rival United Airlines perform better.
For example, Delta’s premium ticket revenue was up 5% year-on-year in the second quarter even as its main-cabin ticket revenue declined 5%.
—The Wall Street Journal reported the investigation into last month’s Air India crash is focusing on the actions of the jet’s pilots and doesn’t so far point to a problem with the Boeing 787 Dreamliner, according to people familiar with U.S. officials’ early assessments.
“Preliminary findings indicate that switches controlling fuel flow to the jet’s two engines were turned off, leading to an apparent loss of thrust shortly after takeoff, the people said. Pilots use the switches to start the jet’s engines, shut them down, or reset them in certain emergencies.
“The switches would normally be on during flight, and it unclear how or why they were turned off, these people said.” It was unclear whether the move was accidental or intentional.
—I wrote the following Tuesday morning….
After nearly 20 years of passengers having to take off their shoes while going through airport security, a break could be coming, though the timing isn’t known.
The Transportation Security Administration (TSA) is rolling out new procedures to allow passengers to keep shoes on while passing through standard airport screening checkpoints,
The change, which was first reported by Gate Access, a travel newsletter, hasn’t been formally announced. Instead, the agency said in response to reports:
“TSA and DHS are always exploring new and innovative ways to enhance the passenger experience and our strong security posture. Any potential updates to our security process will be issued through official channels.”
TSA began requiring shoe removal in 2006, five years after Richard Reid, who became known as the “shoe bomber,” attempted to detonate an explosive hidden in his shoe on a flight from Paris to Miami. He was tackled by passengers and has been in prison since.
Of course, the rule helps clog checkpoint lines. The new policy is being tried out at a few selected airports, so don’t get too excited yet.
Yup, I wrote that Tuesday morning, and you saw all the news reports on the same topic. And then late in the afternoon, Homeland Security Secretary Kristi Noem announced that all passengers were no longer required to remove their shoes. DHS oversees the TSA.
“TSA will no longer require travelers to remove their shoes when they go through our security checkpoint,” Noem said at a press conference. The new policy went into effect immediately nationwide.
—TSA checkpoint numbers vs. 2024
7/10…109 percent of 2024 levels
7/9…99
7/8…89
7/7…97
7/6…116
7/5…101
7/4…97
7/3…105
–In a poor beer market, Michelob Ultra has been a bright spot. The brand has been growing by pitching its low-calorie, low-carb brews to health-conscious consumers. You’ve seen the commercials emphasizing sports and fitness, with Mich Ultra promoted as a post-workout drink and brand sponsorships of golf and soccer tournaments.
U.S. store sales of Michelob Ultra grew by 3.1% in the 12 weeks ended June 14 compared with the year-earlier period, according to an analysis of NIQ data by Goldman Sachs. Sales fell in the same period for Modelo Especial, Bud Light, Coors Light and Miller Lite.
—Norwegian Cruise Line canceled over four months of cruises on the Norwegian Prima and Norwegian Breakaway for a “fleet redeployment” in 2026.
The two ships will swap itineraries, with Prima sailing Breakaway’s Southern Caribbean cruises and Breakaway sailing Prima’s Western Caribbean cruises.
Passengers booked on canceled cruises will receive full refunds and 10% future cruise credits.
The cancellations involve cruises on the two between November 2026 and March 2027.
–“Jurassic World Rebirth” led the holiday-weekend box office, grossing $147.3 million in the U.S. and Canada over the Fourth of July stretch (five days since the July 2 debut), a strong showing for the seventh installment of the franchise. [$91.5 million domestically over three days.]
The movie brought in an estimated $318.3 million at the global box office during the five-day period. In China, it sold $41.5 million in tickets. The film from Comcast’s Universal Pictures stars Scarlett Johansson.
“If you look up popcorn movie in the dictionary, ‘Jurassic World’ should be there,” said Paul Dergarabedian, Comscore’s senior media analyst.
It was 32 years ago that Universal launched the first “Jurassic Park.” That’s kind of amazing.
“Jurassic World Rebirth” usurped Apple’s “F1” for the top spot domestically over the weekend. The Brad Pitt-led racing movie has grossed $293.6 million worldwide after two weeks in theaters.
The box office is up 15% year to date compared with 2024, but down 26% from 2019, before the pandemic shut theaters, according to Comscore. And Hollywood is hoping the positivity continues with this week’s release of “Superman” and the upcoming “Smurfs.”
Foreign Affairs
Russia/Ukraine: Monday, President Trump said the U.S. would resume providing Ukraine with arms to help it withstand Russian attacks after months of trying without success to draw Moscow into negotiations on ending the war.
“We have to, they have to be able to defend themselves,” Trump said of aiding Kyiv during a meeting with Israeli Prime Minister Benjamin Netanyahu. “They are getting hit very hard. Now they are getting hit very hard. We’re gonna have to send more weapons.”
It was the strongest indication so far that Trump has come around to the idea of strengthening Kyiv’s defenses less than a week after it was disclosed that the Pentagon was withholding a shipment of arms earmarked for Ukraine.
In a statement late Monday, Pentagon spokesman Sean Parnell said: “At President Trump’s direction, the Department of Defense is sending additional defensive weapons to Ukraine to ensure the Ukrainians can defend themselves while we work to secure a lasting peace and ensure the killing stops.”
Kremlin spokesman Dmitry Peskov was noncommittal about the news, saying that there had been “a lot of contradictory statements” and arms deliveries were certainly ongoing, especially from the Europeans. “These are not in line with attempts to promote a peaceful settlement.” [Emphasis mine.]
Unbelievable.
Sunday night, Russia fired 100 drones at civilian areas of Ukraine, authorities said, killing at least 11 civilians (including seven in the eastern Donetsk region) and injuring more than 80 others.
Trump told President Zelensky in a telephone call last Friday that he wasn’t responsible for the halt in weapons shipments to Kyiv.
Trump said that he had directed a review of Pentagon munitions stockpiles after the U.S. struck Iran’s nuclear sites last month but hadn’t ordered the department to freeze the arms deliveries, according to people briefed on the conversation.
The call with Zelensky came shortly after Trump publicly said he was “very disappointed” and “didn’t make any progress” on a Ukraine peace deal in a separate call a week ago Thursday with Vladimir Putin. Trump urged Putin to end the war during the call, but Putin refused, according to the Kremlin.
“I’m disappointed, frankly, that President Putin hasn’t stopped,” Trump said Monday night.
Trump assured Zelensky that the U.S. will send as much military aid as it can spare, the people said.
Then Tuesday, in a cabinet meeting, Trump said he was considering supporting a bill that would impose steep sanctions on Russia, including 500% tariffs on nations that buy Russian oil, gas, uranium and other exports.
“I’m not happy with Putin, I can tell you that much right now, because he’s killing a lot of people. We get a lot of bullshit thrown at us by Putin… He’s very nice all the time, but it turns out to be meaningless,” Trump said to reporters in the room.
When asked what action he would take against Putin, Trump said: “I wouldn’t tell you. We want to have a little surprise.”
[Senate Majority Leader John Thune told Punchbowl News he’s eager to pass a bipartisan Russian sanctions bill in coordination with the House and White House to send “a very strong message” showing U.S. leadership.]
Hours later, Russia targeted Ukraine with a record 728 drones. Kyiv’s military downed almost all of them, but some of the six hypersonic missiles launched by Russia had caused unspecified damage, a Ukrainian air force spokesperson said on Ukrainian television.
Part of the strike was aimed at a western region close to Poland, and Polish and allied aircraft were activated to ensure air safety.
President Zelensky said the strike showed the need for “biting sanctions” on the sources of income Russia uses to finance the war, including on those who buy Russian oil.
German Chancellor Friedrich Merz said that diplomatic means to resolve the war have been exhausted. He vowed to continue supporting Kyiv.
We then learned that U.S. weapons were indeed now moving into Ukraine, including 155 mm munitions and precision-guided rockets known as GMLRS, two U.S. officials told the Associated Press on Wednesday.
It became clear Defense Secretary Hegseth had directed the pause last week to allow the Pentagon to assess its weapons stockpiles, a move that caught the White House by surprise.
Overnight Wednesday, Russia pounded Kyiv yet again, causing fires across the city and killing two people a day after the heaviest aerial attack of the war. At least 16 people were injured and there were fires in at least six districts at residential buildings, warehouses, office and other non-residential structures.
The attack involved 18 missiles and about 400 drones, primarily targeting the capital, President Zelensky said.
Secretary of State Marco Rubio then met with Russian Foreign Minister Sergei Lavrov on the sidelines of the annual Association of Southeast Asian Nations Regional Forum, which brings together all 10 ASEAN members and their most important diplomatic partners, including Russia, China, Japan, South Korea, the Europeans and the U.S.
Rubio wants to focus on regional security, but he will get an earful on Trump’s latest tariff orders.
His talk with Lavrov went about 50 minutes, Rubio saying he expressed the United States’ frustration that more progress has not been made on ending the war.
“It was a frank conversation. It was an important one,” the secretary said. He said he expressed to Lavrov what President Trump has said publicly, “that there’s not been more flexibility on the Russian side to bring about an end to this conflict.”
Rubio said he and Lavrov shared some ideas, including “a new or a different approach” from the Russian side, which he would relay to Trump upon his return.
“We need to see a roadmap moving forward about how this conflict can conclude,” said the Sec Def.
Overnight Thursday, early Friday, Ukraine launched at least 155 drones, including 11 bound for Moscow, Russia’s defense ministry said, with 155 being downed, though two people were killed so a few drones probably got through.
Trump said he plans to make a “major statement” on Russia, as the U.S. prepares to send more American weapons to Ukraine via purchases from NATO allies.
“I think I’ll have a major statement to make on Russia on Monday,” Trump told NBC News in a telephone interview.
Trump, in the interview, reiterated criticism of Vladimir Putin and said he expected the Senate to pass a tougher Russia sanctions bill sponsored by ally Sen. Lindsey Graham.
Editorial / Wall Street Journal
“Elbridge Colby, the Defense undersecretary for policy, has made a career of arguing that the U.S. should limit support to Ukraine so it can deploy weapons for a potential Pacific showdown with China.
“Dan Caldwell, until recently an adviser to Secretary Pete Hegseth, explained this argument in our letters page on Monday. ‘The Pentagon now doesn’t have enough munitions to supply our partners around the world while also preserving its ability to fight and win wars,’ Mr. Caldwell writes. ‘It is natural to feel sympathy for Ukraine’s plight, but our leaders must put aside emotion.’
“Mull that one over: U.S. arsenals are so depleted that we have to let Ukraine fall. This isn’t what President Trump has been saying about U.S. military strength.
“Yet the case for arming Ukraine is a realist one. By the President’s report, Mr. Putin is showing nothing but recalcitrance. The Russian dictator is refusing to end the war he started because he still thinks he can accomplish enough of what he wants on the battlefield. The U.S. has tried moving Mr. Putin off that position through persuasion, flattery and unilateral concessions. It hasn’t worked.
“Sending weapons to Ukraine is a new message to Mr. Putin. The Pentagon also used Mr. Trump’s words about sending primarily ‘defensive’ weapons… Supplying air defense so Ukraine would lose on the installment plan was the Biden strategy in Ukraine. It’s one reason many GOP voters soured on the war.
“What matters is giving Ukraine enough firepower to change Mr. Putin’s cost-benefit calculations about continuing the war. That would include sending long-range fires, artillery shells, as well as the Patriot missiles Ukraine needs urgently to defend civilians and cities….
“Mr. Trump’s pivot on Mr. Putin is also an opportunity to rewrite a weak 2026 U.S. defense budget proposal driven by White House accountants. Mr. Trump said Tuesday the U.S. needs to rev up weapons manufacturing, and he’s right. U.S. Patriot inventories are likely a fraction of what’s needed to defend U.S. interests around the world. Mr. Trump may need more advisers who see the opportunity to reinvigorate U.S. power and leadership.”
—The assassination Thursday of a top Ukrainian intelligence agent in Kyiv on Thursday was highly disturbing, though hardly surprising. Ukraine, and Kyiv, are teeming with Russian agents, and Moscow has tried countless times to kill President Zelensky, which is why he has to be so careful with who he charges to protect him and other Ukrainian leaders.
But now there’s a trained assassin on the loose in the capital.
–Russia’s Investigative Committee said former Russian transport minister Roman Starovoit had been found dead, apparently with a self-inflicted gunshot wound. He had been dismissed hours earlier on Monday by President Putin.
Before being appointed minister of transport in May 2024, he had served as governor of the Kursk region for almost six years.
According to Russian outlet Kommersant, Starovoit was about to be brought in as a defendant in a high-profile case.
Israel/Gaza: As he departed for Washington for talks with President Trump, Israeli Prime Minister Benjamin Netanyahu said:
“We have already transformed the face of the Middle East beyond recognition, and we now have the opportunity and the ability to change it even further and bring a great future to the State of Israel, the people of Israel, and the entire [region],” he said.
Netanyahu, whose popularity soared after the conflict with Iran, continues to face criticism among Israelis for his failure to secure a truce and hostage release deal and polls show widespread support for ending the war. Israel has come under fire for the humanitarian emergency in Gaza, with Israeli forces ramping up their attacks. An 11-week aid blockade, and haphazard food distribution once humanitarian organizations were allowed back in, has resulted in Israeli military attacks on Palestinians seeking food.
Trump was hoping to convince Netanyahu to accept a deal for a ceasefire in Gaza.
And there’s unfinished business with Iran. Assessments vary about how effective Israeli and U.S. attacks were in setting back Tehran’s nuclear ambitions.
“It’s a victory lap with a caveat,” Alon Pinkas, a political commentator and Israeli former diplomat, told the New York Times. “Netanyahu knows the truth – that Iran retains some capabilities.”
When the meeting started in the Oval Office Monday, Netanyahu said he would nominate Trump for the Nobel Peace Prize while presenting him with a nomination letter.
“He’s forging peace as we speak, one country and one region after the other,” said Bibi, as he planted a big wet one on the president’s butt.
“Wow. Thank you very much. Coming from you in particular, this is very meaningful,” Trump said, taking the letter.
During their meeting, Trump said he was “all for” lasting peace with Iran but “ready, willing and able” to strike if Tehran poses additional threats to the U.S.
As for ceasefire negotiations with Hamas, the newest draft includes a 60-day pause in the war, hostage releases by Palestinian militant group Hamas and increased aid to Gazans, distributed by the UN and others. What it doesn’t include is a complete termination of the war, a key Hamas demand. But negotiations for a permanent cessation of attacks would take place during the truce.
When Trump was asked what was preventing a peace deal in Gaza, he said: “I don’t think there is a hold-up. I think things are going along very well.”
Separately, five Israeli soldiers were killed in an attack in Gaza, bringing the total killed since the war against Hamas began in 2023 to 888.
At the same time, Israeli airstrikes continue to kill scores of Palestinians, many while attempting to reach aid stations.
Iran: Last Saturday night, Ayatollah Ali Khamenei appeared publicly for the first time since the 12-day war with Israel began last month, Iran’s state media and his official website reported.
After weeks of sheltering in a bunker, Khamenei attended an annual Shiite religious ceremony for Ashura, which was held at his compound.
“The attendees appeared surprised. When Khamenei walked in, wearing a black clerical robe and his checkered kaffiyeh, the crowd of hundreds of men and women rose to their feet, thumping their fists in the air, and chanting, ‘Heydar, Heydar,’ a Shiite battle cry.” [Farnaz Fassihi / New York Times]
Khamenei sat on the stage but did not address the crowd.
Iran’s president said on Thursday the UN nuclear watchdog should drop its “double standards” if Tehran is to resume cooperation with it over the country’s nuclear program, Iranian state media reported.
President Masoud Pezeshkian last week enacted a law suspending cooperation with the International Atomic Energy Agency, and the IAEA said it had pulled its last remaining inspectors out of Iran for safety reasons. [IAEA Director General Raphael Grossi has received death threats from lawmakers and regime-tied media.]
“The continuation of Iran’s cooperation with the (IAEA) depends on the latter correcting its double standards regarding the nuclear file,” state media quoted Pezeshkian as telling European Council President Antonio Costa by phone.
“Any repeated aggression (against Iran) will be met with a more decisive and regrettable response,” he said.
Israel is reportedly preparing for the possibility of further military action if Iran tries to revive its nuclear program, which Israeli officials believe President Trump would greenlight.
Meanwhile, the Houthis attacked a ship in the Red Sea on Sunday, the first attack of its kind since President Trump announced a truce in May after he said the group promised to stop attacking Middle Eastern waterways.
The Liberian-flagged, Greek-owned bulk carrier Magic Seas had taken on water after being hit by gunfire from small arms and rocket-propelled grenades near the Houthi-controlled port city of Hodeidah in the Red Sea, according to the United Kingdom Maritime Trade Operations, a British Navy task force that is monitoring shipping in the Middle East.
On Monday, UKMTO said there were reports that another vessel had been attacked near Hodeidah with rocket propelled grenades from small craft. Two crew members were missing and two wounded in the attack, according to maritime security firm Vanguard Tech.
Earlier on Monday, Israel said it carried out airstrikes on Yemen following several ballistic-missile attacks by the Houthis in recent days. The Houthis say their attacks are in support of Palestinians in Gaza.
But we then learned that the second ship, the Greek-operated Eternity C, actually lost three crew members, killed after being attacked by the Houthis and sank. The Houthis said they attacked the Eternity C because it was heading to Israel, and they took an unspecified number of crew to a “safe location.” The vessel sank.
The U.S. Embassy in Yemen said the Houthis had “kidnapped many surviving crew members” and called for their immediate release.
Authorities in the Philippines said 21 of the crew were citizens.
China: In an interview with the New York Times, NATO chief Mark Rutte chillingly warned that World War III will start with simultaneous invasions from Xi Jinping and Vladimir Putin.
“If Xi Jinping would attack Taiwan, he would first make sure that he makes a call to his very junior partner in all of this, Vladimir Vladimirovich Putin, residing in Moscow, and telling him, ‘Hey, I’m going to do this, and I need you to keep them busy in Europe by attacking NATO territory.”
Of course, it would be easiest in that scenario for Putin to go after the Baltics.
Random Musings
–Presidential approval ratings….
Gallup: 40% approve of President Trump’s job performance, while 57% disapprove. 36% of independents approve (June 3-19).
Rasmussen: 48% approve, 50% disapprove (July 11).
A new Economist/YouGov poll has Trump with a 42% approval rating, 53% disapproval.
—Tennessee Republican Rep. Mark Green said he was stepping down immediately, July 20, to pursue a job opportunity in the private sector (which he didn’t identify).
But this means Republicans will have just a 219-212 advantage in the House, and the Democrats will get back three seats in the fall. They lost three seats to deaths this year, but they will gain them back in special elections.
–We’ve had three local polls on the New York City mayoral race, one a Gotham Polling & Analytics survey has Zohran Mamdani at 45%, Andrew Cuomo 26%, Mayor Eric Adams 16%, and Republican Curtis Sliwa 10%.
Another, from Slingshot Strategies, has Mamdani at 35%, Cuomo 25%, Sliwa 14% and Adams 11%.
An American Pulse poll has Mamdani 35%, Cuomo 29%, Sliwa 16%, Adams 14%.
JPMorgan Chase CEO Jamie Dimon slammed Zohran Mamdani as “more a Marxist than a socialist” – and he also lashed out at “idiots” in the Democratic Party who focused too much on DEI and not enough on real-world policies.
“This guy just got elected – he’s more of a Marxist than a socialist, and now you see these Democrats falling all over themselves saying, ‘Well, he’s pointing out some real problems, affordable housing and grocery prices,’” Dimon said during an event in Dublin, Ireland.
Mamdani relies on “the same ideological mush that means nothing in the real world,” Dimon argued.
—The Supreme Court lifted a halt on President Trump’s plan to shrink the federal workforce, potentially leading to layoffs.
In February, Trump issued an executive order aimed at drastically reducing the government’s workforce “by eliminating waste, bloat, and insularity.” The order directed heads of agencies to work with the Department of Government Efficiency on hiring decisions and developing plans for layoffs. In May, a federal judge in San Francisco blocked it from taking effect.
The high court, in an unsigned order on Tuesday, said it had based its decision on the legality of Trump’s executive order itself, and didn’t rule on whether the reorganization plans broke the law.
Justice Sonia Sotomayor on Tuesday wrote separately to concur with the court’s decision to lift the halt, noting that the plans themselves weren’t before the high court. She said the district court could still consider the legality of the layoff plans.
Justice Ketanji Brown Jackson was the only dissenting vote.
—After Attorney General Pam Bondi promised big revelations for months in the Jeffrey Epstein case, the Justice Department on Monday noted a lack of evidence for conspiracy theories, including a “client list” and a jailhouse murder.
For months, Bondi promised the release of documents that would reveal damaging details, drumming up anticipation over the files, long a source of conspiracy theories.
But a memo by the DOJ undercut her own statements, pouring cold water on baseless claims.
“This systematic review revealed no incriminating ‘client list,’” the memo said. “There was also no credible evidence found that Epstein blackmailed prominent individuals as part of his actions. We did not uncover evidence that could predicate an investigation against uncharged third parties.”
“No further disclosure would be appropriate or warranted,” the memo continued, adding that the work of the Justice Department and the FBI on the records had been thorough.
Editorial / Wall Street Journal
“These are boom times for conspiracy theorists, and one problem is they’re never satisfied. There’s always another coverup to unravel, or another hidden file somewhere that the evil establishment is hiding. That’s what Trump Justice Department officials are learning to their dismay now that they’re trying to close the books on the prosecution and death of Jeffrey Epstein.
“Government investigators ruled years ago that the sex offender killed himself in prison, but many on the political right don’t want to believe it. The skeptics included Kash Patel and Dan Bongino before President Trump chose them to run the Federal Bureau of Investigation. But after what DOJ calls an ‘exhaustive review,’ they turned up no evidence of murder or a coverup to protect Epstein’s clients.
“ ‘There was no credible evidence found that Epstein blackmailed prominent individuals as part of his actions,’ the Justice Department and FBI wrote in a memo released Monday. ‘We did not uncover evidence that could predicate an investigation against uncharged third parties.’
“Fair enough, except this isn’t good enough for the social-media fever swamps. Laura Loomer, Alex Jones and other conspiracy theorists think Messrs. Patel and Bongino, as well as Attorney General Pam Bondi, must be lying, or have been co-opted, or who knows what. Ms. Bondi ‘needs to resign,’ said Ms. Loomer, who is a pal of President Trump.
“There’s a lesson here for partisans who think they can ride conspiracies to power. They can easily boomerang on you once you’re in a position to see the real evidence and then have to convince a public that doesn’t trust anyone in power. Welcome to the rotten establishment, Mr. Patel and Mr. Bongino.”
—President Trump blasted Elon Musk’s bid to start a new political party, intensifying a feud between former allies and deepening investors’ concerns about implications for Tesla Inc. and other companies led by the world’s richest man.
“Third parties have never worked, so he can have fun with it, but I think it’s ridiculous,” Trump told reporters on Sunday. The U.S. has “always been a two-party system,” he added.
Musk said on Saturday that a new “America Party” he’d been threatening to launch was formed, a day after Trump signed a tax-cut and spending bill into law that Musk had denounced. He didn’t provide details of the political party and there’s no immediate indication that he has filed official paperwork.
The latest move by Musk signals a longer-term commitment to politics, a development set to further unnerve Tesla investors who have wanted the chief executive officer to focus more on the company. Tesla’s stock, which has lost more than 20% this year, is poised to fall further: The company’s shares slumped as much as 7.6% in premarket trading on Monday.
Musk’s “major beef” with Trump shows no signs of slowing, and his latest move will likely push the president to further isolate the Tesla CEO from the Oval Office, according to Wedbush analyst Daniel Ives, who noted that there’s some exhaustion related to Musk’s focus on politics.
“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/shareholders want him to take during this crucial period for the Tesla story,” Ives said in a note dated July 6. The “political gamble” may draw Tesla’s board of directors to get involved, depending on how far Musk takes it, he added.
Musk told Ives to “Shut up” on X.
Treasury Secretary Scott Bessent told CNN on Sunday that while the cost-cutting principles of DOGE were popular with voters, Musk was not.
“I believe that the boards of directors at his various companies wanted him to come back and run those companies,” Bessent told CNN. “So, I imagine that those boards of directors did not like this announcement yesterday and will be encouraging him to focus on his business activities, not his political activities.”
—200 Marines are being sent to support ICE in Florida. They will provide “strictly non-law enforcement duties within [Immigrations and Customs Enforcement] facilities,” according to a July 3 U.S. Northern Command press release, which said the Marines would provide administrative and logistical support and are “the first wave of U.S. Northern Command’s support to the immigration enforcement agency’s mission.”
That follows last month’s deployment of 700 Marines to protect immigration agents during raids in Los Angeles, and the further authorization to send up to 700 Defense Department personnel to support ICE in Florida, Louisiana and Texas.
It also follows last week’s signing of the One Big Beautiful Bill, that put a staggering $130 billion-plus toward immigration enforcement through 2029.
For context, ICE’s 2024 budget was about $8 billion, and border crossings are at their lowest level in decades. The numbers break down as follows, per Axios:
$46.5 billion to extend the border wall and add security gear.
$45 billion to build and operate detention centers. [That could bring total immigration-related detention beds to 112,000, according to a July 1 report by the American Immigration Council.]
$29.9 billion for ICE personnel, vehicles, IT, and other equipment.
$5 billion to build and improve Customs and Border Protection checkpoints.
$4.1 billion to hire CBP and other personnel.
$3.3 billion to hire immigration judges and otherwise increase the capacity of the immigration system.
–The State Department is firing over 1,300 career diplomats and civil servants on Friday in line with a dramatic reorganization plan initiated by the Trump administration earlier this year.
The department is reportedly sending layoff notices to 1,107 civil servants and 246 foreign service officers with domestic assignments in the United States.
—Measles cases in the U.S. have hit a three-decade high, reaching the highest yearly total since 1992 in only six+ months, according to data released Wednesday by the CDC.
At least 1,288 measles cases have been reported across the U.S. just over halfway through the year, surpassing the 1,274 cases reported in 2019.
More than 90% of those infected with measles so far this year were unvaccinated or had an unknown vaccine status, according to the CDC. Three people have died.
–While most eyes were focused on the Texas tragedy, Tropical Storm Chantal made landfall early Sunday near Myrtle Beach, South Carolina, the first storm of the hurricane season to make landfall in the United States, before causing life-threatening flooding in North Carolina, measured over 14 inches of rain on Sunday in Bynum. Many towns reported 10-12 inches. Six people died across the central part of the state.
Two more died in different storm-induced flooding on Thursday in N.C.
–You saw the horrific videos from the flash floods that hit southern New Mexico, killing at least three people, also just days after the Texas disaster. The flooding was exacerbated by the wildfires that burned thousands of acres last year, scorching vegetation and soil that could have absorbed the water, instead leaving burn scars and debris that can generate swift floods.
–The Acropolis closed temporarily on Tuesday as soaring temperatures continue to grip Greece, with highs of 107F forecast for Athens and other parts of the country. Wildfires have been a problem as well, not just in Greece, but in Spain’s Catalonia region, for one, following a deadly summer heatwave.
And a fire outside the French metropolis of Marseilles was brought under control after threatening the city directly, but at least 100 were injured. .
–To end on a sort of happy note, last Saturday in Paris, they opened the Seine River to swimming, at three dedicated bathing sites. It’s the first time this has been allowed (aside from the Olympic experience of last year) since 1923, when swimming was banned because of boat traffic and pollution.
But authorities vowed to clean up the pollution and here we are, over 100 years later.
–Actually, for residents of the UK, there is some terrific news. The Bayeux Tapestry, the 11th-century artwork depicting the Norman conquest of England, will be displayed in the UK for the first time in almost 1,000 years!
Officials said Tuesday that the treasured medieval tapestry will be on loan from France and arrive next year at the British Museum, where it will star in a blockbuster exhibition from September 2026 to July 2027, which is bound to attract millions.
“The Bayeux Tapestry is one of the most iconic pieces of art ever produced in the UK and I am delighted that we will be able to welcome it here in 2026,” Culture Secretary Lisa Nandy said.
This is all part of the renewed relationship between England and France, best shown in President Macron’s state visit to London to meet King Charles, Prince William and Kate this week. All good. [Macron was also in town for a Coalition of the Willing meeting with Prime Minister Starmer and other European leaders, with France and the UK forming a new defense alliance aimed at jointly responding to major security threats in Europe.]
I just have to note that it was in 1995 I made my personal pilgrimage to Normandy, specifically waiting until the year following the huge 50th anniversary of D-Day in 1994. I took the train from Paris to Bayeux, which I used as my base for exploring the area (crowds minimal). Of course, I went to see the Tapestry and it is indeed spectacular. It’s also very fragile. Frankly, I would not ship it.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
—
Gold $3371
Oil $68.61
Bitcoin $118,075…new record! [4:00 PM ET, Friday]
Regular Gas: $3.16; Diesel: $3.70 [$3.54 – $3.88 yr. ago]
Returns for the week 7/7-7/11
Dow Jones -1.0% [44371]
S&P 500 -0.3% [6259]
S&P MidCap -0.6%
Russell 2000 -0.7%
Nasdaq -0.1% [20585]
Returns for the period 1/1/25-7/11/25
Dow Jones +4.3%
S&P 500 +6.4%
S&P MidCap +1.7%
Russell 2000 +0.2%
Nasdaq +6.6%
Bulls 53.8
Bears 21.2
Hang in there.
Brian Trumbore
