[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 1,369
Let’s jump right into it. All the big topics are covered down below, yes, including Epstein, Jeffrey Epstein, not “Epstein” from “Welcome Back, Kotter,” though some of us wish we were talking about the latter.
Wall Street and the Economy
President Trump announced on Saturday a 30% tariff rate for goods imported from the European Union and Mexico, starting on Aug. 1.
The 30% tariffs would replace the so-called reciprocal tariffs of 20% that Trump threatened on the EU on April 2, before delaying them until Aug. 1. It would also replace the 25% tariffs on Mexican goods that do not comply with the U.S.-Mexico-Canada free trade agreement.
It wasn’t clear if those USMCA-compliant goods would still be exempt from the Mexico tariffs after Aug. 1, as the White House said would be the case with Canada, which Trump threatened with a tariff hike the prior week.
The EU’s key trade negotiator warned on Monday that President Trump risked upending trans-Atlantic trade if he followed through on his latest tariff threat.
The EU had initially hoped to reach a comprehensive trade agreement with the U.S. for the 27-nation bloc, but until Trump’s social media post on Saturday, it was unclear if it might get a letter announcing more tariffs or when an agreement might be finalized.
Maros Sefcovic, the EU’s trade commissioner, voiced frustration over Mr. Trump’s abrupt about-face on tariffs and threat – after what Mr. Sefcovic said were frequent talks that he felt had the two sides “very close to an agreement.”
A tariff like the one that Trump has threatened would “prohibit” trade between the two closely intertwined economies, Sefcovic said at a meeting of European Union trade ministers in Brussels.
He added that the bloc’s negotiators were surprised and disappointed that their efforts to agree on a deal had added up to so little.
Before Trump issued his threat, EU officials had thought that they were closing in on a deal that was widely expected to include a 10 percent base line tariff, along with important carve-outs.
“We do not want any kind of trade war,” Lars Lokke Rasmussen, the foreign minister of Denmark, said. “It will be devastating, not just for the Americans, but also for Europe.”
Lokke Rasmussen added that the bloc should be prepared to retaliate with its own tariffs against American imports, if needed.
Brussels has been preparing lists for tariffs on U.S. products, but Ursula von der Leyen, the president of the European Commission, made it clear on Sunday that those would be delayed from kicking in until Aug. 1.
Trump said he would consider lowering the tariffs if the EU offers “complete, open Market Access to the United States, with no Tariff being charged to us,” and if Mexico does more to combat drug cartels, who he said are trying to turn “all of North America into a Narco-Trafficking Playground.”
—
Amid President Trump’s ire over interest rates and White House assertions that Federal Reserve Chair Jerome Powell could be fired “for cause,” the price tag of renovations planned for the 1937 central bank headquarters in Washington is a new controversy.
It prompted Powell to appoint a watchdog last month to examine the planned project, which is estimated to cost $2.5 billion. White House Office of Management and Budget Director Russell Vought – along with the National Capital Planning Commission – is investigating Powell over testimony he provided to Congress and questions about whether the project adhered to the National Capital Planning Act.
On ABC Sunday morning, White House national economic adviser Kevin Hassett said the project’s price tag is “being looked into.” Hassett is one of four reported candidates to replace Powell, whose term as chair ends next year.
“The cost overrun for this Federal Reserve project is about the same size as the second biggest building overhaul in American history, which was the FBI building. And so, the Fed has a lot to answer for,” the economist added.
It’s called inflation, Hassett. The project went out for bid in 2017 and commenced in 2019. What do you think happened by 2022? Don’t play us for fools.
The president on Wednesday then said he’s “not planning” to fire Powell despite reports suggesting he was close to making that decision.
Speaking in the Oval Office, Trump told reporters, “No, we’re not planning on doing anything,” but added, “We’re very concerned.”
“He’s doing a lousy job, but no, I’m talking about that. Fortunately, we get to make a change in the next eight months or so, and we’ll pick somebody that’s good,” Trump said.
Well, Tuesday we had the June data on consumer prices and the figures, while essentially as expected, showed headline rising to 2.7% from the prior 2.4%, and ex-food and energy, 2.9% vs. 2.8%. [Month-over-month, the CPI rose 0.3%, 0.2% on core.]
Wednesday, producer prices were better than expected, unchanged and up 2.3% on headline, unchanged and 2.6% ex-food and energy.
On the CPI, products most exposed to tariffs, like household furnishings, saw prices jump 1 percent, significantly higher than the 0.3% rise in May. Prices for appliances rose 1.9% (biggest monthly jump ever), up from 0.8%. Clothing prices rose.
Following the inflation data, Thursday night Fed Governor Christopher Waller made his strongest call yet for a rate cut in July as he again argued that any inflation from tariffs would be temporary, underscoring a divide within the central bank.
“I believe we should cut the policy rate at our meeting in two weeks,” Waller said bluntly in a speech in New York.
He argued that the Fed’s policy rate should be 3%, 125-150 basis points lower than the current rate of 4.25%-4.50%.
Waller again made the case that tariffs are a one-off price increase, allowing the Fed to “look through” them and refocus on the employment side of its dual mandate.
And he favors cutting rates now because while the job market looks fine on the surface, private sector job growth is near “stall speed” and other data suggests downside risks to the job market have increased.
“With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,” Waller said.
So the decision to keep rates unchanged at the July 29-30 Open Market Committee meeting will probably have two dissenters, Waller and Gov. Michelle Bowman, but I’d be surprised if there is a third.
John Williams, president of the New York Federal Reserve, suggested he is reluctant to support lowering interest rates, arguing that tariffs are likely to drive further inflation.
“Maintaining this modestly restrictive stance of monetary policy is entirely appropriate,” Williams said in a speech in New York on Wednesday.
Trump posted on Truth Social Friday morning:
“ ‘Too Late,’ and the Fed, are choking out the housing market with their high rate, making it difficult for people, especially the young, to buy a house. He is truly one of my worst appointments. Sleepy Joe saw how bad he was and reappointed him anyway – And the Fed Board has done nothing to stop this ‘numbskull’ from hurting so many people. In many ways the Board is equally to blame! The USA is Rockin’, there is VERY LOW INFLATION, and we deserve to be at 1%, saving One Trillion Dollars a year on Interest Costs. I can’t tell you how dumb Too Late is – So bad for our Country!”
At least Trump admitted he appointed Powell Friday. Wednesday in the Oval Office, he said of the chairman “I was surprised he was appointed,” forgetting he appointed him.
In other economic data, June retail sales rose 0.6%, 0.5% ex-vehicles, both figures well above expectations. More resiliency on the part of the American consumer.
June industrial production, up 0.3%, also beat consensus.
June housing starts came in at a little better than expected pace, 1.32 million annualized units.
The Atlanta Fed’s GDPNow forecast for second-quarter growth is down to 2.4%. [Most other economists are at about 1.5%.]
Freddie Mac’s 30-year fixed-rate mortgage was 6.75% this week.
Editorial / Wall Street Journal…going back to the tariff topic and the CPI report….
“Trump advisers say the President’s trade agenda is focused on helping Main Street, not Wall Street. But the irony is that the tariffs hurt Main Street while the market volatility caused by his whipsawing tariff threats has been a boon to Wall Street. JPMorgan’s equity trading revenue hit a second-quarter record on Tuesday.
“The Trump team also overlooks that tariff effects will vary by industry and the ability of consumers and business to substitute for lower-cost alternatives. The fact that the June report doesn’t show inflation in some tariffed goods like autos doesn’t mean prices won’t increase. Tariffs could have a long and variable lag, to adapt Milton Friedman’s famous line about monetary policy.
“But tariff effects are clearly starting to appear in the goods that people buy and over time could bleed into services, where inflation is somewhat sticky. Prices for medical services (0.6%) and personal care services (0.6%) jumped last month. Dry cleaners, hospitals and auto-repair shops also rely on imported goods.
“All of this will influence the Federal Reserve, which is considering the relationship between tariffs and inflation as it decides when and how much to cut interest rates. Mr. Trump has been bashing Fed Chairman Jerome Powell as ‘too late,’ but the June report vindicates the Fed chief’s caution. It also probably takes a rate cut in July off the table.
“Americans elected President Trump to increase real incomes and reduce inflation, yet so far he isn’t succeeding at either. Tariffs aren’t helping either mission.”
Europe and Asia
Eurostat is always releasing inflation data for the eurozone and the final June figures matched the flash number of a few weeks ago, 2.0%, up from 1.9% in May. Ex-food and energy the figure is 2.4%, unchanged from May.
Headline inflation….
Germany 2.0%, France 0.9%, Italy 1.8%, Spain 2.3%, Netherlands 2.8%, Ireland 1.6%.
May industrial production rose 1.7% month-over-month, 3.7% year-over-year.
Turning to Asia…China’s National Bureau of Statistics reported second quarter GDP came in at 5.2% annualized, vs. the first quarter’s 5.4% pace. [+1.1% Qtr/Qtr].
June industrial production was up 6.8% year-over-year, better than expected, but retail sales, up 4.8%, disappointed, and fixed asset investment year-to-date rose only 2.8%, which isn’t good at all and may be the key figure in looking to the future.
China’s GDP held up thanks in no small part to front-loading by exporters and resilient shipments to markets outside the U.S. But deflationary pressures are intensifying, with retail sales growth falling short of forecasts and home prices dropping at a faster pace in June.
Analysts expect weaker growth the second half of the year due to payback of front-loading, weaker global trade and all the tariff uncertainty, if not renewed escalation.
Speaking of exports, for June they came in better than the prior month, up 5.8% Y/Y vs. 4.8% in May. The uptick came amid a temporary easing of tariff pressures ahead of the August deadline. Notably, rare-earth exports surged 32% m/m, potentially reflecting progress from agreements reached in June to ease restrictions and restore global supply. The U.S. and China signed a series of accords last month aimed at reopening the rare-earth trade, after Chinese export controls imposed in April – during the peak of trade tensions – disrupted global supply chains and forced shutdowns at some auto factories.
Exports still fell to the U.S., -16.1% from a year ago, but rose 7.6% to the EU.
Imports rose 1.1% vs. -3.4% the month prior.
The June unemployment rate was unchanged at 5%.
Japan’s June inflation data was basically in line with expectations, consumer prices 3.3% vs. 3.5% prior, 3.4% vs. 3.3% in May ex-food and energy.
June exports fell 0.5% year-over-year vs. -1.7% prior.
May industrial production fell 0.1%, -2.4% year-over-year.
We have a big Upper House election this weekend.
Street Bytes
—Nasdaq hit new record highs each day this week, while the S&P 500 hit its own record on Thursday. The Dow Jones is just a good one-day rally away from its closing high. On the week, the Dow did finish down ever so slightly, 0.1% to 44342, the S&P rose 0.6% and Nasdaq 1.5%.
Earnings have been solid thus far, with the big tech players to come, but it’s been clear sailing thus far, albeit at rather lofty valuations. The Street is also taking the tariff crosscurrents in stride.
Earnings from the likes of Tesla and Alphabet next week.
—U.S. Treasury Yields
6-mo. 4.26% 2-yr. 3.88% 10-yr. 4.43% 30-yr. 5.00%
Treasuries were unchanged on the week.
Going back to last Friday afternoon, we had the release of the federal budget deficit figures for June and it was a surplus, $27 billion, though the deficit for the first nine months was $1.337 trillion.
Net tariffs came in at $26.6 billion, and that’s great, a $300 billion annualized pace, but outlays for the fiscal year will come in around $6.75 trillion. And someone is still bearing the costs of the tariffs.
In May, the budget deficit was $315.6 billion.
Treasury Secretary Scott Bessent said on X that the results show the U.S. “reaping the rewards” from Trump’s tariff agenda.
“As President Trump works hard to take back our nation’s economic sovereignty, today’s Monthly Treasury Statement is demonstrating record customs duties – and with no inflation!” Bessent said.
Meanwhile, interest costs on the national debt continued to grow, exceeding all other individual outlays at $921 billion for the first nine months of the fiscal year.
On a different topic, China trimmed its U.S. Treasury holdings for a third straight month in May, amid escalating trade tensions with Washington and mounting concerns over a sweeping tax and spending bill.
Beijing’s holdings fell to U.S. $756.3 billion from U.S. $757.2 billion in April, according to U.S. Treasury Department data. That was the lowest level since March 2009, based on figures compiled by Wind.
The decline has continued since March, when China dropped to third place among foreign holders, behind Japan and the United Kingdom.
But, despite China’s continued selling and an overall monthly dip, total foreign holdings of U.S. Treasuries – including short-term bills and longer-term bonds – rose to $9.05 trillion in May, marking the third straight month above the $9 trillion mark.
—Crude oil declined about a $1 on the week. But we had some big news this morning concerning Chevron and Exxon Mobil. An arbitration panel cleared the way for Chevron to close its $53 billion purchase of Hess, dismissing Exxon’s claim that it had a contractual right to bid for Hess’s crown-jewel assets in Guyana.
The ruling handed down Friday from the International Chamber of Commerce in Paris resolved an often tense and long-running dispute between the two energy giants over one of the world’s most coveted oil projects. Chevron then immediately closed its deal with Hess.
Exxon sought to spoil Chevron’s plans last year when it asserted a right to pre-empt its rival’s bid for Hess’s 30% stake in Guyana’s prolific offshore block. Chevron argued a right-of-first-refusal on the project wouldn’t apply to the takeover of Hess.
Exxon said it respected the arbitration and dispute resolution process, while disagreeing with the ICC’s interpretation.
Exxon still has a 45% stake in the Guyana project, China’s CNOOC 25%, and now Chevron has 30%.
The ruling was critical to Chevron’s restructuring plans, and it provides a boost for its oil-and-gas portfolio.
—Nvidia Corp. CEO Jensen Huang said the U.S. government doesn’t need to be concerned that the Chinese military will use his company’s products to improve their capabilities.
Huang said the Chinese military will avoid using U.S. technology because of the risks associated with doing so, saying “They simply can’t rely on it” and “it could be, of course, limited at any time.”
Huang argued that the U.S. strategy to restrict technology exports to China will fail because it will spur growth of domestic capabilities in China that will eventually rival those created by the U.S. tech industry.
Huang made his comments on Sunday in an interview with CNN’s Fareed Zakaria.
So with the above in mind, Nvidia shares hit a new record on Monday after the company said it planned to resume sales of its H20 AI chip to China after securing Washington’s assurances that such shipments would get approved, a dramatic reversal from the Trump administration’s earlier stance on measures designed to limit Beijing’s AI ambitions.
U.S. government officials told Nvidia they would green-light export licenses for the H20 artificial intelligence accelerator, the company said in a blog post on Monday – a move that may add billions to Nvidia’s revenue this year, restoring its ability to fulfill orders it had written off as lost due to government restrictions. Nvidia designed the less-advanced H20 chip to comply with earlier China trade curbs from Washington, which Trump’s team tightened in April to block H20 sales to the Asian country without a U.S. permit.
Huang appeared on Chinese state broadcaster CCTV shortly after Nvidia announced the decision, saying the company had secured approval to begin shipping.
Washington in recent weeks has lifted a spate of export controls – including on chip design software – imposed ahead of last month’s trade talks in London. That’s in return for China allowing more sales of rare-earth minerals needed to make a range of high-tech products, something the U.S. thought they had achieved in talks in Geneva the prior month. Back then, Trump’s team insisted that controls on Nvidia’s H20 chips were not up for discussion, and then the about-face…a massive win for Huang, who has branded U.S. chip curbs a “failure” as it fueled the rise of Huawei Technologies Co. as Nvidia’s top Chinese rival. H20 shipments are also a boon to companies like DeepSeek and Alibaba, who seek Nvidia hardware to train, expand and operate the AI services they’re building to compete with the likes of OpenAI.
—Netflix beat expectations for its second-quarter earnings results Thursday afternoon, but much of the strength came from a weakened U.S. dollar.
The company reported $7,19 a share in earnings, ahead of Wall Street’s consensus estimate of $7.08, and up from $4.88 last year. Revenue for the quarter reached $11.08 billion, just above expectations of $11.06 billion, and up 16% on the year. Operating profit margin also exceeded expectations.
The company’s outlook for the third quarter was solid. The company’s projection of $6.87 a share in earnings is better than analysts’ estimates of $6.69. Netflix guided to revenue of $11.56 billion versus the expectation of $11.28 billion.
But the company explained in its shareholder letter that all of these beats came from a weaker U.S. dollar in the second quarter than Netflix anticipated three months ago when it gave guidance.
Netflix got 59% of its sales from abroad in 2024, which are subject to the whims of exchange rates. When the dollar weakened, Netflix earned foreign revenue in strengthening currencies like the euro, but booked it in the weakening dollar.
All this aside, Netflix has notched seven quarters in a row with double-digit revenue growth. The stock has been soaring, though it fell 2% today following the release.
According to Nielsen’s June U.S. viewing data, Netflix easily tops all but Alphabet’s YouTube, whose viewing share has increased from 9.9% a year ago to 12.8% in June, with Netflix trailing with 8.3%. The next closest is the combination of Disney’s three streaming services at a 4.8% share.
—It was Big Bank earnings week….
JPMorgan Chase’s second-quarter profit fell to $14.2 billion, but the New York bank beat Wall Street expectations. CEO Jamie Dimon on Tuesday touted another strong performance, particularly its markets division, where revenue rose $8.9 billion.
JPMorgan earned $4.96 per share, adjusted for one-time items, beating the $4.48 analysts were forecasting, but down from last year’s $6.12 per share.
Total managed revenue hit $45.7 billion, also beating expectations but below last year’s $51 billion. The Street was at just under $44 billion.
Dimon said the U.S. economy remained resilient in the second quarter, highlighting tax reform and the potential for more deregulation. However, he noted that plenty of risks remain, including tariffs and trade uncertainty, worsening geopolitical conditions and elevated fiscal deficits.
“As always, we hope for the best but prepare the firm for a wide range of scenarios.”
Market activity surged as investors seized opportunities and hedged risks in response to shifting U.S. tariff policies. The turmoil propelled JPMorgan’s trading revenue 15% higher to $8.9 billion, driven by gains in both fixed income and equities.
Investment banking fees rose 7% to $2.5 billion, underpinned by a rise in initial public offerings and mergers and acquisitions.
Overall profit was $14.99 billion, or $5.24 per share, for the three months ended June 30, compared with $18.15 billion, or $6.12 per share, a year earlier, the largest U.S. bank said.
[The difference between overall profit and the figure I listed up above was a nearly $8 billion one-off gain the bank recorded on a share exchange agreement with Visa last year.]
Separately, Jamie Dimon sounded Wall Street’s clearest warning against the Trump administration’s attacks on Federal Reserve Chair Jerome Powell, describing the central bank’s independence as crucial.
“I think the independence of the Fed is absolutely critical,” Dimon said on the earnings call. “Playing around with the Fed can have adverse consequences, the absolute opposite of what you might be hoping for.”
Wells Fargo’s profit rose in the second quarter as it set aside less money to shield for potential bad loans.
But the shares fell as the lender cut its expectation for annual interest income, which it expects to be roughly in line with 2024’s level of $47.7 billion. In April, the bank had forecast NII growth would be at the low end of the 1% to 3% range. [NII the difference between what it earns on loans and pays out on deposits.]
Meanwhile, provision for credit losses fell to $1.01 billion in the quarter from $1.24 billion a year ago.
The fourth-largest U.S. lender’s net income was $5.49 billion, or $1.60 per share for the second quarter, vs. $4.91 billion, or $1.33 a year earlier.
Last month, the Federal Reserve lifted Wells Fargo’s seven-year-long $1.95 trillion asset cap, allowing the bank to pursue unimpeded growth.
Citigroup’s quarterly profit beat Wall Street estimates on Tuesday, as its traders brought in a windfall from turbulent markets and investment bankers gained from resilient dealmaking.
The third-largest U.S. lender’s net income was $4 billion, or $1.96 per share, for Q2, with total net income rising 25% from a year earlier. Analysts expected $1.60 per share.
Markets revenue jumped 16% to $5.9 billion, its best performance since the second quarter of 2020.
Investment banking remained subdued for most of the quarter, as economic uncertainty and choppy markets made companies hesitant to pursue deals.
But a rebound in June, marked by a string of large IPOs and multi-billion-dollar buyouts, has fueled optimism for the second half.
Citi’s investment banking fees climbed 13% in the second quarter, while overall banking revenue increased nearly 19% to $1.9 billion.
Citi’s revenue rose 8% in the quarter from a year earlier to $21.7 billion.
Bank of America’s profit rose in the second quarter as its traders brought in more revenue from tumultuous markets in the second quarter, it said on Wednesday.
BofA’s sales and trading revenue jumped 15% to $5.4 billion in the quarter, the 13th consecutive quarter of year-over-year revenue growth.
In trading, equities revenue surged 10%, while fixed income, currencies and commodities (FICC) revenue jumped 16% in the quarter.
“Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose. In addition, we saw good momentum in our markets businesses,” CEO Brian Moynihan said.
BofA’s investment banking fees slid 9% to $1.4 billion in the second quarter.
Investment banking fees rose 7% at JPM, 13% at Cit and 9% at WFC.
The bank’s profit was $7.1 billion, or 89 cents per share, compared with $6.9 billion, or 83 cents per share, a year earlier.
Goldman Sachs’ profit jumped 22% in the second quarter, as turbulent markets lifted equities trading to a record and a pickup in dealmaking boosted investment banking.
Goldman’s equities trading revenue rose 36% to $4.3 billion, while FICC hauled in $3.47 billion, 9% higher than a year ago.
Investment banking fees stood at $2.19 billion in the quarter, rising 26% from a year earlier.
Overall profit was $3.7 billion, or $10.91 per share, for the three months ended June 30, compared with $3.04 billion, or $8.62 per share in Q2 2024.
Revenue from Goldman’s asset and wealth management arm, which caters to institutions and high net-worth individuals, dipped 3% to $3.78 billion due to weakness in equity and debt investments.
The bank set aside $384 million as provisions for credit losses, compared with $282 million last year.
Morgan Stanely’s profit climbed as it too took advantage of market volatility that buoyed its trading desk. The investment bank posted net income of $3.5 billion, or $2.13 per share for the second quarter, compared with $3.1bn, or $1.82, a year earlier. The Street was at $1.96 per share.
Revenue reached $16.8 billion vs. $15bn a year ago, also topping expectations.
Equity trading revenue surged 23%, while it jumped 9% in fixed income.
Investment banking revenue fell 5% in the quarter, lagging rivals Goldman and JPMorgan.
BlackRock’s assets under management hit a new high in the second quarter as global markets rallied on the prospect of trade deals and interest-rate cuts from the U.S. Federal Reserve, brushing aside earlier tariff-related jitters.
BlackRock’s assets under management rose to $12.53 trillion in the quarter ended June 30, from $10.65 trillion last year. However, long-term net inflows fell to $46 billion in the quarter, down 9.8%, as a large Asian investor redeemed their assets.
As equities rallied, fixed-income products saw outflows of $4.66 billion, BlackRock said.
Trends for the business are being closely scrutinized, given the turbulence in U.S. treasuries his quarter.
BlackRock’s fixed-income executives expressed concerns last month that ballooning U.S. debt could suppress appetite for longer-dated treasuries and the dollar, which recorded its worst first-half performance this year since 1973.
Adjusted profit came in at $1.88 billion, or $12.05 per share, for the three months ended June 30, up from $1.55 billion, or $10.36 per share, a year earlier.
—United Airlines forecast on Wednesday a lower-than-expected profit in the quarter through September as worries about rising living costs and an uncertain economic outlook have led to a pullback in discretionary travel spending.
The Chicago-based airline, however, said it has seen an improvement in overall bookings in the current quarter from the prior one, with a double-digit acceleration in business travel demand.
But United expects an adjusted profit in the range of $2.25 a share to $2.75 per share in the quarter through September. The midpoint of the forecast is $2.50 per share, compared with analysts’ average estimate of $2.60.
Its earnings in the third quarter are also expected to take a hit as a result of disruptions at Newark airport.
The company’s full-year adjusted profit is now estimated to come in the range of $9 a share to $11 a share, with consensus at $10.04 a share.
For the second quarter, the carrier reported earnings of $3.87 a share, beating the $3.81 analysts expected.
United’s net income of $973 million was down 26% from the year-ago quarter, while total operating revenue of $15.2 billion increased 1.7%.
In April, United took an unusual step of offering two different earnings forecasts as President Trump’s trade war dented consumer and business confidence, making it harder for carriers to forecast their business.
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 air fares, government data shows.
United said demand trends have improved since the beginning of July, especially in business class, thanks to less geopolitical and macroeconomic uncertainty.
—New details in the probe of last month’s Air India crash are shifting the focus to the senior pilot in the cockpit.
A black box recording of dialogue between the flight’s two pilots indicates it was the captain who turned off switches that controlled fuel flowing to the plane’s two engines, according to people familiar with U.S. officials’ early assessment of evidence uncovered in the crash investigation.
The first officer who was flying the Boeing 787 Dreamliner asked the more-experienced captain why he moved the switches to the “cutoff” position after it climbed off the runway, sources told the Wall Street Journal. The first officer expressed surprise and then panicked, these people said, while the captain seemed to remain calm.
The preliminary report summarized the exchange but didn’t identify which pilot said what.
The captain was a decadeslong veteran, while the first officer was in his 30s and eager for the next stage of his career, friends and family members said.
—TSA checkpoint numbers vs. 2024
7/17…114 percent of 2024 levels
7/16…103
7/15…89
7/14…98
7/13…116
7/12…91
7/11…102
7/10…109
—SpaceX has committed $2 billion to xAI as part of a $5 billion equity round, deepening the ties between Elon Musk’s ventures as his artificial intelligence startup races to compete with OpenAI, according to a report in the Wall Street Journal.
The investment follows xAI’s merger with X and values the combined company at $113 billion, with the Grok chatbot now powering Starlink support and eyed for future integration into Tesla’s Optimus robots, the report added.
In response to a post on X about whether Tesla could also invest in xAI, Musk said on Sunday, “It would be great, but subject to board and shareholder approval,” without confirming or denying the Journal report on SpaceX’s investment plans in xAI.
Meanwhile, Tesla’s top sales executive in North America, Troy Jones, left after 15 years at the company, the latest high-level departure at the EV maker.
–Going back to last Friday, the Wall Street Journal pointed out that Ford Motor Co. has set a record for the number of recalls in a calendar year by an auto maker. Through early Friday, Ford has recorded 89 recalls, according to the National Highway Traffic Safety Administration database.
Chief Operating Officer Kumar Galhotra told the Journal that “The increase in recalls reflects our intensive strategy to quickly find and fix any hardware and software issues and go the extra mile to protect customers.”
But remember when Ford’s old advertising slogan was “Quality is Job One”?
I mean the number of recalls is a record for a calendar year and this is in the first six months. [It was 88 through June 30, 89 as of July 11.]
A week ago last Thursday, Ford said it would recall an additional 850,000 pickup trucks and sport-utility vehicles because of a potential fuel-pump failure. A bad fuel pump could result in the engine stalling while a driver is operating the vehicle, according to the recall.
—ASML Holding NV shares plunged after CEO Christophe Fouquet walked back the company’s growth forecast for next year, blaming trade disputes and global tensions.
“We continue to see increasing uncertainty by macro-economic and geopolitical developments,” Fouquet said in a statement on ASML’s quarterly results Wednesday. “Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”
ASML is the only company that makes extreme ultraviolet lithography machines, which produce the advanced semiconductors that power artificial intelligence data centers and smartphones. Chips are currently exempt from U.S. tariffs but there’s uncertainty over how the equipment ASML makes will be affected. [The company is headquartered in the Netherlands.]
ASML’s clients are delaying commitments until there’s more clarity on tariff and export controls, the company said.
Among ASML’s biggest customers outside the U.S. are Taiwan Semiconductor Manufacturing Co. and Samsung Electronics, which have to deal with U.S. restrictions on tech exports to China.
–Speaking of TSMC, the world’s main producer of advanced AI chips, it posted record, forecast-beating quarterly profit on Thursday but warned that future income might be hit by U.S. tariffs, though perhaps not until the fourth quarter.
Saying demand for artificial intelligence was getting stronger and stronger, Taiwan Semi predicted another leap in sales for the third quarter and hiked its revenue outlook for the full year.
It also noted that key client Nvidia had recently been allowed by the U.S. government to resume sales to China of its H20 AI chip.
“China is a big market, and my customer can continue to supply the chip to the big market, and it’s very positive news for them and in return it’s very positive news for TSMC,” CEO C.C. Wei told a press conference.
But momentum for fourth-quarter earnings could be different.
“We are taking into consideration the possible impact of tariffs and a lot of other uncertainties, so we are becoming more conservative,” he said, though he added that TSMC had yet to see any changes in customer behavior so far.
In the April-June quarter, net profit hit a historic high of T$398.3 billion ($13.5 billion), up 60.7% year-on-year and marking its fifth straight quarter of double-digit growth. That was well ahead of consensus.
For the current quarter, it predicted a leap in revenue of up to 40% and for the full year, it now estimates revenue growth of around 30% in U.S. dollar terms, up from a previous forecast of “close to the mid-20s.”
Margins, however, are being impacted by the Taiwan dollar’s appreciation against the U.S. dollar.
TSMC announced plans for a $100 billion U.S. investment with President Donald Trump at the White House in March, on top of $65 billion pledged for three plants in Arizona, one of which is up and running.
But Trump has said semiconductor specific tariffs could come soon. Taiwan was also threatened with a 32% reciprocal tariff rate in April, although it has yet to be notified of an updated figure that some countries have received.
—Johnson & Johnson raised its full-year sales forecast on Wednesday after beating estimates for second-quarter profit on strong demand for its cancer drug, Darzalex, and strength in its medical device business.
The company also reduced its expectations for tariff-related costs to $200 million from $400 million for the year, citing the Trump administration’s pause on levies on China and other retaliatory tariff measures.
On an adjusted basis, the drug and medical device maker earned $2.77 per share for the quarter, above analysts’ expectations of $2.68 per share. Sales in the quarter were $23.74 billion above consensus of $22.84bn.
The company said it now expects full-year sales, including the impact of foreign currency, in the range of $93.2 billion to $93.6 billion, up from its April forecast of $91 billion to $91.8 billion. Analysts were at $91.5 billion for the year.
Darzalex, a blood cancer therapy launched in 2015, brought in second-quarter sales of $3.54 billion, higher than expectations.
Shares of the company rose on the day, Wednesday, following the earnings release.
—Bitcoin hit new record highs Monday, $122,800, before pulling back as lawmakers were set to advance several key pieces of legislation, which aim to establish structure for the crypto sector.
The House then cleared legislation outlining the first federal rules for stablecoins, a popular form of digital currency.
A bipartisan vote (308-122) to approve the bill, known as the Genius Act, sent it to the White House for President Trump’s signature, which he affixed this afternoon.
But another piece of legislation, potentially more consequential, is still working its way through Congress and was in doubt in the Senate. The “Clarity Act” would establish cryptocurrency market regulations that industry executives have championed for months.
—Starbucks is mandating workers return to the office 4 days/week starting in late September. CEO Brian Niccol is also broadening expectations for which workers need to relocate to either of its North American hubs in Seattle and Toronto. Those workers who are expected to be in-person in either location will have a year to make the move. The company said it will also offer buyouts to employees who don’t plan to meet these expectations as part of this broader mandate.
“We are reestablishing our in-office culture because we do our best work when we’re together,” CEO Brian Niccol wrote. “We share these ideas more effectively, creatively solve hard problems, and move much faster. Being in person also helps us build and strengthen our culture. As we work to turn the business around, all these things matter more than ever.”
—PepsiCo shares surged 6% on Thursday after the company said it was expecting a smaller drop in annual core profit, helped by a rebound in demand for its energy drinks and healthier soda brands in the United States as well as benefits from favorable foreign exchange rates.
The company now expects full-year core earnings per share to fall 1.5%, compared with a 3% decline expected previously.
PepsiCo, like rival Coca-Cola, has responded to a shift towards healthier snacking from consumers by offering options such as its recently acquired prebiotic soda brand Poppi and new flavors under popular brands such as Lay’s and Doritos.
While higher prices over the past few years have helped shield the company’s margins, PepsiCo is also trying to offer more products at lower price points to appeal to cost-conscious consumers.
The company’s second-quarter revenue rose about 1% to $22.73 billion, compared with analysts’ expectations of a 1% decline to $22.28bn.
–President Trump announced Wednesday that Coca-Cola would soon include cane sugar in Coke in the United States.
“I’d like to thank all of those in authority at Coca-Cola. This will be a very good move by them – You’ll see. It’s just better!” the president posted on Truth Social.
The soda maker switched to high fructose corn syrup in the 1980s over concerns about cost and agricultural requirements, but many Coke fans still prefer the taste with real sugar.
Trump is a well-known avid drinker of Diet Coke – which contains no sugar at all.
Coca-Cola then defended its use of corn syrup in a statement Thursday.
“The name sounds complex, but high fructose corn syrup (HFCS) – which we use to sweeten some of our beverages – is actually just a sweetener made from corn,” the company said. “It’s safe; it has about the same number of calories per serving as table sugar and is metabolized in a similar way by your body.”
—James Gunn’s “Superman” was the undisputed star of another breakout summer movie weekend, selling $122 million in tickets during a weekend expected to generate nearly $200 million in domestic box office sales. The film grossed another $95 million in 78 international markets, including $6.6 million in China, for an estimated $217 million global weekend.
“Jurassic World Rebirth” picked up another $40 million in ticket sales in its second weekend and has sold more than $232.1 million domestically and $529.5 million globally.
“F1 The Movie” was in third with $13 million in domestic ticket sales, $136.2 million in domestic cumulative sales and $393.4 million globally since it opened June 27.
Friday, Paramount’s animated “Smurfs” opens.
—CBS shocked the television world on Thursday when it announced it was canceling “The Late Show with Stephen Colbert” and retiring a late-night franchise that has existed for more than three decades.
Colbert’s run – and “The Late Show” itself – will end in May.
“This is purely a financial decision against a challenging backdrop in late night,” said George Cheeks, the president of CBS and co-chief executive of Paramount, CBS’ parent company. “It is not related in any way to the show’s performance, content or other matters happening at Paramount. Our admiration, affection and respect for the talents of Stephen Colbert and his incredible team made this agonizing decision even more difficult.”
But the announcement came two days after Colbert spoke out against Paramount Global for settling with President Trump over a “60 Minutes” story.
“I am offended,” Colbert said in his monologue Monday night. “I don’t know if anything – anything – will repair my trust in this company. But, just taking a stab at it, I’d say $16 million would help.”
He said the technical name in legal circles for the deal was “big fat bribe.”
The most recent ratings from Nielsen show Colbert as winning his timeslot, with about 2.417 million viewers across 41 new episodes. It also said his late night show was the only one to gain viewers so far this year.
Foreign Affairs
Russia/Ukraine: President Trump announced the U.S. will send “top-of-the-line weapons” to Ukraine via NATO countries, while also threatening Russia with severe tariffs if a deal to end the war is not reached within 50 days.
“We want to make sure Ukraine can do what it wants to do,” Trump said following a meeting with NATO chief Mark Rutte in Washington.
Rutte confirmed the U.S. had decided to “massively supply Ukraine with what is necessary through NATO” and that the Europeans would foot the bill.
European countries will send Kyiv their own Patriot air defense systems – which Ukraine relies on to repel Russia’s deadly air strikes – and replacements will then be issued by the U.S., Trump said.
“If I was Vladimir Putin today…I would reconsider whether I should not take negotiations about Ukraine more seriously,” Rutte said, as Trump nodded.
On the tariffs front, Trump said that the U.S. would impose 100% secondary tariffs targeting Russia’s remaining trade partners if a peace deal with Ukraine was not reached within 50 days.
This would see any country that trades with Russia face the tax if they want to sell their products to the U.S.
For example, if India keeps buying oil from Russia, U.S. companies that purchase Indian goods would have to pay a 100% import tax, or tariff, when the products reach American shores.
This would make the goods so expensive that U.S. businesses would likely choose to buy them cheaper from elsewhere, resulting in lost revenue for India.
The intention is also to hobble Russia’s economy. If Moscow can’t sell oil to other nations, theoretically it would have less money to finance its war in Ukraine.
Oil and gas account for about a third of Moscow’s state revenue.
Asked about his relationship with Putin, Trump said that the two speak “a lot about getting this thing done” but voiced his displeasure at the fact that “very nice phone calls” with the Russian president are often followed by devastating air strikes on Ukraine – which have been growing in intensity and frequency.
“After that happens three or four times you say: the talk doesn’t mean anything,” Trump said.
“I don’t want to call him an assassin but he’s a tough guy. It’s been proven over the years, he fooled a lot of people – Clinton, Bush, Obama, Biden,” he added. “He didn’t fool me. At a certain point talk doesn’t talk, it’s got to be action.”
Putin fooled you, Mr. President. Admit it.
Russian Senator Konstantin Kosachev argued that “if this is all Trump had to say about Ukraine today, then so far it’s been much ado about nothing.”
In 50 days a lot could change “both on the battlefield and in the moods of the powers that be in the U.S. and NATO,” Kosachev wrote.
–An attack Wednesday evening killed at least two people and injured 27 following a Russian air strike on a shopping center and market in the town of Dobropillia in eastern Donetsk region, officials said.
More than 50 shops, 300 apartments and eight cars were damaged, the regional governor said on Telegram.
In his nightly address, President Zelensky described the strike as “simply horrific” and said there was “no military logic” to it. Russia didn’t comment.
The attack came as U.S. special envoy to Ukraine, Keith Kellogg, was in Kyiv on a week-long trip to discuss U.S.-Ukrainian cooperation with Zelensky.
In March, a rocket, drone and missile attack killed 11 people in the town, including five children.
In an attack overnight last Friday, Russian fired 597 drones and decoys, with 26 cruise missiles, all across Ukraine, with two people dying in the Chernivtsi region of southwestern Ukraine.
The western Lviv region was hit hard, as was Kharkiv in northeastern Ukraine.
And then overnight Saturday, the Kremlin launched 623 drones and 26 missiles, killing at least 13 civilians; three of which were in the southeastern Dnipropetrovsk region, two in Zaporizhzhia region, four in the Sumy region and four were slaughtered by guided bombs in Donetsk, local officials reported.
Editorial / Wall Street Journal
“It took six months, but President Trump seems to have concluded that Vladimir Putin doesn’t want peace in Ukraine. The Russian will have a ‘lovely’ talk with the President ‘and then the missiles go off that night,’ Mr. Trump said in the Oval Office on Monday. This new realism is a welcome change from Mr. Trump’s previous strategy of leaning only on Ukraine and has a better chance of getting a cease-fire.
“The best news from Monday’s White House meeting is that the free world will continue to arm Ukraine against Mr. Putin’s ravages. ‘In a nutshell, we’re going to make top of the line weapons, and they’ll be sent to NATO’ for Ukraine, Mr. Trump said while appearing with alliance Secretary General Mark Rutte.
“ ‘That might also mean that countries will move equipment fast into Ukraine and then the U.S. later backfilling it,’ Mr. Rutte added, ‘Because speed is of the essence here.’
“Some Patriot air-defense missiles could move into Ukraine within days, and they will no doubt be of immediate help. As our Jillian Melchior reported from Kyiv on Monday, Mr. Putin has escalated his aerial assault on Ukraine’s cities with ever-more attack drones and missiles. There is no military purpose for this, as Mr. Rutte said at the White House, except killing civilians to break Ukrainian morale….
“The President also threatened a new 100% tariff on countries that buy Russian goods if there’s no progress toward a cease-fire within 50 days. The threat is clearly an attempt to get ahead of the bill by Sens. Lindsey Graham and Richard Blumenthal that would slap tariffs of up to 500% on countries that purchase Russian oil and gas products.
“The 50-day reprieve is too generous to Mr. Putin, who may think it means Mr. Trump doesn’t really want to do it. Messrs. Graham and Blumenthal issued a statement praising Mr. Trump’s turn on weapons but with a hint of disappointment that he didn’t endorse their sanctions bill, which has 85 co-sponsors….
“The President is clearly frustrated by his inability to end the war, and he seems to have concluded that Mr. Putin is playing him as he has other U.S. leaders. Mr. Trump pointedly said the Russian had fooled Presidents going back to George W. Bush, and he’s right.
“The combination of sanctions and arms is no guarantee that Mr. Putin will negotiate a cease-fire. He is hell-bent on making Ukraine a Russian satrapy. But as the costs of war rise, so does pressure on Mr. Putin. On Monday Mr. Rutte said 100,000 Russian soldiers have died in the war this year. Russia’s economy is in trouble at last, and cutting off its financial lifeline from oil sales will hurt his war machine.
“Mr. Trump called Monday ‘a big day,’ and it will be if it represents a durable turn toward checking Mr. Putin in Europe. The President also said a strong Western Europe is in America’s interests, and an independent Ukraine is essential to that cause.”
David Ignatius / Washington Post
“At first, Trump thought it would be easy to persuade his friend Vladimir Putin to stop the war, he explained on Monday. ‘I felt we had a deal about four times.’ But he has finally realized that the only way to get the Russian leader to make peace is by significantly raising the cost of continuing the conflict. With that decision, Trump opened a new chapter in the Ukraine story, one that carries both hope and danger.
“Trump on Monday threatened to impose ‘severe tariffs’ against Russia if it doesn’t make peace within 50 days. And he pledged to provide Patriot missiles, air defense weapons and artillery – selling them to NATO countries that would then pass them on to Ukraine. That military assistance package totals $10 billion, a source briefed on the deal told me. It will give Ukraine and its battered people some breathing space from a Russian barrage that included more than 700 missile and drone attacks on some days last week.
“What Trump didn’t talk about is that the military assistance might also include authorization for some powerful new offensive weapons. I’m told by a source involved in the decision that this is likely to include permission to use the 18 long-range ATACMS missiles now in Ukraine at their full range of 300 kilometers (about 190 miles). That wouldn’t reach all the way to Moscow or St. Petersburg, but it would strike military bases, airfields and supply depots deep inside Russia that are now out of range. The package might also include more ATACMS.
“Pentagon officials have for months urged deeper strikes into Russia using ATACMS. Each time the range limit was extended, the Russians simply moved their planes and other equipment beyond the Ukrainians’ reach. That will be harder now.
“Trump also considered sending Tomahawk cruise missiles, the same weapons fired against Iranian targets last month. If fired from Ukraine, these could hit Moscow and St. Petersburg, and they were included in discussion as late as Friday. But the Tomahawks are off the delivery list for now, I’m told. That could be deployed later if Trump wants even more leverage….
“Trump is playing hardball with Putin. He’s angry. The Russian leader wasn’t ‘nice,’ as Trump likes to say. ‘I don’t want to say he’s an assassin, but he’s a tough guy,’ Trump said Monday during an Oval Office meeting with NATO Secretary General Mark Rutte.
“Trump decided to escalate for three reasons, according to a source familiar with administration discussions. First, he believed that Putin was disrespecting him, feigning a readiness to make peace but ignoring the U.S. president’s call for a ceasefire. Second, he saw the efficacy of U.S. military power in the use of B-2 bombers and Tomahawk missiles against Iran. And third, he thought Putin would only negotiate if threatened with greater force. As the Russians like to say, Trump decided to ‘escalate to de-escalate.’
“Trump has made a sound choice in recognizing that Putin won’t make concessions without more pressure. But the president has also embarked on an escalatory course whose risks are unknowable. It was interesting that the one question Trump didn’t want to answer in Monday’s Oval Office session was: If Putin decides to escalate further, how far are you willing to go in response?
“ ‘Don’t ask me a question like that, ‘How far?’’ Trump snapped. ‘I just want to get the war settled.’
“If Trump can make this new pressure campaign work, he might just deserve Nobel’s famous prize. But on the way to peace, there might be more dynamite.” [A reference to Albert Nobel being the inventor of dynamite.]
Israel/Gaza/Syria: Syrian government officials and leaders in the Druze religious minority announced Wednesday a renewed ceasefire after days of clashes that have threatened to unravel the country’s postwar political transition and have drawn intervention by Israel.
It was not immediately clear if the new agreement would hold. A previous ceasefire announced the day before quickly fell apart.
The announcement came after Israel launched a series of rare airstrikes in the heart of Damascus, part of a campaign that it said is intended to defend the Druze – who also form a substantial community in Israel – and to push Islamic militants away from its border.
The escalating violence has appeared to be the most serious threat yet to the ability of Syria’s new rulers to consolidate control of the country after a rebel offensive led by Islamist insurgent groups ousted longtime despotic leader, Bashar Assad, in December, bringing an end to a nearly 14-year civil war.
As clashes have raged for days in the southern Syria city of Sweida between government forces and Druze armed groups, Israel has launched dozens of strikes targeting government troops and convoys, and then on Wednesday struck the Syrian Defense Ministry headquarters in the heart of Damascus, and near the presidential palace.
The Druze are an Arabic-speaking ethno-religious minority in Syria, Lebanon, Israel and the occupied Golan Heights. They are an offshoot of Shia Islam with its own unique identity and beliefs.
Half of its roughly one million followers live in Syria, where they make up about 3% of the population. But the Druze community in Israel is largely considered to be loyal to the Israeli state, owing to its members’ participation in military service. There are some 152,000 Druze people living in Israel and the Israeli-occupied Golan Heights, according to the Israeli Central Bureau of Statistics and the BBC.
Well, it was another ceasefire that didn’t last. Clashes between Druze armed groups and members of Bedouin clans resumed.
Over 600 have died in the fighting, according to the Syrian Observatory for Human Rights, the top monitor for such statistics.
In Gaza, ten people, including six children, were killed in an Israeli air strike while waiting to fill water containers in central Gaza on Sunday, emergency service officials said.
Eyewitnesses said a drone fired a missile at a crowd queuing with empty jerry cans next to a water tanker in al-Nuseirat refugee camp.
The Israeli military said there had been a “technical error” with a strike targeting an Islamic Jihad “terrorist” that caused the munition to fall dozens of meters from the target. The incident is under review, the military added.
In another instance of people trying to get food, 20 were killed “amid a chaotic and dangerous surge” at an aid distribution center in southern Gaza, the U.S.- and Israel-backed Gaza Humanitarian Foundation (GHF) said.
Nineteen were trampled to death and one was stabbed at the distribution site in the Khan Younis area, a statement said, adding that it believed the surge was “driven by agitators in the crowd” who were affiliated with Hamas.
But officials at Naser Hospital said the aid site had been closed by the GHF’s U.S. private security contractors.
The UN human rights office said on Tuesday that it had so far recorded 674 killings in the vicinity of the GHF’s four sites in southern and central Gaza over the past six weeks. Another 201 killings had been recorded along routes of UN and other aid convoys, it added.
Separately, the International Committee of the Red Cross said it had treated more mass casualty cases at its Rafah field hospital in southern Gaza in the last six seeks than in the 12 months before that.
Lastly, the future of Prime Minister Benjamin Netanyahu’s government was thrown into doubt when an ultra-Orthodox party in Israel announced it was pulling out of the ruling coalition on Monday night. If more parties quit, they could weaken Netanyahu’s grip on power and bring Israel a step closer to its first elections since the war in Gaza began in October 2023.
At issue is a longstanding debate in the country over whether ultra-Orthodox religious students, who have long received exemptions from military service, can be conscripted. They argue that serving threatens their way of life, but many other Jewish Israelis resent what they regard as special treatment.
The issue has become even more contentious with the Gaza war; hundreds of Israeli soldiers killed in the conflict, while the ultra-Orthodox are sitting by, letting others die for them in battle. This really sucks, frankly. It’s outrageous.
Most Jewish Israelis are conscripted into the military after high school, but ultra-Orthodox men are often exempted so they can study holy texts.
Iran: Iranian Foreign Minister Abbas Araghchi said Saturday that his country would accept a resumption of nuclear talks with the U.S. if there were assurances of no more attacks against it, state media reported.
In a speech to Tehran-based foreign diplomats, Araghchi said that Iran has always been ready and will be ready in the future for talks about its nuclear program, but, “assurance should be provided that in case of a resumption of talks, the trend will not lead to war.”
Referring to the 12-day Israeli bombardment of Iran’s nuclear and military sites, and the U.S. strike on June 22, Araghchi said that if the U.S. and others wish to resume talks with Iran, “first of all, there should be a firm guarantee that such actions will not be repeated. The attack on Iran’s nuclear facilities has made it more difficult and complicated to achieve a solution based on negotiations.”
Following the strikes, Iran suspended cooperation with the UN nuclear watchdog, which led to the departure of inspectors.
Araghchi said that under Iranian law, the country will answer the agency’s request for cooperation “case by case,” based on Iran’s interests. He also said any inspection by the agency should be done based on Iran’s “security” concerns as well as the safety of the inspectors. “The risk of proliferation of radioactive ingredients and an explosion of ammunition that remains from the war in the attacked nuclear sites is serious,” he said.
He also reiterated Iran’s position on the need to continue enriching uranium on its soil. President Trump has insisted that cannot happen.
Iranian President Masoud Pezeshkian previously said in an interview that the U.S. airstrikes so badly damaged his country’s nuclear facilities that Iranian authorities still have not been able to access them to survey the destruction.
China: Chinese Foreign Minser Wang Yi said his sit-down with his American counterpart Marco Rubio in Kuala Lumpur last Friday had set the stage for deeper exchanges.
Speaking to Chinese media on Saturday, Wang said the talks had helped to manage U.S.-China differences as the rival powers seek to manage tensions amid the rising trade frictions.
“The meeting was constructive, with both sides engaging in equal dialogue in the spirit of mutual respect,” Wang said, according to a statement from his ministry.
“From the perspective of historical evolution and humanity as a whole, China and the United States, as two major countries, share extensive common interests and broad space for cooperation,” he said. “Both sides have the responsibility and the opportunity to find a correct way…to get along.”
Rubio also spoke positively about the meeting. The U.S. and China disagreed on some issues but the talks “gave us some things we can work on together,” he said.
Rubio also hinted at a possible meeting between presidents Trump and Xi Jinping this year. “The ‘odds are high,’ he said, but added that the two sides had to “build the right atmosphere and the right deliverables.”
Separately, from Joseph Menn / Washington Post:
“Undeterred by recent indictments alleging widespread cyberespionage against American agencies, journalists and infrastructure targets, Chinese hackers are hitting a wider range of targets and battling harder to stay inside once detected, seven current and former U.S. officials said in interviews.
“Hacks from suspected Chinese government actors detected by security firm CrowdStrike more than doubled from 2023 to more than 330 last year and continued to climb as the new administration took over, the company said. Bursts of espionage are typical with each new president, the officials said, and major staff cuts at the Cybersecurity and Infrastructure Security Agency have disrupted some response coordination.
“ ‘The U.S. is absolutely facing the most serious Chinese hacking ever. We are in China’s golden age of hacking,’ said China expert Dakota Cary of security company SentinelOne.”
The story goes on and on…we are so screwed….
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: 50% approve, 48% disapprove (July 18).
A new CNN/SSRS poll has Trump with a 42% approval rating, 58% disapproval.
A new Quinnipiac University survey has Trump at 40% approval, 54% disapproval.
On the economy, 42% approve of Trump’s handling of it, 55% disapprove.
On immigration, 40% approve, 54% disapprove.
Fewer than 2 in 10 voters (19 %) approve of the way Democrats in Congress are handling their job, while 72% disapprove, a record low since 2009 when Quinnipiac started asking the question.
One-third of voters (33%) approve of the way the Republicans in Congress are handling their job, while 62% disapprove.
A majority of voters (55%) oppose the One Big Beautiful Bill Act, while 35% support it.
—The MAGA revolt over Jeffrey Epstein fractured President Trump’s defensive line on Tuesday.
Trump praised Attorney General Pam Bondi’s general handling of the case, saying: “She’s handled it very well, and it’s going to be up to her. Whatever she thinks is credible, she should release.”
When asked by a reporter if the AG had told Trump whether his name appeared in any of the records, he said: “No, no.”
Later on Tuesday, the president again called for the release of “credible” information, but he questioned the enduring fascination with the Epstein case, calling it “sordid but boring.”
“Only really bad people, including the fake news, want to keep something like this going,” Trump said.
House Speaker Mike Johnson (R-La.) signaled support Tuesday for releasing government files related to Epstein – in an apparent break from President Trump.
“I’m for transparency,” Johnson said in an interview with conservative podcast host Benny Johnson, when asked if he would support congressional efforts to subpoena the Justice Department for documents or seek testimony from convicted Epstein accomplice Ghislaine Maxwell.
“It’s a very delicate subject, but we should put everything out there and let the people decide,” the House speaker declared.
Over in the Senate, Sens. Josh Hawley (R-Mo.) and Mike Lee (R-Utah) said they would support seeking testimony from Maxell.
Editorial / Wall Street Journal
“Donald Trump has traded in conspiracy stories for years: Barack Obama was born in Kenya. Ted Cruz’s father had a link to JFK’s killer. The 2020 election was stolen. Migrants are barbecuing people’s pets. He seems to think this is good show business, with appeal in certain niches of a fragmented culture.
“Yet now he’s upset that the Jeffrey Epstein theories he fanned are proving hard to tamp down. Mr. Trump lamented online Saturday that his Administration is taking heat ‘over a guy who never dies, Jeffrey Epstein. For years, it’s Epstein, over and over again.’ His advisers are suggesting this was a snipe hunt, but the MAGA base is in furious disbelief, since the same people pledged to catch some snipe.
“Asked on a podcast in 2024 about Epstein’s ‘list of clients,’ Mr. Trump said he’d have ‘no problem’ releasing it. Attorney General Pam Bondi said in February that ‘it’s sitting on my desk right now to review.’ FBI Director Kash Patel has been on this beat, too. ‘Put on your big boy pants and let us know who the pedophiles are,’ he told a podcast two years ago.
“But Ms. Bondi’s and Mr. Patel’s review ‘revealed no incriminating ‘client list,’’ the Justice Department and FBI said last week….
“The Trump Administration backs the assessment that Epstein killed himself in prison. But the jailhouse tape it released has a minute gap near midnight. Ms. Bondi said it’s a daily glitch, when the aging surveillance system resets. Yet to conspiracy raconteurs, it’s one more clue. Nothing will satisfy them, because they live in a world of storytelling, not evidence.
“Maybe podcast provocateurs think it’s fun to spin joking-not-joking yarns about Taylor Swift rigging the Super Bowl to help President Biden. What about the truth? By the way, Mr. Trump now says the Epstein furor can’t distract Ms. Bondi from the real conspiracy: ‘The 2020 Election was Rigged and Stolen, and they tried to do the same thing in 2024 – That’s what she is looking into as AG, and much more.’”
Wednesday morning, Trump posted on Truth Social:
“The Radical Left Democrats have hit pay dirt, again! Just like with the FAKE and fully discredited Steele Dossier, the lying 51 ‘Intelligence’ Agents, the Laptop from Hell, which the Dems swore had come from Russia (no, it came from Hunter Biden’s bathroom!), and even the Russia, Russia, Russia Scam itself, a totally fake and made up story used in order to hide Crooked Hillary Clinton’s big loss in the 2016 Presidential Election, these Scams and Hoaxes are all the Democrats are good at – it’s all they have – They are no good at governing, no good at policy, and no good at picking winning candidates. Also, unlike Republicans, they stick together like glue. Their new SCAM is what we will forever call the Jeffrey Epstein Hoax, and my PAST supporters have bought into this ‘bullshit,’ hook, line, and sinker. They haven’t learned their lesson, and probably never will, even after being conned by the Lunatic Left for 8 long years. I have had more success in 6 months than perhaps any President in our Country’s history, and all these people want to talk about, with strong prodding by the Fake News and the success starved Dems, is the Jeffrey Epstein Hoax. Let these weaklings continue forward and do the Democrats work, don’t even think about talking of our incredible and unprecedented success, because I don’t want their support anymore! Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN!”
Unbelievable. Quite a move…to call your base weak and dumb.
Trump on Thursday said Bondi should release the grand jury testimony, the “pertinent” parts.
The above-noted Quinnipiac poll had just 17% of voters saying they approve of the way the administration is handling the Epstein files, while 63% disapprove, and 20% offered no opinion.
Republicans are split…40% approve of the way Trump is handling it, 36% disapprove.
The Wall Street Journal broke the story late Thursday that a book of letters Ghislaine Maxwell had prepared for Epstein’s 50th birthday contained one from Donald Trump that was rather bawdy.
Pages from the leather-bound album – assembled before Epstein was first arrested in 2006 – are among the documents examined by Justice Department officials who investigated Epstein and Maxwell years ago, according to the Journal’s reporting.
Trump denied writing the letter, in an interview with the Journal, or drawing a picture of a naked woman that his signature is allegedly on. “This is not me. This is a fake Wall Street Journal story,” he said.
“I never wrote a picture in my life. I don’t draw pictures of women,” he said. “It’s not my language. It’s not my words.”
Well, that’s rather laughable coming from the man who uttered ‘You can grab them by the pussy…”
Trump said he would sue, of course.
—The Supreme Court agreed on Monday that the Trump administration can proceed with dismantling the Education Department by firing thousands of workers.
It’s a significant victory for the administration and could ease President Trump’s efforts to sharply curtail the federal government’s role in the nation’s schools.
It also represents an expansion of presidential power, allowing Mr. Trump to functionally eliminate a government department created by Congress, without legislators’ input.
The order is technically temporary, applying while appeals proceed through the courts. In practice, thousands of fired workers whom a Boston judge had ordered be reinstated are now again subject to removal from their jobs.
The department was created by an act of Congress, and legislators had not given approval to eliminate it.
—The Senate passed about $9 billion in federal spending cuts requested by President Trump, including deep reductions to public broadcasting and foreign aid, moving forward on one of the president’s top priorities despite concerns from several Republican senators.
The 51-48 vote came after 2 a.m. Thursday after Democrats sought to remove many of the proposed rescissions during 12 hours of amendment votes. None of the Democratic amendments were adopted.
The legislation then moved to the House, where it passed 216-213, with two Republicans in opposition.
—Editorial / Wall Street Journal
“The U.S. bombing raid on Iran’s nuclear sites was an impressive military feat, but don’t let that success fool you. The B-2 bombers are nearly 30 years old, and the U.S. has only 19 of them in service. The military is in worse shape than President Trump claims, and he’s ducking the second-term rearmament he promised.
“The White House is touting its $1 trillion defense budget for 2026. Mr. Trump has also taken a deserved bow for getting NATO to agree to spend 5% of GDP on defense.
“But the U.S. isn’t meeting that NATO target. It’s spending roughly half the 6% of GDP it devoted to defense at the height of Ronald Reagan’s military buildup. Even the $1 trillion is a game of three-card monte. The Administration counts in that total about $113 billion for defense in the GOP’s budget reconciliation bill. That money was supposed to turbocharge purchases of ships, aircraft and unmanned technology – above normal defense spending.
“Yet when the budget bill is excluded, the Administration has proposed a cut after inflation for 2026. Absent more annual GOP bills, which may not be possible if Republicans lose Congress, defense spending could fall to about 2.65% of the economy by 2029 at the end of Mr. Trump’s term. That’s comparable to the European levels that Mr. Trump thinks are so pathetic.
“Take shipbuilding. The 2026 request for a mere three U.S. Navy ships, though the fleet is 60 short of its goal to deter China. Funding for 16 more ships is included in the GOP bill. But no contractor puts up long-term capital to expand production for a one-year plan.
“Unstable demand from government helped produce the current shipbuilding crisis. Mr. Trump cares about restoring U.S. naval power, but what matters is the scoreboard. America needs to build 2.33 attack submarines a year to meet our own requirements and a commitment to sell hulls to the Australians. The current rate is 1.1.
“Where is the Navy’s 30-year shipbuilding plan that would set a strategic direction for the fleet? ‘We’re still looking at that,’ a Navy official told reporters last month….
“The budget is inadequate even on Mr. Trump’s ideas. A Golden Dome missile shield, a crucial project for better protecting the U.S. homeland, receives a one-time $25 billion in the GOP budget bill. What’s the plan to fund this enormous undertaking, which includes space-based interceptors, for decades to come? Ask again later….
“The budget pours $3.5 billion into the new F-47 fighter jet, which is needed. Yet F-35 buys are cut to 47 from 74, and a new fighter for the U.S. Navy is on hold. The latter is especially absurd: U.S. aircraft carrier vulnerability in the Pacific is the most discussed military weakness of the decade, and longer-range aircraft on carriers would be a big counter.
“Mr. Trump likes to invoke Reagan’s peace through strength worldview. But the Gipper made a sustained case about the threats the U.S. faced and the forces required to keep the peace. He explicitly rejected making ‘defense once again the scapegoat of the federal budget.’
“The threats to U.S. security today are arguably greater than during the Cold War: A peer competitor in China, an imperial Russia, the risk of proliferating nuclear weapons, and new technology that empowers lesser powers and threatens the U.S. homeland.
“Congress can fill some of the Trump defense potholes, but reinvigorating the U.S. military requires White House leadership. So far Mr. Trump isn’t providing it.”
—Former Gov. Andrew Cuomo decided to run in the general election for New Yor City mayor, urged on by supporters anxious that his withdrawal would nearly guarantee Assemblyman Zohran Mamdani victory and put Gotham in the hands of a socialist who would do a world of harm.
But Mamdani defeated Cuomo by 12 points in the primary.
“I am truly sorry that I let you down. But as my grandfather used to say, when you get knocked down, learn the lesson and pick yourself back up and get in the game. And that is what I’m going to do,” Cuomo said on Monday. “The fight to save our city isn’t over.”
Cuomo pledged to drop out if in September, the polls show that he is not the highest-ranked challenger to Mamdani, according to people close to Cuomo, though he didn’t mention the caveat in his video. The other challengers – Mayor Eric Adams, Republican Curtis Sliwa, and independent Jim Walden, are expected to do the same.
In a letter to supporters, Cuomo addressed concerns his heart wasn’t in the race.
“All my life I’ve been known for pushing too hard, but this time I played it safe, believing in the polls that said our campaign was way ahead, and not giving New Yorkers the campaign they deserved,” he wrote in the letter. “I was not aggressive enough in communicating my vision for a fairer, safer, more affordable New York, or in debunking and exposing Zohran Mamdani’s unrealistic proposals and divisive agenda. I promise you, I will not make that mistake again.”
Cuomo’s name will appear on the general election ballot under the independent “Fight and Deliver” party he created as a backup plan in the event he lost the primary. Adams is running as an independent.
Tuesday, when asked about Cuomo’s decision to stay in the race, President Trump said the former governor had a “shot” at beating Mamdani.
“I think he should stay,” Trump, rather shockingly, said of Cuomo. “He’s running against a communist. I would think that he would have a good shot at winning.”
I was surprised because Trump has referred to Eric Adams as “a very good person,” the Justice Department having dropped bribery charges against the mayor earlier this year.
For his part, Adams said of Cuomo’s decision to stay in… “New Yorkers aren’t dumb. They have five fingers, and they love the middle one the most.”
—In a Gallup survey, 79 percent of Americans called immigration a “good thing” for the country, a record high, the poll released last Friday as President Trump continues to take aggressive and wide-ranging measures to fortify the southern border and deport people who are in the country illegally.
The same poll also showed that 30 percent of Americans said immigration should be decreased, a sharp decline from 55% in 2024.
The poll found Americans dislike Trump’s handling of the issue by a wide margin. Sixty-two percent gave him negative marks on how he has managed immigration, while 35 percent graded him positively.
—A fire at a newly opened mall in eastern Iraq’s Wasit province killed at least 61 people, most dying from suffocation, in the fire that broke out late Wednesday in the city of Kut.
The five-story building had opened only a week earlier. There was a restaurant and supermarket. I saw a picture of the building and you wonder about fire stairwells and such for that many people to suffocate.
But since it was brand new, most people probably didn’t familiarize themselves with emergency exits, assuming they existed.
–The latest death toll in the devastating flooding in the Texas Hill Country hit 134, with the number of missing at 101.
–Here in New Jersey, we had our own awful storm on Monday, 4-6+ inches in my area in less than 3 hours most spots, a classic setup for flash flooding in the vulnerable areas (such as Route 22, for those of you familiar with it), and two people died in nearby Plainfield when their car was washed into a swollen creek. That marked four storm-related deaths in Plainfield (the city where I was born) in just ten days.
But New Jersey has also had two deaths from lightning strikes in a ten-day period; one on a popular golf course, the other at an archery range attached to a Boy Scout camp, also unheard of for my state.
You just don’t screw around with lightning, despite the odds. I sure as hell don’t.
–Lastly, a major shout out to the Fall River, Mass., Fire Department, for some amazing acts of heroism in another horrific event…a fire at an assisted-living facility which claimed ten lives (the tenth victim dying today). The toll could have been a lot higher were it not for the members of the department, many of whom suffered injuries. God bless them.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
—
Gold $3357
Oil $67.50
Bitcoin: $117,434 [4:00 PM ET, Friday]
Regular Gas: $3.15; Diesel: $3.72* [$3.50 – $3.84 yr. ago]
*Reminder…the price of diesel is critical to the cost of your groceries and items in your drug store. It hit a peak of $5.81, 6/19/22. Regular gasoline peaked at $5.01, 6/14/22.
Returns for the week 7/14-7/18
Dow Jones -0.1% [44342]
S&P 500 +0.6% [6296]
S&P MidCap -0.03%
Russell 2000 +0.2%
Nasdaq +1.5% [20895]
Returns for the period 1/1/25-7/18/25
Dow Jones +4.2%
S&P 500 +7.1%
S&P MidCap +1.6%
Russell 2000 +0.4%
Nasdaq +8.2%
Bulls 54.7
Bears 20.8
Hang in there.
Brian Trumbore
RIP, Shirley M. She was the last surviving parent of my high school gang, the “Poker Group.” Shirley was great, a classic. My thoughts and prayers to good friend and terrific supporter of StocksandNews, Peter M.
