[Posted 4:30 PM ET, Friday]
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Edition 1,422
Oil spiked this week to over $92 on West Texas Intermediate and $101 on Brent as the situation in the Middle East worsened further, the Houthis threatening to close down the Bab el-Mandeb Strait in the Red Sea, which comes on top of the near-closure of the Strait of Hormuz all over again.
The Bab el-Mandeb Strait (and the Red Sea) have been a lifeline for oil exports since the beginning of the war. Many buyers, such as India, have to contemplate a switch to longer and far more costly routes through the Suez Canal.
But look at a map. Iran has bombed Jordan, near Suez, and the Houthis can easily reach the canal with their weaponry.
Meanwhile, President Trump issued one threat after another against Iran, talking of “massive strikes.”
The same president who, hours after attending the dignified transfer of four dead American soldiers at Dover Air Force Base, told a rally in Georgia that the war in which they died was “just a skirmish.”
This came a day after the Secretary of Skirmishes, Pete Hegseth, asked Congress for $67 billion. [More on this below.]
Friday, crude oil fell a bit (though was still way up for the week) on reports that Pakistan, with support from China, was seeking to revive negotiations between Washington and Tehran.
We’ve seen this act before. It was not a smash hit and closed early due to poor reviews.
The energy market is also contending with a spate of attacks by Ukraine on the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast, which exports most of Kazakhstan’s crude, let alone Ukraine’s attacks on Russia’s energy infrastructure throughout the country that are combining to take oil (and diesel fuel) off the market.
Inventories across the globe are depleted by months of conflict, raising the risk of a supply squeeze that threatens to weigh on the global economy if prices continue to climb.
So the picture has changed from ‘oversupply’ to renewed fears in just three weeks.
Bob McNally, president of Rapidan Energy Group and a former White House official, summed it up, if the escalation in fighting continues, and worsens.
“Round 2 of the military conflict is going to be broader than Round 1,” he said in a Bloomberg Television interview. “The risks are great, not only to shipping, but also to energy infrastructure.”
A recent Washington Post-Ipsos poll showed 68% of Americans said the Iran war was not “worth fighting,” while just 28% said it was.
Personally, I was very clear early on…if we’re goin’ in, fight to win it! We haven’t done so.
[At 3: 34 PM ET, today, President Trump told reporters that Iran “wants to make a deal, but isn’t ready to do so.” It never ends with him. And then he says, “We’re locked and loaded and we’re ready to go, but we’re talking to them.” They aren’t talking to them!!! They are passing Post-its through Pakistan. Whoopty-damn-do…and then he says, “I’m not in a hurry….”]
And late this morning, President Trump posted on Truth Social:
“President Xi, at our recent meeting in Beijing, China, told me that he would not, under any circumstances, give or sell weapons to the Islamic Republic of Iran – And that statement included Chinese Companies. Considering our relationship, I take him at his word and, besides, I am doing him very big favors, also. Likewise, President Putin, despite the horrible War going on in Ukraine (The relationship remains, as it does with President Zelensky), told me that he would not sell Weapons to Iran. He understands that I do not sell Weapons to Ukraine, but to NATO Countries. They pay full price, and how those Weapons are distributed, I have no idea. Therefore, two major Countries that people speak of often in terms of Iran are, in my opinion, not participating. If they did, it would be very bad for them – Certainly not in their best interests. Thank you for your attention to this matter!”
This is beyond sick. Trump’s own defense secretary and chairman of the Joint Chiefs of Staff told Congress this week that, yes, Russia and China are enabling Iran.
What compelled the president to write this? Xi and Putin are evil…full stop!
Xi is licking his chops because the United States is expending its munitions in Iran and would have far less in its arsenal to confront China over Taiwan…or did President Trump, wink wink, tell Xi, that’s your sphere…stay out of mine.
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, July 24…$89.30
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, July 24…regular $4.10; diesel $5.24 …impacts everything you buy.
As it went down, day by day, in the Iran War….
The U.S. carried out strikes on Iran on Friday and Saturday, the seventh and eighth consecutive nights since President Trump declared the temporary ceasefire agreement was “over.”
U.S. Central Command said its forces “hit surveillance sites, military logistics infrastructure, underground weapons storage, and maritime capabilities.”
Iran retaliated by targeting U.S. allies in the region including Kuwait, which has been hit especially hard. Kuwait said another of its power and water plants had been hit following a similar attack on Thursday.
About 90% of Kuwait’s drinking water comes from desalination, in which salt is removed from seawater. Strikes on the plants can be catastrophic for the people.
[Approximately 86% of nearby Oman’s potable water and 70% of Saudi Arabia’s drinking water comes from the same process.]
Jordan’s military also said it had intercepted 10 Iranian missiles fired into its airspace overnight. No damage was reported.
The U.S. military denied a report on Iran’s Fars news agency that two oil tankers “exploded and caught fire while passing through a mined route south of the Strait of Hormuz.” Centcom said: “Like most IRGC claims, this is false.”
On Friday, two U.S. troops were killed in Jordan in an attack the U.S. ascribed to the Iranian Revolutionary Guard Corps (IRGC). That attack also wounded four others and left one missing.
Iraq said it shot down attack drones over the city of Irbil.
Saturday, Iran’s supreme leader warned of “unforgettable lessons” if the United States keeps attacking the Islamic Republic and called President Trump’s signature “worthless and invalid.”
The statement attributed to Mojtaba Khamenei, still unseen since the war began, was read out on state television after the United States and Iran again exchanged strikes.
The secretary general of the six-nation Gulf Cooperation Council, Jasem Mohamed al-Budaiwi, accused Iran of war crimes for strikes on infrastructure and civilian facilities.
Saturday, Kuwait suffered one of its worst nights of Iranian retaliatory attacks, with strikes on an oil facility and a second power plant hit in as many days. Residents were asked to ration electricity use.
The United States then announced another death of a service member as it launched more airstrikes on Iran on Sunday, round nine, in response to the killing of U.S. troops, and Iran fired missiles toward Jordan that risked widening the conflict into neighboring Israel.
The U.S. and Iran have been getting closer to all-out war as last month’s interim deal meant to permanently end the fighting has crumbled and shipping traffic in the Strait of Hormuz has largely stalled. Both sides have targeted civilian infrastructure relied on by millions of people.
The U.S. said the service member who was killed in Iraq on Saturday was performing a “controlled detonation” of an “unexploded ordnance from a downed Iranian one-way attack drone.”
Earlier, the military said its strikes targeted Iran’s paramilitary Revolutionary Guard to retaliate for Friday’s killing of troops in Jordan. One service member was missing after that attack, and the military’s new statement said “unidentified remains” were found Sunday and were being examined. Since the war began, 17 (probably 18) U.S. service members have been killed.
The renewed exchanges of fire, now in their second week, have seen the U.S. target bridges, water desalination plants and electrical facilities in Iran. Tehran has hit U.S.-allied countries throughout the Middle East.
Kuwait, Jordan and Bahrain again activated air defenses for incoming Iranian drones and missiles. Israel warned that missiles launched toward neighboring Jordan could cause fire to spill over into Israeli territory for the first time in weeks.
The U.S. military’s Central Command said it hit “Iranian military coastal surveillance and air defense facilities, maritime capabilities and missile and drone storage sites.” It said the attack was designed to degrade Iran’s ability to control the Strait and “swiftly punish Islamic Revolutionary Guard Corps forces,” a power base in Iran’s theocracy that controls its ballistic missile arsenal.
Iran’s atomic energy agency said U.S. strikes targeted the construction site of a planned nuclear power plant in the southwest, state television reported.
The International Atomic Energy Agency said the site, in the “very early stages of construction,” contained no nuclear material when the UN watchdog last visited.
Jordan’s military said it shot down several Iranian missiles. The country hosts major U.S. bases and relies on U.S. air-defense systems. The missiles did not cause casualties or damage, according to Jordan’s military.
President Trump, who has been largely silent for days, told reporters on Sunday that “those great patriots were out there fighting so that Iran cannot have a nuclear weapon.” He also said he feels “very badly,” when asked about the war casualties.
“We hit it very hard again tonight, and we did that in honor” of the personnel killed.
Iranian Foreign Minister Abbas Araghchi said Sunday that certain demands related to the country’s nuclear efforts may remain “unresolvable.”
The United Kingdom Maritime Trade Operations center said early on Monday that a vessel was on fire off the Omani coast in the Strait. Kuwait and Bahrain reported further attacks from Iranian drones on Monday.
President Trump on Truth Social, Mon. PM:
“Every time Iran kills an American Soldier they will pay for that killing many times over! This directive has been passed on to Secretary of War, Pete Hegseth, Chairman of the Joint Chiefs of Staff, Daniel Caine, and every Leader in the Military.”
Monday night into Tuesday, Day 10. Another tanker carrying oil products was reportedly struck near the Strait, highlighting ongoing risks to shipping.
The Kaifan, an oil products tanker owned by Kuwait Oil Tanker Co., was the vessel attacked, according to security consultancy EOS Risk Group.
Meanwhile, Yemen’s Houthi militants threatened to block Saudi maritime traffic in the Red Sea, prompting at least one Saudi crude tanker to reverse course.
A message from the Houthis warned all vessels against calling at Saudi ports.
A disruption to supplies through the Red Sea, the route currently used by Saudi Arabia for the bulk of its crude exports, would exacerbate the war’s impact on the global oil trade.
Meanwhile, Ukraine’s attacks on the Caspian Pipeline Consortium terminal on Russia’s Black Sea coast disrupted exports from Kazakhstan, which has become a large supplier of oil.
For its part, Iran once again attacked sites in Kuwait, Bahrain and Jordan, with Kuwait saying power and desalination plants were hit for a third time.
President Trump told reporters in the Oval Office, Tuesday, that the U.S. would be hitting Iran very hard, including Natanz’s Pickaxe Mountain, which the Wall Street Journal reported is the site where Iran has transferred thousands of uranium enrichment centrifuges to underground facilities deep inside the mountain.
The centrifuges were allegedly transferred following the 12-day war in June 2025, Operation “Midnight Hammer.”
Pickaxe Mountain is located south of the Natanz nuclear complex, the site of two of Iran’s uranium enrichment plants bombed last summer.
The tunnel facility under construction at Pickaxe Mountain wasn’t targeted in either war, according to the Institute for Science and International Security, a U.S.-based think-tank.
The complex was carved to a depth of more than 100 meters below bedrock, making it deeper and more fortified than the Fordow enrichment facility, a highly fortified, underground uranium enrichment facility.
Iranian authorities have prevented International Atomic Energy Agency inspectors from entering the site.
IAEA Director-General Rafael Grossi has demanded that Iran provide answers regarding its activities there. Iran refused to do so.
Overnight Tuesday, the U.S. widened the scope of its airstrikes on Iran, as President Trump and officials in Tehran signaled a renewal of peace talks is unlikely in the near-term.
This was the 11th straight day of attacks on Iran, which again fired on U.S. bases in Kuwait, Bahrain and Jordan.
Iran’s Interior Minister Eskandar Momeni visited Pakistan, but a spokesman for the ministry said after the visit, “There are no negotiations – it’s only possible for there to be an exchange of messages.”
President Trump on Truth Social, Wed. AM:
“From this point forward, any time the Islamic Republic of Iran shoots at a ship in the Strait of Hormuz, whether it be by Missile, Rocket, Drone, or any other device or weapon, the United States will bomb and destroy ONE BRIDGE OR POWER PLANT, including those located next to, or in, the Capital City of Tehran. Thank you for your attention to this matter!”
Overnight Wednesday was then the 12th straight night of attacks on Iran, with Tehran responding in kind.
Thursday, the Houthis opened a new front in the war, claiming to have struck two Saudi tankers in the Red Sea. The strikes were the first since the group announced a blockade on Saudi ships this week. The Saudi government confirmed a strike on one ship, but not the other.
The price of oil hit $100 a barrel for the first time since May.
President Trump on Truth Social, Thurs. AM:
“A year ago the United States of America attacked, very powerfully, the Houthis, for their interference with commerce and trade, by shooting at ships. Since that time, and during our conflict with Iran, they have acted very responsibly. Unfortunately, now they are starting up again, shooting at two Saudi Arabian ships last night. Please let this TRUTH serve to represent that if they do this again, the U.S. will hold Iran responsible, in that the Houthis are a Surrogate and/or Proxy of Iran, and major military punishment will be inflicted upon Iran and, of course, the Houthis, themselves, who I am very disappointed with in that they have, until now, acted very professionally and smart. Thank you for your attention to this matter!”
Later Thursday, President Trump, in an interview with Axios’ Barak Ravid, said that he was “close to making a decision” on attacks that would be “bigger than ever before.” Iran isn’t ready to make a deal and “they haven’t received enough pain yet,” Trump was reported as saying.
Ravid posted on X: “President Trump told me he is ‘close’ to decision on ‘massive attack’ against Iran, but stressed he hasn’t made final determination.”
U.S. forces completed a 13th consecutive wave of strikes on Iran in the early hours on Friday amid a New York Times report that Iranian officials had rejected a U.S. cease-fire proposal carried to Tehran by the leader of Iraq.
Iraqi Prime Minister Ali al-Zaidi presented the proposal, as Iran’s top negotiator, Mohammad Bagher Ghalibaf, the Speaker of the Parliament, told local news outlets that there was no need for another mediator.
“The problem is not passing messages,” Ghalibaf said. “The problem is America’s outlook.”
—Defense Secretary Pete Hegseth faced questions and protests Tuesday over the U.S. war with Iran, which he estimated has cost $37.5 billion so far, as Republicans prepare a $95 billion GOP budget package to fund the military, along with other White House priorities.
Hegseth provided the new estimate, up from earlier assessments, during a fiery hearing before the Senate Appropriations Committee.
Hegseth said the supplemental war funding is an “urgent, necessary” injection of money, and with President Trump’s proposed $1.5 trillion defense budget a generational investment in the military.
“Without these funds, we face critical shortfalls,” Hegseth testified.
But Sen. Patty Murray, the top Democrat on the panel, warned of “another forever war.”
“This war is now spiraling out of control again,” Murray said in her opening remarks.
Trump “has told us over 40 times now that a deal is near, and the war will be over soon,” she said. “But now, he’s asking for $70 billion more – and for us to just trust him it’ll all work out fine.”
—In Israel, the parliament, the Knesset, was dissolved Friday, paving the way for a vote in late October. Recent surveys show Netanyahu’s path to another premiership is narrowing as a patchwork of opposition parties gathers momentum, but political analysts still say it’s anybody’s game.
“The arithmetic isn’t there for him to form a coalition,” said Chuck Freilich, a former deputy national security adviser in Israel. “But Netanyahu is nothing if not a political magician, and to write him off would be premature.”
Netanyahu’s biggest challenge comes from former army chief and political newcomer Gadi Eisenkot, whose centrist Yashar party is polling roughly level with Netanyahu’s Likud. Both are projected to win just over 20 seats by most mainstream polls, far short of the 61 required to form a government, and would need to cobble together a coalition.
But a July 15 poll by the national broadcaster Channel 13 for the first time showed the opposition bloc potentially winning enough seats to form a government.
If neither party meets the threshold, Netanyahu will automatically lead a caretaker government until a new one can be formed, keeping him in power even if he doesn’t win.
—Israel’s defense and finance ministers announced plans for three illegal settlements in Gaza and more than $400 million in funding to expand construction in the occupied West Bank, as Israel’s military commander for the region celebrated violent outposts as his “security partners.”
This is part of Netanyahu’s far-right coalition, and they are racing to expand control of land in occupied Palestine and drive out Palestinians before its mandate expires.
Dozens from Israel’s political and military elite, including two former prime ministers and former heads of all its security services, have threatened legal action against their government over support for Jewish terrorism in the West Bank.
At the same time, the defense minister, Israel Katz, said he intended to set up three “Nahal” outposts in northern Gaza, a type of military community that for decades has paved the way for Israeli civilian settlements.
—The Trump administration on Wednesday signed an agreement with Saudi Arabia that gives that country a pathway to enriching nuclear fuel and commits it to using U.S. firms to supply its reactors.
The agreement, which the Energy Department announced had been signed, is certain to spark heated debate in Congress, where many lawmakers have long expressed concern that exporting enrichment capabilities will lead to proliferation of nuclear arms.
Saudi Crown Prince Mohammed bin Salman has spoken openly about working to develop nuclear weapons if Iran is not stopped from getting them.
The administration offered little information about the agreement’s contents, but it reportedly is designed with safeguards to keep the Saudis from enriching nuclear fuel to weapons-grade level. But they also acknowledge it includes a waiver that exempts the Saudis from the aggressive international inspections required in nuclear reactor deals with other countries, including the United Arab Emirates. Instead, sensitive inspections would be executed by American teams under terms spelled out in the agreement, which was initially worked out when the crown prince visited Washington in November.
“These agreements reflect our two nations’ shared commitment to strengthening U.S.-Saudi commercial relations, delivering prosperity at home and security to our allies abroad,” Energy Secretary Chris Wright said in a statement. “Rest assured, these agreements uphold the highest standards of nuclear safety and nonproliferation, while relying on the world’s best nuclear technology and scientists, designed right here in the United States.”
The deal will be submitted to Congress, and it will be difficult to find the two-thirds majority needed to override a presidential veto.
Needless to say, Israel is not happy.
Editorial / Wall Street Journal
“Why does Saudi Arabia need to enrich uranium on its home soil? The answer isn’t complicated: It doesn’t unless it would like to establish the rudiments of a nuclear-weapons program as a contingency. The more difficult question to answer is why the Trump Administration is going along with it….
“The deal breaks from the ‘gold standard’ of nonproliferation, which would prohibit domestic uranium enrichment and plutonium reprocessing. Instead it establishes a two-year study by the U.S. and Saudi Arabia into the value and commercial viability of Saudi enrichment, after which a decision will be made.
“What’s to study? Everyone knows it isn’t cheaper to begin enriching over there. But commissioning a study is a Washington dodge, and Congress will want to know whether the Administration is stringing it along with a formality.
“The stakes are high. The risks of nuclear-weapons catastrophe increases each time nuclear enrichment spreads. That’s why the bipartisan U.S. consensus has been to stop the spread of the most dangerous processes and capabilities to enemies and allies.
“The next way to prevent nuclear proliferation is with inspections and monitoring, but the Trump deal weakens those, too. The tried-and-true method is the International Atomic Energy Agency’s Additional Protocol. The United Arab Emirates signed up for it, along with the gold standard of no domestic enrichment, as a condition of its 2009 nuclear deal negotiated with George W. Bush. But now the Saudis have been allowed to reject the Additional Protocol and receive U.S. support all the same.
“The Trump Administration says it has devised a bilateral safeguards agreement of its own. But we doubt the Saudis rejected the standard protocol in favor of even stricter inspections. They are bound to be weaker, establishing the precedent that each U.S. ally can push for its own preferential monitoring.
“Expect Turkey and Egypt to come calling, and we know how this President loathes to say no to Turkey’s Recep Tayyip Erdogan. And why would the U.A.E., which has been a far better ally to the U.S. than Saudi Arabia during the war with Iran, now be content to follow the rules alone? It will be far more difficult to prevent nuclear enrichment capability from spreading across the volatile region….
“The U.S. needs Arab allies, and it has much to offer oil-rich Saudi Arabia as it diversifies its economy. But the Saudis don’t need a path to a nuclear bomb to match Iran. Mr. Trump and the U.S. military have been making sure of that. Why undermine that success now?”
But then President Trump posted on Truth Social Thursday AM that the “The Civil Nuclear Deal…is totally subject to Saudi Arabia joining the very respected and successful Abraham Accords.”
Late Thursday morning, the White House said the nuclear deal is dead.
Who the hell knows, but clearly the president was influenced by some key senators and the likes of the Wall Street Journal editorial board. Imagine what the Saudis are thinking.
—
Wall Street and the Economy
No significant economic news this week, but on Thursday, the Trump administration imposed new tariffs of 10% and 12.5% on goods from most major trading partners, including Europe and China, over allegations of lax enforcement of forced labor bans, just as a temporary 10% global tariff expired.
The temporary tariff was put in place in February, after the Supreme Court struck down most of the president’s global tariffs.
The new levies target 60 countries that U.S. Trade Representative Jamieson Greer’s office says represent about 99% of U.S. trade. Countries that have laws on the books to combat forced labor were given a 10% tariff, while those without such statutes were given a 12.5% tariff.
Duties on items from the European Union and Taiwan won’t exceed 10% and products from Japan, Switzerland and South Korea will be broadly capped at 12.5%, in a way that complies with the trade agreements they reached with the U.S., according to a Federal Register notice published Thursday. Products from dozens of others will face a 12.5% charge, with certain other duties stacking on top. The formula also allows for certain tariff exemptions, such as for products that can’t be produced in the U.S. or where tariffs would cause economy-wide disruptions.
Asian nations described the administration’s latest tariffs as baseless and unjustified, while stopping short of retaliatory moves.
Australia called the action “unjustified” and inconsistent with its free trade agreement, according to a statement from their trade minister
The forced-labor duties are Trump’s broadest move toward restoring his protectionist tariff regime since his earlier levies were struck down by the Supreme Court. After that setback he instituted a 10% global import tax, which was to expire Friday.
Imports such as fuel, foods and fertilizers will be exempt from the new tariffs, as well as products such as automobiles, metals and drugs that are covered by separate, industry-specific levies.
On Monday, President Trump imposed 50% tariffs on most other Canadian goods, declaring that Canada has unfairly discriminated against American autos, alcohol and dairy products.
The move threatened to unleash a new wave of economic chaos with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return to the White House.
The 50% tariffs would exclude energy products, potash, fish and critical minerals, but they would include some goods that had previously been protected from import taxes by the United States-Mexico-Canada Agreement, or USMCA. That 2020 trade pact recently expired and triggered a new set of negotiations that could run until 2036.
Prime Minister Mark Carney responded by saying Canada stood ready to “intensify” trade talks with the U.S. in the coming weeks.
Canada has its own 25% counter-tariff on selected imports of American steel, aluminum and vehicles.
The White House said the duties would take effect in 30 days.
Editorial / Wall Street Journal:
“Many hospitality businesses have also been harmed by a decline in Canadian tourism. A study in March found that the tourist dropoff has cost between 14,000 and 42,000 jobs in the U.S. markets most exposed to Canadian tourism. Northern border areas have also suffered from a decline in cross-border trade.
“That may be why Mr. Trump is justifying his tariffs as retribution for Canada’s treatment of U.S. autos and dairy, which are key industries in the Midwest. But Canada is the second largest U.S. trade partner after Mexico, and Mr. Trump’s tariffs are complicating cross-border supply chains, raising costs and creating uncertainty for business.
“The more Mr. Trump keeps swinging recklessly, the more Americans are likely to think there’s only madness in his tariff methods.”
The Atlanta Fed’s GDPNow estimate of second-quarter growth is 1.7%. We get our first official look at Q2 next week.
Freddie Mac’s 30-year fixed-rate mortgage is 6.58%, highest level since last August.
Also, next week, aside from the Fed and the GDP reading, we have the Fed’s preferred inflation barometer, the personal consumption expenditures index (PCE), released Thursday, after the Fed meeting. And some key earnings reports.
Europe and Asia
We had flash PMI readings for July in the eurozone, with the composite index at 51.9 vs. 50.0 in June, a 5-month high (50 the dividing line between growth and contraction). The manufacturing component was 53.0 (a 52-month high), while services came in at 51.6. [S&P Global]
Germany: Manufacturing 54.7 (53-mo. high), services 49.6.
France: Mfg. 48.8, services 49.8.
UK: Mfg. 53.6, services 51.8.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence:
“July is seeing a welcome revival of economic activity in the eurozone, but a volatile geopolitical environment means it remains to be seen if the good news can last.
“After a largely stagnant second quarter, there has been something of a bounce in demand during July which takes the PMI up to a level indicative of GDP growing at a reasonably solid 0.3% quarterly pace. This represents the best performance since the outbreak of the war in the Middle East with manufacturing enjoying its strongest growth spurt since early-2022 and services buoyed by a solid rebound in activity after three months of decline….
“However, whether all the good news can be sustained in the coming months largely depends on the situation in the Middle East. With oil prices on the rise again in recent days and shipping worries escalating, there’s a danger that the economy could relapse if inflationary pressures intensify again and supply disruptions, notably for energy, derail this nascent upturn.”
–Separately, the European Central Bank left its key interest rates unchanged at its July meeting, following a 25-basis point increase in June, the first rate hike in three years, driven by rising energy prices and persistent inflationary pressures.
Since then, policymakers have struck a more cautious tone, adopting a “wait-and-see” approach as softer inflation, wage growth, economic activity, and inflation expectations have reduced the urgency for another move.
But the ECB warned this week that the full inflationary impact of the energy shock has yet to emerge. ECB President Christine Lagarde said the longer energy prices remain elevated, “the more likely they are to drive up broader inflation through indirect and second-round effects.”
In Asia….
Nothing out of China of note.
Japan reported June inflation came in at 1.7%, ditto ex-food and energy, the lowest on core since Aug. 2022.
June exports surged 19.3% year-on-year, the strongest growth since November 2022, and the tenth straight month of export growth. Shipments to the U.S. rose 13.0%, the EU 20.3%, and to China 17.6%.
The July flash PMI readings were released…manufacturing 54.7, services 51.9.
Street Bytes
—Stocks finished down on the week, the Dow Jones falling 0.4% to 51947, the S&P 500 down 0.6% and Nasdaq 2.1%.
For all the hoopla over this great year, the S&P 500 is up 8.3%. Very good, no doubt, but far from spectacular, as the man in the Oval Office wants to portray it.
Next week, aside from the Fed, it’s all about the earnings from Microsoft, Meta, Amazon and Apple.
—U.S. Treasury Yields
6-mo. 4.04% 2-yr. 4.33% 10-yr. 4.67% 30-yr. 5.16%
With the renewed spike in oil prices that just further fueled inflation fears, let alone all the other issues, like our massive debt and future bond issuance, and a lousy global bond market, it was no surprise that Treasury yields rose this week to levels not seen since the beginning of 2025, the 10-year intraday hitting 4.71% on Thursday, the 2-year 4.36%, before a little rally on Friday, the market wanting to believe talk of renewed negotiations in the war.
That said, the 2-year rose a whopping 16 basis points on the week, 13 on the 10-year.
–On Tuesday, Treasury Secretary Scott Bessent said the U.S. would examine open-source models from China for signs of intellectual property theft, threatening sanctions against Chinese AI companies if IP theft is established.
“We’ve seen a lot of talk about open-source models coming and threatening the large language models in the U.S.,” Bessent said on Fox Business. “This administration supports open-source models, but what we do not support is IP theft. If we see, especially, that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft.”
The statement comes as Chinese models – most recently Moonshot AI’s Kimi K3 – are gaining in capabilities and popularity, threatening to harm the business models of top American AI firms like OpenAI and Anthropic, as well as their abilities to raise more capital to continue developing frontier models.
On Monday, Axios reported that the Trump administration is considering a wholesale ban on Chinese open-source models, although others have disputed that claim.
AI companies have been warning for months against campaigns by foreign actors to copy their AI technology and redeploy it as open source.
—A White House official then accused China’s Moonshot of improperly using U.S. artificial intelligence models and Nvidia Corp. chips to create the Kimi K3 system that stunned the tech industry last week with its advanced capabilities.
The company “acquired GB300-equpped servers and has accessed GB300s in Thailand, likely to train its AI models,” White House Office of Science and Technology Policy Director Michael Kratsios said in a social media post on Wednesday, making the case that Moonshot violated U.S. export control rules and companies’ terms of service to build its product.
–Back to OpenAI, the company said its advanced artificial intelligence models inadvertently hacked Hugging Face., in an “unprecedented” incident that prompted fresh calls for curbs on the technology.
The ChatGPT-maker said in a blog post Tuesday that the models broke into Hugging Face’s system, the company being a digital library of AI technology that is popular among developers, during an evaluation of their cyber capabilities. The models, which included GPT-5.6 Sol and another even more capable model that hasn’t been released, were operating with lower guardrails so that they could be tested, the startup said.
The incident raises questions about the ability of advanced AI models to carry out cyberattacks even as governments work to impose guardrails on the technology.
While OpenAI’s models were operating in a so-called sandbox testing environment, they exploited a vulnerability in the software of an unidentified third-party vendor to gain access to the internet and ultimately breached Hugging Face’s infrastructure.
Scary stuff.
—Alphabet reported blowout earnings results late Wednesday, but the stock dropped after the search giant again raised its forecast for capital expenditures.
The Google-parent reported second-quarter adjusted earnings of $9.11 per share, well ahead of Wall Street’s consensus estimate for earnings of $2.88 (that’s not a misprint); a 294% increase from the prior year. Alphabet said the results included $6.26 a share in gains on the fair value of its equity securities.
Revenue for the quarter of $199.8 billion also beat estimates.
Advertising revenue in the quarter rose from the prior year to $81.6 billion, compared to analyst estimates of $81.3 billion. Search revenue of $63.3 billion came in just below Wall Street’s expectation of $63.4 billion.
Google Cloud revenue grew 82% from the prior year to $24.8 billion; analysts had estimated 63% growth. Investors have been looking for accelerating revenue in Big Tech’s cloud segments for proof that customers are spending on AI services.
Capex for the quarter was $44.9 billion, a 101% rise from the same period last year as the company spends to build out the infrastructure needed to power artificial intelligence. Wall Street expected second-quarter capex of $45 billion.
But during its earnings call with investors, Google said it now expected to spend between $195 billion and $205 billion on capex, compared with its prior guidance of $180 billion to $190 billion. And this spooked the market, the shares down 5% Thursday on the open.
Separately, European Union regulators on Thursday hit Google with a $1 billion fine for illegally undercutting competition through its dominance as a search engine.
The move threatens to intensify trans-Atlantic trade tensions, with President Trump having previously threatened to retaliate against the European Union for what he views as the unfair targeting of American tech companies.
—France banned children under 15 from using social media on Tuesday, becoming the first country in the European Union to pass a blanket ban on the platforms as concerns grow worldwide over the harmful effects of digital content on kids.
Both chambers of the Parliament voted in favor of the measure, a flagship initiative of French President Emmanuel Macron’s second term. The bill also bans the use of mobile phones in high schools.
Several families in France have sued TikTok over teen suicides they say are linked to harmful content.
Last December, Australia became the world’s first country to bar anyone under 16 from using many social media apps. Britain and Canada moved toward similar measures last month. The European Union is expected to introduce EU-side measures in September.
–Discount airline king Ryanair saw its profit slump in its most recent quarter on higher fuel costs and lower fares that look set to remain weak through the key summer period amid renewed consumer nervousness due to the Iran war, the airline said Monday.
The weak April-June results for Europe’s largest airline by passenger numbers, are the latest sign of how the five-month-old Iran war is turning up the pressure on companies as peace talks drag on and oil prices remain elevated.
Ryanair CEO Michael O’Leary said the latest escalation in the war was making people more nervous about traveling. “There’s a war going on in the world. There’s a lot of uncertainty,” he told analysts, forecasting fares faced a mid-single-digit year-on-year fall in the current quarter.
But weakness in fares could, however, be short-lived as European aviation faces a wave of consolidation and airlines going bust that will take out capacity, CFO Neil Sorahan told reporters.
The Irish airline reported after-tax profit of $616 million for its first fiscal quarter through June 30, down 34% from the prior year and short of forecasts.
—American Airlines shares fell 8% Thursday after it warned that a renewed surge in jet fuel costs could leave it around breakeven this year despite record revenue, higher fares and resilient travel demand.
The carrier now expects full-year adjusted results to range from a loss of 65 cents per share to a profit of 65 cents, with breakeven at the midpoint. Its previous forecast ranged from a loss of 40 cents to a profit of $1.10. Analysts on average expected a profit of 65 cents.
The cut underscores a broader limit facing the airline industry: strong demand and higher fares have softened the blow from the fuel shock but have not insulated earnings from volatile energy costs.
American has been rebuilding corporate travel, adding premium seats and leaning more heavily on its loyalty program. But its unions have pressed the board over lagging profitability, with some calling for a change in leadership.
American expects year-over-year unit revenue growth in both the third and fourth quarters to exceed the pace achieved in the second quarter.
But its fuel outlook has deteriorated rapidly. CFO Devon May said expected fuel costs for the rest of 2026 had risen by nearly $1.6 billion since the beginning of July, including more than $700 million for the third quarter. May said American expected fuel prices to remain volatile.
Only three weeks earlier, the company had expected to forecast full-year adjusted pretax earnings approaching $1.5 billion, about four times its 2025 result, May said. The latest fuel curve sharply reduced that expectation. It now faces a potential $6 billion year-over-year fuel headwind for 2026.
—The wreckage of a plane that went down in the sea near Puerto Rico has been found after being lost for more than 70 years.
The Pan American Clipper Endeavor crashed shortly after takeoff on its journey from San Juan to New York City in April 1952 after two engines failed. All 69 passengers and crew members survived the initial crash, but panic ensued once the plane hit the water as the tail broke off and the fuselage sank, resulting in the loss of 52 lives.
An aviation search team found the wreckage about 2,000 feet in the water off Puerto Rico.
Safety briefings ahead of takeoff hadn’t been the norm at the time of the crash, but the accident provided a push to make them mandatory.
—TSA checkpoint numbers vs. 2025
7/23…110 percent of 2025 levels
7/22…108
7/21…82
7/20…94
7/19…113
7/18…85
7/17…95
7/16…109
—Tesla boosted its spending to $5.8 billion in the second quarter, sending its free cash flow into the red for the first time in two years despite a surge in revenue.
“This is a massive cap ex year, but I’m confident all the things we’re investing in will yield incredible returns,” CEO Elon Musk told investors on an earnings call Wednesday evening.
Despite Musk’s confidence, the shares fell.
Tesla reported negative free cash flow of $1.1 billion in the second quarter, while its net income fell 5%. Tesla also reported earnings of 33 cents a share, short of the Street’s expectations.
Overall, Tesla’s revenue rose to $28 billion, up 26% from the year before. Revenue from its core automotive business – which has struggled against declining demand in the U.S. and increased competition in China – increased by 23% year-over-year.
Tesla’s energy business revenue, which comes from selling industrial and residential battery storage, was $3 billion for the quarter, up 13% from the year before.
The company also increased subscriptions of its automated driver-assist software, called Full Self-Driving (Supervised), to 1.5 million subscribers – a 15.6% gain from the prior quarter and a 56% increase compared with the year before. It sells subscriptions to Tesla owners for $99 a month.
Tesla sold 480,126 electric vehicles globally in the second quarter, up 24.9% from the same period last year, the company said earlier this month. Much of that growth came from Europe – where fuel prices have surged amid the war in Iran – and China.
Among its largest capital expenditures is a planned chip-manufacturing facility called Terafab, which Tesla is developing in partnership with Musk’s rocket company SpaceX and Intel. Investors and analysts have speculated that Musk could try to merge SpaceX and Tesla into a single AI-focused company.
Musk admitted, “There’s more and more overlap, especially with Terafab,” but said it’s too early to talk about a combination.
The company said it started volume production of its autonomous Cybercab, which doesn’t have a steering wheel or pedals. That vehicle has limited use in Tesla’s autonomous Robotaxi ride-hailing service and isn’t yet available for purchase.
Tesla expanded the Robotaxi service to a limited area of Miami, Orlando and Tampa, in addition to its limited operations in parts of Austin, Dallas and Houston.
—SpaceX went public June 12 at $135, finishing its first day of trading at $160. Day 3, it hit $225 before closing at $211.
This Monday, July 20, the stock closed at $120, and was $113 on Friday, ahead of the scheduled test flight of the Starship rocket tonight (delayed a day by weather…after last week’s aborted launch).
—Intel reported stronger than expected earnings after the close Thursday, on the back of surging demand for artificial intelligence.
Adjusted profit of 42 cents and revenue of $16.1 billion in the second quarter got a boost from a 59% jump in data center and AI revenue. And Intel Foundry revenue climbed 33% from a year ago to $5.8 billion, CEO Lip-Bu Tan citing unprecedented demand for compute.
The company forecasts third-quarter revenue well above Wall Street expectations and raised this year’s capital expenditure estimate to $20 billion from $18 billion. Further, the company forecast 2027 capex will be significantly above this year, mostly spent on the U.S. network. However, it has a lack of foundry customers and, unlike the hyperscalers, didn’t provide a specific number for 2027. The shares ended up falling today.
This month’s selloff in global chip stocks has pushed Intel off record highs but the stock has still more than doubled this year.
—General Motors lifted its full-year earnings outlook on Tuesday for the second time after reporting a 30% increase in second-quarter core profit on the back of profitable SUV and truck sales.
The automaker said it easily surpassed analysts’ profit estimates despite a choppy economic backdrop as consumers grappled with higher gas prices, persistent inflation and slowing job growth during the quarter.
GM’s customers continue to spend up on pricey pickup trucks and large SUVs, such as the Cadillac Escalade, despite higher gas prices. The average GM vehicle in the U.S. sold for about $52,000 during the quarter, up slightly from a year earlier.
That has helped the company to offset pressures from higher commodity and trade-related costs, including added expenses related to relocating some vehicle production to the U.S. to avoid the Trump administration’s tariffs.
On an adjusted basis, GM earned $3.57 per share, topping estimates of $3.20. The company raised its 2026 profit outlook by $500 million to a range of $14 billion to $16 billion.
GM maintained an earlier forecast of a $2.5 billion to $3.5 billion hit to its bottom line from tariffs. It said inflation in raw material, computer chip and logistics costs should cut earnings by $1.5 billion to $2 billion this year.
Quarterly net income dropped 31% from a year earlier to $1.3 billion, mostly because of about $2.3 billion in costs related to restructuring of electric vehicle factory operations. Revenue rose 2% to 448 billion.
—The U.S. Food and Drug Administration on Monday defended publicizing a lettuce sample later found to be a false positive for cyclospora, saying the reversal does not undermine its investigation into a five-state outbreak tied to Taylor Farms lettuce from central Mexico.
The FDA on Saturday had said that a sample of shredded iceberg lettuce supplied by Taylor Farms tested positive for the parasite that has sickened thousands in the U.S. But on Sunday, it called that a false positive after a re-review.
Taylor Farms said: “To be clear, at this moment, FDA has not identified a single positive product test result for cyclospora.”
But Taylor Fresh Foods added that it had completed a voluntary recall of iceberg lettuce from central Mexico as a precaution based on the initial information given.
Cyclosporiasis has been linked to shredded iceberg lettuce served at Yum Brands’ Taco Bell restaurants in Indiana, Kentucky, Michigan, Ohio and West Virginia. It has so far resulted in around 100 hospitalizations and no deaths, according to the CDC.
Poor Taco Bell. With the bad publicity, foot traffic is plummeting. On Friday, July 17, foot traffic was almost 19% below Taco Bell’s daily average for Fridays between Jan. 1 and July 6, according to Placer.ai, which tracks activity from mobile devices to show trends in customer visits.
Placer.ai said Taco Bell traffic was down almost 30% on July 18 compared with the average Saturday traffic. Yikes.
The FDA then said on Wednesday that it had started a new investigation into another outbreak of cyclospora that involves 72 illnesses. The agency hasn’t identified the food, supplier, geographic area, or restaurant involved.
The new cluster is separate from the five-state outbreak and doesn’t currently involve Taco Bell – or any other restaurant.
If investigators find the parasite in another widely used ingredient – such as leafy greens, herbs, berries, or fresh vegetables – consumers could avoid all restaurants selling salads out of caution.
This afternoon, the CDC then linked the latest outbreak to four more states – Illinois, Kansas, Oklahoma and Pennsylvania.
—Domino’s Pizza reported a higher profit and revenue but slowing same-store sales growth in the second quarter.
The company on Monday reported a profit of $135.8 million, or $4.07 a share, compared with $131.1 million, or $3.81 a share, a year earlier.
Revenue rose to $1.19 billion, up from $1.15 billion a year prior and slightly exceeding expectations. Revenue growth was driven by higher franchise royalties and advertising revenues, as well as an increase in order volumes and food basket pricing to stores, the company said.
U.S. same-store sales growth slowed to 0.1% from 3.4% a year earlier. Same-store sales grew 2.1% among company-owned stores, while franchise same-store sales were flat. Analysts were expecting U.S. same-store sales to fall 0.3%.
The company’s order count growth in the second quarter was “meaningful,” CEO Russell Weiner said.
—Christopher Nolan’s “The Odyssey” beat expectations for its opening weekend, selling $124.5 million in tickets in the U.S. and Canada, and another $139.6 million overseas for $264 million in total; the biggest domestic opening of the year for a live-action film.
The first commercial feature film shot entirely in IMAX, IMAX locations delivered about 24% of the opening total. AMC Entertainment, the world’s largest theater operator, scheduled 70-millimeter IMAX screenings at 2 am., 3 a.m. and 6 a.m. in some cities to meet demand. Almost all sold out.
“Christopher Nolan is the only filmmaker working today who could take an ancient story like this, attract a cast as sprawling and accomplished as this, and make it a pop culture event,” said David A. Gross, a film consultant who publishes a newsletter on box office numbers.
Paul Dergarabedian, Rentrak’s head of marketplace trends, said he liked Nolan’s 2023 “Oppenheimer a lot, and it earned nearly a billion dollars at the global box office, but this is next-level filmmaking and that’s really saying something when it comes to Christopher Nolan.”
[Oppenheimer did $82.5 million domestically its opening weekend.]
By the way, “The Odyssey” hasn’t even opened in China (Aug. 14), and Japan (Sept. 11).
Hollywood’s box office sales thus far in 2026 are up 10.4% over 2025.
Foreign Affairs
Russia/Ukraine: Over the weekend, President Zelensky sought to defuse growing discontent over his abrupt dismissal of the country’s popular defense minister, as Russia launched one of the largest ballistic-missile attacks on Kyiv since the start of the war.
Zelensky held meetings with senior military commanders for a second day Sunday, after a protest of thousands in Kyiv on Saturday had called for the ouster of Ukraine’s top general.
Zelensky provoked anger among some in his military and society for his surprise decision last week to remove Defense Minister Mykhailo Fedorov, who has clashed with Gen. Oleksandr Syrskyi over war strategy.
Supporters of Fedorov, the 35-year-old advocate of Ukraine’s drone program, hail his championing of technology that has helped halt some Russian advances and his implementation of digital tenders in an effort to cut corruption.
Zelensky said he wanted a new defense minister who will work more harmoniously with 60-year-old Syrskyi, who commanded forces in successful early battles in the war but has since been blamed for excessive focus on tactical decision, favoring units loyal to him and hanging on to territory at the cost of excessive casualties.
The president said late Saturday that he had spoken with both men. “Decisions regarding the army will be worked out,” he said, without elaborating.
Fedorov posted: “Dialogue is happening. I believe we will succeed.”
Sunday, Zelensky said he spoke with top military commanders including Maj. Gen. Mykhailo Drapatyi, who has publicly praised Fedorov.
At the same time, Both Russia and Ukraine were intensifying their long-range strike campaigns against each other.
Zelensky said Sunday that Ukraine had struck three oil depots in the Stavropol region near Ukraine’s border with drones, as well as hitting three Russian oil tankers in the Black Sea. On Saturday, Ukraine employed a new tactic in striking logistics hubs of a Russian e-commerce company, Wildberries, killing eight people and causing major fires. Zelensky said the warehouses were used for delivering components used for military drones.
Ukraine’s air force said it downed 18 out of 41 Russian missiles fired at Ukraine overnight.
Russia then carried out what Zelensky said was “one of the most massive ballistic attacks” on Kyiv and other regions of the war, killing at least eight people, four of the victims in the northeastern city of Kharkiv, workers at a postal terminal.
[Ukraine then hit Wildberries warehouses in Krasnodar and Stavropol during strikes on Tuesday.]
Late on Sunday, Ukraine’s navy said five people were killed when a Turkish-owned civilian cargo ship with grain was hit by Russian missiles in the Black Sea.
Zelensky appointed Yevhan Khmara as interim defense minister, suggesting that despite the feud between Fedorov and Syrski, the emphasis on technology and long- and medium-range drone strikes is likely to persist. Khmara is a former head of the state security service’s Alpha unit, which has been heavily involved in drone strike operations.
Zelensky indicated he wanted Khmara to push forward with a number of Fedorov’s key reform programs.
And then on Tuesday, Zelensky removed Gen. Syrskyi amid the swelling public protests and growing concerns that the national unity that had helped the country survive nearly five years of war was in danger of fracturing.
Since Ukrainians have largely accepted that there can be no elections while the war rages, mass demonstrations have become a pressure release valve and a check on power.
Zelensky concluded that removing Syrskyi was the only way to restore unity.
He then appointed Gen. Drapatyi as the new commander in chief of the country’s armed forces. The appointment of the general, 43, is likely to please the protesters, especially since he had publicly sided with Fedorov.
Today, at least 15 people were killed in Russian attacks on Ukraine, including 10 dead in ballistic missile strikes on an exhibition near Kyiv showcasing drone technology.
Writing on social media, President Zelensky said some 100 people had been injured in the daytime attack on the exhibition, attended by prominent members of the defense sector.
Elsewhere, five people were killed in the eastern city of Sloviansk by Russian glide bombs.
After the attack on the exhibition, there were fears for the safety of Defense Ministry adviser Serhiy Beskrestnov, aka Flash, and Lyuba Shypovych, who has been involved in developing technology for the Ukrainian army.
Following the incident, both took to social media to confirm they were Ok, and Beskrestnov said he had stayed away from the event because of security concerns.
This is at least the third time since Russia’s full-scale invasion that an exhibition of this kind has been hit, and there is widespread public outrage that an event of this kind apparently had been widely advertised, let alone, why was held at all? President Zelensky said an investigation was underway. Just so stupid.
Meanwhile, an overnight Ukrainian strike killed six people and wounded 26 in the Russian city of Kirov, more than 1,000km (600 miles) behind the front line. Ukraine also attacked warehouses of Wildberries near St. Petersburg.
Random Musings
–Presidential approval ratings….
Rasmussen: 43% approve of President Trump’s job performance, 55% disapprove (July 24), unchanged from last week.
A new Fox News poll of registered voters gave Trump a 39% job approval rating, with 61% who disapprove.
On the economy, only 33% approve of the president’s handling of it. And only 34% approve on the issue of Iran, 66% disapprove.
–Republicans backed by President Trump won handily in Arizona’s primary elections, Tuesday, this being one of the nation’s most competitive political background states.
Among the winners was Rep. Andy Biggs, a 2020 election denier, who secured the Republican nomination to face incumbent Democratic Gov. Katie Hobbs in November.
Hobbs was thought to be vulnerable, but Biggs needs to court undecided independents, a key voting bloc in the state.
—Troy Jackson will wrap up the Maine Democratic Senate nomination on Saturday at the Democrats’ convention.
Hundreds of delegates aligned with Jackson, a logger and former state lawmaker, last weekend, giving him a seemingly insurmountable advantage over two other candidates who stayed in the race.
On to the race against Republican incumbent Susan Collins.
—Lindsey Graham’s sister, Darlene Graham, who last week temporarily replaced her brother, said on Monday that she would enter the race to succeed him.
Among the prominent Republicans in the state, Reps. Russell Fry and Ralph Norman have already indicated their intentions to run. And former governor Mark Sanford threw his hat in the ring.
The filing period closes on July 28, and a special election is scheduled for Aug. 11.
Ms. Graham, 62, has President Trump’s endorsement.
—Gov. Mikie Sherrill (D) said a software error in New Jersey’s Motor Vehicle Commission system led to the registration of roughly 6,600 people who had indicated they were not U.S. citizens, with fewer than 400 of them going on to vote, as she announced Tuesday.
The error occurred between June 2023 and June 2024, under the previous administration, Sherrill said. Affected individuals had answered “no” when asked on a keypad whether they were U.S. citizens while applying for driver’s licenses or identification cards, but the system registered them to vote regardless.
“These individuals answered ‘no’ when asked on a keypad whether they were a U.S. citizen when applying for drivers’ licenses and identification cards, but through no fault of their own, the system registered them anyway,” Sherrill said.
The Governor said she learned of the error last week and immediately ordered her chief counsel to open an investigation. She also ordered the removal of any residents erroneously added to New Jersey’s voter rolls between June 2023 and June 2024.
The MVC administrator she appointed has begun replacing the vendor responsible for administering the system.
The fewer than 400 individuals who voted because of the error were registered as Democrats, Republicans and unaffiliated voters who were scattered across the state, Sherrill said.
No election results were impacted, but this is highly embarrassing for my state and of course gives ammunition to Republicans looking to pass the SAVE America Act.
–Speaking of which, going back to last Thursday night’s prime-time address by President Trump about “shocking vulnerabilities in our election infrastructure” and a “cover-up” of Chinese election interference, he directed viewers to examine declassified intelligence the White House had just posted on its website.
David Ignatius / Washington Post
“Rather than supporting Trump’s inflammatory claims about Chinese election meddling and other threats, the documents undermine many of his arguments. And contrary to his portrait of a diabolical ‘deep state,’ they show an intelligence community that’s almost comically cautious and bureaucratic in reaching its conclusions.
“What’s frightening about Trump’s wild accusations of fraud is that they could ‘undermine confidence in U.S. democratic processes,’ which the National Intelligence Council warned in a January 2020 memorandum was a basic goal of foreign meddlers. ‘Adversaries could make wholly fabricated claims, such as announcing that they have compromised all U.S. voting machines, a claim that would be difficult…for the U.S. government to disprove,’ the memo explained.
“Trump tried to sow precisely these doubts in his speech, with claims that hacked voting machines, fake ballots and illegal voters have sabotaged the integrity of our elections. Though he claimed otherwise, his speech seemed a deliberate attempt to undermine public confidence. Intentionally or not, he was doing our adversaries’ work for them.”
Regarding the SAVE Act…Sen. Lisa Murkowski (R-AK) wrote in an op-ed for the Wall Street Journal:
“I have expressed my concerns with the SAVE America Act for months. I filed several amendments when it came to the Senate floor. No effort has been made to correct its flaws.
“I’ve also asked for the effective date of the legislation to be pushed back to give all states enough time for implementation. As written, the bill would take effect immediately – but it is unreasonable to expect immediate compliance.
“This bill would force many states to modify their election laws. Some legislatures might need special sessions to do that. Thousands of local jurisdictions would have to implement new processes and find workers willing to risk being personally sued. Under the bill’s private right of action, individuals or groups could sue election officials if they believe verification requirements aren’t being strictly enforced.
“Even if federal resources are provided through the budget reconciliation process to help facilitate these changes, it will take weeks or months for those dollars to arrive and much longer to overhaul state voting processes.
“When allowed to speak candidly, state election officials from both parties have been clear: Provisions of the SAVE America Act won’t work, especially in the time frame envisioned by advocates.
“The president is right that we should protect the security of our elections. But we can’t make it harder for American citizens to cast their ballots, because free and fair elections are the cornerstone of our republic.”
Editorial / Wall Street Journal…on the SAVE Act….
“The public likes voter ID, with a poll last year finding 83% of adults, and 71% of Democrats, favor it. Yet the SAVE America Act goes further, rendering most driver’s licenses insufficient to register to vote, and that’s to say nothing of Mr. Trump’s push to override laws in many GOP states – Florida, Georgia, most of the Midwest – that offer mail ballots for convenience.
“In a floor speech Thursday, North Carolina Sen. Thom Tillis argued that even if Congress whooped through the bill, there isn’t time to implement it before November. By his reckoning, the U.S. has about 10,000 county clerks or municipal entities that carry out America’s decentralized elections. The midterms are barely 100 days away, early voting sooner. ‘The math doesn’t work,’ he said. ‘It can’t be done.’
“Mr. Tillis isn’t against ID rules, and he helped pass North Carolina’s….
“Unfortunately, the message from Mr. Trump and others has been that America’s elections can’t be trusted, and the only hope is the SAVE America Act. Aside from being untrue, this is a political backfire for the GOP. If Republican voters believe it, and the bill falls short, then why waste time going to the polls in November? Has the GOP already forgotten how Mr. Trump’s fraud outbursts cost them two Senate seats in the 2021 Georgia runoffs?
“Republicans should be campaigning on what they want to do with two more years in power. There are ways to improve voting integrity, but Mr. Tillis is right that it’s reckless to sow generalized suspicion that American elections aren’t honest. In fact, the intel memo Mr. Trump declassified warned this is what a U.S. adversary might do. ‘Much of the voting public probably knows little about the process of administering U.S. elections,’ it says, ‘which could allow false narratives to gain traction.’
“That’s dated Jan. 15, 2020. Now there’s some prescient intelligence.”
Meanwhile, President Trump downplayed the likelihood he would order retaliation against China over his unfounded allegations that Beijing illegally compromised American election data.
Asked Tuesday if China would face consequences over his accusations tied to the 2020 elections, Trump said the country is “maybe a little bit different today than it was then.”
“Well, we’ve talked to them about it. It took place a long time ago,” Trump told reporters. “But look, they do things, and we do things to them. I’ll be honest, we do things to them too. It’s not a one-way street.”
Oh brother.
—President Trump said on Sunday that the Boeing luxury jet donated by Qatar that he recently took overseas would soon be “maxed out,” suggesting it could get additional defensive capabilities to match the standards of the older jets used for presidential travel.
It was not clear what specific upgrades Trump was referring to, or whether the time frame he gave of a month until it is ready was realistic.
Nonetheless, it appeared to be an admission from the president that the plane’s security measures are not as extensive as the models that have been designed to be built from the ground up to serve as Air Force One.
At the urging of the president, the Justice Department hand-delivered subpoenas to New York Times reporters who had reported earlier that the new jet lacks the same defensive countermeasures as the older model, including antimissile capabilities.
The DOJ then said on Thursday it was withdrawing the subpoenas. This came after a U.S. District Court judge grilled Justice Department lawyers for nearly an hour over their handling of the case.
—The United States has now recorded more cases of measles in 2026 than in any other year since the virus was declared eliminated in 2000.
On Friday, the Centers for Disease Control and Prevention announced that there have been 2,318 confirmed cases of measles so far this year, toppling the record set last year. More measles cases have been reported in the United States in the last two years than in all the years from 2000 through 2024 combined.
Reversing course on measles would require a nationwide push to improve vaccination rates, a prospect that seems unlikely under the leadership of Health Secretary Robert F. Kennedy Jr., who has downplayed the risks of measles and spearheaded a hunt for evidence that vaccines are unsafe.
[About 1,000 of the cases this year took root in a closeknit, evangelical Slavic community in South Carolina. State officials declared the outbreak over in April.]
—What an awful weekend for two groups of people in Utah and Ohio. Last Friday, five family members who had set out for a day of hiking in a red rock canyon near Bicknell, Utah, died in a flash flood.
And then five died on a river near Columbus, Ohio, after several of them went into the water to help another person who was struggling to swim, authorities said.
—France recorded at least 5,700 more deaths than usual during a historic heat wave last month, the public health agency said Wednesday, sharply increasing its estimates of the feared toll from record-shattering temperatures.
This was the highest number of estimated deaths for a heat wave since 2003’s, which caused an estimated 15,000 deaths in France.
But after three consecutive heatwaves, parts of France are a tinderbox, and this week at least 40,000 have either been or are in the process of being evacuated by boat from the Cap Ferret peninsula, a popular tourist spot west of Bordeaux known as the French Hamptons, due to a major fire.
And in Spain, some 26,000 have been told to leave (or have already evacuated) three towns west of Madrid. Like the fires are at the doorstep of a rather large European city.
—More than 1,000 people have died in the Ebola outbreak in Congo, according to Africa’s top health body, a grim toll in the fastest Ebola outbreak in history, as conflict, community resistance and an uneven response fuel its spread.
The outbreak is unlike previous Ebola outbreaks because the Bundibugyo virus responsible for it has no approved vaccines or treatments.
–As of Wednesday, the death toll in the Venezuelan earthquakes of June 24 had risen to 5,398, per the National Assembly.
—Tropical Storm Bertha’s development was hampered by strong wind shear in the Gulf, which is normal this time of year there, but is also a feature of a strengthening El Nino. The same wind shear can significantly limit the number of hurricanes in the Caribbean and Atlantic, with the Caribbean wind shear already running at the second highest on record for early July.
—My area was hit by wicked storms Tuesday for the second time in four days, though my town missed the brunt. Just 15-20 miles away, however, they had three tornadoes, which is rather rare for New Jersey. [Four confirmed overall in the state.]
Last Saturday and Tuesday, there were over 1,300 flight cancellations, combined, at Newark Liberty, Laguardia, and JFK.
—President Trump on Truth Social, last Friday:
“We are holding Canada responsible for the fact that they are not properly maintaining their Forest, and Brush therein, and the United States is being unnecessarily invaded by filthy, polluted, and unhealthy air, the quality of which is dangerous, and totally unacceptable! I will call the Prime Minister during the day to find out what they are going to do about it. The cost is incalculable! Canada has refused to engage in Forest Management and Debris Removal, knowing that such refusal will lead to exactly this result. This is Willful Negligence, and becoming a yearly occurrence, costing the United States Billions of Dollars, which cost of this pollution must of necessity be added to the TARIFFS Canada is currently paying. Thank you for your attention to this matter!”
I wonder if the president has ever looked at a map of Canada. Outside of a few major cities, the northern half is essentially uninhabited and is a rather large, forested expanse. Like larger than anyone has ever seen before!!! Thank you for your attention to this matter.
–The Colorado River’s Lake Powell, the second largest reservoir in the U.S., is now 23% full and is about 33 feet from reaching water levels so low that hydropower can’t be produced. The reservoir could break its all-time record low in early September.
Together with the U.S.’s largest reservoir Lake Mead downstream, the two bodies of water are the lowest they’ve been in nearly 70 years. The last time their combined storage was this small was in May 1957 when Glen Canyon Dam that holds back Powell was being built, according to a recent paper published by a group of academics and former water officials.
The reservoirs will continue to deplete until this winter’s snowpack begins melting next spring. Last winter we had a record-dry winter and extreme heat in the Rockies.
The Colorado River feeding these reservoirs is relied upon by farmers, industries, wildlife, hydropower and more than 40 million people in seven states and Mexico.
I get a kick out of all the data centers and chip manufacturing plants being built and planned for Arizona, for example; the facilities heavily dependent on abundant water.
—President Trump on Truth Social, Monday PM:
“The World Cup turned out to be a spectacular SUCCESS! I want to thank all of those involved but, in particular, our GREAT Law Enforcement. The Respect that everyone has for them, together with their Love of our Country, kept this Great Championship the Safest and Most Spectacular World Cup in History, BY FAR! Thank you also to all others involved and, in particular, to young and dynamic Andrew Giuliani, working for the Government of the United States of America, and the fantastic President of FIFA, Gianni Infantino, on a job well done! Few people will ever be able to accomplish what he has done in elevating the World Cup to a level that nobody thought was possible. Congratulations to all!”
Gianni and FIFA did line their pockets fantastically!
But it was indeed a great show and congratulations to Spain…gracious champions.
—
Pray for the men and women of our armed forces…and all the fallen. We pray for the soldiers killed in Jordan – Pvt. Isabella Gonzales (Carrollton, Texas), First Lt. Tyler James Feehan (Ewa Beach, Hawaii), Sgt. Angel S. Rampersad (Ozone Park, N.Y.) and, in Iraq, Sgt. Emmanuel Swinton (Fayetteville, N.C.)
Slava Ukraini.
God bless America.
—
Gold $4050…Silver $58.15
Oil (WTI) $89.30…Brent $96.70
Regular Gas: $4.10; Diesel: $5.24 [$3.16 – $3.74 yr. ago]
Bitcoin: $64,190 [4:00 PM ET, Friday]
Returns for the week 7/20-7/24
Dow Jones -0.4% [51947]
S&P 500 -0.6% [7411]
S&P MidCap +0.2%
Russell 2000 -1.1%
Nasdaq -2.1% [24975]
Returns for the period 1/1/26-7/24/26
Dow Jones +8.1%
S&P 500 +8.3%
S&P MidCap +14.5%
Russell 2000 +18.1%
Nasdaq +7.5%
Hang in there.
Brian Trumbore
