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Edition 1,424
The war in Ukraine is growing increasingly nasty. With Ukraine going after Russia’s oil refineries (with amazing success) to reduce a major source of funding for Vladimir Putin’s war, Russia is now retaliating by taking out Ukraine’s gas stations…over 250 of them. And the thing is, these aren’t your everyday U.S. mom and pop stations. Many of them are elaborate, with large mini-marts (a la Buc-ees) and are community gathering spots, so it’s very depressing for the people.
There are also growing numbers of videos of Russian drones tracking delivery riders on bicycles and taking them out in such a brutal fashion, that Ukraine said these are clearly war crimes.
More details on the war below…but without interceptors for Russia’s ballistic missiles, this is a critical period for the Ukrainian people and their ability to survive. Thus far, they have been truly amazing examples of dignity, character and supreme courage.
And yet our leader in the White House can’t get himself to come down on the side of Good vs. Evil.
But…this afternoon, the Senate overwhelmingly approved a punishing Russian sanctions package, the result of a year-long campaign by the late Sen. Lindsey Graham to reinforce U.S. support for Ukraine and try to force Vladimir Putin’s hand.
The bipartisan legislation, which passed 86-11, would penalize countries that continue to buy Russian oil, gas and other exports seeking to deprive Putin of further revenues for funding the war.
The House must act when it returns from its break and President Trump said he would sign it, though it gives him lots of authority to grant waivers. That will be the real test of his ultimate support.
—
This afternoon, OpenAI said it is pausing work around one of its upcoming artificial intelligence models to implement stricter safeguards after the system was found to be significantly more adept at cybersecurity tasks.
This comes after the ChatGPT maker said today that it “cannot rule out” that the unreleased Astra model would reach OpenAI’s “critical, cybersecurity threshold,” meaning it’s capable of identifying and developing zero-day exploits* without human intervention.
*The ability to create and use malicious tools to open back doors for hackers…or something like that. As in with each passing day we are learning just how screwed we are.
—
Tale of the Tape
Oil / West Texas Intermediate (WTI)
Friday, Feb. 27…$67.30
Friday, Aug. 7…$76.95
Nationwide averages at the Gas Pump [Source: AAA]
Friday, Feb. 27…regular $2.98; diesel $3.75
Friday, Aug. 7…regular $4.04; diesel $5.33
As it went down, day by day, in the Iran War….
Last Friday, President Trump told reporters that he planned to resume heavy military strikes on Iran to force the regime to come to the negotiating table. He predicted that if the U.S. hit Iran hard enough, the hardline regime would eventually “peter out.”
“We will be hitting them very hard,” Trump said at his cabinet meeting. “And you know at some point, they’re going to say, ‘We just can’t take it anymore.’”
Nothing happened Friday night, in terms of U.S. military action, and then the president called off a new attack Saturday night.
Iran and Israel didn’t immediately comment on the president’s assertion of diplomatic progress.
Iran fired a drone barrage into Kuwait on Saturday. Kuwait said it shot down the volley.
During the day, Saturday, U.S. embassies in the Middle East told Americans to consider departing the region. Airlines extended flight cancellations to Arab Gulf states, which have spent decades building themselves up as international airport hubs. The U.S. warned that airspaces might soon be closed.
President Trump on Truth Social, Sat. PM:
“The U.S.A. is locked and loaded and ready to go against the Islamic Republic of Iran, at levels of Military Terror, Strength, and Power not seen since World War II. Despite this, we have just been asked by Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to. This would include the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat. Based on this request, I have agreed, for the future benefit of the WORLD and, likewise, the survival of a successful and prosperous Iran, to cancel the attack, subject to being able to rapidly make a DEAL. The Country of Israel joins me in this commitment. Get to work, everybody, and get it DONE.”
Axios reported Saudi Crown Prince Mohammed bin Salman told President Trump in a call that he was concerned over the U.S.’s plans for more strikes, the call confirmed by the Crown Prince’s office. MBS also “asked for clarity about the plan of action,” a U.S. official told the outlet.
President Trump announced new talks with Tehran will begin Monday. Appeals from several Gulf state allies – along with Iran itself – led Trump to stand down, he said.
“I was asked to by Saudi Arabia, by UAE, by Qatar, and by Iran,” he told reporters aboard Air Force One Sunday when asked why he scrapped the plan to strike Iran.
“I said to the crown prince, ‘What would you rather do? Would you rather us do this or not?’” Trump said.
“They said we would much prefer a deal as opposed to an attack, because you don’t know where these attacks lead.”
But the Saudi crown prince reassured him that Iran was ready to make a deal.
“They thought that a deal is imminent,” Trump said, noting it would include the Strait of Hormuz and on Iran’s nuclear program.
Trump wouldn’t give a deadline for reaching an agreement but assured that the U.S. military is ready to strike at any time.
“We’re ready to go anytime we want,” he said.
Iran’s Foreign Ministry spokesman Esmail Baghaei rejected the claim, saying no negotiations with the United States were taking place and no meetings were scheduled. Iran had no plans to host foreign delegations or send negotiators abroad in the coming days, he said.
Baghaei added that all Iranian negotiators were currently in the country, apart from Foreign Minister Abbas Araghchi, who was on a religious pilgrimage in Iraq. The only talks under way, he said, were discussions with Oman over management of the Strait of Hormuz. Araghchi was apparently unavailable at least until the end of the week.
But Araghchi did comment Sunday on Telegram that negotiations between Iran and Oman are in the final stages.
Israel is waiting out the latest diplomatic push, according to a member of Prime Minister Netanyahu’s security cabinet, Zev Elkin.
There’s “some kind of vector toward an agreement between Iran and Oman,” he told local Army Radio on Sunday.
Elkin expressed skepticism: “We’ll all wait to see if this vector really does become a full agreement, and whether it will be implemented and where it’s all leading.”
Oil prices fell sharply Monday on Trump’s latest decision to hold back from military action.
Editorial / Wall Street Journal, Sunday p.m.
“A friend quipped the other day that President Trump truly deserves the Nobel Peace Prize because he has already ended the Iran War eight times. Will the ninth time be the charm after his latest decision to call off a military escalation in search of a deal with the revolutionary regime?
“ ‘We have just been asked y Iran, and other Middle Eastern Countries, to hold off any attack in that the perimeters of a deal has been agreed to,’ Mr. Trump posted at 10:05 p.m. on Saturday. He added that this includes ‘Immediate, Complete, and Total’ opening of the Strait of Hormuz and an end to Iran’s nuclear program.
“Mr. Trump offered no other details. It also isn’t clear how this miraculous turn of events happened so quickly after Mr. Trump had been building all week to a military response. Journal reporters said Friday Mr. Trump had made a decision to escalate….
“By now it’s clear that this up and down, back and forth, from war of annihilation to peace in our time is Mr. Trump’s chaotic way of war. He may think it keeps the enemy guessing, but it also keeps the American public unsure of what his war aims are or how he hopes to achieve them. No wonder the polls show voters have soured on the war. If Mr. Trump did restart the bombing, it isn’t even clear what his strategic purpose would be, other than hoping that it would cause the regime to sign what he calls a ‘DEAL.’
“It’s been clear since Mr. Trump agreed to a cease-fire in April that he wants out of the war. He’s worried about the impact on the economy from higher oil prices, or, as he memorably put it, becoming the next Herbert Hoover. He also wants lower gas prices going into the midterm election, especially as his approval rating falls below Joe Biden’s and Barack Obama’s at a comparable period in their terms.
“Iran’s regime knows signals of weakness when it hears them. It interpreted the poorly drafted MOU as an opening to let it control the Strait and has kept taunting Mr. Trump with attacks on U.S. allies and bases. Mr. Trump lashes out with a tit-for-tat bombing response that so far hasn’t caused Iran to bend.
“Iran also knows Mr. Trump is surrounded by advisers who didn’t want the President to attack Iran at all and now want the conflict over on nearly any available terms. His aides think the cost of further fighting is higher than the damage to U.S. (and Mr. Trump’s) credibility from a cease-fire that cedes the initiative in the Gulf to Iran. The death of Sen. Lindsey Graham removed a rare hawkish counselor.
“Has Iran now finally agreed to terms that can plausibly be called a U.S. victory, as Mr. Trump’s Truth Social post suggested? Recall that when the MOU was signed, Mr. Trump’s negotiators hailed the result, and claimed the regime had turned a ‘new leaf,’ as Vice President JD Vance put it, and wanted to become a ‘normal country,’ despite 47 years of promoting terror and regional revolution.
“As ever, it pays to watch what Iran does, not what the regime and Mr. Trump say it will do.”
President Trump on Truth Social, Mon., 11:25 AM:
“Iranian leadership is unbelievably duplicitous! They ask for a meeting, some would say ‘beg,’ talks begin, with more scheduled in the immediate future, and they say, openly and proudly, that they’re not having any discussions, that nothing is being talked about, and they’re only dealing with ‘Oman.’ They then go on to give their usual blather in saying, the Strait of Hormuz will be operated powerfully by them, when it is already completely controlled by the United States Navy and our ‘Blockade’ or, as some say, ‘The United States Wall of Steel!’ Nothing gets through to Iran, unless we want it to, and nothing will get through, unless a Deal, or Total Surrender, is accomplished. Whether Iran wants to admit it or not, we are, in fact, talking of a solution to a problem that they have caused, for decades. It is very simple, IRAN WILL NEVER HAVE A NUCLEAR WEAPON!”
But Iran continues to claim there are no negotiations with the U.S., but said talks with Oman to get more ships moving through the Strait of Hormuz were making progress.
“I want to give them every last chance before decapitation,” Trump told reporters in the Oval Office Monday afternoon. “You’ll find out today or tomorrow. I mean, they’re going to go quickly, one way or the other. It’s not very complex.”
It wasn’t clear which negotiations Trump was referring to or who was involved. He has repeatedly cited diplomatic efforts after backing away from threats of military escalation, only to see talks collapse.
Iran has shown no sign of allowing vessels free passage through the Strait, which Trump has demanded. Instead, Tehran said it is discussing a new shipping route with Oman rather than whether the Strait itself will reopen.
A reported attack on a cargo vessel could complicate diplomatic efforts after the UK Maritime Trade Operations center said late Monday that a ship about 20 nautical miles northeast of Al Khasab, Oman, had broadcast that it was hit by an unidentified projectile.
The discussions with Oman are about a ‘temporary’ route to ensure the safety of ships, Esmail Baghaei, the Iranian foreign ministry spokesman, said on Monday. ‘We are not currently negotiating with the United States,’ he reiterated.
Observable traffic transiting the Strait of Hormuz remained at a trickle as attacks on vessels and Iranian threats heightened safety concerns for shipowners and crews considering a trip through the waterway.
Shipping activity was subdued on Tuesday after six smaller vessels crossed in both directions on Monday with their transponders on near Iran, including bulk carriers and liquefied petroleum gas tankers, according to data from Kpler.
According to the New York Times, the deal Iran and Oman are close to reaching wouldn’t include tolls, per Iranian officials, but there would be a “service fee” to cover the environmental impact of the shipping, security for the cargo ships and tankers, and staffing. Revenues would be divided equally between Iran and Oman, two Iranian officials said.
New York Times: “But a U.S. official familiar with the negotiations said on Monday that the Iranian account was ‘not accurate,’ and said that any ‘temporary’ routes established through the Strait would not involve approvals or permissions by Iran, and would involve no tolls.
“For President Trump, the deal, if it happened, could address his most urgent political problem allowing ships to flow again. For their part, Iranian officials said the Strait would remain closed, despite any agreement, until the U.S. lifts its naval blockade against Iranian ports in the Persian Gulf and both countries return to the 14-point plan laid out in the Islamabad memorandum of understanding.”
Getting the Strait reopened is vital for Trump politically, and the administration appears to be preparing the world for a reopening in which Iran exerts daily control over traffic.
Inside the Pentagon, they worry an Omani-Iranian agreement amounts to capitulation to the Iranians.
Ali Vaez, deputy Middle East program director for the International Crisis Group, said:
“Whatever solution leaves Iran in control of the Strait will be a very tough sell for Trump but there is also no military solution to remove Iran’s control of the Strait,” Vaez said. “Trump’s options are between an unwinnable war and an unpalatable peace.”
Iran and Oman then issued a joint statement on Wednesday, details taking a while to figure out, as Iran’s Baghaei told reporters that negotiations between the two countries are “forward-moving” and a deal would be struck “if certain third parties do not obstruct this process,” he said.
Baghaei didn’t mention any role of Washington in his statement, except to say the closure of the Strait was a result of attacks by the U.S. and Israel.
Iranian state TV earlier played down the outcome of the Iran-Oman discussions, noting an agreement between Tehran and Muscat would not necessarily mean the Strait would open immediately. That would be contingent “on a change in U.S. behavior,’ according to the report.
According to Axios, the U.S., Iran and Oman are close to a 60-day interim agreement to reopen the waterway without tolls.
But Iranian Deputy Foreign Minister Kazem Gharibabadi told state-run IRNA that Iran and Oman are negotiating a “temporary route” that would remain active for two to four months, with a significant portion of traffic passing through the Islamic Republic’s territorial waters. “This understanding does not mean the full reopening of the Strait of Hormuz,” he said.
The rest of the week, Iran and Oman were said to be finalizing a draft agreement to reopen the Strait, which would set up an inbound lane near Iran and an outbound lane near Oman – and have shared it with the U.S., countries in the region and Iran’s top leaders, who still needed to sign off, they said.
But Gulf states worry the proposed agreement could entrench Iran’s sway over the critical waterway, and the U.S. has repeatedly denied that Iran controls or would be allowed to control the Strait.
According to the draft proposal, which would last for 60 days, ships entering the Strait would use the route closest to Iran in coordination with Tehran, and ships exiting the Strait would use a route in the Omani waters in coordination with Muscat.
The deal would exclude charging ships tolls or fees, Iran might not be prevented from collecting voluntary payments to cover costs like security and search and rescue, the people said.
If a deal is announced, the U.S. and Iran would return to the negotiating table to discuss issues including Iran’s nuclear program and financial relief, people familiar with the agreement said.
Meanwhile, Thursday, the Houthis said they conducted a “large-scale” attack against forces from Yemen’s Saudi-backed government, raising concerns over a broadening of the U.S.-Israeli war on Iran into a region-wide conflict.
The Houthis said Thursday that drone and missile attacks in northern and eastern Yemen killed and injured “hundreds” of troops, according to a statement on Telegram. Yemen’s internationally recognized government said earlier that at least 30 troops were killed in the strikes.
—President Trump on Truth Social, Tues. 12:34 AM:
“The U.S. has massive amounts of ‘munitions,’ especially of certain types. Additionally, large amounts are being manufactured and shipped to the U.S. as needed. Defense companies are building the largest number of plants and factories in our country’s history. The “leakers” of these treasonous statements are being hunted down. Long term jail sentences will be sought! President DJT”
Addressing reporters the rest of the week, the president conceded the U.S. is low on certain munitions.
—In Gaza, at least 13 people, including several children, were killed in the latest strikes by Israel, Palestinian officials said last weekend.
Gaza’s Civil Defense Authority said Israeli military aircraft carried out the attacks Saturday on Gaza City, Khen Younis and Deir el-Balah.
It was second successive night of Israeli strikes on the territory, and it comes days after Hamas accepted a disarmament plan, which would see the Palestinian group hand over its weapons to President Trump’s Board of Peace.
A spokesperson for the Israel Defense Forces (IDF) said it was targeting military operatives in Gaza, and two Hamas militants were killed.
The Israeli Energy Minister, Eli Cohen, said on Sunday that no deal had been reached to stop attacks on the Gaza Strip, a territory now under 70% Israeli control.
Cohen added that he saw a need for the strip to be placed under the full control of Israel if Hamas did not disarm – despite the Board of Peace plan for Israel to pull out of the territory.
And then Tuesday, Israeli Prime Minister Netanyahu said that Israeli forces will not withdraw from their current lines in Gaza until Hamas has completely disarmed.
In remarks on social media, Netanyahu suggested there were differences between Israel and the Trump administration over a recent deal announced to disarm the militant group.
“(The administration) sent us a draft. We did not agree. It is not our draft. We sent our comments,” Netanyahu said. “This is our position. We stand firm on our interests, I believe both wisely and resolutely.”
—
Wall Street and the Economy
The Federal Reserve’s ‘dual mandate’ is to pursue the economic goals of maximum employment and price stability, and today’s jobs report for July added to the belief that when the Fed’s Open Market Committee gathers next in mid-September, there is no longer a need to hike interest rates because the job market is weak.
Employers cut 23,000 positions last month, when a gain of 80,000 was expected, as businesses shed jobs in the face of renewed tariffs and higher costs driven by the war in the Middle East. The unemployment rate dipped to 4.1% as hundreds of thousands of people left the labor force.
What was distressing, but good for the bond market, was that the number of jobs for May and June was revised down by 103,000 jobs total. So while you never just look at a single month, the recent trend isn’t great, and despite the sticky inflation that’s been running well over the Fed’s 2% target, Chair Kevin Warsh and Co. can’t possibly hike rates next month.
What was also a bit disconcerting was that average hourly earnings, 0.1% for the month, 3.2% year-over-year, were also well below forecasts and rather putrid, given the inflation.
But next week we have key inflation data for July on both consumer and producer prices, and it will be telling, as oil prices were spiking back up after declining in June. [We will also get a report on retail sales in the month.]
In other economic data, we had the ISM manufacturing and service sector readings, a better than expected 55.6 for the former (best since May 2022), and 54.1 for services, 50 the dividing line between growth and contraction, so very robust.
June construction spending was down 0.1%, and factory orders declined 0.3%, when gains were expected for both.
The Atlanta Fed’s GDPNow early estimate of third-quarter growth is a solid 5.8% (but after Q2’s 1.5% pace).
Freddie Mac’s 30-year fixed-rate mortgage ticked up further to 6.69%.
Europe and Asia
We had the PMIs for the month of July in the eurozone this week, with manufacturing at 51.9, services 51.7.
Germany: mfg. 52.2; services 49.8
France: mfg. 49.8; services 49.6
Italy: mfg. 51.3; services 52.5
Spain: mfg. 50.2; services 58.3 (best since March 2023)
Ireland: mfg. 55.1; services 55.2
Netherlands: mfg. 54.4
Greece: mfg. 54.3
UK: mfg. 51.9; services 52.1
Separately, June producer prices in the euro area were down 0.3% from the month prior, and up 4.6% year-over-year; June retail sales were also down 0.3%, up 0.7% from a year earlier.
Chris Williamson, Chief Economist at S&P Global Market Intelligence:
“July’s final PMI adds to a picture of encouraging resilience of the eurozone economy amid the ongoing conflict in the Middle East, but also underscores how the business climate is being steered by the changing geopolitical landscape….
“July saw the first significant increase in service sector activity since the outbreak of the war, adding to the sunnier summer picture from manufacturing, which has reported the largest increase in production for over four years.
“Business optimism also brightened in July, lifting to the highest since January….
“However, these improvements came on the tailwind of June’s lower oil prices and easing tensions in the Middle East. With the conflict having since flared up again, we are seeing renewed downside risks to growth and upside risks to already-elevated inflation. The latter puts policymakers in a more hawkish decision-making stance, though the marked drop in the PMI price gauges potentially provides a window for further rate hikes to be delayed until the outlook for inflation becomes clearer.”
In Asia….
China’s private RatingDog index for manufacturing in July was 50.9, for services 50.4, both well below consensus.
But China’s export machine kept surging, up 23.9% year-on-year in July, surpassing forecasts but easing from June’s 27.0% growth. The increase was driven by strong demand for AI-related technology products, and a rush by manufacturers to ship goods to the U.S. ahead of potential new tariffs. The U.S. applied a new 12.5% levy on Chinese products in late July, replacing a temporary 10% levy that had lapsed.
Exports of semiconductors almost doubled in value terms from last year, and overall high-tech product exports soared 40.7%.
Exports to the U.S. rose 17.1%, Japan 14.0%, South Korea 46.6%, and the EU 16%.
July imports also surged 27.5%.
Japan’s manufacturing PMI for July was 54.5, for services 51.2.
June household spending was weak, -6.4% over May, and down 3.3% year-over-year; underscoring persistent weakness in consumer demand.
South Korea’s manufacturing PMI for July was 53.1… Taiwan’s 55.1.
Street Bytes
—The Dow Jones and S&P 500 hit new records this week, and Nasdaq had its best week since April, as the earnings have been largely solid, while optimism on a solution to the crisis over the Strait of Hormuz prevailed (probably wrongly…Saudi Arabia at this moment is preparing for attacks from Iran-backed Iraqi militias).
The Dow Jones finished the week up 3.0% to 54036, its closing high set Wednesday at 54349. The S&P 500 surged 3.6% to a record close today, and Nasdaq soared 5.2%…still shy of its record high.
—U.S. Treasury Yields
6-mo. 3.91% 2-yr. 4.19% 10-yr. 4.64% 30-yr. 5.19%
Treasuries rallied early today on the weak jobs report, and fifteen minutes after the release, the yield on the 2-year had fallen to 4.16% and to 4.60% on the 10-year. But then the rally faded.
Meanwhile, President Trump restarted his effort to fire Fed Gov. Lisa Cook. What a jerk. This does not make Kevin Warsh’s job easier.
—OPEC+ pressed ahead with another oil production increase, a move that would complete the group’s planned return of voluntarily withheld barrels to the market while setting the stage for potentially difficult talks over future quotas.
Seven members of the group said Sunday they will raise output by about 188,000 barrels a day in September, a sixth straight monthly increase
The September increase would complete the phased unwinding of 1.65 million barrels a day of voluntary supply cuts originally agreed to in 2023, when the group still included the United Arab Emirates, which left OPEC earlier this year. Separate cuts of around 2 million barrels a day introduced by the broader OPEC+ group in 2022 remain in place through the end of the year.
Separately, Gulf producers continue seeking alternative export routes, with Turkey and Iraq extending a pipeline agreement, while Iran said talks with Oman on a new route through the Strait of Hormuz were in their final stages.
And Saudi Arabia’s Aramco, in announcing that attacks last month didn’t have a material impact on its operations, said it is working to expand its oil export capacity as flows through the Strait of Hormuz have been disrupted. But it noted that if it chooses to export more through the Suez Canal, such a route that would have a tanker taking the Cape of Good Hope and around Africa would require 20 to 25 days longer than usual voyage times, CEO Amin Nasser said.
[Aramco reported profits of around $33 billion in the second quarter, good for the kingdom, which takes in a substantial amount of Aramco’s revenues.]
Russia extended its diesel and gasoline export ban through January 2027 as fuel shortages persisted amid continued Ukrainian strikes at major oil refineries.
Meanwhile, President Trump went after Chevron and Exxon Mobil, saying they are “making too much money” and should return some of their profits back to the public.
“When you look at one company where they made 12 times what they made the year before, they ought to give some of that back to the public,” Trump told reporters in the Oval Office on Monday. “And they better cut the retail price, the consumer price.”
Trump described himself as a “big free enterprise guy,” but said he is nonetheless frustrated by the oil industry’s profits, which come as fuel prices increase as a result of his actions in Iran. “You’re surprised I’m saying it. I’ll say it loud and clear. I’m not happy about it,” he said of the industry’s profits.
Earlier, in a Truth Social post concerning Mike Wirth, CEO of Chevron, Trump posted in part: “(And) get your consumer (retail!) Oil Prices DOWN, NOW!”
Editorial / Wall Street Journal
“Everyone knows President Trump plays the role of political populist, but sometimes all you can do is laugh. Take his lashing Monday of American oil companies for ‘making too much money.’
“Mr. Trump is worried about gasoline prices going into the midterm election, and the President needs someone to blame. Voila, Big Oil….
“Oil and gas giants always make more money when oil prices rise, as they have given the threat to oil supplies from Mr. Trump’s war with Iran. But this is the same industry that Mr. Trump has been cheering for producing more oil in the U.S. Does he want the companies to make less money so they’ll have less to invest in exploration and drilling? Which is it, sir?…
“Mr. Trump’s recent financial disclosure report showed he made some $1.4 billion last year on crypto alone. His Truth Social platform last Saturday launched a service that sells faster access to his often news-breaking posts. Oil prices – to take one example – often gyrate in response to his posts about the war.
“Oil and gas giants make money by producing a valuable commodity. Some uncharitable populist might say Mr. Trump is commoditizing the Presidency.”
—SpaceX stock fell after the company disclosed higher-than-expected spending on its artificial intelligence business, dampening an inaugural quarterly report that broadly surpassed Wall Street forecasts.
“We expect the cadence of AI development to improve dramatically,” CEO Elon Musk told analysts on a call after the company reported results that beat forecasts for revenue, AI losses and Starlink subscriber growth.
The first earnings report for the company since its June IPO added to the sense of uncertainty that has existed since it came public at $135 a share, with more than $100 billion worth of stock also becoming eligible for sale for the first time on Thursday*, potentially putting more downward pressure on the price.
SpaceX reported revenue of $7.8 billion, greater than the $6.8bn the Street expected, with the company losing 9 cents a share for the quarter, less than the 24-cent loss analysts forecast.
But Elon Musk’s long list of growth plans – including putting data centers in space – comes with high costs, significant risks and could take many years to come to fruition.
Underscoring the sweep of Musk’s ambitions, analysts asked executives about the company’s AI and Starlink plans, robotics strategy and Starship rocket heat shield.
The Starship vehicle underpins all of Musk’s goals in space, but it has faced a rocky development path marred by setbacks – at a cost of $15 billion and running, though the last test flight on July 24 was largely successful.
“We expect the cadence of flights to be increasing rapidly,” Musk told analysts, adding that about a year from now he expects to be launching at least one flight a day. “The heat shield appears to be very robust.”
Starship is central to expanding Starlink and sending humans to the moon and Mars.
SpaceX said subscribers in its Starlink satellite-internet service – its only profitable business – reached 12 million by the second quarter, lower than the 12.19 million expected by analysts.
For its AI business, SpaceX disclosed an operating loss of $1.26 billion, better than the $2.39 billion loss seen by analysts. The company said capital spending in the third and fourth quarters would remain similar to the second quarter, which was $18.4 billion, well above analyst estimates of around $6 billion, implying full-year capex of about $65 billion, with Wall Street modeling $50bn this year. The AI startup, xAI, which merged with SpaceX, burned through $6 billion last year and fell behind rivals on coding and product adoption.
But Musk also talked about $100 billion in annual recurring revenue by the end of 2026, hinting at $1 trillion in annual sales by 2029-30. This is an incredible prediction considering Microsoft, Apple and Alphabet are expected to generate a combined $1.5 trillion or so in 2026 sales. Wall Street currently projects $320bn in revenue for SpaceX in 2030.
And SpaceX has to keep raising money to pay for its ambitious plans.
*The shares rose 6% on Thursday after the expiration of a lockup that potentially puts 911 million employee and early insider shares into the market, and then about 13% today to $129 at 3:00.
—Caterpillar shares surged 12% at the open before backing off some, as the heavy equipment maker reported second quarter sales and revenues increased 24% to $20.5 billion, and the company raised its annual revenue growth forecast after beating second-quarter profit estimates, benefiting from a buildout of AI data centers that has spurred demand for its power-generation and construction equipment.
Caterpillar’s results are often seen as a bellwether for the industrial economy. Its quarterly earnings beat and raised forecast signal that the AI-led demand boom for ancillary equipment is sustainable.
CAT said it booked orders worth $9.4 billion in the quarter, taking its order backlog to a record $72.1 billion. Adjusted earnings per share of $8.17 destroyed analysts’ expectations for $6.20 per share.
As for the $20.5 billion in sales, “This is the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter,” Caterpillar CEO Joe Creed said.
—Advanced Micro Devices notched record quarterly revenue as data center sales more than doubled from a year ago, but the results were overshadowed by comments from Tesla and SpaceX CEO Elon Musk, who revealed his company would buy only Nvidia chips going forward, and the shares fell 7%.
Musk had recently said his companies would continue to buy from both chip makers. The announcement marred an otherwise solid if unspectacular second-quarter earnings report, with revenue reaching $11.5 billion, up 50%, and adjusted earnings of $1.66 a share, beating expectations.
In the all-important data center segment, AMD’s sales were $6.7 billion, ahead of projections and up 107%, with a 31% operating margin. Revenue from PC and gaming chips was up 6%, but operating margin in that unit got slammed, down to 15% from 21% a year ago.
AMD had long been the second choice for CPU chips behind Intel, while its GPUs were second to Nvidia. AMD’s server chips are now considered by many to be better than Intel’s, and the company claims to have a 40% market share, on the road to 50%.
And AMD’s new Helios servers are chipping away at Nvidia’s massive lead. Helio will begin shipping to its first two big customers, Meta Platforms and OpenAI, by the end of the current quarter. Microsoft, Oracle, and Anthropic have also agreed to buy Helios servers, leading analysts to expect a sales inflection in the fourth quarter into 2027.
—Palantir Technologies shares soared 29% on its earnings report. The company long known for its work for the federal government, is gaining more traction lately from U.S. commercial sales, a much larger potential market whose recent demand it calls “otherworldly.” Second-quarter numbers surpassed expectations, and the company raised its outlook.
Sales to U.S. commercial customers were up 149% in the second quarter. Palantir’s government revenue was still larger, and rose 90% from a year ago, but the gap is closing. While sales in the U.S. more than doubled this quarter, international revenue rose by just 33%.
In a shareholder letter, CEO Alex Karp reiterated his opposition to AI model labs like OpenAI and Anthropic. He criticizes them for having grown and thrived on written works and now claims the models “now have their sights set on global industry.” Palantir software supports a wide range of AI models, including ones from OpenAI and Anthropic.
Revenue of $1.9 billion was up 93% on the year, continuing the company’s trend of accelerating growth.
Guidance for the current quarter exceeded expectations, and the company raised its 2026 annual outlook, seeing revenue of $8.15 billion to $8.16bn.
—TSA checkpoint numbers vs. 2025
8/6…114 percent of 2025 levels
8/5…103
8/4…83
8/3…91
8/2…109
8/1…87
7/31…99
7/30…111
—A New Mexico judge ordered Meta to pay $567 million and make changes to the way young people can use its platforms, the largest financial penalty yet against the tech giant in its ongoing legal battles over social media harm and addiction.
The ruling, issued late Thursday, was in addition to $375 million that Meta was ordered to pay in the same case in March, when a jury found that the company misled users about the safety of its platforms and enabled the sexual exploitation of young people.
The $567 million will go toward a fund to remedy damages caused by the company, including money for treatment of young people who have been harmed by social media.
Meta will appeal. It’s facing thousands of lawsuits across the country filed by teenagers, school districts and attorneys general claiming that its platforms, and features like infinite scroll, caused widespread harm.
—Eli Lilly and Co. posted better-than-expected quarterly results and raised its full-year revenue forecast on Wednesday, banking on sustained demand for its blockbuster GLP-1 weight-loss and diabetes drugs, sending its shares higher.
The strong results are likely to reassure investors that demand for Lilly’s GLP-1 treatments remains resilient despite pricing pressure and intensifying competition from Novo Nordisk, which launched an oral version of its weight-loss drug, Wegovy, in the U.S. earlier this year.
Sales of diabetes drug Mounjaro rose 91% to $9.94 billion, while obesity drug Zepbound brought in $4.93 billion, both above expectations. The two drugs accounted for a 64.7% share of Lilly’s revenue in the quarter.
Strong demand lifted sales volumes across global markets, with Mounjaro driving growth outside the United States and both Mounjaro and Zepbound boosting U.S. sales. [Novo’s Wegovy pill is quickly gaining traction in its U.S. rollout.]
The global market for obesity drugs reached $66 billion in 2025, with analysts expecting it to hit over $100 billion by 2030 in the U.S. alone.
—McDonald’s missed U.S. sales growth expectations for the second quarter as its value deals failed to sufficiently draw lower-income diners who have been cutting back restaurant spending due to growing economic worries.
Comparable sales in the largest market for McDonald’s grew 0.8%, below analysts’ estimates of a 1.1% rise. The pace of growth in the U.S. was 2.5% a year ago.
Higher prices for basic goods and fuel have left lower-income consumers, a key customer base for McDonald’s, with less money to spend on eating out.
“While our playbook is working around the world, we see an opportunity to raise the bar in the U.S. and accelerate performance in our largest market,” CEO Chris Kempczinski said.
The softer demand also comes as the cyclosporiasis outbreak tied to contaminated produce impacts store visits to Taco Bell, and overall uncertainty about food safety.
Globally, comparable sales rose 1.3%, slowing from a 3.8% jump a year ago. The international markets segment, which includes major European nations, rose 1.5%, down from 4% a year ago. Analysts had expected softer demand in the region as higher energy costs and heatwave conditions curbed spending on dining out.
Adjusted earnings per share increased to $3.38, topping consensus of $3.32.
–Speaking of food safety,Chipotle Mexican Grill shares fell 10% on the news that its jalapeno suppliers at several Minnesota restaurants were linked to a salmonella outbreak, according to state health officials.
The chain said it removed the suspected peppers from every restaurant that received them and replaced them with jalapenos from other growers.
Then the Mexican chain Qdoba said it was removing jalapenos as a precaution.
—Tyson Foods warned that losses in its beef business would widen as tight cattle supplies keep livestock costs elevated.
U.S. ranchers have slashed herd sizes after years of drought burned up pastures and raised feed costs, shrinking cattle inventories to their lowest level in 75 years, driving up beef prices, and squeezing meatpackers’ profit margins.
For its beef business, the company forecast an adjusted operating loss of $500 million to $650 million, compared with its prior expectation of a loss of $350 million to $500 million.
Beef volumes fell 15.9% in the fiscal third quarter ended June 27. CFO Curt Calaway said in May that supplies will remain tight. Supplies were further constrained after the U.S. Department of Agriculture suspended imports of livestock from Mexico over concerns about the spread of the flesh-eating New World screwworm. The agency plans to start lifting its ban this month, a move that could provide some relief to beef processors.
As beef prices rise, some consumers have turned to chicken as a cheaper source of protein, helping Tyson offset part of the weakness in its beef segment.
Chicken volumes rose 1% during the quarter.
—Solar is poised to overtake coal as China’s largest source of installed power capacity this year, as Beijing steps up its green transition with a renewed emphasis on efficiency, quality and orderly growth over sheer scale.
Solar power generation also surged more than 40 percent year on year in the first half of 2026, meeting one-third of peak electricity demand during midday heatwaves.
—The Food and Drug Administration approved Moderna’s mRNA-based flu vaccine Wednesday for adults ages 50 and older, clearing the first shot of its kind after a review process that nearly collapsed in February.
The vaccine, called mFlusiva, uses the same messenger RNA technology as Moderna’s Covid-19 shots. It could reach pharmacies in time for the coming flu season, which typically starts in the fall.
Heath Secretary Robert F. Kennedy Jr. has questioned mRNA vaccine technology, and the Department of Health and Human Services canceled about $500 million in mRNA research contracts last year in moves that public-health officials questioned as politically motivated rather than rooted in science.
—The New York Times Co. reported slower digital subscriber growth for the second quarter on Wednesday and issued a lackluster digital subscription revenue forecast, sending its shares down more than 8%.
Publishers are operating in a crowded market, where big tech firms and AI platforms impact search and referral traffic, while trust in news is shrinking.
Media outlets such as Axios, CNN and The Verge are jostling to gain more readership in a busy news cycle, putting pressure on publishers such as NYT to gain market share.
The Times added about 280,000 net digital-only subscribers in the second quarter, compared with analysts’ average estimate of 295,300, according to data compiled by Visible Alpha. NYT had added 310,000 digital-only subscribers in the previous quarter.
Total advertising revenue rose by 11.3% to $149.1 million, beating estimates.
—Walt Disney stock jumped Wednesday after “Toy Story 5” and a surge in theme-park footfall helped the entertainment company top analysts’ earnings target.
It’s the second straight earnings beat for CEO Josh D’Amaro, who replaced Bob Iger in March and is trying to convince investors he can turn around the Mouse House following a lost decade for shares.
Disney reported adjusted earnings of $2.06 a share for its fiscal third quarter ended June 27, as revenue rose 7% to $25.2 billion from a year ago. The Street was looking for earnings of $1.86 a share on revenue of $25.4 billion.
Disney also stood by its guidance for fiscal 2026.
Operating income for the all-important experiences division, which includes theme parks and cruises, jumped 20% from a year ago to $3.02 billion, easing investors’ fears about the war in Iran disrupting travel.
Entertainment operating income surged 64% to $1.68 billion. The company cited the success of “Toy Story 5” and “The Devil Wears Prada 2,” although it acknowledged that box-office flop “Moana” would hurt the segment’s fourth-quarter results.
—“Spider-Man: Brand New Day” generated the largest opening weekend ticket sales of any film this year, and the second-highest in Hollywood history.
The picture took in $355 million in the U.S. and Canada over the weekend, more than double April’s “The Super Mario Galaxy Movie.”
Brand New Day trailed only Marvel’s “Avengers: Endgame” in terms of all-time biggest opening weekends by only $2 million. That 2019 picture went on to gross $2.8 billion at the global box office. The new Spider-Man film took an additional $573 million in theaters internationally, setting all-time opening records in markets that included France, India and Brazil, according to Sony.
The money Brand New Day took in doesn’t include the novelty items movie theaters were selling, including Spider-Man popcorn buckets ($30 to $35), action tumblers ($25), T-shirts ($29) and baseball caps ($25).
“The Odyssey” took in another $74 billion domestically in its third weekend.
Hollywood’s year-to-date total of $6.195 billion is up 15.2% compared with 2025.
Foreign Affairs
Russia/Ukraine: Last Saturday, Russia launched another intense barrage of ballistic missiles and drones, killing at least nine people and wounding 30 in the Ukrainian capital, Kyiv.
Two days earlier a major Russian attack killed at least 10 people and wounded more than 50 others across Ukraine, as Moscow apparently looks to exploit Kyiv’s critical shortage of Western-supplied anti-ballistic missile defenses. The relentless cycle of attacks dims the potential of reaching a diplomatic end to the more than 4-year-old war.
President Zelensky keeps pressing the United States and other western partners over Ukraine’s need for more Patriot anti-ballistic missile defense systems to counter missile attacks from Russia.
“Every package of ballistic missile interceptors saves the lives of our people. And every night without them results in more casualties,” he wrote on X following the latest attacks.
At a NATO summit in Ankara in July, President Trump said the U.S. would give Ukraine a license to make Patriot systems, but he appeared to move away from that commitment last Friday during a Cabinet meeting in Camp David, Maryland, saying he had not yet made a final decision on the matter.
Trump had said in Ankara that he assented to sharing technology behind the missiles to allow Ukraine to build them, saying that “we’ll give them the right to make Patriots” during a meeting with President Zelensky. He added: “We’ll show them how to do it.”
But at the Cabinet meeting, Trump said “we have not agreed to that,” suggesting he had changed his mind because “it is a hard thing to give away that kind of technology” and because of the risk that “those people you give the technology, they could someday turn on you.”
“You look at war, it has happened a couple of times over the years,” Trump said. “So we have to be very careful. We guard that.”
Hours after, we had the attack on Kyiv that killed nine.
And then Tuesday night into Wednesday, Russian missile and drone strikes on Kyiv and the surrounding region killed 17 people and wounded 44 others, President Zelensky said.
Russia fired 24 ballistic missiles, four other missiles identified as either hypersonic Zircons or supersonic Oniks, and 115 drones, many of them jet-powered, in the attack.
Zelensky said warehouses belonging to civilian businesses, as well as infrastructure and a railway station, sites “with no connection to the war” – including a brewing company, were hit.
Zelensky said in a statement on Telegram: “Ballistic interceptors are what could have saved the lives of those killed today. It is very important for our partners to understand that delays in supplying them, or a reluctance to hand over anti-ballistic systems, lead directly to such horrific casualties and destruction.”
Thursday, Ukraine said at least 11 people were killed in Russian attacks, and the southern city of Kherson reported a total blackout
—Ukraine has been striking back, continuing to hit Russian refineries, including Rosneft’s in Saratov, and they struck an airfield in the same region, 450 miles southeast of Moscow and over 600 miles from Kyiv.
Ukrainian attacks on warehouses for e-commerce giant Wildberries, and others, killed five in the Moscow region on Tuesday morning. Ukraine claims Wildberries distributes missile components for the military.
And a drone hit a busy beach in southern Russia, killing seven people including three children. In video verified by the BBC, a drone can be seen hurtling towards a cliffside before crashing into a fireball on the beach below as tourists look on from the shore and in the water.
The regional governor of the Krasnodar region accused Ukraine of “a deliberate strike on civilians.” Ukraine hasn’t commented.
But some Ukrainian Telegram posts have claimed the drone crashed onto the beach as a result of electronic warfare which jammed the drone’s signal. Several eyewitnesses were quoted by Russian media as saying gunfire preceded the explosion, indicating that air defense may have tried to shoot the drone down.
Thursday, Ukraine said it hit two oil refineries in multiple strikes deep inside Russia with patrol boats and other vessels in the Black Sea also hit.
–And then there was this worrisome development for Kyiv. A North Korean missile unit began deploying to western Russia and could be equipped with 120 ballistic missiles and six launchers for strikes against Ukraine, an official at Ukraine’s military intelligence agency said.
—At least three people were killed and 21 injured after a homemade explosive device was detonated at an Italian restaurant in Moscow, Russian state media reported.
A woman carrying the explosives tried to enter the restaurant but was stopped by a security guard. The device detonated, killing the woman, the guard and a visitor to the popular Balzi Rossi restaurant.
Authorities have not said who they believe was the target, but many suspected a link to the war in Ukraine.
Editorial / Wall Street Journal
“Vladimir Putin has pounded Ukraine with ballistic missiles for so long that his brutal assaults are often no longer above-the-fold news in the U.S. Meanwhile, President Trump is preoccupied with Iran. But a hard question can’t be ignored: Is Mr. Trump going to let a U.S. friend, which has fought valiantly for four years against a common adversary, run out of air defenses?
“Mr. Putin’s strikes Wednesday on Kyiv killed 17 people, and by early press reports Ukraine wasn’t able to take down any of the incoming missiles. Ukraine doesn’t advertise its defense inventory for obvious reasons, though it has long been low on Patriot interceptors. Mr. Trump has floated letting Ukraine build its own Patriots under license, and increased allied production is a good idea, since every country in the free world needs more.
“But Mr. Trump later mused that he might not give Ukraine the license after all, and Kyiv requires cover now, not in months or years after setting up production. Ukraine understands it must do more than swat down Mr. Putin’s missiles, which is why it is running a campaign of strikes deep inside Russia. Providing more U.S. long-range missiles would help. Yet Ukraine has already regained some momentum on the battlefield, and it is imposing heavy manpower costs on Mr. Putin, which is remarkable given the relative demography of the combatants.
“Mr. Putin is still betting he can eventually pound Ukrainian society into submission. Will Mr. Trump, who usually talks about the war as a humanitarian tragedy, allow it.
“Yes, the U.S. also needs to replenish its own interceptor stockpiles amid the Iran war….
“The answer is for Congress to pass the defense funding for a wartime production footing. Ukraine’s survival is more than humanitarian work. It’s a U.S. interest, and Patriots over Kyiv are defending stability and freedom on the European continent. Mr. Trump is busy elsewhere, but Russia’s war is grinding on, and the President will own what happens on his watch.”
Random Musings
–Presidential approval ratings….
Rasmussen: 44% approve of President Trump’s job performance, 55% disapprove (Aug. 7). Unchanged, again, from a week ago.
—Dr. Abdul El-Sayed, a progressive and vocal critic of Israel, edged Representative Haley Stevens, a moderate, to win the Michigan Senate Democratic primary, securing a high-profile victory for the ascendant political left. The race was closer than expected, El-Sayed winning by just a point, about 15,000 votes, 48.5% to 47.5%.
El-Sayed now faces former Representative Mike Rogers, a moderate Republican, in the general election for an open battleground seat that could determine control of the Senate.
Other progressives in Michigan won their Democratic primaries, and we’ll see what the voters, especially independents, say in November.
—Republican Rep. Chuck Edwards (N.C.) announced that he was dropping his re-election bid.
The decision came after the House Ethics Committee had recommended on Monday that he be censured for “persistent unprofessional and inappropriate conduct towards two young female staffers.”
—Todd Blanche, the acting attorney general, confirmed in writing on Sunday night that the Justice Department would abandon elements of the deal it struck with President Trump to resolve his lawsuit against the IRS, conceding to demands from Republican senators who had threatened to block his nomination as attorney general.
The Republican holdouts, Senators John Cornyn of Texas and Thom Tillis of North Carolina, had vowed that they would not confirm Blanche for the role unless he provided written assurances that the Justice Department had formally killed a planned $1.8 billion fund to pay those who claim they were unfairly persecuted by the government.
The senators also insisted that Blanche narrow the scope of the sweeping immunity from IRS scrutiny that was granted to Trump, his family and their businesses under the same agreement.
Blanche posted two documents on social media on Sunday night: a signed memo in which he said that the Justice Department was formally rescinding an order that created the so-called “anti-weaponization fund” and an unsigned statement in which the agency clarified the terms of the IRS protections.
This looked to be enough for Blanche to win over Cornyn and Tillis.
But then, Trump wrote on Truth Social Saturday: “Todd Blanche was a voice of reason! It will immediately be back on the table, and I will get it done.”
This comment validated the senators’ fears. But both Cornyn and Tillis voted to confirm Blanche in a 12-10 vote by the Judiciary Committee Tuesday.
He will squeak by in the full Senate, Sen. Lisa Murkowski (R-Alaska) saying she would vote against, but Sen. Bill Cassidy (R-La.), on the fence, said he would vote to confirm.
–Late last Friday, federal prosecutors moved to drop a criminal charge filed against a former Olympian who had been accused of vandalizing the Lincoln Memorial’s Reflecting Pool, suggesting that the damage was instead due to a “botched” and rushed installation.
Prosecutors said they would dismiss an indictment against David Hearn, an Olympic canoeist, whose arrest last month drew national attention amid questions about why the pool’s new blue liner was peeling. President Trump – who had ordered that officials install the new liner and make other changes to the pool – repeatedly blamed vandals after pieces of the refurbished liner started drifting to the surface.
A Washington Post analysis earlier this month found that the basin’s peeling was likely due to application errors by workers, a conclusion challenged by Trump administration officials at the time but supported by experts in waterproofing materials.
According to Friday’s filing in D.C. Superior Court, internal Interior Department documents also chalked up the peeling of the pool liner to contractor errors made during the hurried effort to overhaul the pool ahead of celebrations to mark the nation’s 250th anniversary.
“Given all of this newly discovered information, it is difficult to attribute the widespread damage to the Reflecting Pool to vandalism, let alone to establish that fact beyond a reasonable doubt,” according to the Justice Department’s filing.
“Had [the Interior Department] been forthcoming with the information clearly in its possession, the government would not have sought a grand jury indictment,” the filing reads.
President Trump said in the past few weeks: “Many additional people have been arrested having to do with the disgraceful Vandalism of our beautiful Reflecting Pool.”
In another post: “It was slashed with a knife, or box cutter, high grade colored waterproofing liner – it was VANDALISM!” in criticizing an ABC News report that suggested the liner was peeling.
Saturday, President Trump then blasted U.S. Attorney (and longtime friend) Jeanine Pirro for moving to drop the criminal charge filed against Hearn, doubling down on claims that the renovated pool had been vandalized.
“I don’t know what she was thinking?” Trump on Truth Social. “To me, it was a pure case of VANDALISM… There may have been some contractor difficulty, but the major damage was caused by VANDALS!”
Reports then came Trump was readying to remove Pirro. Pirro and Trump met on Monday at the White House. Trump told reporters that day that Pirro “choked” and “folded like an umbrella,” but he ducked questions on whether he’d fire her.
Tuesday, he said he hadn’t decided.
—U.S. Sen. Bernie Moreno said his former son-in-law, U.S. Rep. Max Miller, should not be serving in the House and should “seek professional help” as Miller defended himself against allegations of domestic abuse in a live video on X Sunday.
Moreno, who has been restrained in recent months as the bitter custody dispute has played out between Miller and his daughter Emily, said in a lengthy post that “If there are any basic standards of character required to hold elected office, Max Miller fails them. He should not serve in the House of Representatives.”
Moreno wrote that Miller “needs serious psychological help. He is a danger to my daughter, and I hold my breath every minute he has custody of my granddaughter.”
Miller refused to resign or drop out of his race, even as numerous Republican senators and House members urged him to step down.
—President Trump is again targeting the Constitution’s guarantee of birthright citizenship despite a recent Supreme Court ruling upholding the principle, announcing a pair of executive orders limiting who qualifies for automatic citizenship and cracking down on so-called “birth tourism.”
Trump signed an order declaring certain individuals are ineligible for birthright citizenship, including “alien enemies of the United States, members of foreign terrorist organizations and large categories of people who lobby an act on behalf of foreign governments,” White House Deputy Chief of Staff Stephen Miller told reporters in the Oval Office Thursday.
The second order seeks to deny visas to individuals engaged in “birth tourism” and take other actions to curb the practice, Miller said.
The Supreme Court overturned an earlier executive order from Trump seeking to limit birthright citizenship, ruling June 30 that the government couldn’t deny citizenship to children who didn’t have at least one parent with legal status. Trump’s latest bid to curb birthright citizenship is almost certain to face a legal challenge.
But only a few thousand people are foreign lobbyists registered with the Justice Department. No significant populations of U.S. residents are designated as alien enemies or foreign terrorists, making that provision largely symbolic.
—A Republican-led Senate committee voted Thursday to hold Dr. Anthony Fauci in contempt of Congress for refusing to answer lawmakers’ questions about his handling of the Covid-19 pandemic, escalating a yearslong GOP effort to scrutinize one of the nation’s top former health officials.
Senators voted 8-5 on the resolution, along party lines, which was brought by the Homeland Security and Governmental Affairs Committee’s chairman, Sen. Rand Paul (R-Ky.). It seeks to refer the case directly to the Justice Department for potential prosecution, bypassing a vote from the full Senate.
It is unclear how the Justice Department, which has shown a willingness to investigate President Trump’s political adversaries, would approach the contempt issue. Fauci, 85, received a pre-emptive pardon from President Biden, who sought to shield him and other officials from anticipated prosecution by Trump and his allies.
But the referral first goes to the U.S. attorney for D.C., in this case Jeanine Pirro, and her disdain for Fauci is well known.
–In a 2-1 ruling, a federal appeals court Friday halted construction on President Trump’s planned White House ballroom, setting up a potential showdown at the Supreme Court.
A panel of the U.S. Court of Appeals for the District of Columbia Circuit said that only Congress, not the president acting alone, can approve demolitions or design changes to the White House. Trump hasn’t secured congressional approval for the proposed 90,000-square-foot project. The panel upheld a lower-court decision.
Needless to say, the president is pissed.
—The Pima County Sheriff’s Department in Arizona released the full ransom notes surrounding the kidnapping of Nancy Guthrie, and the first one, addressed to Savannah Guthrie a day after her 84-year-old mother was taken from her home, said she was “safe but scared.” The second note several days later said that she had died unexpectedly of a medical condition.
The notes suggested that whoever was responsible for Nancy’s abduction may not have intended to kill her. And the release of the notes was a sign of how little apparent progress the investigation has made.
Earlier last week, Savannah Guthrie had made another plea to whoever is responsible for her mother’s abduction “to do the right thing now.”
Your heart goes out to the Guthries. Savannah has been remarkable amidst the heartbreak, and it has been so hard for her to keep up a brave face.
–On Monday, Spain said it estimates that about 69,500 migrants have returned to Morocco over the past four days, exceeding initial estimates of around 50,000 arrivals in Ceuta last Thursday. The official death toll on the Spanish side of the border stands at 72, with 11 deaths on the Moroccan side.
The crisis has fueled anti-immigration rhetoric throughout Europe and sparked diplomatic tensions within the European Union over border policy, with Spain accusing some partners of an unhelpful and polarizing response.
Foreign Minister Jose Manual Albares said on Monday that Spain had previously supported other EU countries during migration crises and now expected reciprocal backing. He sharply criticized Italy’s government, accusing it of helping amplify misinformation.
Morocco’s Interior Ministry on Sunday blamed the surge on misinformation on social media, human trafficking networks and misinterpretation of a Spanish court ruling banning immediate returns of migrants intercepted at sea.
—Two crew died after two firefighting helicopters collided in Greece last weekend. A British pilot and a Greek crew member survived the crash and were hospitalized. The two killed were a Danish pilot and a Greek fire service liaison officer.
Greece is one of several European countries suffering wildfires after what is now five heatwaves across the continent this summer.
In the French village of Le Porge, 30 miles west of Bordeaux in France’s Gironde region, residents returning to their scorched neighborhoods found that the heat had done more than destroy homes. The fires had actually caused forgotten buried World War II munitions, left in what officials now believe must have been historic demolition pits, to start detonating on their own.
Some of the weapons, which include French mortars and German shells, are capable of throwing lethal fragments up to a third of a mile.
—Numerous governments across Central and Eastern Europe are taking steps to conserve electricity and avert an energy crisis as record-low water levels on the Danube River have forced power plants to the brink of shutting down.
Persistent drought and the successive heatwaves have deprived one of Europe’s largest rivers of water, pushing the Danube’s levels in Hungary’s capital Budapest to around 4 inches on Monday, well below the previous all-time low of 13 inches set in 2018.
Water levels are not expected to rise on the Danube in the coming days or even weeks as no significant rainfall is forecast, and as a renewed extreme heatwave bore down on the region with daytime highs topping 100 degrees F.
The Danube’s record low levels pushed Hungary’s only nuclear power plant to the brink of powering down entirely for the first time in 44 years of service. The four-reactor, Soviet-era Paks plant uses water from the Danube to cool its reactors. On Monday, it was producing only 240 megawatts of power rather than the usual 2,000 due to successive power-downs of its reactors.
Romania is facing a similar situation with the Cernavoda nuclear plant, which relies heavily on the Danube for cooling. To avert a full power grid collapse, naval forces detonated 180 kilograms of explosives to clear rock formations, allowing engineers to construct a temporary dam and route the remaining water toward the reactor’s intake channels.
Back to the heatwaves, the latest is spreading west to France and the UK over the weekend and next week. It is forecast to be 95 in London next Thursday and 102 in Paris the same day.
Next Wed. to Fri., Paris could see highs of 98, 102, and 99.
This week, Austria set its all-time record high temperature, 41.2 C (106.2 F), Wednesday, in the town of Bad Deutsch-Altenburg, near the border with Slovakia, Austria’s national weather service said. The day before, it was 41 C (105.8 F) in nearby Vienna, which for one day was the national record.
—Puerto Rico’s severe drought (and crumbling infrastructure*) is forcing the government to ration water across much of the island.
*65% of the water the Puerto Rico water authority produces goes unbilled or is lost through aging and leaky pipes.
Picture, hundreds of thousands of people in the capital of San Juan and surrounding communities woke up today without running water as a massive rationing measure took effect Friday. As in many of the people will be on a 48 hours with water, 48 hours without schedule.
Similar rationing schemes were implemented in 2015 and 2020.
San Juan had its driest July in at least 120 years, while it was the second-hottest July on record.
Blame the developing Super El Nino in large part.
—The Spokane, Wash., area was hit by wildfires that destroyed at least 700 homes, businesses and other structures, an immense tragedy for what is the state’s second largest city. Roughly 67,000 were evacuated.
“The worst natural disaster our region has faced,” is how the mayor of Spokane described the conflagration that tore through Spokane County over the weekend. More than 1,000 firefighters were battling at least three uncontained blazes in bone-dry, gusty conditions.
Authorities on Monday then arrested a 37-year-old man they suspect of starting one of the devastating wildfires tearing through eastern Washington state as many residents were left wondering if their homes had survived.
The suspect is being held on $1 million bond. This is absolutely sickening. Beyond belief.
—
Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
—
Gold $4350…Silver $63.70…big rallies for both….
Oil (WTI) $76.95…Brent $81.90
Regular Gas: $4.04; Diesel: $5.33 [$3.16 – $3.73 yr. ago]
Bitcoin: $64,926 [4:00 PM ET, Friday]
Returns for the week 8/3-8/7
Dow Jones +3.0% [54036]
S&P 500 +3.6% [7757…record]
S&P MidCap +3.4%
Russell 2000 +3.5%
Nasdaq +5.2% {26690]
Returns for the period 1/1/26-8/7/26
Dow Jones +12.4%
S&P 500 +13.3%
S&P MidCap +17.6%
Russell 2000 +22.3%
Nasdaq +14.8%
Hang in there.
Brian Trumbore
