[Posted 4:30 PM ET, Friday]
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Edition 1,373
As I go to post, Presidents Putin and Trump are in Anchorage, Alaska, for their momentous summit, prelude to which I cover in great detail below. After their first meeting, alone with interpreters, the two are to convene with their teams for lunch and then a highly anticipated joint press conference. At least that’s the plan.
Or I should say that suddenly, as Air Force One was landing around 2:25 PM ET, we learned that it is not going to be a one-on-one initial meeting, but rather three-on-three…Trump, Sec. of State Marco Rubio and Steve Witkoff. Putin will be joined by Foreign Minister Sergei Lavrov and close aide Yuri Ushakov.
Vladimir Putin is the master manipulator and what we don’t want is a repeat of Helsinki, 2018, which was an unmitigated disaster for Trump. I don’t expect this to be the case today.
But…it should be all about a ceasefire and security guarantees, first and foremost. If Putin instead insists there is no ceasefire before he gets some guarantees of his own, like all of Donetsk, then it’s up to President Trump to take a hard line.
Putin is going to look to delay and it will be interesting to see if he deflects by talking about the expiring New START nuclear weapons treaty, for one, while appealing to Trump’s vanity.
The Kremlin has made it clear today they are coming with an extensive agenda.
Fingers crossed. We hope for the best.
[However, it was totally inappropriate for Trump to applaud Putin and to give Vlad the Impaler the red-carpet treatment on his arrival.]
—
Wall Street and the Economy
It was all about the inflation data this week and on Tuesday, the July consumer price report was deemed to be tame by the market, stocks soaring, bonds rallying.
But the actual numbers, especially on core, were hardly great. The CPI on headline was up 0.2%, 2.7% year-over-year, the latter figure a tick better than forecast, while ex-food and energy, it was 0.3% and 3.1%. It’s the 3.1% that the Federal Reserve will be focused on, up from 2.9% the month prior and hardly the Fed’s target of 2%.
Then Thursday we had the producer price index for last month, and it was a shocker. Both on headline and core, up 0.9% when 0.2% was expected. Year-over-year, PPI was up a whopping 3.3% and 3.7% ex-food and energy.
For context the Y/Y figures for June were 2.3% (headline), 2.6% (core). Yes, tariffs are first felt at the producer (factory gate) level before the product hits the store shelves (CPI). [Wholesale goods prices rose 0.7%, wholesale services prices 1.1%, the latter not impacted by tariffs, which makes it even more worrisome should this trend hold in August and September, for example.]
And parts of the PPI are used to calculate the Fed’s preferred inflation barometer, the PCE (personal consumption expenditures index), so the July numbers are doubly troubling, the next PCE numbers being released Friday, Aug. 29.
Trump posted on Truth Social following the CPI report:
“Jerome ‘Too Late’ Powell must NOW lower the rate. Steve ‘Manouychin’ really gave me a ‘beauty’ when he pushed this loser. The damage he has done by always being Too Late is incalculable. Fortunately, the economy is sooo good that we’ve blown through Powell and the complacent Board. I am, though, considering allowing a major lawsuit against Powell to proceed because of the horrible, and grossly incompetent, job he has done in managing the construction of the Fed Buildings. Three Billion Dollars for a job that should have been a $50 Million Dollar fix up. Not good!”
The Fed’s vice chair of supervision, Michelle Bowman, last Saturday said recent weak job data underscores her concerns about labor market fragility and strengthens her confidence in her own forecast that three interest-rate cuts will likely be appropriate this year.
Bowman was one of two Fed governors to dissent last month against the central bank’s decision to leave short-term borrowing costs in the 4.25%-4.50% range they have been since December.
“Taking action at last week’s meeting would have proactively hedged against the risk of a further erosion in labor market conditions and a further weakening in economic activity,” Bowman said in remarks prepared for delivery to the Kansas Bankers Association. The remarks leaned even more heavily into her concerns about a labor market downturn.
Bowman said: “My Summary of Economic Projections includes three cuts for this year, which has been consistent with my forecast since last December, and the latest labor market data reinforce my view.”
And she said she sees “the latest news on economic growth, the labor market, and inflation as consistent with greater risks to the employment side of our dual mandate.”
Treasury Secretary Scott Bessent made his most explicit call yet for the Federal Reserve to execute a cycle of interest-rate cuts, suggesting the central bank’s benchmark ought to be at least 1.5 percentage points lower than it is now.
Bessent said officials might have cut rates if they’d been aware of the revised data on the labor market that came out a couple of days after the latest Open Market Committee meeting.
“I suspect we could have had rate cuts in June and July,” Bessent said in an interview.
[He also said President Trump has 10 or 11 candidates under consideration to succeed Jerome Powell.]
After the CPI data, the market priced in a 25 basis-point cut at the September FOMC gathering, with many, such as Sec. Bessent, calling for 50.
San Francisco Fed President Mary Daly, who favors lowering rates next month, pushed back Wednesday against the need for a jumbo cut. “I’m worried it would send off an urgency signal that I don’t feel about the strength of the labor market,” she said.
And then the PPI data came out, which hardly argued for 50.
We also had the budget deficit picture for July, as released by the Treasury Department, and indeed, revenue from tariffs (gross customs receipts) grew to $28 billion from about $8 billion a year earlier, with the annualized run rate on a pace to exceed $300 billion.
But the budget deficit was still $291 billion, with outlays growing faster than receipts. [Adjusting for July having had fewer business days than last year, the Treasury says the adjusted deficit would be about $271 billion.]
The deficit for July was up 19%, or $47 billion, from July 24. Receipts for the month grew 2% to $338 billion, while outlays jumped 10% to $630 billion.
For the first 10 months of the fiscal year, the Treasury reported an overall $1.629 trillion deficit, up 7% from the same period a year earlier.
The net interest expense is up to $841 billion for the 10 months, greater than the $758 billion spent on defense.
Trump posted on Truth Social prior to the release of the budget report:
“Trillions of Dollars are being taken in on Tariffs, which has been incredible for our Country, its Stock Market, its General Wealth, and just about everything else. It has been proven, that even at this late stage, Tariffs have not caused inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers. Also, it has been shown that, for the most part, Consumers aren’t even paying these Tariffs, it is mostly Companies and Governments, many of them Foreign, picking up the tabs. But David Solomon and Goldman Sachs refuse to give credit where credit is due. They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else. I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution.”
Well, Mr. President, yes, you’re taking in quite a bit of tariff revenue, but it isn’t quite “trillions.” And we are hardly at a “late stage” in the tariff story. It’s just getting started.
As for Goldman and its forecast, that was April 9, when at the start of the day, the research team joined a growing list of Wall Street economists that believed the potential growth hit from the president’s aggressive tariffs stance would push the economy into recession in 2025.
But later that day, Trump placed a 90-day pause on a wide swath of his so-called “reciprocal” tariffs, and Goldman quickly rolled back its recession call.
In other economic data releases this week, retail sales for July came in as expected, 0.5%, 0.3 ex-autos.
July industrial production was down 0.1%. And July import prices increased 0.4%, far more than expected.
The Atlanta Fed’s GDPNow still very early look at third-quarter growth is at 2.5%.
Freddie Mac’s 30-year fixed-rate mortgage is 6.58%, the lowest since October, and housing stocks rallied.
—
Meanwhile, President Trump on Monday nominated E.J. Antoni, chief economist at the conservative Heritage Foundation, to head the Bureau of Labor Statistics. More than a few Democrats and Republicans questioned the pick.
Editorial / Wall Street Journal…on the issues facing the BLS, writ large, and Antoni….
“The truth is that the recent sharp downward revisions [of the jobs report] are a result of declining business survey response rates that require agency statisticians to rely more on models and guesswork. Numbers are later revised when more data is collected. Declining survey response rates are a real problem for the BLS and other federal statistical agencies….
“Another problem: A funding shortage has caused BLS to stop collecting some granular data that can illuminate economic changes. The BLS this month will stop calculating some 350 individual producer price indices showing which industries pay for goods and services
“Criticizing the BLS as Mr. Antoni has from the backbenches is easy, but what is his plan to make the data more reliable? Senators might ask during his confirmation hearing. One imperative is to eliminate bureaucratic silos so statistical agencies can more easily collect and share data. Another is to modernize survey collections. Some data is still collected by fax.
“Mr. Antoni’s commentary at heritage has been highly partisan, but the BLS job demands nonpartisan professionalism….
“Few people trust China’s economic data because they know the government serves the interests of the ruling Communist Party. Mr. Antoni will have to take off his MAGA hat if he wants to ensure that the public and markets can trust BLS data.”
Turning to trade, President Trump signed an executive order implementing another 90-day pause on additional tariffs on China, the new deadline Nov. 9.
The extension means that headline rates agreed to in May of 30% on Chinese imports and 10% on American goods will continue for the immediate future and avoid a snap-back to previous triple-digit levels. Sector-specific tariffs on goods like steel and some medical supplies will keep the effective tariff rate between the two countries higher.
The new pause could increase the odds for a meeting later this year between Presidents Xi and Trump. Both sides have floated the concept of a face-to-face meeting, perhaps as soon as the coming Asia-Pacific Economic Cooperation summit in South Korea at the end of October.
Europe and Asia
Just one item for the eurozone…June industrial production fell 1.3% compared with May, up 0.2% from a year ago.
In Asia…China’s National Bureau of Statistics released key data for July and it wasn’t good. Retail sales up 3.7% year-over-year, industrial production up 5.7%, and fixed asset investment up just 1.6% year-to-date. The unemployment rate was 5.2%, up from 5.0% as millions of graduates hit a subdued labor market.
All of these figures were worse than expected and further evidence of a slowing economy, with Beijing’s crackdown on destructive price wars and spillovers from Trump’s tariffs.
Separately, July inflation was up 0.4% over June, but unchanged year-over-year. PPI was down 3.6% Y/Y.
A preliminary look at Japan’s second-quarter GDP was a better than expected 1.0% (ann.) after a 0.6% rate in the first quarter. It’s the fifth straight quarter of growth.
July producer prices rose 0.2%, 2.6% year-over-year.
Street Bytes
—Another strong week for stocks…the Dow Jones up 1.7% to 44946, just shy of its all-time high, while the S&P 500 (+0.9%) and Nasdaq (+0.8%) hit new record levels midweek.
The Dow was helped Friday when it was revealed Warren Buffett’s Berkshire Hathaway had purchased five million shares of Dow component UnitedHealth Group in the second quarter, while trimming its holdings of Apple and Bank of America, according to a quarterly regulatory filing. Hedge fund titan David Tepper’s Appaloosa also added to his stake in the quarter, as UNH shares rose 11% at the open today (finishing up 14%).
We get Big Box retailer earnings next week, including Walmart, Home Depot, and Target. The accompanying statements should be telling, re ‘state of the consumer’ and any tariff-related impacts.
But next Friday, it’s all about Jerome Powell’s annual speech at the Kansas City Fed’s annual Jackson Hole, Wyoming conference. He’s saving his ammunition since the inflation reports for then.
—U.S. Treasury Yields
6-mo. 4.08% 2-yr. 3.76% 10-yr. 4.33% 30-yr. 4.92%
Pre-release of the PPI on Thursday, the yield on the 10-year was at 4.20%. But it shot back up after the shocking numbers and then finished the week at 4.33%, up 5 basis points on the week.
–The International Energy Agency said in its closely watched monthly report that global oil markets are poised for a larger surplus than previously expected this year, with supply set to grow more than three times faster than demand.
The Paris-based organization now forecasts oil supply growth of 2.5 million barrels a day this year and 1.9 million the next, from earlier estimates of 2.1 million and 1.3 million barrels a day, respectively. The revision follows OPEC+’s latest bumper output hike, though countries outside of the alliance remain the primary drivers of growth.
The IEA raised its estimates for OPEC+ supply growth by 370,000 barrels a day for this year and by 520,000 barrels a day for the next, reflecting a faster-than-anticipated unwinding of voluntary cuts.
“Oil prices have been caught in the crosshairs of fast-changing market dynamics,” the IEA said. “While new sanctions on Russia and Iran threaten to impact trade flows, weaker economic growth is poised to temper demand.”
The IEA expects Russian production to align with its OPEC+ target, averaging just under 9.4 million barrels a day for the remainder of the year.
As for this week’s price action, West Texas Intermediate traded in a narrow range, up one day, down the next, amid geopolitical tensions and expectations of a rate cut next month that could boost demand.
Prices gained after President Trump warned of “severe consequences” if talks with President Putin went badly. But they finished down on the week to about $63 a barrel.
—The Port of Los Angeles, the busiest port in the U.S., reported the highest monthly container volume in its 117-year history for July as shippers front-loaded cargoes to get ahead of the August tariff actions by President Trump.
—Bitcoin hit a record high Wednesday, moving in lockstep with a rally in U.S. equities as investors pushed deeper into risk-taking territory across world markets.
The cryptocurrency rose past $123,500 on Wednesday evening in New York, topping the previous all-time high of $123,205 reached on July 14.
Bitcoin has been steadily rising for most of the past year as a result of the friendly legislative climate in Washington, while public companies, led by Michael Saylor’s Strategy, have boosted the demand by following an increasingly popular corporate tactic of stockpiling the original cryptocurrency. The playbook has recently spread to smaller competitors, like Ether, leading to a broad rise across digital assets.
—U.S.-based chipmakers Nvidia and AMD agreed to pay the United States 15 percent of their revenue from sales of artificial intelligence chips in China, a highly unusual arrangement that some experts warn may be unconstitutional.
Under the agreement, the companies will give the U.S. government a portion of their sales as a prerequisite to obtaining export licenses for China.
Nvidia issued a statement after the Financial Times first reported the arrangement Sunday.
“We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” a spokesperson for Nvidia, referring to the company’s sought-after H20 AI chips, said in the statement. “America cannot repeat 5G and lose telecommunications leadership. America’s AI tech stack can be the world’s standard if we race.”
[For AMD we’re talking their MI308 chip.]
In April, the Trump administration halted H20 chip sales to China, citing security risks, but announced a reversal of the decision in July ahead of another round of trade talks with Beijing.
Monday, President Trump dismissed the H20 as “an old chip” that doesn’t advance China’s capabilities, though “it still has a market” there.
Trump said he had had a conversation with Nvidia CEO Jensen Huang. “I said, if I’m going to do that, I want you to pay us as a country something because I’m giving you a release.”
Actually, Trump noted, “I said ‘I want 20 percent if I’m going to approve this for you,” he told reporters. “For the country, for our country. I don’t want it myself. …And he said, ‘Would you make it 15?’ So we negotiate a little deal.”
A total shakedown.
Christopher Padilla, a top export control official in the George W. Bush administration who is now a senior adviser with the Brunswick Group consulting firm, echoed those fears, describing the deal as “unprecedented and dangerous.”
“Export controls are in place to protect national security, not raise revenue for the government,” Padilla said. “This arrangement seems like bribery or blackmail, or both.”
Stephen Olson, a former U.S. trade negotiator, told Bloomberg: “To call this unusual or unprecedented would be a staggering understatement. What we are seeing is in effect the monetization of U.S. trade policy in which U.S. companies must pay the U.S. government for permission to export. If that’s the case, we’ve entered into a new and dangerous world.”
But the administration’s flip-flopping on chip-sale restrictions on Nvidia was criticized, with officials expressing concern that it would erode international trust in U.S. export controls.
And then China urged local companies to avoid using the H20 processors, complicating the company’s attempts to recoup billions in revenue.
Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, according to Bloomberg’s reporting. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, the people said.
China is one of Nvidia’s most important markets, accounting for 13% of the company’s revenue in its prior fiscal year.
Editorial / Wall Street Journal
“President Trump views tariffs as a toll that he alone gets to set for access to U.S. markets. Now he’s charging fees on U.S. companies for the purported privilege of exporting artificial-intelligence chips to China. Mark this as another step toward government control of private business….
“Want to do business? Pay Paulie. It’s not clear whether the Administration plans to use the cash to pay down the deficit, spend it, or use it for its mooted sovereign wealth fund.
“In any case, this is an export tax that Congress didn’t authorize….
“(Payments) from chip makers suggests the Administration’s real priority is deal-making in pursuit of more revenue.
“Step by step, Mr. Trump is expanding the long arm of the state into more of the private economy. Will any Republican object? Alas, probably not.”
Or as Greg Ip of the Journal opined:
“A generation ago conventional wisdom held that as China liberalized, its economy would come to resemble America’s. Instead, capitalism in America is starting to look like China.”
Ip notes not just the examples of shaking down Nvidia and AMD, but also the “golden share” Washington receives in the Nippon Steel takeover of U.S. Steel, and the $1.5 trillion of promised investment from trading partners Trump plans to personally direct.
“This isn’t socialism, in which the state owns the means of production. It is more like state capitalism, a hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises.”
And, “It is…a sea change from the free market ethos the U.S. once embodied.”
Trump isn’t the first. The federal government commandeered production during World War II, and emergencies such as the pandemic. It bailed out banks and car companies during the financial crisis.
Joe Biden earmarked $39 billion in subsidies for domestic semiconductor manufacturing, and Biden blocked Nippon Steel’s takeover of U.S. Steel.
But as Greg Ip adds:
“State capitalism is a means of political, not just economic, control. Xi ruthlessly deploys economic levers to crush any challenge to party primacy. In 2020, Alibaba co-founder Jack Ma, arguably the country’s most famous business leader, criticized Chinese regulators for stifling financial innovation. Retaliation was swift. Regulators canceled the initial public offering of Ma’s financial company, Ant Group, and eventually fined it $2.8 billion for anticompetitive behavior. Ma briefly disappeared from public view.
“Trump has similarly deployed executive orders and regulatory powers against media companies, banks, law firms and other companies he believes oppose him, while rewarding executives who align themselves with his priorities….
“Trump has long admired the control Xi exercises over his country, but there are, in theory, limits to how far he can emulate him.
“American democracy constrains the state through an independent judiciary, free speech, due process and the diffusion of power among multiple levels and branches of government. How far state capitalism ultimately displaces free-market capitalism in the U.S. depends on how well those checks and balances hold up.”
—President Trump met with embattled Intel CEO Lip-Bu Tan Monday, Trump striking a more conciliatory tone than he had last week when he called for Tan’s resignation.
“The meeting was a very interesting one,” Trump posted to Truth Social. “His success and rise is an amazing story. Mr. Tan and now my Cabinet members are going to spend time together, and bring suggestions to me during the next week.”
Last week, Republican Sen. Tom Cotton questioned Tan’s links to Chinese firms and the president piled on.
Tan responded with a letter to employees in which he said there was “a lot of misinformation” about his past roles and that Intel was engaging with the administration to address its concerns.
Intel’s hopes of competing in advanced chip manufacturing with the likes of Taiwan Semiconductor Manufacturing Co. or South Korea’s Samsung Electronics have been dashed time and time again.
But if Tan can convince Trump the U.S. needs Intel as a domestic chip manufacturing champion, he’ll have an influential ally and argument to use with potential customers.
Even if Trump can’t explicitly send customers Intel’s way, a White House endorsement would go a long way toward reassuring the market about the future of projects such as its $28 billion Ohio semiconductor project, which is heavily dependent on government funding.
So I wrote the above Wednesday, and then Thursday afternoon, Bloomberg first reported that the administration was in talks with Intel to have the government take a stake in the chipmaker, in another sign of the White House’s willingness to blur the lines between state and industry.
A deal would shore up the Ohio factory hub, sources told Bloomberg. Should this be the case, I have no problem with it.
—Spirit Airlines said it might not continue to operate if its financial results don’t improve faster than it previously expected.
The budget airline emerged from bankruptcy in March, but travel demand among price-sensitive consumers has remained under pressure. It has taken steps to enhance its product in response, including through a premium economy travel in combination with cost-saving measures such as pilot furloughs in July. But the company said it expects pressure on the business to continue for the remainder of 2025.
Shares of other airlines rallied Tuesday as investors anticipated rival carriers could benefit from reduced competition if Spirit is unable to operate or has to scale back further. Rival budget airlines saw the biggest gains. Shares of Frontier Group Holdings, the parent of Frontier Airlines, rose 24%.
—Air Canada flight attendants are preparing to strike as early as Saturday after contract negotiations broke down, with the airline saying the flight attendants’ union had made a recent counteroffer seeking “exorbitant” pay increases, and that it had rejected an offer to enter third-party binding arbitration.
Air Canada transports about 130,000 customers a day. The airline began grounding flights Thursday and could cancel 500 by Friday evening unless there is a settlement. Several dozen overseas flights were canceled Thursday. Picture how upset tens of thousands are going to be.
—TSA checkpoint numbers vs. 2024
8/14…119 percent of 2024 levels
8/13…103
8/12…83
8/11…97
8/10…120
8/9…89
8/8…102
8/7…113
—Ford Motor is revamping its manufacturing process to build lighter, more affordable electric vehicles, even as EV sales for the industry have been under pressure. The inventor of the Model T is reinventing itself to compete better with Tesla and China’s BYD, including developing a $30,000 electric pickup by 2027.
Ford is investing $2 billion to build the new vehicles on a “universal EV platform” at its assembly plant in Louisville, Ky. The platform can make EVs 40% faster than current processes, with 20% fewer parts. Overall Ford is spending $5 billion. It will create about 4,000 jobs.
Ford’s new midsize EV pickup will seat five, with more passenger space than a Toyota RAV4. It will use cheaper lithium-ion phosphate batteries.
Ford’s EV division, called Model e, lost $1.3 billion in the second quarter, while vehicle sales increased 128% to about 60,000 units. But things are trending up. The per-car loss – operating profit divided by unit sales – fell to roughly $22,000 a car from $44,000 a year ago.
Ford is billing this shift as its latest Model T moment.
—Cisco Systems stock fell a bit after the networking company reported fiscal-fourth quarter financials Wednesday night.
Adjusted earnings came in at 99 cents a share on revenue of $14.7 billion, slightly above the Street’s 98 cents and revenue of $14.6 billion.
Revenue for Cisco’s networking segment, which brings in the most revenue for the company and includes gear used in AI data centers, was $7.63 billion, a 12% increase from the prior year. Analysts were at $7.34 billion.
“The AI infrastructure orders we received from webscale customers in fiscal 2025 were more than double our original target, indicating a massive opportunity ahead as we lead the required architectural shift and build the critical infrastructure needed for the AI era,” CEO Chuck Robbins said in the earnings release.
Cisco also said it expects first-quarter earnings to be between 97 cents and 99 cents a share on revenue from $14.65 billion to $14.85 billion. That’s compared with analyst estimates of 97 cents a share and $14.62 billion in revenue.
For the year, Cisco said it is expecting earnings to be between $4 and $4.06 a share, compared with Wall Street estimates of $4.02, while estimates for the year forecast a range of $59 billion to $60 billion compared with analyst expectations of $59.4 billion.
It was the tepid guidance that turned off investors, who are also concerned that enterprises may cut their budgets, or increase them less than they would have otherwise, as tariffs increase their costs.
—From McDonald’s and Coca-Cola to Amazon and Apple, U.S.-based multinationals are facing calls for a boycott in India as business executives and Prime Minister Narendra Modi’s supporters stoke anti-American sentiment to protest against U.S. tariffs, now 50%.
—A U.S. Steel Corp. plant in the Pittsburgh area that experienced an explosion killing two and injuring ten Monday has a history of accidents and violations over the past 15 years, resulting in worker injuries, lawsuits and fines.
The blast at the Clairton Coke Works plant, the biggest facility of its kind in the U.S., comes after years of U.S. Steel underinvesting in its facilities, a major factor in the company’s historic takeover by Nippon Steel Corp.
—Deere shares fell sharply Thursday after the company lowered the high end of its full-year outlook as its profit and sales fell in its fiscal third quarter, hurt by weaker volumes amid what CEO John May said are challenging times.
The farm-equipment manufacturer has worked to manage inventories, both by matching production levels with retail demand and by continuing to address the high levels of used equipment in the industry, May said.
At the same time, the company has been weighing production shifts and higher prices as it aims to offset the approximately $500 million in tariff costs it previously said it expects to incur this year.
For its fiscal 2025, Deere now expects net income of $4.75 billion to $5.25 billion, compared with a prior outlook of $4.75 billion to $5.5 billion.
The company backed its forecast for sales in its production and precision-agriculture business to fall 15% to 20% this year, and for sales in its construction-and-forestry unit to be down 10% to 15%.
For its three months ended July 27, the company posted a profit of $1.29 billion, compared with $1.73 billion a year earlier. Quarterly earnings of $4.75 a share came in ahead of the $4.58 a share the Street expected.
Net sales fell 9% to $10.36 billion but met consensus.
—Amazon is pushing into one of the few retail sectors it hasn’t conquered: groceries. The e-commerce giant is expanding same-day grocery deliveries in more than 1,000 places nationwide, with plans to expand to more than 2,300 locations by the end of 2025 in a challenge to Walmart.
Prime members can get free deliveries on orders of $25 or more (or $2.99 for smaller orders), while nonmembers pay $12.99. Walmart and grocers Kroger, Albertsons, and Publix have a greater share of the trillion-dollar grocery market. Amazon’s 22.6% share lags behind Walmart’s 32%, Emarketer research said.
The move is designed to complement Amazon’s existing grocery delivery services, which include Whole Foods online market and Amazon Fresh.
–Artificial-intelligence startup Perplexity AI has offered Alphabet $34.5 billion to buy Google’s Chrome browser. Perplexity CEO Aravind Srinivas wrote in a letter to Alphabet CEO Sundar Pichai that the proposal would satisfy an antitrust remedy in the event a federal judge rules Google must sell the browser.
Google has been waiting for U.S. District Judge Amit Mehta’s decision on the remedies it must make to restore competition after ruling the company ran a monopoly in search. The Justice Department urged the judge this spring to force Google to sell its Chrome web browser.
In outlining the proposal, Perplexity called itself a “capable, independent operator focused on continuity, openness, and consumer protection,” and said it was committed to “maintaining, supporting, and promoting Chromium” as the open-source project that underlies many web browsers.
Although the proposed purchase amount is larger than Perplexity’s own $18 billion valuation*, the company told the Wall Street Journal that several investors including large venture-capital funds have agreed to back the transaction in full.
Estimates on Chrome’s enterprise value range from $20 billion to $50 billion.
Google told Barron’s last November that being forced to spin off Chrome or Android would “harm consumers, developers and American technological leadership.”
Chrome has roughly 3.5 billion users worldwide and accounts for more than 60% of the global browser market.
*Wednesday, it was reported Perplexity was in the midst of a new funding round valuing it at $20 billion.
—Smithfield Foods, the biggest U.S. pork producer, raised its annual operating profit forecast on Tuesday after its hog business rebounded from losses last year.
The Virginia-based company’s sales and adjusted earnings in the three months to June 29 rose year on year, though the share price was flat after a drop in quarterly operating profits at its packaged meats and fresh pork divisions.
Smithfield has reduced risks from owning livestock by raising fewer hogs itself and buying more from other producers and has said it expects to produce about 11.5 million hogs this year, down from 14.6 million in 2024.
Livestock feed, often the biggest expense in raising hogs, has become less expensive owing to low grain prices.
Smithfield projected total 2025 adjusted profit at $1.15 billion to $1.35 billion, up marginally from a prior forecast.
For the first half of the year, U.S. pork exports were down 4% from 2024, with exports to China – the world’s biggest pork consumer – down 19%, U.S. government data shows.
Exports accounted for 13% of Smithfield’s total sales last year, 3% of which were to China, the company has said.
Total sales rose 11% to $3.79 billion in the quarter while adjusted net income edged up to 55 cents per share from 51 cents a year earlier.
—Paramount is purchasing the rights to UFC in a landmark $7.7 billion deal over seven years beginning in 2026, the companies announced in a statement Monday, in a move that will eliminate the pay-per-view model. All of the UFC’s events will now be accessible with only a Paramount+ subscription, and a select number will also air on CBS.
“This historic deal with Paramount and CBS is incredible for UFC fans and our athletes,” UFC president Dana White said in a statement. “For the first time ever, fans in the U.S. will have access to all UFC content without a Pay-Per-View model, making it more affordable and accessible to view the greatest fights on a massive platform. This deal puts UFC amongst the biggest sports in the world. The exposure provided by the Paramount and CBS networks under this new structure is a huge win for our athletes and anyone who watches and loves this sport.”
ESPN, UFC’s current rightsholder, has been using a pay-per-view model, which TKO Group president Mark Shapiro called “a thing of the past.”
ESPN and Disney owned UFC’s rights for the past five years while paying an average of $500 million per year. The deal with Disney expires at the end of the year.
With the Skydance-Paramount deal closing this past Thursday, TKO Group – which owns the UFC and WWE – was able to come to an agreement rather quickly, according to CEO David Ellison, who spoke to the Financial Times.
Paramount and CBS have had a longstanding relationship with the NFL, and this deal should continue to bring mixed martial arts to the forefront of sports programming.
“When you look at the incredible portfolio of sports that Paramount has with the NFL, UEFA, Masters and March Madness, there really was a lull in the summer, and now with the UFC, we really do have a very strong year-long sports offering on both Paramount+ and CBS,” Ellison told the FT.
CBS will air the Super Bowl in 2028, when they will be in year two of their deal with the UFC.
There was talk earlier this year of UFC potentially linking up with Netflix, not to mention an ESPN renewal.
The UFC deal comes days after WWE landed a five-year, $1.6 billion deal with ESPN to have their premium live events streamed on their new direct-to-consumer app.
—Canada’s prohibition on U.S. alcohol is creating a major headache for American liquor and winemakers. Thousands of bottles of U.S. wine and spirits sit in storage across the country.
In the roughly six months that have passed since the U.S.-Canada trade spat kicked off, the hit to the U.S. alcohol industry is coming into view.
The Distilled Spirits Council, an industry group, estimated exports of U.S. distilled spirits to Canada at $43.4 million over the first six months of 2025, down about 62% from the same period in 2024. Exports of American wine were about 67% lower, the group said.
In 2024, Canada comprised 35% of all U.S. wine export business, making it the industry’s largest export destination by far.
As if the above isn’t enough bad news for the U.S. wine and spirits industries, a new Gallup poll this week revealed that the percentage of U.S. adults who say they consume alcohol has fallen to 54%, the lowest by one percentage point in Gallup’s nearly 90-year trend. This coincides with a growing belief among Americans that moderate alcohol consumption is bad for one’s health, now the majority view for the first time. [The survey period was July 7-21.]
—Hollywood had another blockbuster weekend with Warner Bros.’ “Weapons” coming in first in its first weekend, notching domestic box office sales of $42.5 million, according to Comscore. Walt Disney’s latest, “Freakier Friday,” generated $29 million in sales.
Overall, domestic weekend box office sales reached $131 million, pushing the total for the year so far to $5.6 billion, according to Comscore, up 7.6% from a year ago…though the advantage over 2024 has been shrinking in recent weeks.
Foreign Affairs
Russia/Ukraine: As we approached Friday in Anchorage, President Zelensky said he won’t cede the eastern region of Donbas to Russia and pushed for Kyiv to be included in the talks.
“For Russians, Donbas is a bridgehead for a future new offensive,” Zelensky told reporters on Tuesday in Kyiv. “Any territorial issues cannot be separated from security guarantees.”
Zelensky was in Berlin on Wednesday to meet German Chancellor Merz. Together with several European leaders and NATO Secretary General Mark Rutte, they held a call with President Trump ahead of the summit.
Last week in Moscow, Putin told Trump envoy Steve Witkoff he would agree to a complete ceasefire if Ukraine agreed to withdraw forces from all of Ukraine’s Donetsk region. Russia would then control the Donetsk and Luhansk regions, as well as the Crimean peninsula, which it seized in 2014 and wants recognized as sovereign Russian territory.
Russia now occupies most of Donetsk and Luhansk, but Ukrainian forces still control sizable chunks of territory, including key cities that are now strongholds of its defense.
As for the inexperienced Witkoff, he misinterpreted withdrawal terms presented by his Russian counterparts during the talks at the Kremlin.
Witkoff mistook Russia’s insistence that Ukrainians leave their own Donetsk, Kherson, and Zaporizhzhia regions and initially thought instead that Putin volunteered to ‘peacefully withdraw’ Russian troops from the latter two regions, Germany’s Bild reported over the weekend. The Wall Street Journal confirmed Witkoff’s misrepresentation. Witkoff also misunderstood a Russian ceasefire regarding energy infrastructure and long-range strikes, European officials told Bild.
“This is deeply damaging incompetence,” former U.S. ambassador to Russia Michael McFaul wrote on social media. “Witkoff should finally start taking a notetaker from the U.S. embassy for future meetings. That’s how professional diplomacy works.”
By midweek, Trump was setting the lowest possible bar for his meeting with Putin, declaring that “probably in the first two minutes I’ll know exactly whether or not a deal can get one,” and insisting he was ready to walk away from the talks and let the two sides continue to fight it out.
In a rambling news conference Monday, Trump reiterated that he planned to negotiate what he called “land swaps.” He added, “I may leave and say good luck, and that’ll be the end.”
But during the hourlong presser, Trump never once mentioned security guarantees for Ukraine.
By Wednesday, Trump said the meeting in Anchorage might lead to a second meeting between Putin and Zelensky. White House officials were talking about this being a “listening session.”
President Zelensky said on social media Wednesday: “This war must be ended. Pressure must be exerted on Russia for the sake of a just peace. Ukraine’s and our partners’ experience must be used to prevent deception by Russia.
“At present, there is no sign that the Russians are preparing to end the war,” Zelensky said.
European leaders, after their joint call with Trump on Wednesday, said the discussion featured talk of “red lines.” As the Wall Street Journal reported: “These include: a ceasefire as a prerequisite for further talks; any territorial discussions to start from the current front lines; and binding Western security guarantees that Russia must accept.”
But Russian officials insisted Ukraine must give up four regions Russia has invaded – Donetsk and Luhansk in the east, and Zaporizhzhia and Kherson in the south. “The territorial integrity of the Russian Federation is enshrined in our constitution, and that says it all,” Russian deputy foreign ministry spokesman Alexei Fadeev said Wednesday.
Zelensky told Trump he thinks Fadeev and Putin are “bluffing.”
Trump warned he would impose “very severe consequences” if Putin didn’t agree to a ceasefire agreement.
Thursday, Putin lauded the Trump administration’s “energetic” and “sincere” efforts to end the war in Ukraine – and suggested the U.S. and Russia could reach a deal on nuclear arms control at their summit. There also seemed little doubt that Putin will appeal to Trump’s vanity and his yearning for the Nobel Peace Prize.
The Russian leader was referring to the 2011 nuclear arms deal, known as New START, which expires on Feb. 5, 2026, Putin having announced Russia would no longer comply with its requirements in February.
And so the stage was set for Anchorage.
Editorial / Wall Street Journal
“President Trump and Vladimir Putin are set to meet in Alaska on Friday, and trepidation is high in Ukraine, Europe and among Kyiv’s American friends. Mr. Trump’s legacy and American security interests are as much on the line as the future of Ukraine and the NATO alliance.
“Presidential summitry has its uses, though it’s high-risk when the contours of a deal aren’t clear in advance. A cause for concern in this case is Mr. Trump’s 180-degree turn after weeks of expressing frustration at Mr. Putin’s refusal to negotiate a ceasefire. He let his Friday deadline pass for imposing new sanctions without taking new action.
“It isn’t clear what changed. Mr. Trump sent envoy Steve Witkoff to meet Mr. Putin in Moscow, and contradictory details of a land-swap deal have leaked. One version says Russia would stop bombing Ukraine’s cities if Kyiv cedes to Russia all of Donetsk oblast in eastern Ukraine, including parts Russia doesn’t now hold. Mr. Putin wants all of Donetsk because Ukraine has built a key defensive line there going back to 2014. Ukraine might also get some land back that Russia now holds in the east, but it isn’t clear what or when that would happen.
“Ukrainian President Volodymyr Zelensky is rejecting that outcome, and understandably so given Mr. Putin’s many previous broken promises. He signed two ceasefires known as Minsk I and II only to violate them soon thereafter. No one in Ukraine believes he will keep his word this time. Ukraine will need security guarantees from the West, not Mr. Putin, before it will agree to even a de facto concession on territory Russia now holds.
“It is also worrying that Messrs. Putin and Trump will meet without Ukraine represented. It’s hard to see how a realistic peace can be negotiated without Mr. Zelensky and his government at the table. Mr. Trump said Monday Mr. Zelensky will be invited to his next meeting with Mr. Putin.
“The optimistic pitch is that Mr. Trump can use the face-to-face meeting to test Mr. Putin’s sincerity. That’s the line from Mark Rutte, the NATO secretary general….
“The abiding reality, however, is that Mr. Putin doesn’t want Ukraine to emerge from this war as an independent country free to join the European Union if its people want. He wants Ukraine to be part of a Greater Russian bloc, another Belarus. He may accept a short-term ceasefire if he can get favorable enough terms. But he will only accept a real armistice if he believes the war begins to jeopardize his political control inside Russia….
“Mr. Trump wants to be known as a peacemaker, especially in Ukraine. But peace is easy to reach if you concede what an aggressor wants. If the U.S. President wants a lasting peace, he’ll need a settlement that gives Ukraine the freedom to determine its own future and the security to defend itself when Mr. Putin inevitably returns to grab more Ukrainian territory.”
Max Boot / Washington Post
“President Donald Trump’s unhealthy obsession with winning the Nobel Peace Prize has driven him to make a series of rash decisions in pursuit of ending the war in Ukraine. The latest example is the scheduling of a premature summit with Russian dictator Vladimir Putin in Alaska – an object lesson in how not to do diplomacy.
“Trump came to office promising to end the war in Ukraine in 24 hours, perhaps thinking that Putin would stop the Russian invasion as a personal favor to him. He first tried to strong-arm Ukrainian President Zelensky, publicly berating the leader during an infamous Oval Office meeting in February.
“But after Zelensky agreed to a ceasefire, it started to dawn on Trump that Putin was the problem. By June, the American president started expressing frustration with his Russian counterpart. ‘We get a lot of bullshit thrown at us by Putin, if you want to know the truth,’ Trump said during a Cabinet meeting last month. ‘He is very nice all the time, but it turns out to be meaningless.’
“Trump’s newfound anger led to more erratic behavior. In threatening to impose massive secondary sanctions on countries doing business with Russia, he first set a deadline for early September, then moved it up to this past Friday. He announced his intention to impose an additional 25 percent tariff on India – an important U.S. strategic partner in Asia – as punishment for buying and refining Russian oil. But no such threats were levied at China, America’s chief rival in Asia, which buys more Russian oil than India.
“Ultimately, no broad sanctions push was forthcoming on Friday. Instead, Trump announced a ‘highly anticipated meeting’ next week with Putin in Alaska. Eschewing his more realistic recent assessments of Putin’s perfidy, Trump was back to claiming that ‘President Putin I believe wants to see peace.’….
“By rushing to meet Putin in Alaska – territory that, significantly, was sold by Russia to the United States – Trump risks once again allowing himself to be manipulated by the wily Russian dictator.
“There is a better way. If Trump truly wants to win that Nobel Peace Prize, he should follow through on announcing a plethora of sanctions on Russia, work on turning over frozen Russian assets to Kyiv and dramatically ramping up arms transfers to Ukraine. Such moves would have gotten Putin’s attention and potentially set up for far more fruitful negotiations. Instead, Trump is rapidly squandering the leverage he achieved with his sanctions threats and allowing Putin to continue his unprovoked invasion.”
David Ignatius / Washington Post
“As President Dwight D. Eisenhower waited to hear whether an armistice agreement had halted the Korean War in July 1953, he couldn’t sleep. He stayed up into the night ‘talking almost incessantly’ about the horrors of battle, according to his aides – and how a Soviet general had once shocked him by saying he cleared minefields by marching his own troops over them.
“What will President Donald Trump be thinking on the eve of his summit Friday in Alaska with Russian President Vladimir Putin? Perhaps he’ll just have a Diet Coke and get a good night’s rest. Certainly, the White House has been trimming expectations for any breakthrough, with Trump calling it ‘really a feel-out meeting’ and his press secretary saying it would merely a ‘listening exercise.’
“But I would guess that Trump won’t be quite as pliable or passive as some of the presummit commentary suggests. He has spoken for more than a year about his passion for ending what he calls a ‘bloodbath.’ He has become increasingly frustrated that Putin has been stringing him along and ignoring his requests for compromise. And in Trump’s mind, at least, he has flipped the script: Compared with his last meeting with Putin, in 2019, he’s far stronger and Putin is much weaker.
“ ‘It will not be a listening exercise; it will be a talking exercise,’ predicted one knowledgeable official after a Trump call Wednesday with European leaders outlining plans for the summit. The official explained: ‘Trump will tell Putin what the deal is and what he has to do: land for peace. On land, how much and what terms? On peace, how durable and how protected?’
“And what if Putin refuses to accept Trump’s peace framework? That will pose a test of Trump’s ability to act with patience and resolve. Officials tell me Trump is ready to impose the sanctions he has threatened for months. ‘It will be a humiliation for him’ if Putin balks, argued the knowledgeable official. The Senate has already drafted a tough sanctions bill with strong bipartisan support. Trump will need to follow through and punish Moscow, something he has been reluctant to do.
“If Putin is smart, he’ll drag out the process. He won’t say no, but he won’t say yes, either. He’ll agree to some terms but not others. And until a ceasefire takes hold, he will keep pounding at Ukraine’s ever-weaker front lines….
“Trump is right that it’s time to end this war. Both sides have suffered shocking losses. As he enters the meeting room with Putin, Trump should remind himself that a bad deal – one that neuters Ukraine – won’t work. As with every war, the only peace deal that lasts is a just one.”
Editorial / Wall Street Journal…Wednesday p.m.
“Leaks to the press suggest that Mr. Putin wants Ukraine to cede all of Donetsk oblast. Notably, he wants parts of the region that Ukraine still controls. In return, the leaks say, Russia may concede some less vital areas it now controls in Kherson and Zaporizhzhia.
“Why that swap? The likely answer is that Ukraine created what essentially is a 31-mile fortress belt of heavily fortified cities, towns and defensive embattlements in Donetsk. The effort goes back to the first Russian invasion in eastern Ukraine in 2014.
“Russian forces have failed to break the Donetsk line despite years of effort. The Institute for the Study of War, which follows fighting in Ukraine, says it ‘would likely take several years’ for the Russians to break through on current trend. Mr. Putin is making a bid to achieve through negotiation with Mr. Trump what he’s failed to achieve on the battlefield.
“As the Friday summit nears, Russian forces have also been accelerating efforts to take the city of Pokrovsk in Donetsk. Ukrainians are severely outnumbered there, and the Russians have used unjammable fiber-optic drones to interdict troops and supplies moving to the front. That makes defensive positions increasingly difficult to hold, and our sources say the Russians are on the cusp of taking the city.
“Yet it has taken Russia more than 17 months to close in on Pokrovsk, which had a pre-war population of about 60,000. The Institute for the Study of War notes the Russians have lost ‘well over five divisions’ worth of armored vehicles and tanks’ there since October 2023. They’ve also suffered as many as 14,000 to 15,000 casualties a month in the battle for Pokrovsk.
“If Mr. Putin gains full control of Donetsk with a ceasefire gambit, Russia will be better positioned to roll into the Kharkiv and Dnipropetrovsk regions. Ukraine would have to scramble to set up new defensive lines, including on terrain where they’d be more vulnerable.
“All of which is reason for Mr. Trump to beware of a Russian President promising concessions that are really bids for strategic advantage. That’s also a reason to have Ukraine in the room where the negotiations happen.”
—Ahead of the Friday summit, Russian forces reportedly advanced another six miles or so in Ukraine’s east, toward Dobropillya in Donetsk, almost fully encircling the critical above-noted logistical hub at Pokrovsk.
“The Russians found a gap in Ukrainian lines this week after weeks of probing attacks, and then used their vast reserves of manpower to break through the lines,” a Ukrainian officer told the Wall Street Journal. Analysts at the Washington-based Institute for the Study of War noted parallels to previous recent gains for Moscow: “Russian forces used a similar tactical penetration in mid-April 2024 to facilitate the seizure of operationally significant territory northwest of Avdiivka,” ISW wrote Monday.
However, “It is premature to call the Russian advances an operational breakthrough, though Russian forces very likely seek to mature their tactical advances into an operational-level breakthrough in the coming days,” ISW analysts write. “The next several days in the Pokrovsk area of operations will likely be critical for Ukraine’s ability to prevent accelerated Russian gains north and northwest of Pokrovsk.”
Israel/Gaza: By Monday, the number of malnutrition-related deaths in Gaza had risen to 212, including 98 children, according to the Hamas-run health ministry. Another 38 people had been killed as a result of Israeli military activity over just one 24-hour period. And then Wednesday, at least 25 more aid-seekers were killed in Israeli attacks.
Deaths continue to rise amid reports that a deadline of Oct. 7, 2025, has been set for residents to evacuate Gaza City following the announcement of a controversial Israeli plan to take control of the area.
The plan has been met with criticism from world leaders as well as fierce opposition from some within Israel, including from military officials and the families of hostages still being held in Gaza who fear for their safety.
Israel has rejected the criticism, with Defense Minister Israel Katz saying condemnation would “not weaken our resolve.”
Prior to Oct. 7, 2025, Israel plans to forcibly displace the estimated one million Palestinians living in Gaza City, roughly half the number of people living in the entirety of the territory.
Gaza City is the capital of the Gaza Strip. Its pre-war population was estimated at around 600,000 people, but that number has grown significantly throughout the war as Israel’s military campaign has pushed Palestinians into the city.
Israeli media reports that the military would move the population towards al-Mawasi, a vast tent encampment in the south of Gaza, already home to thousands of Palestinians suffering from an absence of basic facilities and sanitation.
The plan is widely condemned by humanitarian agencies and indeed many of Israel’s allies for its potential to add untold human suffering onto the shoulders of an already exhausted and beleaguered people.
Israel has denied there is starvation in Gaza and accused UN agencies of not picking up aid at the borders and delivering it.
Prime Minister Benjamin Netanyahu said in an interview with Israeli television that he would “allow” Palestinians to leave the Strip during the upcoming offensive.
Netanyahu supports Trump’s vision of relocating many of the 2 million people in Gaza through what the prime minister refers to as “voluntary migration.”
“Give them the opportunity to leave. First, from combat zones, and also from the Strip if they want. We are not pushing them out but allowing them to leave.”
Netanyahu, speaking to foreign media, said Israel “has no choice but to finish the job and complete the defeat of Hamas,” given the militant group’s refusal to lay down its arms.
He asserted that “our goal is not to occupy Gaza, our goal is to free Gaza.”
Netanyahu also pushed back against what he calls a “global campaign of lies.”
The goals in Gaza include demilitarizing it, the Israeli military (IDF) having “overriding security control” there and a non-Israeli civilian administration in charge.
The prime minister also said he had directed the IDF in recent days to “bring in more foreign journalists” – which is a striking development as they have not been allowed into Gaza beyond military imbeds.
On Sunday night, the IDF said it had killed Al Jazeera journalist Anas Al Sharif in a strike on Gaza City, accusing him of heading a Hamas cell. “Anas Al Sharif served as the head of a terrorist cell in the Hamas terrorist organization and was responsible for advancing rocket attacks against Israeli civilians and IDF troops,” the military said in a statement.
Al Jazeera said five of its journalists had been killed in the Israeli strike, calling Al Sharif’s death a “targeted assassination” and “yet another blatant and premeditated attack on press freedom.”
–Wednesday, the story hit that Israel is in talks to possibly resettle Palestinians from Gaza in South Sudan, which is nuts.
It’s unclear how far along the talks are, but if implemented, it would amount to transferring people from one war-ravaged land at risk of famine to another, and raise human rights concerns.
There would also be further international condemnation at a time Israel can ill afford same.
—Thursday, Finance Minister Bezalel Smotrich approved a new settlement plan, called E1, which would split east Jerusalem from the West Bank.
“Those around the world who try to recognize a Palestinian state will see our response on the ground – not with documents or declarations, but with facts: homes, roads, and Jewish families building their lives here,” Smotrich said.
“They will talk about a Palestinian dream – and we will continue to build a Jewish reality,” he said. “This reality buries the idea for good – there is nothing to recognize.”
Smotrich called on Netanyahu to annex the West Bank.
Israel had frozen construction plans at the site since 2012 because of objections from the United States, European allies, and other world powers who considered the project a threat to any future peace deal with the Palestinians.
Needless to say, there was global condemnation of the decision, and the plan has yet to receive formal approval.
China: Research ships are appearing more often in the United States Arctic than they have in years past, the U.S. Coast Guard said. In response, Coast Guard crews are ramping up their presence in U.S. Arctic waters to address what they’ve described in a news release as “increased activity” as of late by Chinese research vessels in that area.
And on Wednesday, a Chinese fighter jet allegedly flew close to a Philippine coastguard aircraft near the disputed Scarborough Shoal, while U.S. and PLA naval vessels operated close by amid the heightened tensions in the South China Sea.
South Korea: The country’s military is more than 20% smaller than it was six years ago, Reuters reported the other day, citing a new report from Seoul’s defense ministry. There were about 450,000 troops in uniform last month, down from 560,000 in 2019.
The reason? There are far fewer men of enlistment age across the country, and South Korea has the world’s lowest birth rate. As a result, “the military is 50,000 troops short of the number of troops adequate for maintaining defense readiness,” Reuters notes.
North Korea: The powerful sister of leader Kim Jong Un, Kim Yo Jong, dismissed South Korean claims that the North is removing some of its loudspeakers along the inter-Korean border, mocking the government in Seoul for clinging to hopes of renewed diplomacy between the war-divided rivals.
South Korea’s military said over the weekend that it had detected the North removing some of its loudspeakers, days after the South dismantled its own front-line speakers used for anti-North propaganda broadcasts in a bid to ease tensions.
Kim Yo Jong reiterated previous North Korean statements that it has no immediate interest in reviving long-stalled negotiations with Washington and Seoul, citing an upcoming joint military exercise between the allies as proof of their continued hostility toward Pyongyang.
Kim accused South Korea’s new liberal President Lee Jae Myung’s government of misleading the public, saying that North Koreans “have never removed loudspeakers installed on the border area and are not willing to remove them.”
South Korea’s military maintained that the North had removed some of the speakers.
Kim Yo Jong also said the North has no interest in talks with the Americans.
Kim Jong Un and Vladimir Putin held a phone call Wednesday to discuss their deepening ties and war efforts against Ukraine. Russia’s TASS news agency said Putin shared information with Kim on the upcoming summit with Donald Trump.
Random Musings
—Presidential approval ratings….
Gallup: 37% approve of President Trump’s job performance, while 59% disapprove. 29% of independents approve (July 7-21).
Rasmussen: 49% approve, 49% disapprove (Aug. 15).
A new Economist/YouGov poll has 42% of Americans approving of Trump’s handling of his job, 54% disapproving.
Trump’s support among Republicans, while still very high, has slowly trended downwards in this survey.
The January 26-28 poll found that 92% of Republicans and independents who leaned Republican approved of Trump’s job performance and 5% disapproved.
This week, the percentage was down to 83% approving, 13% disapproving.
On inflation, 48% expect there to be higher inflation in six months, vs. only 17% who expect there to be a lower rate of inflation in six months, down from 33% in December 2024.
The share of Americans who view Trump as honest and trustworthy (31%) is at a new low since the start of his second term.
—President Trump said he would deploy National Guard troops to Washington, D.C., and place the city’s police department under federal control, launching an unprecedented effort to take charge of the nation’s capital.
“This is Liberation Day in D.C., and we’re going to take our capital back,” Trump said during a news conference at the White House, where he was flanked by Defense Secretary Pete Hegseth, Attorney General Pam Bondi and other senior administration officials.
Trump also said he would call in active-duty military troops if needed.
The president compared the homicide rate in Washington with capitals around the world, including Baghdad and Bogota, Colombia. Violent crime in the city was down 35% last year from 2023, Justice Department data show, the lowest in more than 30 years. The data showed a decline in homicides, robberies, armed carjackings and assaults with a dangerous weapon.
“You want to have safety in the streets. You want to be able to leave your apartment or your house where you live and feel safe in going to a store to buy a newspaper or buy something, and you don’t have that now,” Trump said, adding he was going to “get rid of slums.”
The administration is deploying hundreds of federal agents throughout the district, including more than 100 from the FBI, as part of the crackdown.
Trump brought up Edward Coristine, who worked for the Department of Government Efficiency and was beaten after an attempted carjacking earlier this month. He previously posted a photo of a bloodied Coristine, without identifying him, on social media. “If D.C. doesn’t get its act together, and quickly, we will have no choice but to take Federal control of the City,” Trump wrote in the post.
Under the Home Rule Act, the president can deploy the district’s National Guard, but has limited ability to intervene in day-to-day matters.
Trump said Bondi would oversee the city’s police department. Terry Cole, the administrator for the U.S. Drug Enforcement Administration, will serve as interim federal commissioner of the D.C. police, he said.
The president also said at his news briefing that his administration has started removing homeless encampments “from all over our parks, our beautiful, beautiful parks.”
“We’re getting rid of the slums, too,” Trump said.
In a Truth Social post on Sunday Trump noted: “The Homeless have to move out, IMMEDIATELY. We will give you places to stay, but FAR from the Capital.”
Editorial / New York Post
“Washington, DC’s political class may scream in fury at Team Trump’s takeover of policing, but we suspect most district residents will be relieved: Regular people put public safety first.
“The city’s politicians have failed to do that, and the feds have a duty to act when the nation’s capital is unsafe.
“Even Democrats have been willing to stomp on DC’s demands for ‘home rule’ when it comes to fighting crime: By a vote of 81-14 in 2023, for example, the Dem-run Senate joined with the GOP-run House to override the City Council’s bid to reduce maximum penalties for violent crime, including carjackings – and President Joe Biden signed the measure into law.
“Carjackings, for the record, are still triple the 2018 level, part of a grim wave of youth crime – yet city leaders have refused to get serious about stopping the violence….
“Indeed, as Trump noted, the U.S. capital has more murders per capita than notorious Mexico City and Bogota, Colombia. The homicide rate is six times New York City’s.
“To drive crime down, this intervention will bring in new resources, including hundreds of National Guard and broader deployment of the federal Park Police….
“We hope neither the City Council nor Democrats (in Congress or neighboring Maryland and Virginia) try to sabotage this intervention. Everyone but the bad guys, and DC’s citizens most of all, is a winner if it succeeds.”
Whether the data reflects falling crime rates or not, it’s all about perception.
Today, D.C. Attorney General Brian Schwalb sued President Donald Trump over his executive actions asserting control over the D.C. police department and attempting to install an emergency police commissioner.
The lawsuit came hours after Attorney General Pam Bondi ordered sweeping changes in law enforcement policies in the city, while appointing an administration official to assume all duties and responsibilities of the police chief.
—Trump dismissed Internal Revenue Service Commissioner Billy Long from his job after less than two months in the role. He will be replaced by Treasury Secretary Scott Bessent, who will serve as acting commissioner.
Long, a former Republican congressman from Missouri, is being exiled to Iceland to serve as ambassador. [Note to Mr. Long: Before is very expensive here, but you’ll love the seafood!]
—President Trump’s former surgeon general, Dr. Jerome Adams, has a stark warning about the potential ramifications of Health and Human Services Secretary Robert F. Kennedy Jr. canceling funding for mRNA vaccine development.
“People are going to die because we’re cutting short funding for this technology,” Adams said in a CBS interview last Sunday.
Adams served from 2017 through the end of Trump’s first term, when the administration helped develop mRNA vaccines to combat Covid-19 through Operation Warp Speed. Adams described the initiative as Trump’s greatest achievement “bar none” and said it’s concerning that his administration is turning away from the mRNA technology.
Adams, citing other experts, said it would’ve taken 18 to 24 months longer to develop the vaccines without the technology.
“By the most conservative estimates, at least 2 million lives were saved,” Adams said. “Many people say that up to 20 million lives were saved because of the vaccines.”
—Mexico expelled 26 high-ranking cartel figures to the United States in the latest major deal with the Trump administration as American authorities ratchet up pressure on criminal networks sending drugs across the border, the Associated Press reported.
The cartel leaders and other prominent figures were being flown from Mexico to the U.S. on Tuesday, the person said.
Mexico’s Attorney General’s Office and Security ministry confirmed the transfers, which were carried out after a promise from the U.S. Justice Department that prosecutors would not seek the death penalty in any of the cases.
It’s the second time in months Mexico has expelled cartel figures accused of narcotics smuggling, murder and other crimes amid mounting pressure from the Trump administration to curb the flow of drugs across the border. In February, Mexico handed over to American authorities 29 cartel figures.
—More than 70 million Americans sweated through the muggiest first two months of summer on record, an Associated Press data analysis shows.
Parts of 27 states and Washington, D.C., had a record amount of days that meteorologists call uncomfortable – with average daily dew points of 65 degrees Fahrenheit or higher – in June and July, according to data derived from the Copernicus Climate Service.
In much of the East, the mugginess kept rising to near tropical levels for a few humid hours. Philadelphia had 29 days, Washington had 27 days and Baltimore had 24 days where the highest dew point simmered to at least 75 degrees, which even the National Weather Service calls oppressive.
On a related matter, the NWS said 5.74 inches of rain fell on the city of Milwaukee Sat., Aug. 9, smashing the daily record of 1.64 inches of rain, causing massive flooding in the area, canceling the Wisconsin State Fair and causing havoc at the Mets-Brewers baseball game Saturday night, rain even seeping through the domed stadium.
Some parts of the Milwaukee area had 10-11 inches, according to Weather.com.
And our hearts go out to the residents of Chattanooga, Tenn., where four people died in catastrophic flooding after more than six inches of rain fell in hours…6.4 inches recorded at Chattanooga Airport, the second-wettest day ever for the city dating back to 1879.
—Extreme heat is breaking temperature records across Europe and driving bigger and stronger wildfires.
In southwest France, records were broken on Monday in scores of locations, with officials says maximum temperatures in the affected region were 12 degrees above the norm for the past few decades.
In Croatia, air temperature records were set in Sibenik, at 39.5 (103 F.) degrees, and Dubrovnik, 38.9 (102 F.) degrees, while large forest fires raged along its coasts and ripped through neighboring countries in the Balkans.
Wildfires caused by both arsonists and thunderstorms have affected 1,700 square miles in the eurozone so far in 2025, double the average for the same period of the year since 2006, according to the EU Science Hub’s Joint Research Center.
In Iraq, record-breaking temperatures approaching 120 F. were blamed for a nationwide power blackout.
There were unprecedented temperatures of above 30 degrees (86 F.) in the Arctic Circle this month.
—Flash floods in northern and northwest Pakistan, as well as Indian-controlled Kashmir, claimed a staggering 280+ lives over a 24-hour period, Thursday into Friday, with scores missing.
In Pakistan, a helicopter carrying relief supplies crashed due to bad weather today, killing all five on board, the government said.
“Cloudbursts” are common in the Himalayan region, which can lead to landslides.
–We have our first hurricane of the season in the Atlantic, Erin. It will soon become a major CAT 3 and 4. We need it to thread the needle between the East Coast and Bermuda. I love Bermuda…been there four times. Stay safe, Bermudians.
–Finally, I literally got word of the passing of astronaut Jim Lovell minutes before I posted last week. This was a truly great American.
Lovell, 97, never realized his dream of walking on the moon, but he would become America’s most famous astronaut for landing back on Earth alive. His aborted Apollo 13 mission, as memorialized in the classic move, turned out to be one of NASA’s greatest triumphs.
Lovell attended the Naval Academy, becoming a naval aviator, then a test pilot. He nearly made the first group of seven U.S. astronauts, but was chosen for the second group for the Gemini and Apollo programs. He flew several space missions and circled the moon in Apollo 8 in 1968 as mission navigator.
As the Wall Street Journal editorialized:
“Apollo 13 was supposed to be the third mission to land men on the moon, but an oxygen tank exploded on the spacecraft owing to a design flaw and faulty wiring. ‘Houston, we’ve had a problem,’ Lovell famously said.
“That’s when the three-man crew, commanded by Lovell, and the flight engineers at Mission Control in Houston scrambled to pull off one of the greatest rescues in history. While running out of oxygen and having to shut down most electrical systems, Lovell, Fred Haise and Jack Swigert overcame dozens of technical issues, any one of which could have been deadly.
“In 2020, the 50th anniversary of Apollo 13, Lovell wrote (with Jim Bridenstine) in these pages that ‘in the face of seemingly impossible odds, Americans didn’t let fear paralyze us. Instead we joined together, working calmly and efficiently to find a solution.’ He said Apollo 13 is a reminder of hard things worth doing.
“Lovell became an evangelist for the U.S. space program and urged his country to return to explore the planets and stars. His life is a reminder of what this country can accomplish when it strives to do great things.”
Just to set the record straight, since the “Apollo 13” movie engaged in some artistic license, with Tom Hanks’ version of Captain Lovell’s call to NASA ground control when an explosion rocked his spaceship, “Houston, we have a problem,” in real-life Apollo 13, it was command module pilot, Jack Swigert, who first told NASA that there was trouble. Lovell echoed his words when NASA asked for the message to be repeated. Both of the men had said, “Houston, we’ve had a problem.”
Swigert’s alert was not in the movie, and Lovell’s exact wording was altered to provide a more dramatic sense of urgency. And it’s the Hollywood version we all use to this day.
Apollo 13 returned to Earth, 610 miles southeast of American Samoa, on April 17, 1970, providing a lift to a nation battered by domestic turmoil and devastated by Vietnam War casualties.
Lovell would later tell the New York Times, “We were all test pilots, and the only thing we could do was try to get home. The idea of despair never occurred to us, because we were always optimistic we would get home.”
Captain Lovell never achieved his goal of walking on the moon, but as he told the Milwaukee Journal Sentinel 35 years after Apollo 13 had passed into history, he had found an important consolation with the passing of the years.
“I realized that although I didn’t land on the moon and was disappointed,” he said, “it was a triumph in a different direction, meaning getting people back from a certain catastrophe.”
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Pray for the men and women of our armed forces…and all the fallen.
Slava Ukraini.
God bless America.
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Gold $3381
Oil $62.98
Bitcoin: $117,217 [4:00 PM ET, Friday]
Regular Gas: $3.15; Diesel: $3.71 [$3.44 – $3.76 yr. ago]
Returns for the week 8/11-8/15
Dow Jones +1.7% [44946]
S&P 500 +0.9% [6449]
S&P MidCap +1.6%
Russell 2000 +3.1%
Nasdaq +0.8% [21622]
Returns for the period 1/1/25-8/15/25
Dow Jones +5.7%
S&P 500 +9.7%
S&P MidCap +1.7%
Russell 2000 +2.5%
Nasdaq +12.0%
Bulls 46.3
Bears 22.2…interesting the number of bulls hasn’t been higher given the record highs in equities.
Hang in there.
Brian Trumbore
