By Eric Peters, CIO of One River Asset Management

“President Putin said, ‘I would love to meet Zelensky in Moscow.’ And I said, ‘I don’t think…you know, I have to put myself in his position. I don’t know that he’d go to Moscow,” said Trump, seated next to Zelensky in the Oval Office, the two of them discussing Russia’s war on Ukraine. “Maybe he would. Would you go to Moscow?” Trump asked Zelensky, putting him on the spot, cameras snapping away. “It’s difficult. There are a lot of Ukrainian drones there,” answered Zelensky, unable to suppress a smile. “That’s right,” said Trump. “It’s dangerous,” laughed Zelensky.

Human beings really are the best. We can adapt to the sickest crap. And if we really can’t stop ourselves from killing one another, may as well start joking about it. Iran’s Larijani joked that the IRGC could take Trump out with a micro-drone while sunbathing at Mar-a-Lago. Trump told Fox News that it’s been a long time since he’s been sunbathing, “Maybe I was around 7 or so. I’m not too big into it.”

It wasn’t long ago that the Iran war seemed like a big deal. It used to be that killing heads of state was taboo. And I can remember when people thought closing Hormuz would spark a global depression. Russia’s biggest industrialist, Andrey Melnichenko, warned of the potential for a horrifying outcome if Russia continues down its self-destructive path. I’m pretty sure he was hinting that Putin might use a tactical nuclear weapon if backed into a corner.

I first saw a philosophical justification for a preemptive tactical nuke strike 2mths ago [here]. Apparently, now that humans have adapted to the doctrine of mutually assured destruction, our thermonuclear nukes have become a bit of a joke, because no one would dare ever use one. The VIX index naturally declined to 15. Which mechanically forces volatility-controlled investment strategies to take more risk. Lifting equity prices. Lowering volatility. Inviting volatility sellers. Just like every other late market cycle. After a while it honestly gets kind of funny. 

Artificial Intelligence+

To break dependence on Western technology and drive a new era of growth, in 2024 Beijing explicitly categorized its industrial focus into:

1. Six Future Industries (long-term, frontier technologies) and
2. Six Emerging Pillar Industries (near-term economic drivers).

Then in Aug 2025, Beijing formalized an “Artificial Intelligence+” initiative, which treats AI as foundational, cross-cutting tech – like electricity or infrastructure – rather than a standalone sector. The initiative emphasizes deep AI integration across The Sixes. 

The Six Future Industries are frontier technologies that Beijing seeks to establish first-mover advantage and dictate global standards over 10yrs. China’s Ministry of Industry and Information Technology established six broad overarching categories (Future Manufacturing, Information, Materials, Energy, Space, Health). These translate into six specific priorities: Embodied Artificial Intelligence, Brain-Computer Interfaces, Quantum Technology, Hydrogen & Nuclear Fusion Energy, Biomanufacturing, and 6G Mobile Communications. 

The Six Emerging Pillar Industries are to drive immediate, massive economic output.

• Integrated Circuits: domestic semiconductor manufacturing to bypass US export controls.
• Low-Altitude Economy: drones, flying cars, and infrastructure to manage low-altitude airspace.
• Intelligent Robots: automation hardware for factories/logistics.
• Aviation and Aerospace: commercial spaceflight, satellite networks, domestic commercial aircraft.
• Energy Storage: advanced battery tech to support the grid.
• Biomedicine: advanced pharmaceuticals and medical equipment.

Ten Basis Points:

“It’s going to be China or the US,” said the CIO, an American who built his firm in Asia, investing in equities, tech names, macro themes. “A European sovereign AI is a pipe dream – they think Mistral will be their LLM and they’ll build data centers? Really? How exactly?” he asked. “They need Nvidia. They need a tech stack that has emerged from American and Asian IP that combines to form these magical machines that you throw a model into.” To create intelligence. “And what happens to these nations that can’t afford tokens in the next few years? How do India and Brazil and all these second-tier companies even compete?”

“We’ve entered an era where the biggest of the big – Google, Microsoft, SpaceX, Tesla, even JP Morgan – will be accessing tokens in ways that is going to catapult their businesses ahead of everybody else,” continued the CIO. “This sort of faux debate over cheap open-source AI versus expensive Anthropic is nonsense. There’s a shortage of intelligence – pure and simple – we’re below ten basis points of market penetration in this stuff across the global economy, why are people even having a debate over this?”

“Given all the component shortages and constraints, and the anti-AI populist backlash, we could see a horrific market crash along the way, but we haven’t yet diffused this technology across the economy to the degree that it can be useful,” he continued. My Tesla drives me everywhere. I’m a super user, virtually alone. But in 10 years, no one will drive. “We have zero AI in  regulated processes within banks, healthcare companies and insurance companies because the errors and hallucination are being ironed out.” But they will be. “This could be the last great bull market in technology. What could eclipse superintelligence?” 

Anecdote:

“As we know the two principal players and their mentor, I take their words and actions as a serious roadmap,” said the CIO. We were discussing Bessent’s speech at the Economic Club of New York [here] and Warsh’s press conference following his first FOMC meeting [here]. “Much like the Chinese Communist Party 5-year plans, we’re glimpsing the future for American economic policy. Having watched the Chinese game the global trading system to the point that it broke leads me to believe it should be reassembled in Scott’s vision for something more equitable,” continued the CIO, an American who built his firm in Asia, investing in equities, tech, macro themes.

“AI competition with China is also central to this strategy. It’s possible that like Reagan spending Gorbachev into the ground, we could cause the Chinese system to hit the wall.” Interesting.

“Beijing’s national data center strategy is to build massive scale in token factories.” CXMT is their national DRAM champion and is about to IPO. Its disclosures reveal deep inefficiencies. Beijing will inevitably subsidize its losses. “Chinese open-source models are all the rage on Twitter. They’re not as good for complex thinking but very good at specific tasks and sub agent work. Therefore, as these models sit on US tech stacks, no Chinese innovator is making money – AWS makes the money for producing the token,” he said.

“Having already sunk massive amounts into EV, Solar, and other areas, one day the Chinese may well hit a wall, especially given they have yet to tackle their property sector.” The chronic decline in Chinese property prices has caused a depression in domestic consumption.

“If Scott’s strategy works and allied nations realize it’s better to play along then not, the Chinese export markets could become smaller precisely when they need them most. At the same time Taiwan, Singapore, Korea, and Hong Kong do stuff we need so we could work more diplomatically with them as they are no longer the Asian Tigers of our youth,” he said.

“Let’s see how it plays out but it’s fascinating and why guys like us stay in the game.”

Authored by Naveen Athrappully via The Epoch Times,

The United States was the largest crude oil producer in the world in 2025, outputting a “record-high” 13.6 million barrels per day (bpd), according to a July 9 statement from the Energy Information Administration (EIA).

America’s output was far ahead of second-placed Russia, which produced 9.9 million bpd. Saudi Arabia came in third with 9.6 million bpd, with Canada in the fourth spot at 5 million bpd. The difference in oil output between the United States and other top producers widened last year, with Russian supplies mostly remaining unchanged year-over-year while Saudi Arabia saw a modest increase.

The 13.6 million bpd output breaks the previous U.S. and global production record of 13.2 million bpd set in 2024. The United States first overtook Russia as the top global oil producer in 2018 and has since retained the number one spot.

EIA attributed the consistently high oil production in the United States to “continued gains in drilling productivity and operational efficiency across key shale basins, which allow operators to extract more oil per well.”

Powered by shale development, the United States has become not only the top crude oil producer “but the largest producer of crude oil ever,” the agency said.

In addition to record-high production last year, exports have been climbing. In April, U.S. exports of crude oil and petroleum products hit a record, with crude oil exports averaging 5.6 million bpd, 21 percent higher than the previous record from December 2023, the EIA said in a July 8 statement.

The exports of finished petroleum products, including jet fuel and motor gasoline, hit the highest level since December 2024.

The record-high exports in April 2026 came amid disruptions to energy shipments through the Strait of Hormuz due to the U.S.–Iran war, a development that ended up boosting global demand for American energy. Brent crude oil futures had hit a peak of over $126 per barrel in April. Prices have since come down and ended Friday at around $76.

In its latest statement, EIA said the jump in oil production last year happened despite oil prices being lower, with the West Texas Intermediate (WTI) price dropping from an average of $77 per barrel in 2024 to $65 per barrel in 2025. WTI is a benchmark for crude oil produced in the United States.

Moreover, EIA predicts America’s crude oil production to be close to 13.7 million bpd this year and to rise to 14.2 million bpd in 2027.

Boosting Oil Production

The higher oil output follows multiple actions taken by the Trump administration aimed at boosting production.

In November 2025, the administration announced the approval of new oil drilling leases off the coasts of Alaska, Florida, and California.

In January this year, the administration initiated the first step to offering oil and gas drilling leases in California, with the Bureau of Ocean Energy Management seeking information on potential lease areas to auction as early as next year.

In March, the Department of the Interior conducted an oil lease sale in the National Petroleum Reserve–Alaska, the first since 2019.

This action came under criticism from the environmental group Sierra Club. Mike Scott, Sierra Club’s oil and gas campaign manager, in a March 18 statement, accused President Donald Trump of making oil corporation CEOs richer at the cost of the environment.

“The Western Arctic is not just any landscape—it’s one of the last true wild places in the country, home to rare and threatened wildlife and cultures that have subsisted on the land for thousands of years,” Scott said.

“Drilling in the Arctic won’t solve our energy crisis, but it will cause irreversible damage to these pristine landscapes. Big Oil has been champing at the bit to get its hands on these lands, and Trump is making their wishes come true.”

Secretary of the Interior Doug Burgum had said, post the lease sale in Alaska, that the sale underscored the reserve’s vital role in strengthening America’s energy security.

The reserve “was created to support our nation’s energy needs, and this successful sale demonstrates what’s possible when we align responsible development with that original purpose,” Burgum said. “Revenues from these leases will help bolster local communities, create good‑paying jobs, and ensure that Alaska continues to be a cornerstone of America’s domestic energy production.”

Meanwhile, the U.S. Department of Justice has decided to ditch the oil and gas leasing restrictions imposed by the prior administration in the Coastal Plain of the Arctic National Wildlife Refuge. Alaska and its industrial development and export authority had filed lawsuits challenging the restrictions.

On July 7, the department said that these restrictions violated federal law and asked the court to dismiss the lawsuits.

U.S. acting Attorney General Todd Blanche said that the prior administration’s actions “improperly limited” Alaska’s energy potential through “unreasonable” regulations. “This settlement supports the Trump administration’s commitment to secure American energy independence and our national security for generations to come.”

update(1745ET): The Pentagon has confirmed late in the day Sunday that US forces have continues launching more strikes on Iran throughout the day, describing that the latest wave of strikes are aimed to “degrade Iran’s ability to attack civilian mariners.”

US Central Command has been providing more frequent updates throughout the day, as the conflict intensifies. “At 5 p.m. ET today, U.S. Central Command forces began launching more strikes against Iran to continue degrading their ability to attack civilian mariners and commercial ships freely transiting the Strait of Hormuz,” it stated. “The Commander in Chief has directed the strikes to hold Iranian forces accountable.” According to some emerging targeting info:

• Explosions have also been heard in Iran’s Qeshm Island as well as Jask, state TV is reporting.
• Iran’s state TV is reporting explosions near Sirik and west of Bandar Abbas.
• CNN: Within past hour, IRGC fired at commercial shipping
• Trump was on NBC’s Meet the Press a few hours ago, and described Saturday’s US strikes on the Iranian military by saying, “We bombed the hell out of them.”

And more of the latest from Trump:

Also Sunday, President Donald Trump told NBC’s “Meet the Press” that the strait was open to commercial traffic.

“It’s open. We bombed the hell out of them last night. They’re very, very evil and sick people,” Trump said. He said that the Iranians agreed to “a perfect deal for us” the day prior — “no nuclear, no this, no that, no nothing. They gave up everything.”

“And then after that, they left the room. And then within an hour, they launched a drone at a ship,” Trump said.

In the meantime The Washington Post has on Sunday issued an investigative report from the opening days of the war. Washington Post on Sunday is reporting that six Americans were killed in an Iranian drone attack on Kuwait during the second day of sustained exchanges of fire, on March 1st. Military sources cited in WaPo allege this was after American military commanders failed to act on warnings that the targeted facility was vulnerable. The emerging details point toward a severe failure of operational oversight:

Exclusive: Six soldiers died on day two of the Iran war in a drone strike on Port Shuaiba, Kuwait. Dozens more were wounded, some seriously.

It’s one of the war’s costliest attacks for U.S. personnel — and survivors fear no one will be held accountable. https://t.co/jBXpUs3bZz

— The Washington Post (@washingtonpost) July 12, 2026

Update 1210ET. 

* * *

Update 10:40pm ET.

Somewhat predictably, as has been the pattern of this war – Iran is in the very early morning hours (local) launching retaliatory strikes on Arab Gulf nations, or as the Iranians say against US assets and bases in the Gulf. Per state media:

IRAN LAUNCHES SERIES OF STRIKES AGAINST US TARGETS: PRESS TV

Last week Kuwait and Bahrain were favored targets, but there are signs that Iran – now with reports of Tehran having been hit tonight (CBS) – could begin widening its attacks to include the UAE, or even potentially the Saudis (though there have yet to be signs of this). 

What’s clear is that things are back to square one – with the MoU agreement clearly effectively dead, unless diplomacy gets into overdrive and both sides show some measure of restraint. But restraint is not evident currently, only a widening up the escalation ladder.

Iran has fired 12 Ballisitc Missiles towards Muwaffaq Salti Airbase in Jordan

Reports of 3 impacts.

The reason they aimed there could be for the F-35s parked there. We shall see. I was expecting them to aim for Bahrain or Kuwait. pic.twitter.com/zfYEJmTW3a

— Ryan Rozbiani (@RyanRozbiani) July 12, 2026

To recount from where we started Saturday morning, we wrote…

As for the big picture of where things stand, University of Chicago political scientist Robert Pape, who authors “The Escalation Trap,” has pointed out that that the millions of Iranians who took to the streets last week to attend the late Ayatollah’s funeral demonstrate growing nationalist resolve. He explained that this only makes further escalation more likely later this summer, as public sentiment gets hardened against the US.

“The balance of military capabilities did not change over the weekend,” Pape said. “The balance of political will shifted.“

Referencing the now unraveling ceasefire and negotiations process, Pape is predicting: “The pause appears to be another stage in the escalation process rather than the beginning of de-escalation.” 

*  *  *

Update 8:40pm ET.

At 7:15pm ET, the US launched its third round of strikes on Iran this week after Tehran declared that it’s closing the Strait of Hormuz “until further notice”, and Iranian forces attacked a Cyprus-flagged container ship, the M/V GFS Galaxy, transiting the Strait of Hormuz. 

US Central Command said that President Donald Trump ordered the fresh strikes, which targeted Iran’s ability to attack commercial vessels, after the latest Iranian attack on the Hormuz-crossing vessel. Central Command said a civilian crew member is missing and the ship was unable to continue its journey after suffering significant damage.

At 7:15 p.m. ET today, U.S. Central Command forces began launching the third round of strikes this week against Iran after Islamic Revolutionary Guard Corps forces blatantly attacked M/V GFS Galaxy, a Cyprus-flagged container ship transiting the Strait of Hormuz. A civilian crew…

— U.S. Central Command (@CENTCOM) July 11, 2026

Shortly after the Iran’s state-run media reported explosions at multiple areas along the country’s southern coasts, including the energy and petrochemical hubs of Bushehr and Asalouyeh. Blasts were also reported at the port cities of Bandar Abbas and Bandar-e Dayyer, as well as the Sirik area near the Strait of Hormuz.

BREAKING: The IRNA news agency says more than 10 explosions have been heard in the port city of Jask in the southern Hormozgan province.

🔴 LIVE updates: https://t.co/sfnZg9WSSH pic.twitter.com/FAzm8nC9ou

— Al Jazeera English (@AJEnglish) July 12, 2026

According to unconfirmed reports, the US strikes on Iran have reached all the way north to the Capital of Iran, Tehran as the US goes “full scale from bases in Kuwait and Bahrain.”

CBS Reports the Strikes on Iran have reached the Capital of Iran, Tehran

The U.S. is going FULL SCALE from the bases in Kuwait and Bahrain.

Iran’s air force is in the air and air defenses are active over TEHRAN pic.twitter.com/S0c6DWz9dE

— Ryan Rozbiani (@RyanRozbiani) July 12, 2026

“Iran made a poor choice,” Pentagon chief Pete Hegseth said on social media. “Now they pay.”

Iran made a poor choice. Now they pay. https://t.co/8m4fEfgrXv

— Pete Hegseth (@PeteHegseth) July 11, 2026

The Islamic Revolutionary Guard Corps announced the Hormuz closure, saying it won’t allow any vessels to pass through until foreign interference ends, according to state-run IRIB News. The IRGC said it halted a cargo ship after firing a warning shot because it tried to transit the strait on Saturday despite being told not to, the outlet added.

The developments cast significant doubts over the potential for talks aimed at trying to reach a more lasting peace deal. The rhetoric had been getting more heated on both sides in recent days even as the two parties had suggested there was still room for conversations. 

Reports from Iran of heavy new U.S. airstrikes in a Bandar Abbas, Bushehr nuclear facility, Minab, Qeshm, and several other locations pic.twitter.com/k2zK9N5pOm

— Emily Schrader – אמילי שריידר امیلی شریدر (@emilykschrader) July 11, 2026

Earlier on Saturday, Iran’s Foreign Minister Abbas Araghchi traveled to Oman on Saturday for talks on the future of Hormuz, but there was no sign of involvement by senior US envoys. Also Earlier, Iran demanded that the US implement key commitments under a recent deal before more talks take place, rejecting Trump’s contention that negotiations could continue without a ceasefire. Tehran said Washington must meet Iran’s conditions for resolving transit issues through the Strait of Hormuz and normalizing its oil exports.

On Friday Trump threatened to shower Iran with “1000 Missiles” if it acted on a threat to kill the US leader, “in this case, ME!”

The US had also demanded that Iran publicly declare all channels of the Hormuz open to shipping and pledge not to attack civilian vessels transiting the waterway. Tehran would face consequences if it fails to deliver the public assurance, senior Trump administration officials told reporters. Those demands followed several days of US airstrikes and Iranian retaliation that sent oil prices higher this week. 

The Islamic Republic is holding a three-day memorial ceremony for the late Supreme Leader Ayatollah Ali Khamenei, following a days-long funeral that drew large crowds to cities in Iran and neighboring Iraq. Khamenei was killed in an attack as the US and Israel began their war on Iran at the end of February.

His son and successor, Mojtaba Khamenei, on Saturday called for revenge for the killing of his father.

“It is our certain and undeniable duty that this revenge be carried out,” he said in a post on X.

Earlier

Iran has thrown Trump’s ultimatum and Saturday deadline right back at Washington, saying that instead it is the United States that must first meet the agreed-upon conditions in order to normalize shipping and energy transit in the Strait of Hormuz.

Fars news agency reports Saturday that Iranian leadership is demanding that the US implement “agreed-upon understandings” before any talks take place. While the White House has declared the ceasefire to be ‘over’ – it has also indicated ongoing contacts and talks with Iran via mediators. But this appears to have been reduced to simple ultimatums being shuttled between capitals by Qatari mediators. There are no actual sit-down talks on the horizon after two rounds of fresh tit-for-tat attacks broke out this past week.

The memorandum of understanding (MoU) itself is barely alive at this point, also with Iran’s ambassador to the United Nations, Amir-Saeid Iravani, separately announcing that Tehran could stop honoring the MoU if US attacks continue. 

“Should the United States continue to violate its obligations under the MoU, Iran will no longer be bound to fulfil its obligations under the MoU,” Iravani told reporters at UN headquarters.

But he did make clear that Iran is still committed to the agreement “provided that the United States fully and faithfully complies with its own obligations.”

President Trump has meanwhile continued to issue his own warnings and threats. He said Friday that the US military would “completely decimate” Iran if its leaders attempted or carried out his assassination. He took it a step further in an overnight Truth Social Post, saying he has 1,000 missiles “locked and loaded” – aimed at Iran – should he be targeted by Tehran’s agents.

Strangely, the US President signed off with his puzzling “praise be to Allah!” reference – perhaps mockingly or sarcastically.

Meanwhile, Supreme Leader Mojtaba Khamenei still hasn’t been seen in public after the Feb.28 US-Israeli airstrikes took out his father, killed members of his family, and reportedly badly wounded him. Mojtaba is said to be observing a private memorial for his slain father, and made no known appearance at the week-long funeral processions and burial.

But on Saturday he did call for revenge in a rare public message. “It is our certain and undeniable duty that this revenge be carried out,” he said.

“We pledge to avenge your pure blood and the blood of all the martyrs of these two [recent] wars by taking revenge against the criminal, disgraceful murderers,” the Ayatollah also stated. “This vengeance is what our nation is demanding, and this must definitely be done.”

He issued a series of statements tinged with Shia Islamic references. His words contain repeat vows to enacting vengeance, including this not so veiled threat to kill Iran’s enemies: 

The criminal, disgraceful murderers of the martyred Leader, whose names are fully documented from the highest to the lowest ranks, will carry their dream of a peaceful death in bed to the grave.

— Ayatollah Mojtaba Khamenei (@MKhamenei_ir) July 11, 2026

As for the big picture of where things stand, University of Chicago political scientist Robert Pape, who authors “The Escalation Trap,” has pointed out that that the millions of Iranians who took to the streets last week to attend the late Ayatollah’s funeral demonstrate growing nationalist resolve. He explained that this only makes further escalation more likely later this summer, as public sentiment gets hardened against the US.

“The balance of military capabilities did not change over the weekend,” Pape said. “The balance of political will shifted.“

Referencing the now unraveling ceasefire and negotiations process, Pape is predicting: “The pause appears to be another stage in the escalation process rather than the beginning of de-escalation.” 

Chinese e-commerce platforms are selling miniature heads that, according to Fred Lambert at the EV blog Electrek, are being used to “trick Tesla’s cabin camera into thinking a driver is paying attention.”

Priced at $20 to $50 and marketed as dashboard decorations or “travel companions,” these miniature heads are mounted near the rearview mirror to mimic a human face while Autopilot or Full Self-Driving is engaged.

via Instagram user “decentmiss_” … 

While FSD is engaged, Tesla’s cabin camera monitors driver attentiveness, including whether the driver repeatedly looks away from the road, and issues warnings when attention appears to lapse. Tesla requires increased supervision when FSD is in “Mad Max” or “Hurry” mode.

Videos of the miniature heads recently went viral on social media, suggesting that some users in China are employing them to trick Tesla’s driver-attention safeguards.

😈🔥The Chinese have already found a hack for the driver-monitoring cameras inside the cars. 💀😂 pic.twitter.com/owW95q0ERp

— Alladdin (@Alladdin1983) July 11, 2026

Here is Lambert’s first take:

Let me be direct: anyone mounting a fake head to defeat their Tesla’s driver monitoring system is putting their life and the lives of everyone around them at risk. And the sellers profiting from these devices are enabling potentially fatal behavior for $30 a pop.

Over the years, drivers have used various defeat devices, such as counterweights attached to the steering wheel to trick the torque sensor into believing someone was holding it. Tesla countered that workaround with the cabin camera, but now must address the issue of miniature heads.

Related:

• Is Tesla About To Use Facial Recognition Before Activating Full Self-Driving

Tesla’s fastest countermeasure would likely be an over-the-air software update that uses facial recognition of the driver.

By Peter Tchir of Academy Securities

Inflection Point Overload? 

Between 250th Celebrations, heat waves, power failures, and jet lag, I feel more discombobulated than I have in a long time (I do admit that I really liked a sign that I think was in PHX airport just past security – Recombobulation Area). I think that’s what I could use.

In any case, last weekend’s ProSec Mid-Year Outlook is worth checking out. We had people send us several variations of the same theme – the concept is catching on for investors and corporations even if the name isn’t (yet). 

We also published our positive take on where Compute credit spreads are headed. “Compute” is meant to capture data centers, AI, and the entire ecosystem. We are a bit more focused on the corporate bond side of things, but there are implications and ramifications on the private and project finance/structured side of the world too. We are positive on the sector for a number of reasons and will be expanding on the rationale in the coming days (or weeks, as this week’s schedule of Berlin, Munich, Rome, Dublin, and Belfast may leave little time for typing). 

While the Iran conflict may seem to be at an inflection point (the risk of escalation is back on the table), we expect this is just a move to a riskier end of the current status quo, rather than a shift in how markets should be thinking about this conflict. However, it is important to note that the U.S. strategy, with the ceasefire having been declared “over,” is shifting to a priority of re-establishing deterrence. Neil Wiley from our GIG, the former Principal Executive in the Office of the Director of National Intelligence, said that “Iran will calculate that they can strike when it suits, confident that they can comfortably endure whatever comes back at them. In this circumstance, there is fundamentally no deterrence. I am concerned that this is now where we find ourselves. Establishing or re-establishing deterrence requires, ironically, a very disproportionate response.” This is what we have seen this week with the third strikes being launched by the U.S. on Saturday in response to yet another Iranian attack on commercial shipping in the Strait. The U.S. has both shortened the time between Iranian attacks and its strikes and increased the magnitude of its retaliatory strikes in an effort to convince Iran that it is not in its best interest to continue these attacks. We will have to see if this has the intended effect, but the message is clear: the U.S. is now hitting Iran much harder than before for allowing the IRGC to attack ships in the Strait, even if it is just rogue elements of the IRGC conducting these attacks. 

Possible Inflection Points 

AI spending. This is the most important potential inflection point for the market and the economy. Is it slowing at all? Are there bottlenecks that will slow it, even if it doesn’t want to be slowed? The market seems to oscillate back and forth. While I think the answer remains to be determined, there are many stocks in the sector down well into double digits on a percentage basis in recent weeks, so maybe the market already answered the question and we can move on? We discuss this to some degree in both the Thursday report and last weekend’s report as well. 

• Earnings. I rarely focus on earnings. About 70% of companies will beat earnings and Wall Street (checks calendar) will act surprised for the 200th quarter running! But this time I will pay more attention than usual. Last quarter, earnings really seemed to be what turned the stock market around. We can argue and nitpick that it was possibly too few sectors that really drove the earnings story (lots participated, but there were some really positive outliers). More recently, a chip company’s earnings call set the stage for the latest rebound in tech as it convincingly laid out the case for strong demand, and more importantly, committed orders for years to come. I’m not about to go all in on understanding the earnings season dynamics, but I will be paying closer attention. It is nice that many companies will combine to determine how good earnings season is for the market (for a few quarters, it all seemed to hang on NVDA). 

Russia/Ukraine. Are we nearing an inflection point here? From “how are you dressed in my office” to “sure, we can set up a Patriot missile factory in your country,” the relationship between the President and Zelensky has changed. I can’t remember the last time the President played the “droog” card with Putin. A Clockwork Orange had many “slang” words (Nadsat) based on Russian words (some argue Ukrainian), so it seemed like an appropriate time to insert a reference. In any case, the war is changing. Russia is attacking Ukraine more heavily (dangerous for Ukraine, but likely a sign of things getting worse for Russia). Increasingly, Ukraine is being allowed to follow a military plan along the lines of what our GIG would have drawn up on day 1 (there have been restrictions on what they could do, even when they had the right hardware, on top of lack of access to some hardware). Trump hinted that the U.S. now has mineral stakes in Ukraine during his recent trip. If there is a peace deal of any sort, expect opportunities for investments in Russia and Ukraine. Expect Poland to be a staging ground for many U.S. operations (corporate, investment, and military) into both Ukraine and Russia. Peace doesn’t seem close, but with both sides having more firepower, as well as their own sets of difficulties, maybe we are nearing that time? 

Japanese Yen. The infamous carry trade. 

Both times we had steep declines in the USD vs JPY, we saw U.S. equity markets sell off. The summer of 2024 was linked to the carry trade, while spring of 2025 was more about tariffs and Liberation Day. Is the yen going to continue to decline? By all accounts, betting against the yen, especially after recent attempts at intervention have failed, is a popular trade (dare I say, consensus?). The case for a weaker yen makes a lot of sense, but, as a contrarian, the opportunity for a rapid appreciation seems worth paying attention to, if not betting on. 

Crypto and DATCos. Digital Asset Treasury Companies have been both a blessing and a curse to crypto. The companies certainly provided a lot of support on the way up. Some DATCos do a lot with their crypto and are heavily involved in the infrastructure of the space. Others seem to be accumulation vehicles, where their sources of funds to accumulate have grown more complex. 

There is no arguing that this administration has been pro-crypto. The enthusiasm post-2024 election is obvious. The naming of the crypto czar and an accommodating regulatory environment helped push crypto to all-time highs. It has been a “dark” time since then. While headlines have generally been positive, crypto has struggled. In recent weeks, much of the selling has been attributed to MSTR selling bitcoin to fund some of its “debt” servicing requirements (really preferreds). The “security” best known as STRC ($STRC on Twitter) has been front and center in recent angst. That security seems to have bottomed as the Strategy team has announced several steps (changing the payment schedule, increasing the dividend, and selling a larger amount of crypto to raise more USD). Have they done enough to alleviate market fears? Is this an inflection point, where the market can move beyond the current needs of some DATCos and focus on potential upside from the administration continuing to embrace crypto? Or are we headed to new lows, despite that support, which would be scary? My expectation is that the bounce we’ve seen will be short-lived, as FOMO in crypto is almost gone (very few advisors not already allocated to crypto seem that excited about the prospect at the moment). And the gambling/get-rich-quick crowd has long since moved from crypto. Watch this market as the next leg is likely to be important for overall market sentiment/cash flows. 

Inflation. Our argument for expecting rate cuts before hikes and possibly as soon as September hinges on inflation. Yes, Warsh is watching inflation. But: 

• Inflation is coming down. The classic “magician” in the room. Warsh is an inflation hawk because he expects inflation to come down. 
• While we weren’t selected for the data source task force, by all accounts his selections to run the various task forces have been met with approval. Even with the announcement, it might be too early to expect a change in which data is deemed most important by September. Given the people picked, it may take longer to establish the committee and deliver findings than I hoped or expected. 

For our view on the path of rates, we need this to be true, and we are betting on it. The market definitely has a different perception (either on the path of inflation or on how much Warsh cares about inflation) than we do. 

Bottom Line 

While many might hope for a “sleepy” July, given how frantic this year has been, with so many key markets at possible inflection points, it seems like hoping for a dull summer is wishful thinking (for those hoping to take a break from the screens). This might be one of the most consequential earnings seasons that I can remember, let alone for a summer earnings season. 

Holtec announced last week that the major refurbishment projects at Palisades are complete.

Reactor vessel inspections, head penetration replacements, steam generator tube refurbishment, primary system decontamination, and operator training all wrapped up. New fuel now sits on site, ready for loading. The company called it a “watershed moment” and shifted focus to grinding through the remaining work.

Yet there is still no restart date…

     “Holtec International remains on track to restart operations at Palisades in October 2025”

These are the comments provided by a Utility Dive article in 2025 after they spoke with Holtec’s International Director of Government Affairs and Communications Patrick O’Brien.

Needless to say, that date has passed. Starting earlier this year, the company pivoted to the vaguer line that Palisades would restart “when the plant is ready for long-term operations.” CEO Kris Singh told the Financial Times he still expects the plant back this year, ahead of the March 2027 power supply contract. But “this year” is now half over with no firm schedule attached.

When the $1.5 billion DOE loan closed in 2024, expectations centered on a late 2025 restart. As the first deadline came to pass near the end of 2025 and the beginning of 2026, material issues, particularly with steam generators, had pushed the target into the middle of 2026. 

Each update added a few more months. Now the language has softened further into “steady progress” and “when ready.” More than 5,000 individual work activities remain on the checklist. Most are described as routine maintenance, testing, inspection, and operational readiness items. 

The legal and financial pieces have at least moved forward. A federal court dismissed the environmental groups’ lawsuit challenging the NRC exemption that allows a decommissioned plant to restart. 

Holtec is also preparing an IPO that multiple outlets peg at a roughly $10 billion valuation.

Palisades was always presented as the easiest restart project on the table. An existing plant on an existing site, with a recently operating license framework, the first major DOE loan guarantee, and novel NRC regulatory pathways created specifically to enable it. If any restart should have translated funding, approvals, and major refurbishment work into electrons on the grid without prolonged slippage, this was the one. 

The repeated movement of internal targets and the current shift to “when the plant is ready for long-term operations” instead makes reactor restarts look more uncertain and execution-heavy than simply licensing and building a new plant from scratch. That undercuts the core industry argument that restarts represent the lowest-risk, fastest path to new nuclear capacity.