Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Following the release of our article The High Beta Melt Up- Echoes of 1999, we received a few emails complaining that we left our readers hanging. They wanted to know how investors could have shifted their holdings from high beta and momentum stocks to sidestep massive losses when the dot-com bubble burst. In the first article, we mentioned that low beta stocks performed well during the bust, but we didn’t provide details.  

The first graph below from the article shows that shifting from high to low beta stocks at the end of the dotcom bubble (2000) would have been a brilliant move.

The second graph steps back and reveals that while low beta stocks were flat on average during the 1998-2000 boom, their return over the entire boom-bust cycle (1998-2003) was +35%. Conversely, the highest beta decile, which increased by 111% during the boom, earned a modest 2% return over the entire period.

Coaching A Portfolio

Managing a portfolio is like coaching a sports team. A coach needs to consistently assess the game environment and decide who sits and who plays. Equally important, they must be prepared to change players as the game evolves.

Similarly, as portfolio managers, we need to invest for today’s market while maintaining a plan for tomorrow.  Accordingly, let’s look beyond high and low-beta stocks and examine how other stock factors performed during the dotcom boom-bust era. This will provide a roster of the types of stocks that may thrive if the current speculative melt-up melts down.

As we did in the original article, the monthly decile data is from Kenneth French and Dartmouth.  Their database includes all stocks traded on the NYSE, Nasdaq, and the AMEX exchanges.

With that, we evaluate how some stock factors performed during the 1995-2003 market cycle.

Growth Vs. Value

To determine what constitutes growth and value stocks, we use the traditional price-to-book value ratio. However, the French data computes the ratio in the reverse order, book to price. Thus, as we present below, the lower deciles are tilted toward growth-oriented stocks, while the higher deciles indicate more value-oriented stocks.

Like we saw with beta, in the rally leading up to the melt-up (1995-1998), both growth and value performed similarly. Also, like our beta analysis, and as we show below, the market leaned toward growth stocks at the expense of value stocks during the 1998-2000 boom. Interestingly, bucking the general trend, the highest decile of value stocks did much better than the lower deciles of value stocks.

The following graph charts the price ratio of growth (lowest decile) to value (highest decile) through the entire cycle. Other than the melt-up from 1998-2000, the top decile of value stocks were clear outperformers versus the most growth-oriented stocks.

Lastly, the final chart shows that despite the underperformance during the boom, value investors who stuck with value stocks for the entire cycle fared much better than growth investors. However, the return differentials are much less evident for many of the deciles between the top and bottom. Thus, the data argue that deep value, not just value, was an investor preference during the period.

Market Cap

Next, we assess performance during the dotcom era using deciles of market capitalization. The lowest decile includes the smallest stocks, while the highest decile includes the largest. 

This analysis of market cap is a little different than what we have calculated with beta and growth/value. In the pre-melt-up period, ranging from 1995 to October 1998, there was a large performance difference by market cap. The top decile of large-cap stocks grew by 180%, surpassing the small-cap deciles by over 100%.

However, the lowest two deciles were the best performers during the melt-up from October 1998 to March 2000. Furthermore, after the market peaked, that sector’s performance continued to grow through the bust and recovery. As shown below, the lowest decile rose 77% during the dotcom boom and over 200% through the 1998-2003 cycle. The largest decile of market-cap stocks posted a slight loss for the cycle.

In the recent era covering 2023 until the 15% decline in April, i.e., the reign of the Magnificent Seven, the top decile by market cap increased by 51%, while the smallest decile by size declined by 14%.

As we show below the large cap S&P 500 (SPY) handily outperformed the small-cap Russell 1000 (IWM).

Will the current boom and eventual bust be the time to shift toward small companies?

Profitability

One of the recent themes, alongside high beta, that has emerged is profitability. Many of the stocks with the most impressive gains over the past three months have little to no profits. Similarly, the 1998-2000 boom was driven by stocks with poor profitability. At the time, investors were not concerned about current earnings. They were more captivated by potential future profitability.

The graph below shows that from 1995 to 2003, the least profitable decile grossly underperformed the highest decile stocks. However, during the 1998-2000 boom, the least profitable companies took charge.

The lowest decile beat every other decile by at least 50%. This is highlighted in the second graph.

Despite the enormous gains from 1998 to 2000, the least profitable decile fell by 21% from 1998 to 2003. The highest decile was up 15% through the same period.  

Review

Before looking at recent performance, let’s sum up our findings from the dotcom era.

• Pre-boom persistent bullish trend (1995 to October 1998): the market preferred the largest and most highly profitable companies. It was relatively indifferent regarding beta and valuation.

• Dotcom boom (October 1998 to March 2000): the market preferred stocks with the lowest profitability and highest betas. The other factors were mixed.

• Dotcom bust (March 2000 through 2003), the market preferred higher profitability, low beta, smaller size, and value-oriented companies.

Today’s Potential Boom And Tomorrow’s Bust

The table below shows which factors were favored or out of favor during the bullish trend leading up to the tariff-induced decline and during the recent recovery. As shown, growth, large market cap, and high profitability were preferred before April. Not surprisingly, those traits characterize the Magnificent Seven. However, since the April lows, high beta and low profitability have been driving the market.

As a reminder, during the run-up to the 1998-2000 dot-com boom, the market favored large and profitable companies. Similarly, during the boom, low profitability and high beta were preferred.

If this current highly speculative trend continues into bubble territory like the dot-com era, we should consider that the winners and losers of a possible coming crash could share similar characteristics to those that outperformed during the dot-com bust. If so, smaller, low-beta, value-focused stocks with high profitability are likely to perform well.

Summary

Investor behaviors and preferences during the dotcom boom-bust and the current environment are similar. It’s too early to label the recent speculative activity as a boom on the same scale as the late 1990s. If a correction happens today, the fallout would probably be much smaller than what occurred 25 years ago.

However, if this speculative desire for high beta and lower profitability continues, we should consider gathering a list of stock factors and stocks that can help us grow our wealth as the broader markets and more speculative stocks correct themselves.

Bloomberg is reporting Wednesday that President Donald Trump suggested he would hike tariffs on more countries buying Russian energy, including China, as the deadline for ceasefire looms, and as US envoy Steve Witkoff is in Moscow trying to make headway with President Putin.

Witkoff’s talks with Putin lasted three hours, according to Russian media, after Witkoff landed in the country early on Wednesday. Images in Russian media showed the two men smiling and shaking hands in an ornate, gilded hall – after having met for several rounds of meetings spanning prior months.

The Kremlin in follow-up called it “constructive and useful” – according to TASS. They discussed the ongoing war in Ukraine, RIA Novosti stated.

Last month, Trump’s outlook turned more dire and negative on the chances for peace. “We thought we had [the war] settled numerous times, and then President Putin goes out and starts launching rockets into some city like Kyiv and kills a lot of people in a nursing home or whatever,” he had said.

And last week witnessed the single deadliest airstrikes on Kiev since the war’s start – with the death toll having risen to 32 after another man recently died of his injuries, following the collapse of a nine-story apartment that was struck.

Ukraine’s Volodymyr Zelensky has of course welcomed the prospect tougher US sanctions and tariffs on nations buying Russian oil. He has made clear Ukraine’s perspective that Putin would be forced into a serious peace deal if his war machine ran out of money.

Wednesday saw a fresh Russian attack in the central region of Zaporizhzhia, reportedly striking a holiday camp which left two dead and 12 wounded. “There’s no military sense in this attack. It’s just cruelty to scare people,” Zelensky said in the aftermath.

As for the dialogue with Trump’s envoy Witkoff, part of it took place through conversation with Putin’s economic envoy Kirill Dmitriev, with the two taking a relaxed stroll through a public park in Moscow, which apparently caught some random Muscovites by surprise.

Our exclusive footage of Steve Witkoff and Vladimir Putin’s economic envoy Kirill Dmitriev taking an early morning walk through Zaryadye park next to the Kremlin.

Notably minimal visible security as ordinary Muscovites appear surprised to find themselves among such company. pic.twitter.com/9NJWNiXLDI

— Margarita Simonyan (@M_Simonyan) August 6, 2025

So the Kremlin appears to be sending calm messaging, likely in hopes that Trump will hold off on implementing the more dire and drastic of consequences and threats.

Dmitriev has at the same time said he is confident Moscow and Washington can find common ground through diplomacy and honest dialogue. The CEO of the Russian Direct Investment Fund (RDIF) took to X after the Witkoff meeting and thanked his followers in English for “kind wishes for a successful visit of Steve Witkoff to Moscow,” adding that “Dialogue will prevail.”

Thank you all for your kind wishes for a successful visit of @SteveWitkoff to Moscow. 🇷🇺🇺🇸🕊️

Dialogue will prevail. 🤝

— Kirill A. Dmitriev (@kadmitriev) August 6, 2025

Will it? Let’s hope so.

Disney shares are trading lower in premarket following Q3 results that were broadly in line but revealed underlying softness. The company raised full-year adjusted EPS guidance to $5.85 (from $5.75), ahead of the Bloomberg Consensus $5.77 estimate. While adjusted EPS of $1.61 beat consensus ($1.46), investor sentiment was dampened by continued deterioration in the conventional entertainment TV segment, which posted a sharp year-over-year decline. The theme here is that this segment-level weakness overshadowed strength in parks and streaming. 

Data compiled by Bloomberg shows Disney’s revenue rose 2.1% year-over-year to $23.68 billion in the quarter ended June 28, in line with consensus estimates. Adjusted earnings came in at $1.61 per share, topping the Bloomberg Consensus estimate of $1.46.

Overshadowing Disney’s strong performance in its theme parks and streaming businesses was a sharp decline in conventional entertainment TV, where income plunged 28%, and a loss from the Disney film studio. Income at the theme parks division grew 13% in the quarter to $2.52 billion, while revenue rose 8%. The streaming segment delivered a quarterly profit of $346 million.

Here’s a breakdown of Disney’s Q3 financials and subscriber metrics, comparing actual results to both year-over-year (y/y) performance and Bloomberg Consensus estimates:

Headline Results

• Adjusted EPS: $1.61 Up from $1.39 y/y, Beats estimate of $1.46

• Revenue: $23.65B +2.1% y/y, Marginal miss vs. estimate of $23.68B

Revenue by Segment

• Entertainment: $10.70B, +1.2% y/y, Below estimate of $10.82B

• Sports (mainly ESPN): $4.31B, -5.5% y/y, Missed estimate of $4.44B

• Experiences (Theme Parks, Cruises, etc.): $9.09B, +8.3% y/y, Beat estimate of $8.87B

• Eliminations (internal sales): -$448M, Down 21% y/y (non-core line item)

Operating Income by Segment

• Total Operating Income: $4.58B, +8.3% y/y, Beat estimate of $4.47B

• Entertainment: $1.02B, -15% y/y, Below estimate of $1.11B → weak performance in TV/film

• Sports: $1.04B, +29% y/y, Beat estimate of $961.7M → strong profitability at ESPN

• Experiences: $2.52B, +13% y/y, Beat estimate of $2.44B → theme parks continue to outperform

Streaming Metrics

Disney+ Total Subscribers:

• 127.8M +1.4% QoQ

• Slight miss vs. estimate of 127.97M

• Domestic (US/Canada): 57.8M (flat QoQ) — missed 58.73M

• International: 69.9M (+2.5% QoQ) — beat 69.2M

Hulu Total Subscribers:

• 55.5M +1.5% QoQ, beat 55.18M

• Hulu SVOD only: 51.2M (+1.8%), beat

• Hulu Live TV + SVOD: 4.3M (-2.3%), missed

Average Revenue Per User (ARPU)

• Disney+ ARPU: $7.86 (+1.2% QoQ), beat $7.43

• Hulu SVOD ARPU: $12.40 (+0.3% QoQ), missed $12.83

• Hulu Live TV + SVOD ARPU: $100.27 (+0.3% QoQ), missed $100.69

Disney’s Q4 and full-year forecasts both suggest solid profitability momentum: 

Disney Q4 Forecast Summary:

• Disney+ Subscribers: Expected to see a modest quarter-over-quarter increase, roughly in line with the +1.6% estimate.

• Total Streaming (Disney+ + Hulu): Forecasts net subscriber growth of over 10 million, driven primarily by Hulu, benefiting from the recently expanded Charter distribution deal.

Disney 2025 Full-Year Outlook Summary:

• Sees adjusted EPS $5.85, saw $5.75, estimate $5.77 (Bloomberg Consensus)

• Sees entertainment direct-to-consumer operating income $1.3 billion, estimate $1.22 billion

• Still sees entertainment operating income growth double-digit percentage, estimate +24.2%

• Sees experiences operating income +8%, saw +6% to +8%, estimate +7.5%

• Still sees sports operating income +18%, estimate +17.4%

• Sees cruise line pre-opening expense of about $185 million, with about $50 million 4Q

• Sees equity loss from India JV about $200 million from purchase accounting amortization

In markets, Disney shares are slightly lower in premarket trading. On the year, shares are up 6% as of Tuesday’s close. Shares are trading around Covid lows.

In a separate announcement, Disney revealed that the National Football League will acquire a 10% equity stake in ESPN.

President Donald Trump will announce that AI laggard Apple will commit to spend another $100 billion on domestic manufacturing, the latest (unforceable and thus meaningless) pledge by the tech giant to increase US production of its products as it seeks to avoid punishing tariffs on its flagship iPhones.

The announcement scheduled for 4:30pm ET at the White House on Wednesday includes a new manufacturing program designed to bring more of Apple’s supply chain to the US, with an eye toward manufacturing additional critical components domestically, according to a White House official who detailed the announcement on the condition of anonymity.

“President Trump’s America First economic agenda has secured trillions of dollars in investments that support American jobs and bolster American businesses,” White House spokesperson Taylor Rogers said in a statement. “Today’s announcement with Apple is another win for our manufacturing industry that will simultaneously help reshore the production of critical components to protect America’s economic and national security.”

As Bloomberg reminds us, earlier this year, Trump warned that he would hit Apple with a tariff of at least 25% if it didn’t move manufacturing of the iPhone to the US, a day after meeting with CEO Tim Apple Cook at the White House.

Cook has led a push by Apple to win a carve-out for its iPhone product line, with phones currently primarily manufactured in China and India. The company previously announced it plans to spend $500 billion in the US over the next four years, which will include work on a new server manufacturing facility in Houston, a supplier academy in Michigan and additional spending with its existing suppliers in the country. Wednesday’s announcement will bring Apple’s cumulative commitment to $600 billion, the White House said, all of which is just empty promises until Apple actually does something besides just talk. 

The announcement comes with Trump readying plans to unveil a tariff on all products containing semiconductor chips as soon as next week. Separately, the president’s country-specific tariffs on dozens of trading partners are set to take effect on Thursday.

During Trump’s first term, Apple was able to win tariff carveouts for its products. If Cook is able to do so again, it could help the company avoid tariff costs that analysts expected to erode profit margins and increase consumer costs — or even offer a competitive advantage over foreign rivals like Samsung Electronics Co Ltd.

The Apple event is the latest in a flurry of announcements Trump has made alongside corporate leaders who have said they plan to increase their US presence. Earlier this year, Trump announced a $100 billion “Stargate” investment in artificial intelligence data centers from Oracle, SoftBank and OpenAI — with a goal of increasing the total to at least $500 billion — a bid to boost American innovation in technology and artificial technology. OpenAI and Oracle later announced they will develop 4.5 gigawatts of additional US data-center capacity in an expanded partnership. Last month we reported that, like all other ridiculous promises, virtually none of this massive Stargate promise will actually come to fruition. 

The president has also ramped up partnerships with key players in the chip industry, announcing that Nvidia plans to produce as much as half a trillion dollars’ worth of AI infrastructure in the US over the next four years through manufacturing partnerships.

Trump has also made securing investments a key part of negotiating with other countries on geopolitical issues, such as trade.

Part of the US’ deal with the European Union included an agreement from the EU to purchase $750 billion in American energy products and invest $600 billion in the US, while the president’s deal with Japan includes the creation of a $550 billion fund to make investments in the US. And all of these “deals” are, you guessed it, nothing more than unforceable hot air. 

Authored by Steve Watson via Modernity.news,

A former CIA operations officer has warned that Deep State operatives who concocted the fake Russia collusion narrative against President Trump under then Director John Brennan are still active inside the agency.

Bryan Dean Wright told the Daily Caller that “At least two still do work there. That doesn’t mean that all of the other people have left. Those are just the two that I’m aware of.”

Wright claims that One of the operatives still has a “blue badge,” meaning they are a direct CIA employee, while another possesses a “green badge,” and carries out work as a contractor.

The Daily Caller notes that Wright declared in a recent op-ed that Brennan should “rot in prison” for treasonous plotting to undermine the integrity of the Republic.

“These men thought they knew what was best for America, and they didn’t give a damn what voters like you thought,” the former spook asserted.

Wright further suggested that because Brennan worked at the agency for so long, he likely continues to shape the culture at the CIA and has almost certainly cultivated generations of like minded employees.

As we’ve highlighted, Director of National Intelligence Tulsi Gabbard has officially handed the Department of Justice a criminal referral relating to the “treasonous conspiracy” by Brennan, other Obama officials and the former President himself outlined in Declassified documents.

Further documents released by Gabbard have revealed that not only did the CIA believe a Russian intelligence assessment that the 2016 Hillary Clinton campaign planned to smear Trump by linking him to the Kremlin, but that the FBI helped the Clinton campaign orchestrate the Russia hoax to distract from its investigation into her emails.

The declassified documents also show that the Clinton Campaign plotted to use Crowdstrike to push the claim that Russian hackers leaked information from the Democratic National Convention (DNC) and the Democratic Congressional Campaign Committee (DCCC).

President Trump has admitted that he previously refrained from pursuing an indictment for Hillary Clinton, but believes now she should “pay a very big price.”

A House Permanent Select Committee on Intelligence report declassified on July 23 has also shown that just five CIA analysts under Brennan wrote the 2017 intelligence assessment, which included the infamous fake Steele dossier, on which the Russia hoax was based.

The report notes that according to a CIA self-assessment declassified on July 2, the analysts were part of a “Fusion Cell” Brennan had put together months to explore Russian election interference.

There are concerns that those agents remain embedded in the framework of the CIA.

Current CIA Director John Ratcliffe proclaimed last week that Brennan, James Comey, Hillary and others face “serious legal consequences,” for their roles in the scandal, revealing that he has made additional referrals for criminal prosecution, building on those sent weeks earlier by Gabbard, including one about Barack Obama.

“We’re gonna continue to share the intelligence that would support the ability of our Department of Justice to… bring fair and just claims against those who have perpetrated this hoax and the American people and this stain on our country,” he said during a Fox News interview.

CIA DIRECTOR RATCLIFFE SAYS MORE IS COMING ON OBAMAGATE.pic.twitter.com/1HcfNv9Nxn

— Citizen Free Press (@CitizenFreePres) July 28, 2025

On Sunday Ratcliffe described Hillary’s role in the Russia hoax and her efforts to frame Trump as the “greatest political scandal” in a lifetime.

“There was Intelligence from foreign Intelligence services, that one U.S. presidential candidate was trying to frame another candidate for treason, claiming that he was an agent of a foreign power, an agent of Russia, and that Intelligence was never shared,” Ratcliffe urged.

Our new CIA DIRECTOR is a Patriot.
John Ratcliffe explains what he found and declassified concerning the Obama Administration’s FRAMING of Donald Trump with the Russian Collusion Hoax.
More will be coming out… pic.twitter.com/jjuEF7bdSO

— Joe Borz ❤🇺🇸❤ (@GiJoe1699) August 4, 2025

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

President Donald Trump and Elon Musk have called for the federalization of crime-ridden Washington, D.C., following the brutal attack on 19-year-old Edward Coristine, a former staffer at the Department of Government Efficiency (DOGE) whose LinkedIn handle earned him the nickname ‘Big Balls’. 

“I have to say that somebody from DOGE was very badly hurt. A young man who was beaten up by a bunch of thugs in D.C., and either they’re gonna straighten their act out in the terms of government and in terms of protection, or we’re gonna have to federalize and run it the way it’s supposed to be run,” President Trump told reporters Tuesday.

The president also posted a lengthy message on Truth Social about the deteriorating crime situation in the nation’s capital. He said the city is “totally out of control,” adding that kids as young as 14, 15, and 16 are randomly attacking, mugging, maiming, and shooting innocent citizens. 

President Trump posted an image of ‘Big Balls’ sitting on the ground, bloodied after the mob attack. He then declared, “If this continues, I am going to exert my powers and FEDERALIZE this city.” 

Former DOGE employee Marko Elez claimed on X that he snapped the photo of Big Balls after the assault. 

My friend Big Balls (@as400495) is a hero. I took this photo after Edward protected a young woman from an attempted carjacking by 8 thugs near Dupont Circle. Violence like this in the heart of DC is completely unacceptable. https://t.co/ELShlkXYaS

— Marko Elez (@marko_elez) August 5, 2025

Musk also chimed in: “It is time to federalize DC.” 

A few days ago, a gang of about a dozen young men tried to assault a woman in her car at night in DC.

A @Doge team member saw what was happening, ran to defend her and was severely beaten to the point of concussion, but he saved her.

It is time to federalize DC. pic.twitter.com/RPHKj7J3ti

— Elon Musk (@elonmusk) August 5, 2025

For years, we’ve informed readers that parts of the nation’s capital, and even into Baltimore City, are crime-ridden areas plagued by violent child gangsters. This comes as no surprise, given that far-left Democrats entirely control these metro areas. These far-left leaders are not competent managers, but DEI activists who have done more harm to society than good…

• D.C. Enforces Youth Curfew “To Keep Young People Out Of Trouble”

• Defund Police Backfires: Democrat Congressman Carjacked At Gunpoint In DC As Crime Chaos Spreads

• UPS Driver Carjacked In’ Grand Theft Auto-Style’ Robbery Near DC

• Citywide Youth Curfew Begins In Baltimore As Mayor Strives To Restore Law And Order

It’s time to restore safety in America’s cities, starting with the nation’s capital. For decades, Democrats have masqueraded as competent stewards of these urban areas, but that illusion has collapsed. Their policies have massively failed, and the consequences are undeniable. 

The time has come for a serious course correction and to restore these crime-ridden cities that rob the youth of a future. Democrats have failed.

US futures rebound from yesterday’s modest drop as the market shakes off stagflationary concerns raised by NFP/ISM, although spoos trade well off their early session gains. As of 8:00am ET, S&P 500 futures and Nasdaq 100 futures were  0.2% higher. In premarket trading, McDonald’s and Shopify jumped after earnings beats; Mag7 names are mostly higher while Semis are dragged with downbeat AMD/SMCI earnings (see below). DIS/UBER highlight pre-mkt earnings releases; the former is lower on disappointing TV revenues, while the latter is flat despite solid results. Energy, Industrials, Healthcare and Utilities are stronger, too. Yields are bear steepening and the USD is flat for the second day. The Swiss President arrived in DC yesterday to meet with Trump, even as the US president preps new sanctions against Russia’s shadow tanker fleet unless Putin agrees to a cease-fire by Friday; WTI did not react to this news. Witkoff to meet with Russian officials today. Macro data releases are light with only mortgage apps but keep an eye on 10Y bond auction today at 1pm. EPS still a top priority for investors with another slew today. 

In premarket trading, Mag 7 stocks are mixed (Microsoft +0.7%, Amazon +0.7%, Meta +0.5%, Apple +0.4%, Alphabet +0.1%, Tesla -0.1%, Nvidia -0.8%); Uber and Disney dropped after reporting results that disappointed some investors. Super Micro Computer plunged more than 17% after cutting its annual sales forecasts, while AMD slumped after the company was unable to give a clear outlook for resuming sales in China. Some more details:

• Advanced Micro Devices Inc. (AMD) drops 5% after the company was unable to give a clear outlook for resuming sales in China, a crucial market for the second-largest maker of artificial intelligence processors.
• American Woodmark (AMWD) rises 2% after MasterBrand agreed to buy the company in an all-stock deal with an equity value of $2.4 billion.
• Arista Networks (ANET) is up 13% after the communication equipment company’s revenue forecast for the third quarter exceeded the average analyst estimate.
• Astera Labs (ALAB) gains 18% after the semiconductor manufacturer reported second-quarter revenue and adjusted earnings per share that beat the average analyst’s estimate.
• Bridgebio (BBIO) sinks 9% after the drugmaker reported second-quarter sales of its recently launched heart drug, Attruby, that fell short of investors’ high expectations. Piper Sandler says the sales were good but couldn’t keep up with an ever-raising bar.
• Clover Health (CLOV) slumps 10% after the Medicare Advantage health insurer raised its guidance for expected medical costs for the year, citing elevated utilization in the second quarter.
• Emerson Electric (EMR) falls 7% after the automation technology provider’s underlying sales grew less than analysts expected in the third quarter.
• Hinge Health Inc. (HNGE) rallies 12% after reporting 2Q revenue that increased 55% from the year-ago period in the digital physical therapy firm’s first earnings since its May IPO.
• Klaviyo (KVYO) gains 12% after the e-marketing solutions provider forecast revenue for the third quarter that beat Wall Street’s expectations.
• Lucid Group (LCID) falls 7% after the electric-vehicle maker lowered its production forecast for the year and the company’s second-quarter results were worse than expectations.
• Match Group Inc. (MTCH) is up 5% after the company provided a better-than-expected third-quarter sales forecast and pledged to invest $50 million in product development.
• McDonald’s Corp. (MCD) climbs 3% as sales picked up in the latest quarter, suggesting that pop culture-focused collaborations and budget meals are helping to offset diners’ economic anxiety.
• RingCentral (RNG) climbs 17% after the software company raised its full-year forecast for adjusted earnings. It also named Vaibhav Agarwal as chief financial officer.
• Snap (SNAP) falls 17% after the social-media company said an issue with its ad platform weighed on revenue growth in the second quarter.
• Super Micro Computer (SMCI) drops 17% after the server maker reported fourth-quarter results that missed analysts’ estimates.
• Vertex (VERX) falls 5% after the tax software firmcut its revenue guidance for the full year.
• Wolverine World Wide (WWW) climbs 4% after after the owner of footwear brands including Saucony posted quarterly results.

In other corporate news, Cathay Pacific said it would place a $8.1 billion order for 14 Boeing 777-9 jets in its first deal with the US planemaker in 12 years. The NFL is said to be putting together a few games for a new media package that it could sell to potential streaming partners, following news it will sell most of its media businesses to Disney in exchange for a 10% stake in ESPN. Miner Glencore has scrapped plans to move its primary listing to New York.

While earnings have mostly beat sharply trimmed estimates so far this season, investors are worried about the impact of tariffs and a slowing economy. The Services ISM data on Tuesday showed another stagflationary deterioration: sticky price pressures alongside deteriorating labor indicators, further complicating the Federal Reserve’s policy challenges after last week’s weak jobs numbers. 

“Earnings are important, but at the headline level for markets, the most important thing is the macro,” said Jon Bell, a portfolio manager at Newton Investment Management. “I don’t think there’s any real expectation that uncertainty will go down. Every time we think we’ve got certainty about tariff levels, something else changes.”

Meanwhile, Trump ramped up his tariff blitz, saying he’ll impose increased levies on countries buying energy from Russia (including China) while his envoy Steve Witkoff is in Moscow, and slap duties on semiconductor and pharmaceutical imports soon. Trump is scheduled to make an announcement at 4:30pm today in the Oval Office. As a reminder, yesterday Trump said he was “very close to a deal” with China to extend the trade truce and he would likely meet with Xi by the end of the year if a deal is made. 

Still, markets seem fairly indifferent to tariff news at this point, and are more excited about tech again — especially after Bloomberg reported that OpenAI is in early talks about a potential share sale at a whopping valuation of about $500 billion. The rush back into the AI theme has resulted in an extreme divergence between TMT’s market cap share — now at a post-2000 peak — and its earnings share of the S&P 500, according to BI strategists Gina Martin Adams and Michael Casper. The combination of soaring capital spending on AI, plus heavy tariff-related uncertainty weighing on non-AI components of the index has led to “renewed bubble risk,” they said. Bloomberg macro strategist Cameron Crise, meanwhile, is “surprised at just how vigorous the appetite to buy the equity dip has been.”

Meanwhile, Swiss President Karin Keller-Sutter arrived in Washington to make a last-minute bid for a deal to lower the 39% tariff imposed last week by Trump.

In Europe, the Stoxx 600 is little changed having reversed an earlier gain of as much as 0.4% as losses in healthcare shares weigh on the broader market. Novartis, Roche and Novo Nordisk are making the largest negative points contribution to the index as Washington readies tariffs on pharmaceutical imports. The SMI falls 0.8%. Here are the biggest movers Wednesday:

• Hiscox shares jump as much as 15% to the highest since November 2019 after the insurance company reported first-half pretax profit that beat the average analyst estimate. Citi noted positives from the unexpected buyback increase
• Voestalpine climbs as much as 8.2%, the most in almost four months, and is by far the top performer on the Stoxx 600 basic resources index on Wednesday following its first-quarter results
• Sampo gains as much as 3.7%, the most since May and reaching a fresh record high, after the Finnish insurance group raised its full-year guidance and its second-quarter results beat expectations
• Vonovia shares rise as much as 4.3%, the most in almost four months, after the German real estate group raised its adjusted EBT forecast for the full year. The results provide “a welcome update,” JPMorgan says
• Vesuvius gains as much as 4.3%, the most in three months, after the materials technology company releases its full first-half report; RBC says that while markets remain tough, would expect some signs of recovery going into 2026
• Kardex rises as much as 5.3% to a record high and Interroll rises as much as 4.4% after Berenberg upgrades its recommendations for the Swiss machinery companies to buy from hold on expectations of further growth
• Novo Nordisk swings between gains and losses after the Danish drugmaker’s 2Q sales showed the weakest growth in four years. Analysts also noted the numerous clinical trial discontinuations in last Wednesday’s release
• Beiersdorf shares fall as much as 8.7% to their lowest level since November 2022, after the maker of personal care products reported weaker organic growth than expected and cut its full-year guidance
• Bayer shares fall as much as 5.2%, the most since June 30, after the German firm reported second-quarter results and Morgan Stanley noted the miss in the pharmaceutical unit’s Ebit
• ABN Amro drop as much as 7.3% on Wednesday, the worst performer on the Stoxx 600 Banks Index, as some analysts had expected a higher share buyback and stronger net interest income
• Coca-Cola HBC shares drop as much as 8.2% after the bottling company said it expects to hit the top-end of its guidance range this year. Citi said this is disappointing as some investors had anticipated the outlook to be raised
• TP ICAP shares drop as much as 9% after the financial services firm’s results came in below expectations and triggered some profit-taking, according to analysts at Shore Capital
• Zalando shares fall as much as 3.8% after the German online retailer narrowed its full-year revenue forecast lower. Morgan Stanley analysts say consensus had already lowered forecasts into the print
• Schaeffler slips as much as 6.8%, the most since April 9, after the automotive supplier’s adjusted Ebit margin disappointed in the second quarter. However, the firm maintained its overall outlook for the full year

In other European news, UK Construction PMI was weaker and German factory orders unexpectedly declined for a second month in June, when the results of a European-US trade deal were still far from clear. the data came after outgoing Governing Council member Robert Holzmann said the European Central Bank shouldn’t lower borrowing costs again.

Earlier in the session, Asian stocks advanced, on track for a third day of gains, as optimism in Japan helped offset gloom in the technology sector.  The MSCI Asia Pacific Index rose as much as 0.4%. Tencent and Alibaba were among the biggest boosts. Toyota shares gained as much as 2.7% ahead of its quarterly earnings report. Key gauges climbed in Thailand, Vietnam and Australia. Indian stocks edged lower after the central bank maintained the benchmark interest rate.

In rates, treasuries hold small losses in early US session, with long-end yields cheaper by around 3bp and the curve steeper, ahead of the 10-year new-issue auction at 1pm and Thursday’s 30-year. US yields are 1bp-3bp higher across tenors with 2s10s and 5s30s spreads steeper by 1bp-2bp. 10-year near 4.234% is about 2.5bp cheaper, with German’s similar and UK’s outperforming slightly. Bunds see similar price action following German factory orders data and auctions of debt maturing in 2038 and 2042. Sentiment continues to be influenced by shifting US trade policy, and President Trump said he’d impose increased tariffs on countries buying energy from Russia. 

In FX, the Bloomberg Dollar Spot Index is little changed. The kiwi dollar tops the G-10 FX pile, rising 0.3% against the greenback after the New Zealand unemployment rate rose less than forecast.

• USD/JPY down 0.1% at 147.55 
• EUR/USD up 0.2% at 1.1606
• GBP/USD little changed at 1.3293

In commodities, WTI crude futures rise 1.5% after a four-day loss. Spot gold slips $17 to $3362.

Looking at the day ahead, we have UK construction PMI, Germany’s June factory orders, July construction PMI, France Q2 private sector payrolls, Italy June industrial production, and Eurozone retail sales. We’ll also hear the Fed’s Cook and Collins speak. Earnings out today include Novo Nordisk, McDonald’s, Walt Disney, Uber, Shopify, AppLovin, DoorDash, and Glencore. We’ll also get the US 10-year notes auction ($42bn).

Market Snapshot

• S&P 500 mini +0.3%
• Nasdaq 100 mini little changed
• Russell 2000 mini +0.4%
• Stoxx Europe 600 little changed
• DAX +0.3%
• CAC 40 +0.1%
• 10-year Treasury yield +3 basis points at 4.24%
• VIX -0.3 points at 17.54
• Bloomberg Dollar Index little changed at 1209.53
• euro little changed at $1.1582
• WTI crude +1.4% at $66.09/barrel

Top Overnight News

• Donald Trump suggested he would hike tariffs on more countries buying Russian energy, including China. BBG
• Trump administration is considering additional sanctions on Russia’s “shadow fleet” of oil tankers if Putin does not agree to a ceasefire in Ukraine by Friday. FT
• Trump said Japan would accept imports of Ford’s huge F-150 pickup trucks, in the latest sign that the two countries are at odds in their understanding of their trade agreement. BBG 
• Trump said the Fed Governor decision will be made by the end of the week and they have a couple of candidates, while he added that they are looking at the Fed Chair which is down to four people with ‘two Kevins and two other people’.
• OpenAI is in talks for a secondary share sale valuing the company at about $500 billion, a sharp jump from its $300 billion valuation earlier this year. BBG
• German manufacturing orders unexpectedly declined in June (fell short of expectations in June at -1% M/M vs. the Street +1%), but were up overall in the second quarter of this year, a sign of resilience in the economy despite international demand being hit by U.S. tariffs. WSJ
• Punchbowl News reports “Senate Democrats are pressing for new data on the fallout if boosted Obamacare subsidies are allowed to lapse at the end of the year.”
• China plans to allow the launch of its first stablecoins in a bid to internationalize the renminbi and compete against the dollar, but concerns about capital flight are slowing the technology’s growth in the country. FT
• Japan’s nominal wages rose 2.5% in June from a year earlier, fueling market speculation that the BOJ may hike its benchmark rate in coming months. BBG
• The Kremlin is weighing options for a concession to US President Donald Trump that could include an air truce with Ukraine to try to head off the threat of secondary sanctions, even as Russia remains determined to continue its war. BBG
• The US Health Department is ending 22 contracts worth almost $500 million to develop vaccines using mRNA technology. BBG

Trade/Tariffs

• Canada’s Foreign Minister Anand said they agreed to build a work plan between Canada and Mexico to focus on supply chains, energy security and others, while she added that trade talks with the US continue to be constructive.
• South Korea’s Industry Minister said they need to hold further discussions on the timing of US tariff cuts on autos.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded somewhat mixed following the subdued handover from Wall St, where the attention was on the various comments from US President Trump and with sentiment dampened amid disappointing ISM Services data. ASX 200 gained at the open with strength in the materials, mining and resources sectors spearheading the advance in the index to a fresh record high. Nikkei 225 pared its opening losses and gradually extended higher amid gains in the heavy industry stocks, while softer-than-expected labour cost data and negative real cash earnings supports the case for the BoJ to continue to refrain from resuming its policy normalisation. Hang Seng and Shanghai Comp were varied in rangebound trade with little fresh drivers and after the PBoC reiterated China’s support pledges including to strengthen macroeconomic policy orientation and optimise the environment for policy implementation.

Top Asian News

• RBI kept the Repurchase Rate unchanged at 5.50%, as expected, and maintained a neutral stance with the MPC vote on the repo rate and policy stance made unanimously. RBI Governor Malhotra stated geopolitical uncertainties have somewhat abated and growth is robust but below aspirations and tariff uncertainties are still evolving. Malhotra also stated that monetary policy transmission is still continuing and that current macroeconomic conditions and the outlook call for a continuation of the policy rate at current levels. Furthermore, he stated the Indian economy is navigating a steady growth path and monetary policy has appropriately used available space to support growth, while he also revealed that the FY26 real GDP growth view was retained at 6.5% and the FY26 CPI inflation view was cut to 3.1% from 3.7% previously.
• South Korea is to offer visa-free entry to Chinese tourists from September 29th.
• New Zealand announced steps to replace the petrol tax in the coming years with road user charges and is to pass the legislation in 2026.
• South Korean Finance Minister says in talks with US finance authorities on FX; South Korean Finance Minister says FX rates should be determined by markets in principle; does not have specific direction in mind for FX rates.

European bourses (STOXX 600 +0.2%) opened modestly firmer across the board and have traded at elevated levels throughout the morning. Though, the European benchmarks and US futures have been gradually fading from best into the arrival of US participants. European sectors hold a strong positive bias, with only really two clear underperformers today. Healthcare sits right at the foot of the pile, dragged down by post-earning losses in Novo Nordisk (-1%). The Danish Ozempic-maker initially opened higher after its Q2 metrics, but then gradually dipped into the red. Most headline metrics were weaker than expected, but Wegovy sales marginally beat expectations. Real Estate leads, lifted after Vonovia (+5%) posted strong H1 metrics and lifted guidance.

Top European news

• ECB’s Holzmann reiterated in an interview that there is no reason to cut rates again.
• UK Chancellor Reeves needs to raise taxes immediately to fill a GBP 50bln hole in the public finances, according to NIESR via the Telegraph. NIESR’s Deputy Director said the scale of tax rises required would be equivalent to a 5p increase to the basic and higher rates of income.
• Germany reportedly readies EUR 100bln fund to invest in strategic assets, according to Bloomberg; in a bid to secure sectors such as defence, critical raw materials, and energy

Fixed Income

• USTs are on the backfoot, into a 10yr supply. US docket is weighted towards the end of the day with supply, earnings and Fed speak from Collins, Cook and Daly. Into this, USTs are softer given the modestly constructive risk tone and as the benchmark continues to ease from post-NFP highs; though, once again, magnitudes are modest with USTs in a thin six+ tick range. If the downside picks up and the current 112-00+ base is breached, then support resides at the 111-31+ Monday WTD low, below this a bit of a gap before the figure and then lows from the last few weeks below 111-00.
• Bunds follow global peers, but with magnitudes much more contained. Bunds spent the overnight session contained before picking up to a 130.41 peak early doors with gains of six ticks at best. Thereafter, the benchmark began to gradually fade in limited newsflow but experienced a pickup in bearish pressure on a Bloomberg report that Germany is preparing a EUR 100bln fund for investment in strategic assets. Since, newsflow has been light aside from Retail Sales for the bloc which printed mixed vs consensus while the priors were revised higher, but spurred no move.
• Gilts are underperforming today, as it reacts to the NIESR’s latest forecast on the UK economy, which estimates a current fiscal deficit of GBP 41.2bln in the 2029-30 period. UK press is heavily focussed on this report, largely running with headlines that Reeves will need to find just over GBP 51bln in the Autumn Budget; a figure formed of the above deficit, and an assumed desire to restore headroom to around the GBP 9.9bln figure. Gapped lower by 33 ticks before extending another six to a 92.36 trough. A move that took the benchmark to within reach of Monday’s 92.24 WTD base; below that, support features at 91.96, 91.70 and 91.44 from the week before.
• Germany sells EUR 1.262bln vs exp. EUR 1.5bln 1.00% 2038 and EUR 0.782bln vs exp. EUR 1bln 3.25% 2042 Bund

Commodities

• Firmer trade in the crude complex despite a lack of fresh catalysts during the European morning, but as traders deal with the uncertainty of US secondary tariffs for the purchase of Russian oil – US Special Envoy is currently meeting with Russian President Putin, regarding Trump’s peace deadline. WTI resides in a 65.11-66.26/bbl range while Brent sits in a USD 67.74-68.78/bbl range.
• Precious metals trade lower across the board with global haven assets on a slightly softer footing this morning. Price action this morning has been contained for the yellow metal, in a USD 3,364.97-3,385.36/oz range, compared to Tuesday’s USD 3,349.89-3,390.60/oz parameter, and with the 50 DMA today at USD 3,346.41/oz.
• Base metals regain some composure following recent selling pressure, but the recovery is limited amid the mixed risk appetite in Asia and Europe. 3M LME copper prices reside in a USD 9,625.20-9,692.00/t range.
• US Private Inventory Data (bbls): Crude -4.2mln (exp. -0.6mln), Distillate +1.6mln (exp. +0.8mln), Gasoline -0.9mln (exp. -0.4mln), Cushing +1.7mln.
• Russia’s crude output was slightly above the OPEC+ target in July.
• Iraqi Oil Minister says bp (BP/ LN) will begin developing Kirkuk oil fields in less than a month.
• Nigeria’s Dangote oil refinery (650k bpd) is planning a 15 day maintenance on its gasoline-making RFCC unit from Aug 10, IIR says.
• Iraq Oil Minister says oil exports through Turkey’s Ceyhan pipeline to resume on Wednesday or Thursday.

Geopolitics

• Russia’s Kremlin spokesman Peskov said improving Russia-US relations requires overcoming existing inertia which will take time, according to TASS.
• Russian and Chinese ships will conduct joint patrols in the Asia-Pac region following exercises in the Sea of Japan.
• North Korea received Russia’s help in modernising nuclear weapons carriers, according to Yonhap citing Ukrainian news.
• US President Trump will host leaders from Armenia and Azerbaijan for peace talks at the White House on Friday.

US Event Calendar

• 7:00 am: Aug 1 MBA Mortgage Applications 3.1%, prior -3.8%

Central Bank Speakers

• 2:00 pm: Fed’s Cook and Collins Participate in Panel Event
• 4:10 pm: Fed’s Daly Speaks at Anchorage Economic Summit

DB’s Jim Reid concludes the overnight wrap

The market focus on US macro uncertainty continued over the past 24 hours. A notable miss in the July ISM services data weighed on the S&P 500 (-0.49%), while 2yr Treasury yields (+4.9bps) reversed some of the sharp decline they’d seen since Friday’s weak payrolls print, in part as the ISM details showed signs of heightened price pressures. We also saw a flurry of trade headlines as Trump signaled tariffs on semiconductors and pharma within the next week, as well as an imminent threat of additional tariffs on India.

Starting with that US data, the July services ISM fell to 50.1 from 50.8 in June, disappointing expectations for a rebound to 51.5. The ISM details were also worrisome, as the employment component fell further into contraction (46.4 vs 47.2 previously), while prices paid (69.9 vs 66.5 exp.) rose to their highest since October 2022. So that raised renewed concerns that tariffs were pushing the US economy in a more stagflationary direction, complicating the Fed’s job in the process. To be fair, the data was not all bad, with the S&P Global services PMI instead revised up to a 7-month high of 55.7 (vs. 55.2 flash). The services ISM and PMI have trended in opposite directions in the past few months. The gap likely reflects tariff worries weighing more heavily on the larger, multi-national corporates that are represented more in the ISM versus smaller, more domestic-oriented PMI respondents.

Those stagflationary signs were enough to spook US equities, leaving the S&P 500 (-0.49%) and the NASDAQ Composite (-0.65%) lower on the day, though the small cap Russell 2000 gained (+0.60%). Tech stocks struggled despite Palantir’s (+7.85%) continued rise after reporting strong earnings the previous evening, with the Mag-7 down -0.59% and the Philadelphia Semiconductor index slumping by -1.12%. After the US close, we saw chipmaker AMD’s upbeat sales projections overshadowed by uncertainty over its ability to export to China, while Super Micro Computer’s shares plunged after-hours after it lowered its fiscal-year revenue forecast.

The decline in chips stocks came as Trump said in an interview with CNBC that tariffs on semiconductors and pharma would be revealed “within the next week or so.” While impending pharma tariffs have been well flagged, the timing of tariffs on chips has been uncertain with a Section 232 investigation under way since April. Trump also said that pharma tariffs will be phased in incrementally, saying that within the next year and a half, the tariff rate will go to “150%” and then “250%,” saying “we want pharmaceuticals made in our country.”

During the interview, Trump also escalated his threats to impose higher tariffs against India for purchasing Russian oil, saying he would “very substantially” raise tariffs on India within “the next 24 hours”. Later in day, he suggested the US may also place secondary tariffs on other importers of Russian energy, though he claimed he “never said a percentage” that such tariffs would be set at. So maintaining ambiguity after previously floating 100% tariffs. The FT reported that the US is also considering additional sanctions on Russia’s so called “shadow fleet”. Trump’s earlier 10-day deadline for Russia to agree a ceasefire ends on Friday and his envoy Steve Witkoff is visiting Moscow today. India’s government has pushed back against the US criticism and the Indian rupee has underperformed so far this week, down -0.32% against the dollar since Friday. By contrast, oil prices fell for a fourth consecutive session yesterday, with Brent crude down -1.63%, though they are up half a percent this morning.

In other tariff news, Trump claimed that the EU would face 35% tariffs if the bloc does not follow through on its promise to invest in the US. Under the 15% tariff deal struck last week, the EU had promised $600bn of investment into the US and $750bn of US energy purchases by 2028, though the EU readout implied softer commitments than claimed by the White House. It seems like another lifetime when the center of the trade war was between the US and China, but in a mollifying development Trump said yesterday that trade talks with China were “very close to a deal” on an extension of the current trade truce and that he has “a very good relationship” with President Xi, with the two set to meet “before the end of this year.” We also heard that Swiss President Karin Keller-Sutter has travelled to Washington for talks to try and lower the 39% tariffs that will go into effect along with the other new country rates on August 7. She is due to meet Treasury Secretary Rubio this morning.

Turning to the Fed, Trump said last night that he would make the decision on filling Governor Kugler’s vacancy on the Fed Board “before the end of the week”, though adding it was not yet decided if this would be a permanent replacement or only until Kugler’s term ends in January. A permanent replacement would be seen as a potential choice for Fed Chair, given that Kugler’s seat is the main way for the White House to bring in an external candidate if Powell were to stay on the board after his term as Chair expires next May. Earlier yesterday the President confirmed that he was considering four candidates for Fed Chair, including Kevin Hassett and Kevin Warsh, and that Treasury Secretary Scott Bessent was not in the running as he “wants to stay in the Treasury.”

Fed funds futures on Tuesday slightly reversed increased expectations of rate cuts, with the amount of easing priced by December down -4.4.bps to 58bps. But that’s a full cut more than the 33bps priced prior to Friday’s payrolls and a 25bp cut is still 90% priced by the September meeting. Treasuries saw a sizeable flattening, with 2yr yields +4.9bps higher at 3.72%, 10yr up a modest +1.8bps and 30yr yields declining -1.1bps. Treasury markets showed some caution ahead of this week’s busy auction calendar, which began with $58bn of 3-year notes issued yesterday +0.7bps above the pre-sale yield. It will continue with 10yr and 30yr auctions today and tomorrow.

In Europe, equities put on a positive performance after decent PMI data there, although they lost momentum later on. The euro area July composite PMI came in at 50.9, a touch below 51.0 flash but up from 50.6 in June. The services PMI details saw Spain (55.1 vs 52.5 exp.) surprise to the upside and Germany revised up (50.6 vs 50.1 flash), while France (48.5 vs 49.7 flash) lagged. The country differences were reflected in the equity reaction, with Germany’s DAX (+0.37%) and Spain’s IBEX (+0.15%) advancing, but France’s CAC (-0.14%) falling back. The STOXX 600 was up +0.15%. European bonds held steady, with yields on 10 yr OATs (+0.1bps), bunds (-0.1bps) and BTPs (-0.1bps) little changed, while gilts (+0.7bps) saw a modest sell off after the stronger composite PMI there (51.5 vs 51.0 flash).

Overnight in Asia, Japan’s monthly wage data saw nominal wages grow by a slower-than-expected +2.5% in June (+3.1% exp.), though this still marked the fastest growth since February. Scheduled full-time pay (+2.3% vs. +2.5% exp.) saw a more modest miss, while real earnings (-1.3% vs -0.7% exp.) remained negative for a sixth consecutive month. Meanwhile, Japan’s Taro Kono, who is seen as a potential candidate for Prime Minister, said that it is necessary for the BoJ to raise rates, highlighting the inflationary pressures and saying that “the yen is too cheap”. 10yr JGB yields (+1.7bps) and the Japanese yen (+0.20%) are slightly higher this morning, with the Nikkei (+0.63%) also gaining.
Other Asian equity markets are little changed, with the Hang Seng (+0.18%), CSI 300 (+0.18%) and Shanghai Composite (+0.27%) all slightly higher, while Korea’s KOSPI is lower (-0.19%). S&P 500 futures are up +0.24%, with NASDAQ (+0.14%) slightly lagging after the softer AMD and Super Micro results.

Finally, this morning the Reserve Bank of India left its key rate on hold at 5.50%. This was in line with most economists’ expectations, though increased risks from the US trade headwinds had seen a sizeable minority calling for a cut. Earlier in the morning, India’s composite PMI was revised up from 60.7 to 61.1 in the final July reading, reaching its highest level since April 2024.

In terms of the day ahead, we have UK construction PMI, Germany’s June factory orders, July construction PMI, France Q2 private sector payrolls, Italy June industrial production, and Eurozone retail sales. We’ll also hear the Fed’s Cook and Collins speak. Earnings out today include Novo Nordisk, McDonald’s, Walt Disney, Uber, Shopify, AppLovin, DoorDash, and Glencore. We’ll also get the US 10-year notes auction ($42bn).

Update (ET):

The Solactive China Humanoid Robotics Index – a thematic equity index tracking Chinese companies involved in the commercialization of humanoid and robotics technologies – jumped more than 4% on Wednesday after Chinese robotics firm Unitree released a stunning video of its new robot dog. 

“The main trigger for today’s robotic stocks is Unitree’s new robot dog. The real application for robot dogs is actually broader than humanoid robots, and they are lighter and easier to enter the market,” Fu Zhifeng, chief investment officer at Shanghai Chengzhou Investment Management, wrote in a note to clients.

The video and more color about the new robot are below…

*   *   * 

Chinese robotics firm Unitree, arguably the global leader in affordable consumer-grade quadrupeds and robodogs, has just released footage of its latest machine: the “A2 Stellar Hunter.”

The new robodog brings flashbacks to Black Mirror’s infamous 2017 episode “Metalhead,” where killer robot dogs stalk and exterminate humans in a post-apocalyptic world.

Overview and specs of the A2 Stellar Hunter: 

• Total weight: ~37kg

• Unloaded range: ~20km

• Lighter, Stronger and Faster.

• Engineered for Industrial Applications.

Unitree’s robot timeline:

• Laikago (2017): early public quadruped robot.

• AlienGo (2019): more advanced and cable‑free version.

• A1 (2021): education-focused, affordable robot dog (~3.3 m/s top speed).

• Go1, Go2, and industrial-grade B1/B2, including wheeled variants like Go2-W and B2-W.

• G1 humanoid robot (2024): ~35 kg, 23–43 joints, priced at ~$16,000.

• H1 humanoid robot: full-sized with advanced mobility and sensors.

• R1 humanoid companion (2025): ~$5,900 with acrobatic capability (cartwheels, punches, running) and multimodal

Unitree claims it now produces roughly 60% of the world’s quadruped robots, leaving U.S. rivals like Boston Dynamics in the dust. With Tesla’s humanoid bots expected to scale in the coming years, American consumers may finally get a competitive, homegrown alternative to China’s robotics dominance.

Unitree Introducing | Unitree A2 Stellar Hunter 🤩
Total weight: ~37kg | Unloaded range: ~20km
Lighter, Stronger and Faster. Engineered for Industrial Applications. pic.twitter.com/Rqpa7EkU0B

— Unitree (@UnitreeRobotics) August 5, 2025

As we’ve previously pointed out, the “iPhone moment” for robotics is fast approaching, and it’s only a matter of time before these machines, infused with large language models, become highly intelligent and potentially weaponized by bad actors.

Our coverage focuses on a ‘Skynet-like system’ materializing in the years ahead:

• Goldman’s Chat With Top Robotics Firm Reveals Skynet Humanoid Timeline

• Goldman’s Investing Guide To Skynet

• “Here Come Humanoids”: Morgan Stanley Braces For The Looming Phase Shift in AI

• There’s An iPhone Moment Happening With Humanoids

• “iPhone Moment” Nears For Humanoid Robots

• China Warns of Rogue Robot Troops Unleashing Terminator-Style “Indiscriminate Killings”

. . . 

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Italian police arrested 13 people in a nationwide sweep against Chinese organized crime groups, striking what authorities called a “double blow” to criminal networks accused of drug trafficking, labor and sex exploitation, and money laundering.

Multiple coordinated operations conducted across a total of 25 provinces, including Milan, Rome, Florence, Prato, and Catania, targeted Chinese clans operating with mafia‑style intimidation and territorial control, according to a statement from the Interior Ministry and remarks by anti-organized crime police official Andrea Olivadese.

“On one front, the State Police carried out a ‘high‑impact’ action in 24 Italian provinces targeting entrenched Chinese criminal groups engaged in illegal trafficking, exploitation of prostitution and labor, product counterfeiting, drug dealing, and international money laundering,” the Interior Ministry said in a statement.

Hundreds of commercial businesses and vehicles were inspected, with more than 1,900 potential suspects identified, it added.

Alongside the arrests, police seized 550 grams—about 5,500 doses—of crystal methamphetamine known locally as “shabu,” as well as weapons and cash, Olivadese said. Another 31 people were reported to judicial authorities but not taken into custody.

Another operation, led by the Guardia di Finanza, dismantled a $3.9‑billion tax‑fraud ring, seizing $858 million, closing 266 shell companies, and freezing 400 bank accounts across the regions of Marche, Lombardy, and Piedmont, the Interior Ministry said.

“These coordinated actions show that Chinese mafia activity is not just a local issue but a transnational criminal reality capable of moving billions and infiltrating the economic fabric,” Interior Minister Matteo Piantedosi said in the ministry’s statement.

He praised the “exemplary professionalism and determination” of investigators in protecting the “honest citizens and economic health of the country.”

The crackdown comes amid heightened scrutiny of Chinese influence in Italy, including investigations into “overseas police stations” operated by Chinese authorities. Human rights group Safeguard Defenders reported in 2022 that Italy hosts the highest number of these clandestine centers—11 in total—in cities such as Rome, Milan, Venice, Florence, Sicily, and Prato.

Italian officials have denied authorizing the centers and pledged increased monitoring. Piantedosi said in December 2022 that sanctions would follow if any illegality was confirmed. Italy previously participated in joint patrols with Chinese police, but those were terminated in 2022 amid concerns about Beijing’s human rights record and the potential misuse of such facilities to surveil dissidents of the Chinese regime.

The Italian Parliament’s Anti‑Mafia Commission has also expanded its remit to investigate Chinese organized crime and alleged ties to the Chinese Communist Party (CCP). Analysts, including former NATO Defense College Foundation Director Giuseppe Morabito, have warned that Chinese gangs in Europe often operate in symbiosis with state‑linked actors, blurring the line between organized crime and foreign influence.

The Italian operations follow years of investigations into underground Chinese banking networks accused of funneling billions of euros from counterfeit goods, prostitution, and tax evasion back to China.

International reporting has also highlighted Chinese organized crime’s reach beyond Europe. A joint investigation by ProPublica and The Frontier in 2024 described links between Chinese diplomats and organized crime figures in the United States, while other studies have traced the role of Chinese triads in supplying Mexican cartels with precursor chemicals for fentanyl.

Ben Liang, Olivia Li, and Reuters contributed to this report.

The amount of cash being sent home by Mexicans living in the United States cratered in the first half of 2025 – with June marking the third consecutive monthly increase.

According to Banxico, Mexico’s national bank, remittances from the United States have fallen by nearly 6% since January, and 16.2% during the month of June – when only $5.2 billion was sent back to Mexico, vs $6.207 billion in the same month in 2024. 

And while the bank reports that the average amount being sent back is higher than in 2024 at $409, the number of people sending money back has dropped by 14%. 

Executives at Western Union recently admitted on an earnings call that the outflow of hot money from the United States has slowed amid the crackdown on illegal aliens.

CFO Matt Cagwin told Wall Street analysts that they “continued to see weakness in North America, driven by immigration policy, which led to a slowdown in the independent channel.”

CEO Devin McGranahan explained that the “slowdown” is in both retail and digital businesses between the United States and Mexico.

Over the past year, nearly $63 billion was sent back to Mexico by people living north of the border – a significant drop from the peak years of 2023 and 2024. 

Illegals sent $56 billion dollars back to their home countries just in the year 2024

$56 BILLION was sent out of America while they received free housing, healthcare, food etc

This has been the scam of illegals for decades. Collect our benefits while building a life in Mexico pic.twitter.com/DWGgd84ROW

— Wall Street Apes (@WallStreetApes) June 23, 2025

“Remittances plummeted in June due to low job creation for Mexicans in the United States and the fear of migrants to go out due to the possibility of being deported,” Gabriela Siller, director of economic analysis at Banco Base, wrote on X on Friday, adding that “remittances could continue to decline for the rest of the year, affecting consumption in Mexico.”

As we noted on Friday, there has been an unprecedented purge of illegal alien workers in the United States. In July, the number of foreign born workers tumbled by 467K. It wasn’t just July though: as shown below, foreign-born workers (which, again, are mostly illegal aliens) have declined four months in a row…

Analysts, meanwhile, think remittances could continue to fall throughout the second half of the year. 

Analysts from the banks Banorte, BBVA, Goldman Sachs and JPMorgan also believe there is a risk that remittances will continue to decline in the second half of 2025, according to the newspaper El Economista.

Such an eventuality would affect millions of Mexican families that depend on remittances to meet their basic needs. It would also affect the Mexican economy, reducing consumption and thus contributing to what is widely forecast to be a lower level of growth in 2025. -MexicoNewsDaily

The vast majority of remittances to Mexico are sent from the United States – which will impose a 1% tax on cash sent starting Jan. 1, 2026 – which has prompted the Mexican government to promote a government bank card that can avoid US-based Mexicans to avoid the tax.

Immigrants are leaving US workforce in mass.

Remittance payments US→MX plummeting, down over -2 million from a year ago.

Biggest decline by far in 30+ years – a period that includes a homebuilding depression and a 100-year financial crisis. pic.twitter.com/o49TeyLvOC

— Eric Finnigan (@EricFinnigan) August 3, 2025

99% of money transfers were done electronically, while the rest were done via cash or money transfers according to Banxico, as reported by Border Report. 

According to Jesús Cervantes González, director of economic statistics at the Center for Latin American Monetary Studies, “there are indicators that show a weakening of employment for Mexican immigrant workers in the United States,” MexicoNewsDaily reports.

“That could be due both to a genuine decrease in demand for such workers and to their irregular presence at their workplaces out of fear of being deported,” he said. 

US Immigration and Customs Enforcement has been carrying out immigration raids in various US cities this year – including a major operation in Los Angeles in June – with President Trump pledging to carry out the “largest deportation operation in US history.”