Corporate America has been desperate to see a burst of productivity (i.e., cost cutting) emerging from the latest flood of agentic AI euphoria, and it is slowly starting to get it. Not everyone will be pleased.

Starbucks is developing in-house tools with the help of artificial intelligence that could replace some software applications it now buys from companies such as Microsoft and IBM. 

According to Bloomberg, the coffee chain, whose stock price has gone nowhere in the past 3 years, is building alternatives to a Microsoft system that tracks inventory and an IBM tool that manages maintenance. Some of the Starbucks-developed software could roll out by the end of next year, pending the results of testing, the report notes.

Before the advent of advanced AI models, businesses were tethered for years to their technology vendors due to fear of business disruption and the complexity of building in-house tools. But AI is shifting that calculus as it makes it easier to develop applications from scratch and as companies push workers to use the technology (especially when it means those very same workers are teaching AI models how to do their work for them).

This is hardly new: at the start of 2026 the software sector cratered as Wall Street expressed doubts about the “terminal value” of business models that can easily be disrupted by AI. Since then, sentiment has stabilized but leading software companies still face concerns about whether they’ll be able to fend off competition from products built by upstarts, or their own customers, using AI. This phenomenon has weighed on software stocks this year, with Microsoft and IBM both trailing the S&P 500.

Shares of both companies fell during trading on Thursday, with Microsoft down 2.4% and IBM sinking 5.2% at 9:30 a.m. in New York, following the Bloomberg report..

Starbucks spends about $400 million a year on software alone, CTO Anand Varadarajan told workers in an internal forum earlier this year. “There’s clear opportunities to reduce the spend in software,” Varadarajan said. In-house software can be cheaper, an incentive for companies such as Starbucks, which is looking to cut $2 billion in costs as part of a broader turnaround effort. That said, in the long run, building can lead a company to pay higher maintenance and labor costs.

When it comes to technology, Starbucks company is reviewing “every contract and service,” according to the presentation seen by Bloomberg. In some cases, that includes building products to replace software that its engineers have to heavily tailor anyway. As an example, the company has been working for several years on building a point-of-sale system that would take the place of Oracle Simphony.  In a blog post earlier this year, the company said AI and other technology advancements will support its long-term growth and free up baristas to focus more on customer service.

AI-assisted coding was also key to developing the platform that could replace the IBM tool. Starbucks has been pushing tech workers to use artificial intelligence, even factoring usage into their bonuses, which is ironic since the better the model, the less need for the person who created it meaning the bonus will likely be their last.

To be sure, there’s skepticism about how much, or how quickly, AI can speed up and automate work. Starbucks recently pulled an AI-powered system to track inventory at stores, reverting to manual counting; According to Reuters, that tool was part of CEO Brian Niccol’s efforts to fix the coffee chain’s persistent product shortages that he has blamed for hurting sales. The app – designed to improve Starbucks’ visibility into shortages at stores – frequently miscounted and mislabeled items, such as confusing similar milk types or ​missing them altogether. It also continues to use software from third-party vendors, including from companies such as Microsoft. 

The Starbucks enterprise technology team is on track to reduce its budget by about $30 million in the fiscal year ending in late September, according to the internal presentation. That includes cutting about $10 million in software spending. Another $13 million will be saved mostly by cutting back on contractors from professional services firms and backfilling some roles with its own staff. Starbucks is setting up offices in Nashville and India that will house some tech workers, while others will remain at its Seattle headquarters. The company has cut about 2,300 jobs since February of last year, including many in tech.

Authored by David Manney via PJMedia.com,

Former Milwaukee County Circuit Court Judge Hannah Dugan just discovered a remarkable sentencing principle: Commit a felony, lose at trial, watch the conviction survive post-trial motions, face a guideline range of 15 to 21 months, and still walk out without prison, probation, and a $5,000 fine.

Regular defendants may want to write down the magic words before the courts patch up the loophole: Otherwise good person. I hope you were sitting down for that.

BREAKING: Former Milwaukee County Judge Hannah Dugan has been sentenced to no prison time after she was found guilty of obstructing ICE agents from arresting an illegal alien in a courthouse last year. Federal judge Lynn Adelman (Clinton appointee) has just ordered Dugan to pay a… pic.twitter.com/RudVgCUPlt

— Bill Melugin (@BillMelugin_) July 8, 2026

U.S. District Judge Lynn Adelman sentenced Dugan on Wednesday after a federal jury convicted her in December of obstructing an ICE arrest at the Milwaukee County courthouse.

Dugan was acquitted of a separate count accusing her of concealing Eduardo Flores-Ruiz from arrest, but the felony obstruction conviction stood. The official court page lists the case, the trial’s conclusion, and the July 8 sentencing.

So the question isn’t whether the system had enough process; it had plenty. It just reached a result that smells like one menu for the powerful and another one for everybody else.

Flores-Ruiz, a Mexican national, was in court on misdemeanor domestic assault charges when federal immigration agents arrived to arrest him. Prosecutors said Dugan helped him leave through a non-public courtroom door, which turned a planned courthouse arrest into a foot chase outside.

Their sentencing memo argued Dugan used the power and prestige of her office to obstruct federal agents and placed the interests of a criminal defendant above the rights of his alleged victims.

Here’s where the cornbread legal system starts rising in the pan. Prosecutors said Dugan understood the justice system better than the average defendant, citing statements suggesting she knew she was crossing the line. From Reuters:

U.S. District Judge Lynn Adelman noted Dugan’s long history of public service in deciding to spare Dugan from prison.

“The punishment should fit the offender, and not merely the crime,” Adelman ⁠said during a hearing in Milwaukee federal court, adding that Dugan “made a bad decision in the moment.”

Dugan was convicted of obstructing a federal proceeding and cleared of a lesser charge of concealing a person from arrest following a federal trial in December. Prosecutors said she helped a Mexican migrant sought by federal agents leave through a non-public courtroom door.

The migrant, who was scheduled to appear in her courtroom on misdemeanor assault charges, left by a “jury door” to avoid federal agents who were positioned in a hallway outside her courtroom.

The migrant, Eduardo Flores-Ruiz, walked through a public hallway with his attorney and was arrested outside the courthouse following a brief foot chase.

In addressing the court prior to the sentencing, Dugan said her prosecution was politicized.

“I was a public ‌servant ⁠who was just trying to do my job,” she said.

Federal prosecutors did not make a specific sentencing recommendation but had argued that federal guidelines called for between 15 and 21 months in prison.

“Rather than uphold the rule of law, the defendant used the power and prestige of judicial office to obstruct federal agents carrying out their lawful duties in order to help an individual evade arrest,” prosecutors wrote in a sentencing ⁠memorandum.

The sentence should reflect the “serious nature of her conduct and its broader impact on the justice system,” prosecutors wrote.

They also told the court that similarly situated defendants in 935 administration-of-justice cases since 2015 received an average sentence of 16 months and a median sentence of 10 months.

Dugan got neither. Not a month, week, or night.

Her defense made the case for mercy. Dugan is 67, has no prior record, lost the judgeship she loved, and served the community for decades. Her lawyers argued the offense was isolated, unique, and not capable of being repeated because she had resigned from the bench. They also argued the guideline range overstated the seriousness of the conduct and that a lower range would apply if the case were viewed differently.

I’m not a fan, but fine; judges can consider age, history, service, remorse, risk, deterrence, and collateral consequences. A sentencing courtroom isn’t a vending machine: push felony, receive prison.

But sentencing also tells the public what the law means when the defendant once wore the robe. If a judge can obstruct federal agents and then avoid prison because she’s otherwise decent and upset by immigration policy, every courthouse lecture about accountability gets a little harder to swallow.

Adelman described Dugan as an otherwise good person who made a bad decision while upset by immigration policies.

Wonderful.

Somewhere out there, a defense lawyer just heard angels sing.

“Your honor, my client is also a good person. He was just upset by tax policy, bank policy, drug policy, border policy, the thought of dogs loving mail carriers while living with cats, or whichever law ruined his Wednesday. Please update the jury instructions accordingly.”

The worst part isn’t mercy; mercy can be noble when paired with the truth. The worst part is selective tenderness dressed up as wisdom. Ordinary people are routinely told that intent, stress, frustration, and good deeds don’t erase criminal conduct. They hear that a sentence must promote respect for the law, that deterrence counts, and that the process has consequences.

Then a judge commits a felony tied to her official power, and suddenly the system finds poetry in restraint.

Nobody should want cruel sentencing. Conservatives, of all people, should know government can overcharge, overpunish, and ruin lives. But equal justice can’t mean leniency for the credentialed and iron for the rest.

A judge who breaks the law from the bench hasn’t merely made a private mistake; she’s damaged the very promise she once had a sworn duty to protect.

Dugan may think she acted from compassion or courtroom concern. The jury didn’t buy enough of it to clear her. The conviction remains, and the fine is now due.

But any opportunity of a prison sentence disappeared. If “nobody is above the law” still means something, the public deserves to see it when the defendant already knows every hallway in the courthouse.

Gold’s break below key technical support of 4050 to the 4023 low in New York trading on Wednesday appears driven primarily by stop-loss liquidation and positioning rather than a material deterioration in macro fundamentals, according to UBS. 

As the bank’s trader Marcus Millis writes, “the move flushed out long exposure and left positioning looking more balanced, reducing the immediate risk of further forced selling.”

However, he cautions, the broader trading backdrop remains challenging. That’s because with front-end USD rates expected to stay under pressure, upside in gold looks limited, and rallies are still viewed as opportunities to reduce exposure rather than chase higher prices.

Near-term support should emerge around recent lows at 4040-50 with resistance at 4110/20, but conviction for a sustained rebound remains low.

That said, the long term fundamentals remain especially solid, and patient holders who would rather collect income from gold as a “productive” metal until its next breakout, rather than a passive, not-yielding asset, can check out the offerings from our partner Monetary Metals. 

Case in point: as we reported a few weeks ago when analyzing the World Gold Council’s 2026 Central Bank Gold Reserves Survey, the punchline was that a record 45% of respondents expect their own gold reserves will increase over the next 12 months

Central banks have accumulated an average of 1,000t of gold over the past four years, up significantly from the 500t average over the preceding decade. This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers.

The WGC’s 2026 Central Bank Gold Reserves (CBGR) survey was conducted between 5 February and 19 May. With the majority of responses coming in after the start of the Middle East conflict, this year’s survey contains insights on how central bankers view gold in the light of ongoing geopolitical turmoil. The sample is highly representative of the overall central bank community, both geographically and in terms of gold owned. This robust participation is a powerful signal of engagement with gold amongst the central banking community. 

Here are some more of the notable highlights:

• Similar to findings from previous surveys, central banks continue to hold favorable expectations on gold. Respondents overwhelmingly (89%) believe that global central bank gold reserves will increase over the next 12 months.

• This year, a record 45% of respondents expect their own gold reserves will also increase over the same period. The majority of the remaining respondents indicated they expect no change while 1% expect their institution’s gold reserves to decrease (hello, Turkey).

• Gold’s performance during times of crisis, portfolio diversification and inflation hedging are some of the key factors for central banks to hold gold. In addition, gold as a geopolitical risk hedge and gold as part of a reserve diversification policy also feature as key reasons for increasing allocations to gold.

• The majority of respondents (74%) see moderate or significantly lower US dollar holdings within global reserves over the next five years. Respondents also believe that the share of other currencies, such as the euro and renminbi will remain unchanged over the same period, while gold holdings will increase.

• This year’s survey asked respondents how they would fund their new gold purchases. Half of respondents indicated through a domestic purchase program in local currency, while 38% indicated through selling existing reserve assets.

• The Bank of England remains the most popular vaulting location among respondents at 57%, though central banks continue to diversify their storage across multiple locations. Domestic storage came in second at 49%, followed by the Bank for International Settlements at 16% (a slight uptick from last year). The Swiss National Bank saw a notable decline in preference, dropping to 6% from 12% in 2025.

• A notable increase in changes to vaulting locations was observed in this year’s survey, with 9% saying they have increased domestic storage and 10% saying they have diversified overseas storage locations in the past 12 months, compared with 5% and 2% respectively in last year’s survey. The trend is also observed in future plans for vaulting, with 7% saying they plan to increase domestic storage and 9% saying they plan to diversify overseas storage locations in the coming 12 months. 

To summarize, this year’s survey reinforces the trend: central banks remain very positive on gold, highlighting its significance amid a volatile geopolitical and economic environment.

• When asked about expectations for how global central bank gold reserves will change over the next 12 months, respondents were almost unanimous, with 89% of respondents believing that official gold reserves will continue to increase (Chart 3). This sentiment was consistent across both advanced economy and EMDE respondents. It should be noted that 11% of central banks believe that gold’s proportion of total reserves would remain unchanged, up from 5% last year.  In addition, 45% of respondents thought that their own institution’s gold reserves would rise over the next year, broadly in line with last year’s finding (43%).
• Most respondents did not expect their gold reserves to change in the next 12 months. This marks a new record high in the proportion of central banks expecting to add gold to their own reserves with EMDE banks continuing to lead their advanced economy counterparts. Among EMDE respondents around half thought that their own gold reserves would increase in the next 12 months, while the other half anticipated they would remain unchanged.
• The findings highlight that gold sentiment within the central banking community remains upbeat. Expectations point to continued gold buying over the next 12 months, reflecting sustained confidence in gold’s strategic role amid evolving geopolitical and macroeconomic dynamics.

In other words, the demand fundamentals – especially among the “price-indiscriminate buyers” have never been better, and while technicals and positioning remain challenging, especially when factoring for the continued selling in gold ETFs…

… gold tends to reward patient holders in the long run (as all those who purchased it for much of the 2010s and early 2020s experienced, when the yellow metal barely moved, then rapidly 3x-ed in just one year). And while waiting, there is now an option to collect as much as 4% yield on physical, paid out as additional ounces of physical gold.

The US military has struck Iranian targets for a second straight day, while Tehran has responded with ballistic missile and drone attacks targeting Kuwait, Qatar, Bahrain and even faraway Jordan. While our overnight wrap focused on the latest war developments, the focus here is what energy traders are watching most closely: vessel traffic through the Strait of Hormuz.

Bloomberg cites new shipping data showing that the Hormuz chokepoint slowed to a near standstill on Thursday.

More color from the report:

Among larger vessels, only a US-sanctioned supertanker heading out of the Persian Gulf was seen in the strait, alongside an Iranian-flagged container ship. It’s possible that some vessels may be crossing with their transponders turned off, however.

The slowdown marks a sharp reversal from the partial recovery that followed the mid-June interim US-Iran peace deal to reopen the Strait of Hormuz.

Commodity-vessel transits averaged 34 a day over the past three weeks and peaked at 59 on June 24, according to Kpler data. That compares with just 14 crossings Wednesday, the lowest since the deal and near wartime levels.

Maritime research firm Windward also commented on the Hormuz slowdown:

Additional overnight signal: one inbound vessel made a sharp U-turn near the strait entrance off Khasab. Watching for what happens next. pic.twitter.com/uGefTl5cG7

— Windward (@WindwardAI) July 9, 2026

Earlier, Islamic Revolutionary Guard Corps Navy Command stated that it has taken control of managing security and vessel routing through the Hormuz chokepoint.

Here’s the translated statement:

Islamic Revolutionary Guard Corps Navy Command

In the name of God, the Most Compassionate, the Most Merciful.

Peace be upon the insightful and honorable nation, whose astonishing presence and tens-of-millions-strong funeral processions for their martyred leader in Iran and Iraq showed that this is the era of the end of the bullying of powers, and the century of the triumph of nations’ will.

And peace be upon the brave warriors of Islam, who, with their crushing response to the aggressions of the child-killing American army, proved that the outcome of battle is determined not by the abundance of weapons, but by the power of faith.

These warriors, by stabilizing management of the Strait of Hormuz, establishing its security over the past two weeks, and gradually reopening it, have increased passage capacity to about 50% of prewar traffic. They are also increasing the transit capacity of vessels that, while observing the security regulations with discipline, obtain permission from the IRGC Navy to pass through the routes designated by the Islamic Republic.

Once again, we declare that foreigners have no stake in this land or in the Strait of Hormuz. The adventurism of the terrorist American army and its interference in determining traffic routes will not only bring our crushing response, but will also seriously disrupt the process of gradual reopening and seriously endanger the interests of countries that benefit from the Strait of Hormuz.

🇮🇷 The IRGC Navy issued a statement declaring that Iran has established control over the Strait of Hormuz.

It stated that shipping traffic has gradually increased to nearly 50% of pre-war levels, and warned that any foreign interference or attempts to dictate shipping routes… pic.twitter.com/0fKkz9vqmW

— Mario Nawfal (@MarioNawfal) July 9, 2026

On Tuesday, following three separate Iranian attacks on commercial vessels, the Joint Maritime Information Center raised the threat level of the Hormuz chokepoint to “severe.”

The unwinding of diplomatic efforts will complicate the normalization process of reopening the Hormuz.

Goldman analyst Chris Hussey commented on this:

Hormuz recovery stalls. Oil has rebounded as renewed fighting around the Strait of Hormuz has interrupted the post-reopening recovery in Persian Gulf flows, while refined products markets remain even tighter than crude, writes Yulia Grigsby in “Oil Tracker: Negative Supply News From Gulf and Russia.” Persian Gulf oil flows initially recovered to above 80% of pre-war levels after reopening, but recent tanker attacks pushed them back to the low-70% range, with exports through Hormuz falling from about 10 mb/d to 8.3 mb/d on a 7-day average basis. This supports our view that the key constraint is now Iran’s willingness to allow flows, not tanker capacity.

Polymarket:

Brent crude futures were trading around $79 a barrel early Thursday, while WTI hovered near $74, signaling that traders were pricing in renewed geopolitical war risk premium as Hormuz vessel traffic slowed and the US-Iran conflict flared up.

Via RealInvestmentAdvice.com,

Goldman Sachs’ volatility desk made the following comment:

“With the VIX back to its lowest levels in more than a month, our Vol desk is focused on hedging opportunities as 1-month S&P implied correlation is near its lowest level in 20 years.” 

Simply, a low VIX can convey a sense of market calm on the surface, yet implied correlation tells a different story.

The VIX, based on option trading data, measures the implied volatility of the S&P 500 index.

A low VIX means traders expect the market to be relatively calm with not much volatility.

Conversely, a higher VIX reflects expectations for high levels of volatility.

Today, the VIX is relatively low with a 16 handle today, as S&P 500 index option trades appear complacent.

Implied correlation measures how much S&P 500 stocks are expected to move together.

When implied correlation is high, as it was during COVID, the 2022 interest rate shock, and more recently at the beginning of the Iran conflict, macro forces dominate trading activity, and stocks tend to go up or down together.

When correlation is low, stocks decouple. Individual company fundamentals, technical setups, and momentum chasing drive returns.

As we see in the chart below, the implied correlation is at a 20-year low.

The low VIX implies smooth sailing ahead, while a record-low implied correlation suggests the market could be at risk.

Goldman is hedging the risk of a correction, i.e., an implied correlation spike.

Often, when implied correlation rises sharply from extreme lows, as it did in August 2024 during the yen carry trade unwind, the divergences that kept the index calm disappear.

Stocks start moving together again, and most of the time they move down.

This condition is not a warning to expect a market downdraft, but it does suggest that risk awareness is critical.  

Fears of a possible collapse at a condo tower under construction near Grand Central Terminal had abated by the end of the week, but the incident only signals the massive engineering challenges tied to Manhattan’s office-to-apartment conversion boom.

The former Pfizer headquarters at 235 East 42nd Street, being converted by David Werner and Nathan Berman’s Metro Loft Management into more than 1,600 residential units, has become a high-profile example of the risks of repurposing aging office towers into housing at scale to achieve socialist NYC Mayor Zohran Mamdani’s strategy to address the metro area’s housing shortage.

Engineer: “The concrete beams in our residential conversion of the Pfizer Building are buckling. The building could collapse! Did you correctly account for the weight of the additional floors we added?”

ChatGPT: “You’re absolutely right! I see the issue now—in using the Euler… pic.twitter.com/Wh3pABw84f

— tedfrank (@tedfrank) July 8, 2026

Metro Loft CEO Nathan Berman told Bloomberg in an interview that 15 stories were added to part of the building, and that two columns beneath were insufficiently reinforced, leading to a failure that caused some of the 15 cantilevered floors above to sag.

Via Bloomberg

Berman said Metro Loft now plans to replace the facade, slabs, and steel on those floors: “We are prepared to rebuild that portion of the building.”

“It will be reskinned, everything will be leveled, fixed in place, and it will be brand new,” he said.

Tuesday morning’s column failure prompted evaluations of the building and surrounding structures, as well as street closures for fear the building would collapse. Since then, crews have been working to install temporary supports.

New York City’s Department of Buildings has released a new image showing the emergency works to stablise the 37-storey tower at 235 East 42nd Street after structural beams were seen buckling on its 21st floor.

In a statement, the Department said: “Crews working through the night… pic.twitter.com/R1U5su2h2r

— The B1M (@TheB1M) July 8, 2026

James LaFave, a professor of civil engineering at the University of Illinois Urbana-Champaign, told the outlet, “Engineers rationally overestimate what they think the loads would be, underestimate how strong they think elements would be to simplify it, and therefore you would end up with a substantial margin of safety.”

LaFave noted, “For something to have caused the level of buckling seen in that column there, it’s not some small perturbation from expectation that would make that happen. It’s something substantial.”

Authored by José Niño via Headline USA,

Rep. Tim Burchett, R-Tenn, has thrown a fresh spotlight on one of Washington’s most stubborn cold cases. 

On July 7, 2026, the Tennessee Republican posted on X that he had formally pressed FBI Director Kash Patel to surrender every document the bureau holds on the 2016 killing of DNC staffer Seth Rich.

“I have called for @FBIDirectorKash to release all records related to the death of Seth Rich,” Burchett wrote.

His press office added, “Today, I sent a letter to FBI Director Kash Patel asking for the release of all records related to the death of Seth Rich. The American people deserve answers.”

I have called for @FBIDirectorKash to release all records related to the death of Seth Rich. pic.twitter.com/8Lt7Vm10Mk

— Tim Burchett (@timburchett) July 7, 2026

The letter itself, dated on Tuesday, opens plainly.

“I write to request the release of all Federal Bureau of Investigation (FBI) records related to the death of Seth Rich,” Burchett states.

He then leans on the White House, urging, “Given the Administration’s commitment to transparency, I strongly urge the full release of these records, as permitted by law.”

Rich, 27, was shot and killed while walking home in Washington during the early morning hours of July 10, 2016.

Police treated the case as a botched robbery, and it stays unsolved.

Rich’s death later fueled a viral theory that he leaked DNC emails to WikiLeaks and was silenced for it. 

Burchett’s demand follows years of FOIA warfare waged by attorney Ty Clevenger on behalf of plaintiff Brian Huddleston. The FBI first claimed it held no relevant files, then conceded it possessed more than 20,000 pages of potentially relevant material, Rich’s work laptop, and an image of his personal one.

According to Radar, this week Clevenger said a government lawyer told him he would soon receive confirmation that several hundred more Rich pages had surfaced inside a previously concealed room at FBI headquarters—the same unmapped SCIF where “burn bags” of Russia-probe files marked for destruction were reportedly found. 

That connection remains Clevenger’s account.  The FBI has not confirmed it, and the separate burn-bags report never established that Rich records were among those files.

After an ugly Spring selling season, existing home sales have rebounded in Q2 (so far) with expectations for another 1.0% MoM increase in June.

However, that was not to be with US existing home sales tumbling 2.4% MoM in June (although May was revised up to a +3.7% MoM gain from +3.2%). That slowed the annual improvement in sales to +2.75% YoY…

Overall, existing home sales SAAR remains just off record lows…

“The back-and-forth in monthly home sales activity, driven by mild fluctuations in mortgage rates, shows how sensitive home buyers are to affordability conditions,” NAR Chief Economist Lawrence Yun said in a statement. But recent job gains will continue to provide support to the housing market, he added.

NAR’s Housing Affordability Index, which measures whether typical families can qualify for a mortgage for a median-priced home, has improved somewhat from a year ago but is at its lowest since August 2025.

Inventories of new homes for sale remain high (and are thus pressuring homebuilders to choke back on additional supply)…

But, the inventory of existing homes for sale climbed 1.3% from a year earlier to 1.56 million. From a month earlier, however, it fell slightly for the first time this year.

Yun called the annual gain “minuscule.”

“We need to see 30%, 40%,” he said. “We’re not seeing that.”

Last month, the median sales price of a previously owned home rose 1.8% from a year ago to a record high of $440,600, NAR data show.

While prices continue to climb, the advance is far smaller than the gains seen a couple years ago.

Weakness in the US South, the nation’s biggest home-selling region, helped drag down the national results, with sales there declining 3.6% to an annualized 1.89 million. Sales also slipped in the Midwest and West, though they gained in the Northeast.

First-time buyers accounted for 33% of sales in June, compared with 35% in May.

By Michael Every of Rabobank

“It ain’t over till it’s over, but…”

The US hit Iran for a second night along Hormuz, in southern cities, near a nuclear site, and a railway bridge in the northwest. The message from VP Vance was to stop striking ships in Hormuz or get hit back harder. From Trump, it was that Iran are “liars” and “scum” and the MOU is “over,” repeating threats to reimpose the US blockade of Iranian oil –showing why few (save China) were keen to buy it with a temporary sanctions waiver that lapsed before shipments arrived — and to hit electricity and desalination plants and/or take Kharg Island, it’s key oil facility.

Even Axios, purveyor of ‘world peace(fire)’ headlines, is reporting the US is preparing for an extended confrontation –from 1-2 days to a month– and that the ‘Battle of Hormuz’ may be about to begin.

Trump did add negotiators could keep talking if they wanted to; and on Air Force One (the old one: that just gifted by Qatar was left in the UK, speaking to a security problem) he stated Iranian officials “called a little while ago. They want to make a deal so badly.”

So, the immediate choice to go up or down the escalation ladder lies with Iran. If Tehran deescalates, they cede control of Hormuz. If they escalate, their options are to hit Hormuz more – triggering more US counter strikes; or GCC energy – triggering a larger war; to use (battered) proxies like Hezbollah – triggering wider war; or perhaps to rush for a nuclear weapon – which would mean far worse war. The New York Times reports Iran’s president and foreign minister were physically attacked this week by supporters of a hard-line faction that vehemently opposes any deal with the US: it remains to be seen if the streets, IRGC, clerics, or politicians will decide what happens next – but both the politicians and the IRGC benefit from talks going on and oil flowing.

The US would also have to decide if it can afford to cede Hormuz or will fight to keep it open when the SPR is seen near a tank bottom– was this discussed at the NATO summit, perhaps?

A tell for stepped up military statecraft would be a matching step-up in economic statecraft. Note the White House’s launch of ‘Freedom Fuel’ gas stations offering lower prices (via lower profit margins; or, at $3.67 a gallon, possible federal subsidies). If that scheme expands past an initial 25 sites it suggests more disruption in Hormuz ahead. However, that’s just a stepping stone to the NAPHTHA closed-loop energy system we’ve flagged the US might need to consider.

There are also longer term moves to avoid Hormuz. The UAE’s pipeline to Fujairah is underway; the Saudis may expand their East-West Red Sea pipeline by 2m barrels per day, allowing themselves and other GCC states to benefit; and Riyadh is exploring an IMEC route through Syria and Turkey – as Trump informed Congress of his intent to remove Syria from the state sponsor of terror list and was nice to Erdogan at the Ankara NATO summit; and following a state visit to Damascus by Macron and Erdogan literally giving the EU’s Von der Leyen and Costa guns.

For now, we stick with our base case that Hormuz tension blows over rather than blowing up. However, the odds of the latter happening sooner, rather than post-midterms as expected, have increased.

In energy markets, oil is up, but not hugely, with Brent at $79: but crack spreads are near record highs. Yes, lots of oil just flooded out of Hormuz, but global refineries already couldn’t process the backlog easily – add a new war there and things look far worse.

Crack spreads have also been driven by Russia banning exports of diesel until end-July in response to the devastating strikes against its oil refineries by Ukrainian drones: these are causing fuel shortages and have turned Russia from a net exporter to a net importer of refined products.

At the NATO summit — besides Trump threatening Spain with a trade boycott for being peaceniks — there was US backing for Ukraine‘s strikes deep into Russia and against energy facilities; Ukraine was also given permission to manufacture Patriot missiles itself to boost its air defences. Expect a lot more damage to Russian energy ahead, unless Russia comes to the table.

In related geoeconomic developments, the FT reports Trump-backed US rare earth mines are selling to Japan and South Korea – then again, South Korea and Japan might build US weapons and navy vessels in the near future.

In Europe, a leaked report has revealed France is seeking to widen Brussels’ Made-in-Europe policy: Paris wants such measures extended to shipbuilding and trains. Buy local schemes are even more effective economic statecraft than tariffs. The FT also carries an op-ed from former Italian PM Letta arguing ‘Europe must have the financial power to match its economic heft,’ and the continent’s savings should be used to invest in its own future, not someone else’s. Are we also going to see capital controls for the beating heart of the ‘liberal world order’?

Yet Rutte’s ‘Made in NATO’ weapons push collides with EU’s ‘Buy European’ drive, as Politico puts it, where “The NATO chief wants to build the transatlantic military industrial complex, but the EU is backing its own companies.” Who will win that battle given Europe still needs LNG, which the US has and where Turkey may soon play a key role too, and given the US holds the cards on tech and, relatively, on rare earths?

Spain, while making the peace sign, is also pushing the European Commission to borrow an additional €850bn per year on behalf of EU countries to get lower yields – which may not get a ‘Made in Europe’ response from northern member states. That’s as the UK government is warned by the OBR that another £120 of tax hikes are needed as debt is on an unsustainable trajectory.

Political news matches this geopolitical and geoeconomic drama: the Democratic Party Maine Senate candidate Platner has dropped out over allegations of sexual assault (not his Nazi tattoo); the Democratic Governor of Kentucky has, in so many words, requested that Republican Senator McConnell show that he’s still with us, when rumour is that he isn’t; and in the UK, Reform UK’s Farage is likely to contest a 6 August by-election solely against a man who wears a dustbin on his head, with the key policy pledge of building “at least one affordable home.”

Lastly, and deliberately last, the Fed minutes headline was that ‘a few’ members saw the case for a June hike. And?

• First, it may not be long until we don’t get much information about what the Fed is thinking under the Warsh Doctrine.
• Second, backwards-looking reports can’t keep up with the speed and scale of geopolitical developments.
• Third, the economic models of those who write those reports can’t predict geopolitical outcomes.

As this Global Daily’s title says, “It ain’t over till it’s over, but…” – and that covers the usefulness of central-bank ‘he said, she said’ just as much as it does the US-Iran ‘he said, he said’ MoU.  

Bloom Energy is responding forcefully against allegations made by short seller Hunterbrook Capital, rejecting the firm’s claims about its accounting, supply chain and growth prospects a day after a report sent shares sharply lower.

The clean energy company said Thursday that Hunterbrook’s assertions regarding its financial reporting and access to critical raw materials are “false and misleading,” according to a statement reported by Bloomberg.

The response comes after Hunterbrook published an investigation on July 8 that questioned Bloom’s independence from Chinese suppliers and argued that the company’s long-term manufacturing ambitions may be constrained by global scandium availability. Hunterbrook disclosed that it stands to benefit if Bloom’s shares decline through a short position.

Bloom specifically defended its financial reporting, saying allegations concerning its accounting are contradicted by its audited financial statements. The company also disputed Hunterbrook’s central thesis surrounding scandium oxide, the specialty material used in Bloom’s solid oxide fuel cells.

Bloom said it has sufficient scandium oxide supply to meet both current production needs and its existing customer backlog. It added that its scandium supply is not dependent on China, either for current operations or future demand growth. Looking further ahead, Bloom said it has visibility across its supply chain sufficient to support production capacity of 25 gigawatts of fuel cells annually, adding that it expects to continue expanding that capacity over time.

Hunterbrook’s report, published Wednesday under the title Bloom’s Big Lie, argued that Bloom’s public messaging about its supply chain conflicts with trade data and supplier relationships. According to the investigation, multiple international trade routes appear to connect Bloom’s supply chain to Chinese sources of scandium despite repeated statements from CEO K.R. Sridhar that the company has “no China supply chain.”

Hunterbrook said its research relied on global shipping records, corporate filings and satellite imagery. The report also cited a representative from Chinese producer Hunan Oriental Scandium who allegedly identified Bloom as one of its largest customers.

The report further argued that Bloom’s long-term manufacturing targets face a fundamental resource constraint. Hunterbrook estimated that producing five gigawatts of fuel cells annually would require roughly 220 tons of scandium oxide each year, nearly the entire projected global supply of approximately 240 tons, raising questions about whether the company’s expansion plans are feasible.

Hunterbrook also challenged Bloom’s reported order backlog. The firm argued that while Bloom has discussed an approximately $20 billion backlog, audited contractual performance obligations are substantially smaller, at roughly $492 million, suggesting investors may be overstating the visibility of future revenue.

The report helped send Bloom shares down roughly 6% on Wednesday. Bloom’s Thursday response marks its formal rebuttal to the allegations, with the company maintaining that its audited financial statements, supply chain and access to scandium fully support its current operations and future growth plans.

Recall, back in 2019 now-defunct short seller Hindenburg Research also took on Bloom, highlighting “trick accounting”, claiming “Bloom’s technology is not sustainable, clean, green, or remotely profitable” and raising a question to the company about how important the price and supply of scandium was to the company’s supply chain.