Individual Economists

Trump Accuses 'Shifty Adam Schiff' Of Mortgage Fraud, Says He 'Needs To Be Brought To Justice'

Zero Hedge -

Trump Accuses 'Shifty Adam Schiff' Of Mortgage Fraud, Says He 'Needs To Be Brought To Justice'

Authored by Debra Heine via American Greatness,

President Donald Trump on Tuesday accused Sen. Adam Schiff (D-Calif) of engaging in a pattern of mortgage fraud, calling him a “scam artist” who “needs to be brought to justice.”

The president took to Truth Social Monday morning to share the conclusion of fraud allegedly reached by Fannie Mae’s financial crimes division.

“I have always suspected Shifty Adam Schiff was a scam artist. And now I learn that Fannie Mae’s Financial Crimes Division have concluded that Adam Schiff has engaged in a sustained pattern of possible Mortgage Fraud,” Trump stated.

“Adam Schiff said that his primary residence was in MARYLAND to get a cheaper mortgage and rip off America, when he must LIVE in CALIFORNIA because he was a Congressman from CALIFORNIA,” the president continued.

By listing his Maryland home as his primary residence, according to the accusation, Schiff may have been trying to take advantage of more favorable loan terms, such as lower interest rates.

“I always knew Adam Schiff was a Crook,” Trump posted on Truth Social.

“The FRAUD began with the refinance of his Maryland property on February 6, 2009, and continued through multiple transactions until the Maryland property was correctly designated as a second home on October 13, 2020.”

The president concluded: “Mortgage Fraud is very serious, and CROOKED Adam Schiff (now a Senator) needs to be brought to justice.”

Trump’s accusations follow a “bombshell ethics complaint” against Schiff detailed in a May 2025 USA Herald report.

The complaint was filed by Christine Bish and Darren Ellis in October 2024, accusing him of a “pattern of mortgage fraud, voter fraud, and unlawful campaign filings stretching back over two decades.”

According to the complaint, “In 2009, Adam Schiff’s residence and voting registration was called to question in a House Ethics Committee hearing. Adam Schiff, despite claiming to live and represent the people in the state of California, filed and reaffirmed through refinancing documents, his primary residence at [—- —— —- ——-], Potomac Maryland, 28054.”

The complaint further alleges, “Adam Schiff is on the record having acknowledged the mortgage document filings [of Maryland as his primary residence] during a House Ethics hearing in 2009… He made the claim of ‘mistake,’ thereby acknowledging the appearance of possible mortgage fraud.”

The allegations against Schiff mirror those leveled against New York Attorney General Letitia James earlier this year  involving her properties in Norfolk, Virginia and Brooklyn, New York. The U.S. Department of Justice (DOJ) launched a formal criminal investigation into James in May which could potentially lead to charges of wire fraud, mail fraud, bank fraud, and making false statements to financial institutions.

The junior senator from California, who earned the nickname “Shifty Schiff” as a member of the House of Representatives from January 2001 to December 2024, has been a major player in numerous political operations against President Trump, including the Russia hoax, the Ukraine hoax, and the “Hunter Biden’s laptop is Russian disinformation” hoax.

In 2019, then-House Minority Leader Kevin McCarthy signed a Republican resolution to censure then-House Intelligence Committee Chairman Adam Schiff for fabricating the presidential phone call between Trump and Ukraine President Volodymyr Zelenskyy that spurred the Democrats’ impeachment inquiry.

In January 2023, then the House Speaker,  McCarthy took the extraordinary step of kicking Schiff and fellow Russia-hoaxer Rep. Eric Swalwell (D-Calif.) off the Intelligence Committee. In June of that same year, the House of Representatives censured Schiff “for misleading the American public and for conduct unbecoming of an elected Member of the House of Representatives.”

After Trump’s election in November, Schiff and many other Democrats repeatedly voiced concerns that Trump’s Department of Justice could potentially investigate Democrats in retaliation for their past weaponization of the Justice system to prosecute and harass their political enemies.

“Since I led his first impeachment, Trump has repeatedly called for me to be arrested for treason,” Schiff wrote on X in response to Trump’s post. “So in a way, I guess this is a bit of a letdown.”

He added: “And this baseless attempt at political retribution won’t stop me from holding him accountable. Not by a long shot.”

Tyler Durden Wed, 07/16/2025 - 11:45

(Progressive) Bonfire Of The Vanities, 'Mad-Mani' Style

Zero Hedge -

(Progressive) Bonfire Of The Vanities, 'Mad-Mani' Style

Authored by David DesRosiers, President of the RealClearFoundation,

New York City has met many challenges in its history as the capital of capital.

The constant problem that surrounds the city is that with great wealth comes great political profligacy. It is not the first time New York has found itself staring down a time for choosing at the barrel of a gun.

Tom Wolfe captured the “radical chic” and “mau-mauing” of the compromised big-city life in America, most obviously in San Francisco and New York. But Mayor Rudy Giuliani and his capable chieftains snuffed out the bonfire of the vanities through such commonsense policies like fixing broken windows policing, COMP-STAT, and welfare to work – commonsense policies that fueled an urban renaissance, which Mayor Michael Bloomberg inherited, embraced, and built upon over his three terms.

Somehow, New York voters forgot what unbridled crime in the streets and rampant racialist and redistributionist policies in city hall did to their quality of life. And so they elected Bill de Blasio as mayor. As promised, he swiftly began dismantling the regime of good governance that had made the city great again.

Eric Adams was elected precisely because the people of New York wanted a return to law and order sanity after eight years of de Blasio’s progressive dumpster fire. Sadly, Adams proved to be too ethically compromised to effectively resist the flood of illegal immigrants – many of whom were dispatched on border state buses – who filled the Port Authority. Housed in luxury hotels at taxpayers’ expense, they tested New York City’s sanctuary resolve.

Motivated by his political survival instincts, Adams’ spine stiffened. Conveniently, he was summarily whacked with a federal prosecution. “More lawfare!” said his defenders. “Just following the facts where they lead,” countered the Justice Department careerists. Nonetheless, he and Donald Trump found common purpose – and this triggered Democrats in general and progressives in particular. Rep. Alexandria Ocasio-Cortez, naturally, called for Adams to step down “for the good of the city.” You know, the new mantra of the left: guilty until proven innocent.

What are the political odds on Mayor Adams winning against the Democratic Party blob that has just nominated 33-year-old anti-Israel, Marxist Zohran Mamdani as its mayoral nominee? Not good. Presently, far from a coin toss.

Adams and New York City have four months to mount a credible, winning opposition. It’s a window of political opportunity that would not exist if it were not for Trump’s gratuitously playing a lawfare card of his own in the form of a timely presidential pardon, giving Adams a new lease on life – and New Yorkers a last chance to inhabit a livable city.

Trump hasn’t yet nicknamed Mamdani “Mad-Mani,” so I’ll go ahead and do it for him. Whatever he’s called, he’s a real threat to the city. Peter Orszag spoke for many successful business executives – the ones responsible for New York’s financial health. Appearing on CNBC, Lazard’s CEO revealed how troubling he found Mad-Mani’s “globalize the intifada” language – not to mention the would-be mayor’s antipathy for free-market capitalism and dislike for the wealthy. Orszag strongly hinted that his firm, and all the public and cultural goods that it underwrites, could relocate to more friendly climes. Florida beckons.

What have this long-time Democrat in good standing, and others like New York’s senior Sen. Chuck Schumer, been hearing from the socialist-friendly new guard?

It’s “they” – the old guard – who are no longer in charge of New York City politics. The Brooklyn progressives are running things now. Atop the pyramid is the new Adam and Eve, political power couple Mad-Mani and AOC. The vibe they send out is that they would happily have the old guard acquiesce to their agenda or move to Boca Raton.

What does this ascendant power couple hold to be shared and self-evident? For them, Israel and America are both apartheid states, and capitalism is the engine of inequality. And this antisemitic, anti-capitalist, anti-American power couple is trending on Instagram and just won the Democratic primary. AOC is coming for you, Chuck.

Why do they hold fast to such obvious falsehoods? The answer is that they are repeating what they have been taught in school, from Head Start to college classes. This is what most American kids are being taught, unless they were home-schooled, took the Catholic school route, or went to Hillsdale College.

Sen. Schumer and Orszag know this, as do untold numbers of sensible, centrist Democrats. Many of them know the “Chicken for KFC” mindset firsthand in their own families, and that their kids, grandkids, and wives are voting for this madness. The intifada chicken has come home to politically roost – and on your watch, and with your wallet.

While conservatives and centrists were shaking their heads in mirth at the spectacle of “Dykes for Palestine,” AOC was still basking in the spotlight for successfully killing a proposal from Amazon to build a second headquarters in Queens, adjacent to her congressional district. Not because she wanted the jobs in her Bronx district, but because she didn’t want them in New York City at all. Mind you, this was a project so beneficial to the area – it included some 25,000 jobs – that not only was Andrew Cuomo for it, but so was Bill de Blasio. AOC, though, was content to invoke the specter of “corporate greed,” which is what passes for reasoned debate among the generation of young Democrats.

And New York’s City Council, and the protest industrial complex surrounding it, has gotten a lot younger. They are the ones doing the work, organizing, showing up, and winning elections. The Democratic Party is nothing without the protest industrial complex. George Soros and his son pay well and seem to have a taste for chaos.

The progressive ramparts have their favorites. They want true believers running things.

Sorry, Chuck, they are not that into you anymore. Truth be told, they never were.

Although New York has not had a viable two-party system for a long time, when things get bad enough, New Yorkers turn to a law-and-order Republican like Giuliani or an independent like Mike Bloomberg. But do NYC voters really need to wait for all those broken windows – and the chaos it symbolizes – to materialize again before waking up?

It is time for New Yorkers’ wallets to shut tight on Mamdani, and open wide for Adams. A new coalition of sanity needs to be built and built quickly. New York is worth fighting for and saving. Its future hangs on the choice those who have not yet left make now.

Tyler Durden Wed, 07/16/2025 - 11:45

At The Money: How to Spend Your Money in Retirement

The Big Picture -

 

 

 

At The Money: The Right Way to Spend Your Money in Retirement (July 16, 2025)

One of the biggest challenges of retirement is actually spending your money! After decades of working, saving, and investing, pivoting to spending down your accumulated wealth can be surprisingly difficult.

Full transcript below.

~~~

About this week’s guest:

Christine Benz is Director of Personal Finance & Retirement Planning at Morningstar; her new book is “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement.” She joins Barry Ritholtz to discuss what you need to know about planning for retirement.

For more info, see:

Professional/Personal website

LinkedIn

Twitter

BookHow to Retire: 20 lessons for a happy, successful, and wealthy retirement 

~~~

Find all of the previous At the Money episodes here, and in the MiB feed on Apple PodcastsYouTubeSpotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify

 

 

 

TRANSCRIPT:

Speak to any financial advisor and they’ll tell you one of the biggest challenges they have professionally is getting clients to actually spend their money after decades of working and saving and investing. Making the turn to spending money can be a challenge.

I’m Barry Ritholtz and on today’s edition of At The Money, we’re gonna discuss spending your moolah in retirement.

To help us unpack all of this and what it means to your retirement, let’s bring in Christine Benz. She is the Director of Personal Finance and Retirement Planning at Morningstar. She’s published numerous books on money investing and retirement. Most recently, “How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement.”

So, so let’s start with the basic problem. Getting those type A personalities who are used to working and saving and working and investing to kind of pivot to working and spending is a big challenge. How big of an issue is this amongst people who are looking at retirement? It’s a very big issue and it’s kind of, you know, a difficult topic to talk about because we have a lot of people in our society who are quite under saved, uh, relative to what they will need for retirement.

They’ll be exclusively dependent on social security, but there’s also a. Segment of our population who struggles with spending appropriately. I can’t tell you Barry, how many times I’ve been out speaking to a group of older adults and I’ll have someone come up at the end of one of my sessions, clearly in his or her eighties, usually his, um, based on the com composition of the audiences I usually speak with.

Um, and he’ll proudly say I only spend 2% of my portfolio per year, whatever the value is. That’s what I spend. And I kind of think to myself, well, gosh, I hope that that delivers you a good quality of life. And I also think to myself, you’re probably pretty significantly short changing yourself if you’re just spending at, at that level.

And as you said, Barry, I hear this from financial advisors as well, that they struggle getting their clients to spend appropriately. I, I heard, um, a funny line from, um, a parent. Older clients who were getting on a plane and they were sitting in first class and they bump into friends they know who are sitting in coach, and the conversation was they just could imagine each other’s conversation.

Look at them sitting in the front of the plane, spending their kids’ inheritance, and then the one sitting in the front of the plane saying, can you imagine they’re flying coach so their kids can fly first, ca first class? It’s kind of funny, but ultimately, isn’t this a psychological struggle about not just outliving your own money?

Uh, assuming we’re talking about people who aren’t gonna outlive their own money, there’s still this enormous hesitancy to spend their kids’ inheritance or to spend money when they’ve spent their whole lives as savers. Tell us about that. Exactly. It’s a sense of identity. I think that one builds as a saver and an investor that you are someone who defers gratification.

You set money aside each month and the further you go along in that journey, probably the more successful you are. Um, you get to see the incredible power of compounding. I think there is a common tendency to kind of anchor on the. Portfolio’s, high watermark to think, well, if it’s here, I never wanna see it go lower.

It just does not feel good to see the balance go down after a lifetime of seeing it generally escalate. So there’s a lot going on psychologically and kind of the elephant in the room, um, in this respect is long-term care. Mm-hmm. That people who have. Not purchased long-term care insurance and may have really good reasons to not have done so.

Still have this, uh, risk of like, oh, may I have this balloon payment at the end of my life where, you know, I could get stuck with years and years of expensive care. So I think that that is a real risk factor that that is in the mix as well. Really, really interesting. Um, so since we’re talking about long-term care, let’s talk about generally putting together a personalized plan, thinking about needs and goals, lifestyle considerations.

 

What should someone who wants to spend more of their money do in order to feel comfortable that they can afford to spend a little cash? Well, I would say, um, either get a financial advisor to help you with this, where they’re effectively dispersing a portion of your portfolio to you per year if you’re doing it on your own.

 

Get familiar with the research on safe spending rates. A lot of the research that’s been done by our team and others points to the value of. Being flexible with your portfolio withdrawals, where you are taking more, when your balance is up, when the markets are up and you’re taking a little bit less when things are down.

 

Um, I think if people understand the data that we have on retirement spending, one thing that we know is that people tend to spend less as they age. Um, so you’re. Early years of retirement should be the higher spending years of your retirement because that’s usually when people’s health is good. Um, they are, uh.

They may have pent up demand to do travel. They may be launching adult children. A lot of things going on at that life stage, you should give yourself permission to spend a little bit more early in retirement with the knowledge that even when we look at spending trajectories among very wealthy households, people spend less as they age.

So if you’re okay with that, trade off with the idea that you probably will spend less, you should give yourself a little bit more license to spend earlier on. So, so let’s break those spending desires down. You mentioned travel, like it’s easy to travel in your sixties and seventies than it is in your eighties and nineties.

Um, hobbies, legacy, philanthropy or charitable goals to say nothing of future healthcare needs. How should people organize their thoughts and planning for, for future spending? Yeah, I think it, it’s helpful to get very granular about the budgeting, and I don’t mean you know that you’re nickel and dimming yourself and looking at every line item, but if you have, say, a big family trip planned in year two of your retirement, spend some time figuring out what the implications will be.

For your plan, for your spending in that year. Know that those big outlays won’t occur every year, but actually spend some time mapping them out. And the nice thing about that is that in addition to it helping your spending plan, it will also help you get these plans off the ground, rather than having them as some, you know, sort of vague notion of.

Of things that you want to do. Um, you mentioned lifetime giving Barry to family members and charity. I have come to be a huge evangelist for this because when we look at the data on when people inherit money from their parents, they’re usually in their fifties or in their sixties. Their financial fortunes are pretty well set by that life stage.

Whereas if you have young people in your life, whether children, grandchildren, nieces, nephews, you can make a. Big impact for them in that the twenties, thirties, forties, um, with home down payments or paying off student loans. And these don’t need to be big ticket gifts. Smaller gifts can make a big impact.

I often talk about how my mom and dad gave my husband and me a little bit of padding for our home down payment on our first home, and that helped us get into a home that we were able to. Day in for 12 years, we lived it exactly in the community where we wanted to live. So having that discussion with your loved ones about the gifts that might help them, I think is, um, something that can add a lot of richness to someone’s retirement.

I recall reading your piece, what was it in the fall last year or maybe, uh, around, around the holidays? Um, inter vivos transfers is the technical term, right? While you’re alive. This seems to be increasingly modern development. Like I think back 25, 35 years, you didn’t hear that much about it, at least outside of the top one or 5%.

 

Now it’s fairly common for the X or boomer generation to help with a down payment or college, as you mentioned. Tell us about what you’re seeing out in the world. How significant has this become? Is this, um, something around the fri fringes, or are we seeing a lot more intr vivos transfers today than say, 20, 30, 40 years ago?

 

I don’t have any data on it, Barry, but my sense is that the movement to toward lifetime giving is picking up steam and not just for very wealthy people. I think sometimes people are put off by the term lifetime giving. It sounds very high brow, but it doesn’t have to be. It can be assistance with some of those smaller, um, life achievements that that young people might.

 

Might wanna tick off their list. So I would urge planners and individuals pursuing their own retirement plans to think about building in some of those lifetime, uh, giving, uh, aspirations. And also, you know, there are really nice tax planning mechanisms that people can use to help them achieve, achieve those things as well.

Um, the donor advised fund for charitable gifts, especially. And why shouldn’t you see family members, friends, whoever enjoy the benefits of your large S while you’re still around? It shouldn’t be just something you think about when you’re at your estate attorney and you’re signing a document and that’s the last you see of it.

Why not get to enjoy your, your kids or nephews or whoever in a new house that you helped them get there? Exactly that. That is the huge side benefit of contemplating lifetime giving, so, so let’s talk about a little more formal type of giving. You mentioned donor-advised funds, uh, philanthropy when it comes to both financial and estate planning.

Philanthropy is a big part of both retirement and estate planning. Talk a little bit about the idea behind. How families should be thinking about, um, managing philanthropy or donating to causes that are near and dear to their heart. Yeah, get, get some advice on the tax aspect of this.

The donor advised fund is a really nice mechanism for people of varying means, and it’s especially appropriate for people who have concentrated positions in their portfolios, often employer stock, where you can kind of take a risk out of the portfolio, uh, and donate the, say, employer stock to the donor advised fund.

You can get, uh, a. A tax deduction on that contribution. And you can also, uh, remove the capital gains tax associated with that big gain in the position at, at the same time. And then from there on, once you’ve established the donor advised funds, you can make those. Those charitable gifts on an ongoing basis.

So that’s one strategy that I would say would be kind of a first line, uh, to consider for, for people of all levels of wealth. And then for people who are moving up and getting into retirement, um, using the, uh, the, the charitable qu. Qualified charitable distribution from IRAs can be a really nice strategy as well where you are giving a portion of your IRA once you pass age 70 and a half to charity and the, we’ve seen a little in inflation adjustment in the amount that you can give, but it’s now over a hundred thousand dollars per year.

It’s a way to reduce the tax burden associated with, um, that IRA. So that’s another strategy to consider. I just wish it were. Um, available to people of, of all ages where you could potentially lighten up your IRAA little bit and, and get a tax break and do some charitable giving. So we’re talking about spending in retirement and, but we have yet to talk about drawing down portfolios.

Um, uh, bill Sharp, Nobel Laureate, uh, and, and a key, uh, person when it comes to both modern portfolio theory and understanding. Asset allocation has called this the thorniest problem in all of finance. Why is figuring out. How much to draw down your portfolios, whether just to live on it or for special spending.

Why is that such a challenging, um, set of numbers? The key issue is that you’re dealing with a bunch of wildcards, so you have an uncertain time horizon. You don’t know how long you’ll live, and you may have a little bit of a window into that as you age, but most of us do not have that crystal ball, and then we don’t know how the markets will perform over our retirement time horizon.

And then this recent inflation shock really illustrated the wild card that inflation is. For retirement plans. So you don’t know how inflation will, um, play out over your horizon, so you don’t know how much you’ll have to elevate your spending just to kind of keep your head above water. So all of those things are super tricky to get.

To get your arms around And the key conclusion for a lot of people is like, well, I’d rather be safe than sorry. I’d rather be a little bit conservative if it means a very high likelihood that I won’t run out. Um, but I do think the kind of one and done withdrawal rate, the 4% style guideline is, you know, maybe a good proxy if you’re 50 and trying to figure out if you have enough.

But it’s not a retirement. Spending plan because people don’t spend that way. They don’t just spend the same amount in a straight line adjusted for inflation throughout retirement. It’s lumpier. So you have a sequence of return problem on the asset side, and then you have a front loaded spend on the consumption side.

That sounds like that could be potentially challenging with just a straight up 4%. Definitely. And then long-term care, which we talked about earlier, that’s another wild card in the mix. So how often should retirees be reviewing their holdings? How often should they be making changes to their budgets? Is this a set and forget, or do you need to regularly be updating this?

I like the idea of doing it once a year as kind of a holistic strategy where you’re checking up on your withdrawal rate, you’re looking at what your portfolio could support in the year ahead, and you’re doing a little bit of portfolio maintenance. So I’m a big believer in the bucket approach to retirement income.

If you’ve spent from that cash bucket in the previous year, you’re also looking at your portfolio and. Deciding, well, where is a sane place for me to pull from if I need to top up that cash bucket to provide me with spending money in the year ahead? And you’re also doing a little bit of tax planning as well.

So if you’re subject to required minimum distributions, for example, you’re figuring out where to where to go for them. So I think a good one, stop holistic portfolio review is, is fine for most retirees. And our final question. You talked about the difference between retirement spending and legacy planning.

Explain to listeners what that difference actually is. So, uh, I’m not sure how to answer that question, Barry. Um, and it, it came from your article about your parents helping you with the down payment. Okay. Okay. Could you ask me again? Sure. So in the article you wrote about spending while you’re still alive, talking about how your, your folks help you and your husband with the down payment for your first house, and how much that was, uh, a significant change to you guys personally explain the difference between simple retirement spending and legacy planning.

The term spending, I think is super loaded. When we tell people they should be able to spend X in retirement, I think they automatically jump to it means we’re telling them to buy cars every year, even if they don’t need a new one or go out to dinner every night. Even if. That’s not really something they wanna do.

And so I think this term spending is kind of loaded, and maybe we’re a little bit judgy about it, but I would urge people to think broadly about retirement spending and use their retirement spending. To do some legacy planning. So, you know, the example of our home down payment is one way that I think my parents pursued legacy.

They, um, you know, certainly made an impact on our lives. They kept us nice and close to them so that we were able to help them later in life because we lived nice and close by. So I would urge people to think bigger about retirement spending, that it should encompass some of these legacy goals and you should give your.

Yourself permission to gift to your loved ones during their lifetimes and during your lifetime. So to wrap up, everybody needs to plan for retirement, but we also need to think about our spending. The odds are that we’re gonna spend more in the early parts of our retirement when we’re still younger and more mobile than the latter part of our retirement.

And we really need to think about the prior. Standard of waiting till you are deceased for the monies to find its way to the rest of your family. Assuming you have enough money to live on and that you’re not gonna outlive your cash, don’t be afraid to spend a little money. Don’t be afraid to donate a little money, whether it’s family members or charity, while you’re still alive and while you could see the benefits of your generosity, uh, with your own eyes.

I’m Barry Rithltz. You are listening to Bloomberg’s. At the money.

 

~~~

Find our entire music playlist for At the Money on Spotify.

 

The post At The Money: How to Spend Your Money in Retirement appeared first on The Big Picture.

Bats And Newts

Zero Hedge -

Bats And Newts

By Jane Foley, senior FX strategist at Rabobank

It has been a while since the details of the US CPI inflation report was poured over so much. On initial inspection the slightly softer than expected increase in core CPI inflation at 0.2% m/m (compared with a median expectation of 0.3% m/m) had calmed fears regarding the impact of President Trump’s tariffs on US price pressures. US stock futures rose while treasury yields, and the USD edged lower on what appeared on first sight to be a tame inflation report.  Not everyone was relaxed, however, and as the detail was examined the market changed its tune. The breakdown showed that prices of household furnishings and supplies was up a hefty 1% m/m, while prices of video and audio products surged 1.1%.  Additionally toy prices jumped 1.8% m/m with apparel rising 0.4% m/m. All four categories are flagged as being tariff sensitive and market hawks will remain nervous that further inflationary pressures could yet appear as tariffed inventory continues to pass through the supply chain to the consumer. Through the remainder of the session, stock markets were dragged lower as the market priced out some Fed easing for this year, yields moved down and EUR/USD dipped its toe briefly below the 1.16 level for the first time since the end of last month. That said, economists have differing views as to whether these pressures will prove to be transient. Our view, and that of the consensus, remains that the Fed will continue to sit tight at the July 30 FOMC meeting awaiting more clarity on the outlook for price pressures. That said, market hopes for a rate cut in September slipped yesterday as the breakdown of the inflation report was absorbed. 

It is not just what the Fed might do next that is drawing market attention. Speculation as to whether Fed Chair Powell will remain part of the FOMC until the end of his term is also in view.  Powell’s position as Chair expires next May, though his seat on the Board of Governors runs until January 2028. Yesterday Treasury Secretary Bessent confirmed that a “formal process” is already starting to identify a potential successor. 

Up until yesterday’s pullback, investors have this month been accused of displaying ambivalent attitudes to the many uncertainties that are still connected to US tariffs.  The firmer than expected tone of Germany’s ZEW survey highlighted that investor optimism has been a theme on both sides of the Atlantic. The ZEW expectations index rose to 52.7 from 47.5 the previous month with ZEW President Wamback pointing to hopes for a resolution in the EU-US tariff dispute, along with the impact stemming from the German government’s planned investment programme. Market sentiment suggests that President Trump’s weekend threat of a 30% tariff on the EU is generally being viewed as a negotiation tactic.  Yesterday Trump announced a trade deal with Indonesia and indicated that tariffs on pharmaceuticals could come as soon as the end of the month. The FT is reporting this morning that in Q2 US revenues from customs duties hit a record high of USD64 bln, which is USD47 bln more than in Q1.  The inference being that tariffs are raising revenue. No new news has been forthcoming with respect to trade agreements with the EU or Japan.  

JGB yields continue to draw attention. Today, JGB yields have pulled back from yesterday’s sell-off, though they remain elevated.  Fears that seat loses for the ruling LDP party at the July 20 Upper House election have raised the risk that PM Ishiba could resign and be replaced by a less fiscally hawkish leader.  Speculation regarding more fiscal spending and relative high inflation pressures in Japan have undermined the country’s bond market. 

In geopolitics, President Trump indicated that he won’t give long range missiles that can hit Moscow to Ukraine.  The previous day Trump had threatened increased sanctions on Russia and tariffs on its trading partners in addition to more weapons for Kyiv if President Putin did not act within 50 days to end the war in Ukraine.  

In Israel, the government is on the brink of collapse after an ultra-Orthodox party quit the coalition over the long running dispute over a new military conscription bill

At last night’s Mansion House speech, UK Chancellor Reeves pledged to push back against the re-regulation of the City that took place after the GFC. She stated that the “same flawed judgements that has seen newts and bats block major infrastructure projects is the one that requires almost 140,000 finance professionals to certify they are fit for the roles on an annual basis”. 

Tyler Durden Wed, 07/16/2025 - 10:45

WTI Holds Losses After Surprise Crude Draw As Rig Count Decline Rejects 'Drill, Baby, Drill'

Zero Hedge -

WTI Holds Losses After Surprise Crude Draw As Rig Count Decline Rejects 'Drill, Baby, Drill'

Crude futures are lower for a third session in a row with the market refocusing on supply and demand balances after putting concerns about U.S. tariffs and Russia sanctions on hold, and API reporting another build in crude (and gasoline) stocks - the third straight weekly rise in inventories.

While global crude inventories have been swelling in recent months, the bulk of the accumulation has come in markets that have relatively little impact on futures prices, according to Morgan Stanley.

The premiums traders are paying for more immediate supplies, a pattern known as backwardation, signal strong short-term demand.

API

  • Crude +800k

  • Cushing +100k

  • Gasoline +1.9mm

  • Distillates +800k

DOE

  • Crude -3.86mm

  • Cushing +213k

  • Gasoline +3.39mm

  • Distillates +4.17mm

The official data reversed API's guess with a sizable Crude inventory draw (ending the short streak of builds), but products stocks soared...

Source: Bloomberg

For the first time since Sept 2023, the SPR saw a drawdown as DoE Authorizes Exxon To Tap SPR To Avert Refinery Disruptions...

Source: Bloomberg

US Crude production remains at or near record highs as rig counts continue to tumble despite Trump's 'drill baby drill' mantra...

Source: Bloomberg

WTI was trading lower ahead of the official data and shows no signs of life post...

Source: Bloomberg

Price gauges indicate that availability is tight for the time being, with a premium of 81 cents on the international benchmark’s prompt spread, and US distillate inventories, which include diesel, touching the lowest level since 2005.

“The Brent futures curve remains firmly in backwardation across the first four-to-six months — a structure that usually points to market tightness,” Morgan Stanley analysts including Martijn Rats said in a note, which highlighted what they described as an uneven distribution of inventory increases.

“The builds have been in the Pacific, but Brent is priced in the Atlantic,” they said.

Oil has traded in a tight range over the past three weeks as strong summer demand is being matched with rising supply. OPEC+ has been adding 411,000 barrels per day to the market in monthly tranches that began in May and will boost that by 548,000 bpd in August.

The additional supply is boosting inventories.

 

Tyler Durden Wed, 07/16/2025 - 10:40

US Industrial Production Surges In June

Zero Hedge -

US Industrial Production Surges In June

US Industrial production rose significantly more than expected in June (+0.3% MoM vs +0.1% MoM exp) with May's 0.2% MoM decline revised up to unchanged. This left Industrial production up 0.73% YoY...

Source: Bloomberg

Drilling down, we see Manufacturing output also jump in June (+0.1% vs 0.0% exp), lifting the YoY growth to +0.8%...

Source: Bloomberg

Additionally, Capacity Utilization ticked up very modestly but remains in a downtrend...

Source: Bloomberg

...so much for the post-tariff-front-running hangover?

Tyler Durden Wed, 07/16/2025 - 09:23

Watch: Rent-A-Protester CEO Rejects $20 Million Contract To Stage Anti-Trump Protests 

Zero Hedge -

Watch: Rent-A-Protester CEO Rejects $20 Million Contract To Stage Anti-Trump Protests 

Free speech in the U.S. was never intended to serve as a perpetual vehicle for permanent protest. However, over the past decade, it has morphed into a billion-dollar industry fueled by dark-money-funded, far-left-aligned NGOs—many backed by opaque funding sources, including leftist billionaires and entities based in countries classified as foreign adversaries.

Yet here we are. Far-left NGO networks, some aligned with Marxist ideology, attempted coordinated acts of civil unrest in Los Angeles last month, including arson and insurrectionist behavior.

Simultaneously, operatives tied to far-left color revolution operations, including the Indivisible movement, have targeted Elon Musk and President Trump. In fact, Indivisible has maintained a continuous, nationwide protest pressure campaign against Trump.

Just yesterday, Indivisible foot soldiers were spotted outside Carnegie Mellon's facilities in Pittsburgh, where the President Trump attended an Energy and Innovation Summit.

Most of these protests are highly organized, and emerging evidence suggests they are largely artificial. In other words, NGOs are hiring "rent-a-protesters" to amplify their message and create the illusion of popular support—when in reality, that mass support does not exist.

The latest evidence comes from an interview between NewsNation's Brian Entin and Adam Swart, CEO of an activist group called "Crowds on Demand."

Swart told Entin that an unnamed organization offered his company $20 million to recruit demonstrators for the anti-Trump protests on Thursday.

He told the journalist, "We had to reject an offer worth around $20 million for nationwide, large-scale demonstrations across the country. Personally, I don't think it's effective. I'm rejecting the contract not because I don't want the business, but because, frankly, this is going to be ineffective and make us all look bad."

Thursday's upcoming color revolution operation, titled "Good Trouble Lives On," is a front group supported by dozens of leftist nonprofits, some of which have participated in previous protests (e.g., "No Kings"). The new development is that the CEO of a protest-for-hire company publicly admitted that a group offered $20 million to recruit fake protesters and amplify an artificial narrative.

Good Trouble Lives On's partners...

Attempting another nationwide color revolution operation.... 

Thursday's Good Trouble Lives On's mobilization focuses on civil rights, not issues like Tesla or DOGE or Trump—topics addressed by earlier calls to action.

Jason Curtis Anderson from One City Rising comments on this latest development: 

Most people who defend the right to protest are really defending the right to free speech, which is important. The thing they don't understand is that it's become a permanent protest industry, and there's a lot of components about it that should alarm all Americans, but most do not understand what is going on. 

Someone creating a national 'crowds on demand' business and someone from the NGO world offering them $20M shows that omni-cause advocacy is a national business, and it actually pays quite well. Something that the American people have failed to grasp, even as protests become permanent, is that the tax-deductible 501c3 nonprofit world is the unregulated wild west of this behavior. It's the only sector where someone can get paid to sow chaos and protest every day, not have any tangible deliverables or metrics that prove they are in-fact working for the public good, and that there's a multi-billion dollar network of NGOs behind these entities to support them. 

Another really alarming component is the co-mingling of foreign interests. Just a few weeks ago, it was revealed that CHIRLA, a California-based nonprofit that receives large federal and state funding, had members that were part of Neville Roy Singham's network

It's bad enough that we can't even address the organizations that are doing the bidding of foreign governments, but mix this in with people who want to throw millions of dollars into paid agitators and the general public no longer has the ability to tell what is real.

.  .  . 

Tyler Durden Wed, 07/16/2025 - 09:20

Industrial Production Increased 0.3% in June

Calculated Risk -

From the Fed: Industrial Production and Capacity Utilization
Industrial production (IP) increased 0.3 percent in June after remaining unchanged in April and May; for the second quarter as a whole, IP increased at an annual rate of 1.1 percent. In June, manufacturing output ticked up 0.1 percent, and the index for mining decreased 0.3 percent. The index for utilities rose 2.8 percent. At 104.0 percent of its 2017 average, total IP in June was 0.7 percent above its year-earlier level. Capacity utilization moved up to 77.6 percent, a rate that is 2.0 percentage points below its long-run (1972–2024) average.
emphasis added
Capacity UtilizationClick on graph for larger image.

This graph shows Capacity Utilization. This series is up from the record low set in April 2020, and close to the level in February 2020 (pre-pandemic).

Capacity utilization at 77.6% is 2.0% below the average from 1972 to 2023.  This was above consensus expectations.

Note: y-axis doesn't start at zero to better show the change.

Industrial Production The second graph shows industrial production since 1967.

Industrial production decreased to 104.0. This is above the pre-pandemic level.

Industrial production was above consensus expectations.

Illegal Border Crossings Hit Record Monthly Low, CBP Says

Zero Hedge -

Illegal Border Crossings Hit Record Monthly Low, CBP Says

Authored by Aldgra Fredly via The Epoch Times,

Illegal border crossings fell to their lowest level in June, with no parole releases of illegal immigrants, according to U.S. Customs and Border Protection (CPB) data released on Tuesday.

There were 25,228 total encounters nationwide in June, down from 29,478 the previous month, the data showed. This marks the lowest monthly total ever recorded by CBP, the agency stated.

Border Patrol apprehensions nationwide also dropped to a historic low, with 8,024 apprehensions recorded last month, compared to 10,357 in May, the data showed.

Of that total, Border Patrol agents apprehended 6,072 illegal immigrants at the southwest border, marking a 15 percent decline from the March record of 7,183 apprehensions.

CBP recorded its lowest single-day apprehension total on June 28, with just 136 apprehensions, according to the data.

For the second consecutive month, the agency reported zero illegal immigrant releases along the southwest border.

The agency also has seen a 13 percent increase in nationwide seizures of illicit drugs, such as fentanyl and methamphetamine, in June compared to the previous month, which underscored efforts to combat “cartel-driven smuggling routes” at the border.

Methamphetamine seizures surged 102 percent compared to May.

CBP Commissioner Rodney Scott said that these figures were proof of the agency’s commitment to protecting the country “with relentless focus” under the Trump administration.

“From shutting down illegal crossings to seizing fentanyl and enforcing billions in tariffs, CBP is delivering results on every front,” Scott said in a statement.

Secretary of Homeland Security Kristi Noem (2nd R) during a tour along the Nogales border wall at the Mariposa Port of Entry in Nogales, Ariz., on March 15, 2025. Alex Brandon/AFP via Getty Images

Homeland Security Secretary Kristi Noem stated on July 2 that the Trump administration has delivered “the most secure border in American history,” as demonstrated by the latest figures.

“The world is hearing our message: the border is closed to law breakers. Under President Trump, our Border Patrol agents are empowered to do their job once again, secure our border, and protect the American people,” Noem stated on X.

After taking office for a second term on Jan. 20, President Donald Trump signed an executive order aimed at “securing our borders,” directing his administration to build barriers at the border, deter and prevent the entry of illegal immigrants, remove “promptly all aliens who enter or remain in violation of federal law,” and pursue criminal charges “against illegal aliens who violate the immigration laws.”

The order said the United States has seen a “large-scale invasion at an unprecedented level” over the past four years, with millions of illegal immigrants entering the country, including potential terrorists, foreign spies, members of cartels, and other hostile actors with malicious intent.

To further tighten border security, Trump issued a memo on April 11 authorizing the military to take control of land along the U.S.-Mexico border as part of efforts to curb illegal immigration and drug trafficking.

The memo does not apply to Native American reservations but does extend to the Roosevelt Reservation, a 60-foot-wide corridor owned by the federal government running along the U.S.–Mexico border in California, Arizona, and New Mexico.

It also authorized Defense Secretary Pete Hegseth to treat areas where troops are deployed as military installations, granting him the authority to protect those zones and restrict access as necessary.

Tyler Durden Wed, 07/16/2025 - 09:00

Bank of America Misses On Revenue Despite Stellar Sales And Trading Results, Projects Two Rates Cuts In NII Forecast

Zero Hedge -

Bank of America Misses On Revenue Despite Stellar Sales And Trading Results, Projects Two Rates Cuts In NII Forecast

The strong bank earnings continued for a second day, when after solid results from JPM yesterday (if rather mediocre from Wells) this morning we got top and bottom line beats from Goldman, Morgan Stanley and Bank of America. Taking a closer look at the latter, the bank's traders posted a record second quarter - yet one which missed revenue estimates - as the company reaped the benefits of volatile markets and net interest income topped analysts’ estimates.

While BofA reported an EPS beat (Q2 came at $0.89, vs est of $0.85), total Q2 revenue of $26.5 billion was down 3% YoY from $27.4 billion a year ago, and missed estimates of $26.75 billion. Overall, Bank of America’s second-quarter profit rose, with net income up 3.2% to $7.12 billion, more than the $6.56 billion analysts had predicted.

Still, revenue from fixed income, currencies and commodities trading jumped 19% to $3.25 billion "driven by strong performance in macro products", which helped Bank of America top analysts’ estimates for per-share earnings. Equity trading rose 9.6% to $2.13 billion, also topping expectations," driven by improved trading
performance and increased client activity."

Unlike JPM, where the provision for credit losses unexpectedly tumbled, Bank of America saw its loss provisions rise to $1.6 billion from $1.5 billion a year ago, and in Q1 2025. The net reserve build was $67MM in 2Q25 vs.$28MM in 1Q25. Some more details:

  • Total net charge-offs of $1.5B increased $73MM from 1Q25
    • Consumer net charge-offs of $1.1B decreased $60MM, driven by lower credit card losses: Credit card loss rate of 3.82% in 2Q25 vs. 4.05% in 1Q25
    • Commercial net charge-offs of $466MM increased $133MM driven primarily by sales and resolutions of commercial real estate office properties
    • Net charge-off ratio of 0.55% vs. 0.54% in 1Q25
  • Allowance for loan and lease losses of $13.3B represented 1.17% of total loans and leases
  • Total allowance of $14.4B included $1.1B for unfunded commitments

Taking a closer look at the balance sheet, both total deposits and loans increased across the franchise:

  • Average deposits of $1.97T increased $64B, or 3%

  • Average loans and leases of $1.13T increased $77B, or 7%

  • Average Global Liquidity Sources of $938B
  • CET1 capital of $201B was flat to 1Q25
  • CET1 ratio of 11.5%4 vs. 11.8% in 1Q25; well above regulatory minimum
  • Paid $2.0B in common dividends and announced plans to increase quarterly common dividend 8%5
  • Repurchased $5.3B of common stock

Here is Goldman's recap of the earnings: 

  • Earnings beat – BAC reported 2Q25 EPS of 89¢, vs. GSe/Visible Alpha Consensus Data 89¢/85¢, with core EPS of 89¢ vs. our/Street like estimates of 91¢/90¢ (backing out $51mn losses on CVA/DVA, a $67mn reserve build, and normalizing the tax rate); with NII-FTE coming in at $14.815, above ‘buyside expects’ of ~$14.7-14.8bn while both expenses and fees were in-line. Both loans and deposits looked better than expectations (there were some worries on deposits) while the buyback also came in a touch above at ~$5.3bn. Within the in-line print in fees, BAC beat in both Trading and IB while the negative offset was ‘other income’
  • Key takeaway: We view these results as better than feared, given a core PPNR of $9.5bn roughly in line with the Street, on better core fees, slightly lower NII, and roughly in-line core operating efficiency, with a core ROTCE of 13.3% 20bps below the Street. We expect the focus to be on the cadence of NII and rate sensitivity, and the expense guidance into 2025, although the company held the 4Q25 NII guide unchanged, which we think will be key to the share price performance today, given the weaker NII print for the quarter, vs. consensus. The pick up in NII growth in the second half is driven by a step change in asset repricing (from around $100m in Q2 to $225m per quarter in 3Q/4Q25), and that the guidance still assumes two rate cuts.
  • Summary of key quarterly trends: NII was ~0.5% below the Street, on higher loans, earning assets, and deposit balances, and a lower NIM (mainly driven by lower loan and security yields, partially offset by better deposit repricing). Core fee revenue came in ~0.5% above like consensus, on better trading and investment banking revenue, in particular, although core fees are above as well. We peg the core efficiency ratio at 64.5%, 10bps worse vs. the Street. Provisions were 2% below Street estimates, and BAC built $67mn of reserves (largely in line with GSe for a $59mn build).
  • Summary of guidance and vs. expectations: Management held the 4Q25 NII guide unchanged at $15.5-15.7bn (vs. Street at $15.6bn), despite 2 fewer rate cuts in their current forecast, although the company upped commentary from low to mid single digit loan growth through the balance of the year. The company also committed to delivering operating leverage in 2H25.
  • We look for further clarity on: 1) the contributors to the unchanged 2025 NII outlook, given 2 less rate cuts, but healthy balance sheet growth trends in the quarter, and the company upping guidance from low to mid single digit loan growth; 2) capital returns, given $5.3bn of share repurchases in the quarter (vs. GSe for $5.4bn), and recently freed up additional excess capital from the most recent CCAR test, and the SLR proposal; 3) sustainability of trading revenue, after 2Q25 trading was up 15% YoY (vs. intraquarter guidance for up mid-single digit to high single-digit YoY), and additional excess capital that could be deployed into the business. Separately, the pace of improvement of investment banking, which was down 7% YoY (vs. an implied intraquarter guidance of 23% decline YoY); 4) the efficiency outlook for 2025, after core expenses rose 5% YoY in 2Q25; and 5) the pace and magnitude of credit normalization and reserve builds, given macro and geopolitical uncertainty.

Banks benefited from the market volatility which whipsawed global markets after Trump announced tariffs on trading partners around the world in April. Indeed, what was bad news for markets (at least initially) was great news for businesses at Bank of America and its rivals across Wall Street as they’ve benefited from a surge in client activity while also thwarting expectations for a strong rebound in mergers and acquisitions.

The second-largest US bank also said that net interest income, a key source of revenue for the company, rose 7.1% to $14.7 billion, above the 6.5% analyst estimate for NII, the revenue collected from loan payments minus what depositors are paid. Commenting on the results, BofA said that NII increased $0.2B from 1Q25, "driven by higher deposit and loan balances, one additional day of interest accrual, and fixed-rate asset repricing, partially offset by the impact of lower non-U.S. interest rates on loan yields." The Q2 NII also "increased $1.0B from 2Q24, driven by fixed-rate asset repricing, higher NII related to Global Markets (GM) activity, and higher deposit and loan balances, partially offset by the impact of lower interest rates."

Similar to JPMorgan, BofA's outlook is for continued growth in NII (to $15.6BN), where fixed-rate asset repricing adds $450MM by year end, offsetting the $250MM in expected rate cuts in Sept and Oct. 

“Consumers remained resilient, with healthy spending and asset quality, and commercial borrower utilization rates rose,” Chief Executive Officer Brian Moynihan said in the statement. “In addition, we saw good momentum in our markets businesses.”

As Bloomberg notes, Bank of America’s results offered a further look at how the biggest US banks fared at the beginning of Trump’s second term. Investors are also eager to hear details on the national economy from executives whose firms cater to large swaths of American consumers and businesses.

On Tuesday, JPMorgan and Citigroup reported earnings that beat analysts’ estimates, with trading and investment-banking activity boosting results. Executives at both banks expect the momentum in trading to continue and the investment-banking pipeline to build as corporate clients get more comfortable with geopolitical tensions.

Shares of Charlotte, North Carolina-based Bank of America rose 1.8% at 6:59 a.m. in early New York trading. They gained 4.6% in the 12 months through Tuesday, less than the 19% increase in the S&P 500 Financials Index.

Much more in the full Bank of America earnings presentation below (pdf link).

Tyler Durden Wed, 07/16/2025 - 08:42

'Cool' US Producer Prices Blow Up Tariff-Flation Narrative

Zero Hedge -

'Cool' US Producer Prices Blow Up Tariff-Flation Narrative

Following yesterday's 'mixed' CPI, all eyes are on the Producer Prices prints this morning for signs that the inflation pipeline is hotting up (or not)... and the print confirms - it's not hotting up.

Headline and core PPI printed cooler than expected (unchanged MoM), well below the expected +0.2% MoM (in fact it was lower than all estimates)

Headline PPI rose 2.3% YoY (down from a revised higher 2.7% in May and below the 2.5% expected) - that is the lowest YoY print since Sept 2024...

Source: Bloomberg

On a MoM basis, Services PPI 'deflated'...

Source: Bloomberg

And on a YoY basis, Energy prices continue to 'deflate'...

Source: Bloomberg

Final demand goods:

Prices for final demand goods rose 0.3 percent in June, the largest increase since moving up 0.3 percent in February. Over half of the broad-based advance in June can be traced to the index for final demand goods less foods and energy, which climbed 0.3 percent. Prices for final demand energy and for final demand foods also rose, 0.6 percent and 0.2 percent, respectively.

Product detail: Within the index for final demand goods in June, prices for communication and related equipment increased 0.8 percent. The indexes for gasoline; residential electric power; canned, cooked, smoked, or prepared poultry; meats; and tree nuts also moved higher. In contrast, prices for chicken eggs dropped 21.8 percent. The indexes for natural gas liquids and for thermoplastic resins and plastics materials also declined. 

Final demand services:

Prices for final demand services edged down 0.1 percent in June after increasing 0.4 percent in May. Leading the decrease, the index for final demand services less trade, transportation, and warehousing declined 0.1 percent. Prices for final demand transportation and warehousing services fell 0.9 percent, while margins for final demand trade services were unchanged. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: Over half of the June decline in the index for final demand services can be attributed to prices for traveler accommodation services, which fell 4.1 percent. The indexes for automobiles and automobile parts retailing, deposit services (partial), airline passenger services, and food and alcohol wholesaling also decreased. Conversely, prices for portfolio management advanced 2.2 percent. The indexes for machinery, equipment, parts, and supplies wholesaling; furniture retailing; and apparel, jewelry, footwear, and accessories retailing also rose. 

But will the energy component start to rise next month?

Core PPI also printed cooler than expected, down to just 2.6% YoY. Core PPI YoY was last lower than this is March 2024...

Source: Bloomberg

The pipeline for PPI is picking with Intermediate Demand Goods prices picking up...

Source: Bloomberg

Margin pressure lifted this month...

Source: Bloomberg

So much for the terrifying threat of tariff-flation... or will we just have to wait for next month to see the full horror.. or the next month?

Tyler Durden Wed, 07/16/2025 - 08:39

Federal Judge Takes Control Of US Government

Zero Hedge -

Federal Judge Takes Control Of US Government

Authored by Kenin Spivak via RealClearPolitics,

Just days after the Supreme Court again made it clear that the separation of powers is sacrosanct, Indira Talwani, an Obama appointed federal judge in Massachusetts, has taken the unprecedented step of ordering the government to fund Planned Parenthood, purporting to enjoin implementation of a portion of the Big Beautiful Bill (BBB) passed by Congress.

The BBB imposed a one-year ban on state Medicaid payments to health care nonprofits that offer abortions and also received more than $800,000 in federal funding in 2023. Three days after the president signed the BBB into law, Planned Parenthood sought a temporary restraining order (TRO). Without hearing from the government, complying with federal rules, or even providing an explanation, within hours after the filing, Talwani issued a TRO for at least 14 days that requires the government to spend money Congress declined to appropriate.

Four days later, the administration asked Talwani to dissolve the TRO because of its obvious infirmities. Instead, she doubled down, issuing an amended TRO that satisfied the technical requirements she had previously ignored.

I work with Planned Parenthood’s very capable lead lawyers. Without the facts or the law on their side, they did the right thing. They found a far-left federal judge who has repeatedly ruled against the Trump administration and is willing to create a constitutional crisis to advance a political cause.

Numerous Supreme Court decisions explain that merely because something is legal does not mean that Congress must fund it, or continue to do so. Just a few weeks ago, in Medina v. Planned Parenthood, the Supreme Court rejected Planned Parenthood’s challenge to South Carolina’s right to exclude Planned Parenthood from its Medicaid program. For more than 40 years, the Hyde Amendment has generally prohibited federal funding for abortion, and the court has repeatedly held that the government is under no contrary obligations (e.g., Maher v. Roe and Harris v. McRae).

Talwani’s order violates Article I of the Constitution, which could not be more clear: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Article I vests the power to authorize spending exclusively in Congress. In OPM v. Richmond (1989), the Supreme Court confirmed that the Appropriations Clause conveys a “straightforward and explicit command” that no money “can be paid out of the Treasury unless it has been appropriated by an act of Congress.”

There is no basis in the Constitution or any Supreme Court decision to support the right of a court – any court – to interfere in congressional decisions to fund, or cease funding, a private organization. To the contrary, in Rust v. Sullivan (1991), the Supreme Court held that “the Government has no constitutional duty to subsidize an activity merely because the activity is constitutionally protected.”

Planned Parenthood’s main argument is the equivalent of jury nullification. Because it is the dominant provider of abortion services in the United States, limiting its ability to carry out its mission would deprive women of access to such services. Even if true, that is a political argument unsuccessfully made during the last election and during the debate over the BBB.

Planned Parenthood asserts that the BBB is an unconstitutional bill of attainder because the criteria for defunding effectively single it out. That absurd argument flies in the face of an unbroken line of cases that apply the Article I prohibition on bills of attainder only to criminal or quasi-criminal punishment. Congress often funds, or defunds, individuals and organizations. In Nixon v. Administrator of General Services (1971), the Supreme Court rejected the proposition that an individual or defined group is subject to a bill of attainder merely because Congress singles them out. Talwani did not mention bills of attainder in her amended TRO.

Planned Parenthood also claims that defunding its efforts constitutes viewpoint retaliation under the First Amendment, and a violation of the equal protection clause of the Fifth Amendment. In Rust, the Supreme Court rejected similar claims. In its papers, Planned Parenthood cites no Supreme Court case compelling Congress to appropriate spending on these grounds.

Nonetheless, in her amended TRO, Talwani relied on the First and Fifth Amendments to justify issuance of the TRO. She also rejected the government’s concern that it would be harmed if it paid money to Planned Parenthood, because, she averred, the government likely would instead use the funds to pay another provider. By that logic, a mugger is only taking money that his victim would probably spend on something else.

The first hearing is on Friday. If Talwani does not relent, she can expect an unpleasant rebuke from appellate courts.

Kenin M. Spivak is founder and chairman of SMI Group LLC, an international consulting firm and investment bank. He is the author of fiction and non-fiction books and a frequent speaker and contributor to media, including The American Mind, National Review, the National Association of Scholars, television, radio, and podcasts.

Tyler Durden Wed, 07/16/2025 - 08:25

Futures Drop As Tariffs, Earnings And Rising Yields Dent Sentiment

Zero Hedge -

Futures Drop As Tariffs, Earnings And Rising Yields Dent Sentiment

US equity futures and global stocks dropped, but were well off session lows, as a stream of negative tariff headlines and dialed-back expectations for interest-rate cuts prompted doubts about the market’s ability to sustain recent highs and sent 30Y yields above 5%, a level seen as a redline for further stock appreciation. As of 7:00am, the S&P 500 was on track for a second straight decline, with futures down 0.1% after , while Nasdaq futures were 0.3% lower after closing at a record; the small-caps Russell 2000 is seeing an early outperformance bid. Pre-mkt, Mag7/semis are mixed as are Cyclicals with Banks seeing an offer into the next batch of earnings. In Europe, the Stoxx 600 slipped 0.2%, weighed down by technology shares as ASML Holding NV trimmed its growth outlook for next year, citing trade tensions; French car giant Renault slumped 16% after slashing its profit guidance. Treasury yields are flat as is the USD. Commodities are mostly higher with Ags leading, precious metals following while energy is modestly weaker. Today’s macro data focus is the PPI data which will give more clues about how tariffs are affecting companies after mixed CPI numbers. We have another batch of Fedspeakers who will say nothing of importance.

In premarket trading, Mag 7 stocks are mixed (Apple +0.3%, Alphabet +0.2%, Meta +0.3%, Microsoft little changed, Tesla -0.4%, Amazon -0.5%, Nvidia -0.6%). Here are some other notable premarket movers:

  • Crypto-linked stocks rose with Bitcoin prices in premarket trading Wednesday as President Donald Trump said the House will pass the GENIUS Act stablecoin bill on Wednesday after a procedural vote Tuesday failed (Among gainers Strategy +1.5%, Circle Internet Group +1.6%, Coinbase +0.8%, Galaxy Digital +4.1%, Hut 8 +2.3%, Hive Digital Technologies +0.7%, MARA Holdings +1.8%, Cleanspark +1.8%, Riot Platforms +2.1%, Cipher Mining +0.5%, Bitfarms +2.9%, Terawulf +1.6%, Bit Digital +6.4%, SharpLink Gaming +13%, and Bitdeer Technologies +2.6%).
  • ASML ADRs (ASML) fall 8.4% after the chip equipment maker struck a more cautious tone about growth outlook next year.
  • JB Hunt reported 2Q earnings that beat estimates, but flagged “higher professional driver wages and equipment-related costs.” 
  • Brighthouse Financial (BHF) is up 7.4% on light volume after the Wall Street Journal said Aquarian is in exclusive talks to buy the provider of annuities and life insurance, citing people familiar.
  • Global Payments (GPN) is up 6.4%; activist investor Elliott Investment Management has amassed a sizable position in payments services company, according to a person with knowledge of the matter.
  • Renault SA shares sank 16% after the automaker lowered its profitability outlook for the year and named company veteran Duncan Minto interim chief executive officer.
  • Nvidia Corp. boss Jensen Huang anticipates getting the first batch of US licenses to export H20 AI chips to China soon.
  • Barclays Plc was fined £42 million ($56 million) over failures to properly identify financial crime risks with two clients.
  • Huawei Technologies Co. took the top spot in China’s smartphone market for the first time in more than four years.

Among trade headlines, Trump said he was likely to impose tariffs on pharmaceuticals as soon as the end of the month and that levies on chips could come soon as well. Traders further pared bets to their lowest level in a month for two Federal Reserve interest rate cuts this year on anticipation that tariff-related costs are increasingly being passed on to consumers (a continuation of a bet that has so far been dead wrong). Elsewhere, EU’s McGrath says a trade deal between the EU and US can be done by Aug. 1 and expects two weeks of “intense negotiations.” Meanwhile, UBS strategists said US equity investors are complacent in their view that tariffs are predominantly a negotiation tool. They put their S&P 500 year-end target of 5,300 - some 1000 lower than where the S&P is trading now - under review.

Traders trimmed expectations for Fed rate cuts after the CPI data, but the main Fed focus today is on who may replace Powell. Kevin Hassett is the early frontrunner, Bloomberg reported, with Kevin Warsh also in the top two. The Trump administration is also said to be finalizing an executive order that would pave the way for 401(k) retirement savings plans to invest in private equity.

After big bank earnings got off to an underwhelming start on Tuesday, investors will be looking at the next flurry of results with Bank of American Corp., Goldman Sachs and Morgan Stanley reporting today. “We have toned down our risk by a notch,” said Mohit Kumar, chief European strategist at Jefferies International. “However, technicals are still supportive and news flow of more deals being struck over the coming weeks should offset some of the negative trade rhetoric.”

US stocks are back to near-historic premiums over global peers, but bargain hunters must also work harder to find options outside the world’s biggest market, according to Bloomberg Intelligence. The S&P 500 now trades at a 55% forward P/E premium to the Bloomberg Global ex-US Index, more than double the roughly 25% median from 2015-19.

Economic data due later Wednesday is expected to show a similar trend for producer goods. “The tariff inflation shock starts to hit,” wrote Robin Brooks, a senior fellow at the Brookings Institution and former chief currency strategist at Goldman Sachs Group Inc. “This effect will keep building in intensity as pre-tariff inventories are depleted.”

In Europe, the Stoxx 600 is down 0.2%, falling for a fourth straight session after some disappointing corporate updates from the region. Autos are leading declines as Renault shares fall 17% after the French carmaker issued a profit warning. Technology stocks also underperform as ASML shares fall 8% in Amsterdam after the CEO walked back the company’s growth forecast for next year due to trade disputes and global tensions.  Equities have struggled to hit new highs in recent weeks amid lingering uncertainty around the US trade war. Among notable moves, Richemont rises on better-than-expected sales, defying a wider downturn for luxury goods. Renault shares tumble after a profit warning. Here are some of the more notable equity movers:

  • Richemont shares rise as much as 2.4% after the Cartier-owner reported surging sales at its jewelry division despite a tough backdrop for the luxury goods industry.
  • Partners Group climbs as much as 7.3%, after the Swiss private equity company delivers a beat on assets under management in the first half and reiterates its outlook for the full year.
  • Barco shares surge as much as 17%, hitting the highest since April 2024, following the visualization specialist’s first-half Ebitda beat.
  • ASML shares fall as much as 7.3%, the most in three months, after the chip equipment maker cautioned about growth next year.
  • Renault shares fall as much as 17%, the steepest drop since March 2020, after the French carmaker issued a profit warning on Tuesday evening, lowering operating margin guidance for this year and also trimming its free cash flow expectations.
  • AstraZeneca shares drop as much as 1.6%, after its experimental drug for a rare plasma cell disorder failed to delay death or reduce the number of hospitalizations for heart problems.
  • Ontex shares plunge as much as 12%, after the maker of disposable personal hygiene products delivered quarterly results below expectations and cut its full-year earnings outlook.
  • Bakkafrost falls as much as 14%, the most since July 2023, after the seafood group issued a profit warning.
  • Nel falls as much as 8.1%, the most since May, after the hydrogen technology supplier reported a sharp fall in new orders in the second quarter. Citi said weak order intake is a continued concern.
  • Fuchs shares plunge as much as 16%, the biggest drop since 2011, as the lubricant maker cut its annual guidance after second-quarter profit came in lower than expected.
  • DNO shares drop as much as 8.1% after the oil producer said it has temporarily suspended operations at its Tawke license in the Kurdistan region of Iraq following three explosions early this morning.
  • Svenska Handelsbanken declines as much as 8%, the worst performer on the Stoxx 600 Banks Index, after net interest income at the Nordic lender missed analysts estimates for the second quarter.

Earlier in the session, Asian stocks were mixed, as gains in Hong Kong and optimism over the tech sector were countered by dimming prospects for Federal Reserve easing. The MSCI Asia Pacific Index dipped 0.1%. Key gauges declined in Australia and South Korea, while shares rose in Taiwan as well as Hong Kong. TSMC and Alibaba climbed for a second day after news that the US would allow resumption of some AI chip shipments to China. The regional benchmark has traded sideways in July after a three-month rally. Broader sentiment took a hit Wednesday after US consumer price data indicated companies are beginning to pass through some tariff-related costs, with Fed Dallas President Lorie Logan saying. Hong Kong stocks advanced meanwhile, with the Hang Seng Index heading for its highest close since February 2022 on a rebound in risk appetite amid signs of easing US-China tensions. Still, upcoming Chinese corporate results are expected to show weak earnings growth.

In FX, the Bloomberg Dollar Spot Index falls 0.1%. The euro outperforms its G-10 peers slightly with a 0.2% gain. The pound fades post-CPI gains, trading flat versus the greenback just below $1.34.

In rates, Treasuries are steady ahead of more US inflation data later on Wednesday in the form of producer prices. US 10-year yields are flat at 4.48%. Japan’s super-long bonds rebounded following a sharp selloff earlier in the week, as investors weighed the potential for increased fiscal spending after this weekend’s upper house election.  

Gilts fall along the curve after UK inflation unexpectedly rose to its highest level since January 2024, prompting traders to trim bets on easing by the Bank of England this year. UK 10-year yields rise 3 bps to 4.65%. Bunds are little changed.

In commodities, spot gold rises $16 to around $3,340/oz. Bitcoin climbs 2% and back above $119,000. WTI falls 0.5% to near $66.20 a barrel.

Today's US economic data slate includes June PPI and July New York Fed services business activity (8:30am) and June industrial production (9:15am). Fed speaker slate includes Barkin (8am), Hammack (9:15am), Barr (10am), Bostic (3:30pm) and Williams (6:30pm), and Fed releases Beige book at 2pm

Market Snapshot

  • S&P 500 mini -0.1%
  • Nasdaq 100 mini -0.3%
  • Russell 2000 mini little changed
  • Stoxx Europe 600 -0.1%
  • DAX +0.2%
  • CAC 40 little changed
  • 10-year Treasury yield -1 basis point at 4.48%
  • VIX unchanged at 17.38
  • Bloomberg Dollar Index little changed at 1206.71
  • euro +0.2% at $1.162
  • WTI crude -0.3% at $66.32/barrel

Top Overnight News

  • Trump said on Tuesday that Treasury Secretary Scott Bessent could be a candidate to replace Federal Reserve Chairman Jerome Powell, but suggested that might not happen. When asked if Powell’s renovation cost overrun were a fire able offense, Trump said “I think it sort of is.” RTRS
  • President Donald Trump said he was likely to impose tariffs on pharmaceuticals as soon as the end of the month and that levies on semiconductors could come soon as well, suggesting that those import taxes could hit alongside broad “reciprocal” rates set for implementation on Aug. 1. BBG
  • Kevin Hassett, one of President Donald Trump’s longest-serving economic aides, is the early frontrunner to replace Jerome Powell as Federal Reserve chief next year, followed by Kevin Warsh. BBG
  • Trump is expected to sign an executive order in the coming days designed to help open up 401(k)s to private-market investments, according to WSJ.
  • Senator Cassidy said President Trump is to sign Fentanyl Act into law on Wednesday.
  • Defense Secretary Hegseth ordered the release of 2000 National Guard troops from the federal protection mission in LA.
  • Japan’s super-long bonds rose, reversing course after a rout earlier in the week over concern that this weekend’s election will result in higher government spending. BBG
  • Rio Tinto’s macro commentary on the Chinese economy – “industrial activity and net exports grew strongly during the quarter on the back of China’s highly competitive manufacturing sector. Trade diversification continued as the decline in exports to the US was more than offset by shipments to other regions. Retail sales growth was supported by ongoing stimulus measures while the government remains committed to infrastructure investment. However, headwinds such as trade tensions and a soft property market continue to pose challenges."
  • Indonesia’s central bank cut its policy rate by 25bp to 5.25% (analysts were split on the outcome of this meeting, with some anticipating a cut while others felt rates would stay unchanged). WSJ
  • ASML (-7.3% in pre)  walked back growth forecasts for next year due to the trade uncertainty, even as its second-quarter orders beat estimates. The stock slumped. BBG
  • Inflation unexpectedly rose in the U.K., likely keeping policymakers at the BOE cautious despite a limping economy. Headline, core, and services CPI all were higher than anticipated. WSJ
  • Taiwan, Switzerland and India, none of which received letters letters from Trump last week, are all potentially closing in on deals that could be announced in the coming weeks. Politico
  • Fed's Logan (2026 voter) said the base case is that monetary policy needs to hold tight for a while longer to bring inflation down and she wants to see low inflation continue longer to be convinced, while she added that June CPI data suggests PCE inflation, which the Fed targets at 2%, will rise. Logan also commented that softer inflation and a weakening labor market could call for lower rates fairly soon and under the base case, the Fed can sustain maximum employment even with modestly restrictive policy. 

Trade/Tariffs

  • US President Trump they are working on five to six trade deals and there will probably be two to three deals by August 1st.
  • US President Trump said pharma tariffs will probably begin at month-end and initial tariffs on pharmaceuticals will be low, while Trump also said they will release tariff letters for smaller countries soon and will probably set one tariff for all of them over 10%.
  • US President Trump said a great deal for everybody was just made with Indonesia with Indonesia to pay 19%, while the US will pay nothing and similar deals are in the works. Trump later posted that "Indonesia has committed to purchasing $15 Billion Dollars in U.S. Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777’s."
  • US Trade Representative announced the initiation of a Section 301 investigation of Brazil's unfair trading practices.
  • China's Commerce Ministry said China and Australia signed a memorandum of understanding on the implementation and review of the China-Australia Free Trade Agreement.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued following the lacklustre handover from Wall St owing to an acceleration in US CPI data, while trade uncertainty lingered after President Trump suggested pharma tariffs could begin at month-end and tariff letters for smaller countries could be sent out soon. ASX 200 retreated with nearly all sectors in the red aside from tech and with miners not helped by the indecisive performance in Rio Tinto following its quarterly operations update in which it registered higher iron ore production but a decline in shipments Y/Y. Nikkei 225 traded indecisively in which the index swung between gains and losses amid the lack of pertinent drivers for Japan and some political concerns ahead of Sunday's upper house election as a recent poll showed the ruling bloc was at risk of losing its majority. Hang Seng and Shanghai Comp were mixed in the absence of any major fresh pertinent macro drivers and despite comments from China's Vice Premier He Lifeng who stated that China is accelerating the construction of a modern industrial system and is stepping up efforts to boost consumption.

Top Asian News

  • China's Vice Premier He Lifeng said China is accelerating the construction of a modern industrial system and its industrial upgrading providing support to global industrial and supply chain operations, while He added China is stepping up efforts to boost consumption.
  • Japan's ruling coalition risks losing a majority at the upper house election, according to Nikkei.

European bourses opened mixed/mostly lower, but have traded with an upward bias throughout the European morning, to show a mixed picture. European sectors are mixed, with underperformance in Autos, dragged lower by post-earning losses in Renault (-16.4%) after it cut guidance; Stellantis (-4%) also moves lower after it halted its hydrogen fuel cell technology development programme. Tech has also been pressured by ASML (-8.7%) after its Q2 results; the Co. reported better-than-expected headline metrics, but guidance was light and the CEO said they cannot confirm growth in 2026.

Top European News

  • BoE Governor Bailey said multilateral institutions are essential for good policymaking and they are following financial stability risks closely, while he noted countries with big deficits typically come under most financial market pressure and he is yet to be convinced about the need for a retail CBDC.

European earnings

  • ASML -8.7%: Lowered Q3 rev., margin outlook, does not confirm 2026 growth target.
  • Renault -16.2%: Provided dreary FY guidance, stressed poor retail market.
  • Rio Tinto +1.2%: Pilbara iron ore output rise, copper production exp. at top of FY guidance.
  • Richemont +0.5%: Q1 sales at constant FX rise.
  • Sandvik -0.9%: mixed results, noted of strong momentum noted in mining, highest order intake ever in Q2

FX

  • The dollar is giving back some of Tuesday's gains seen in the aftermath of US CPI data. Further inflation data is due today with Y/Y PPI expected to decline to 2.5% from 2.6%, M/M is expected to pick up to 0.2% from 0.1%. Once released, markets will be able to cement calls for the upcoming PCE report (the Fed's preferred inflation gauge). Today's Fed docket is a busy one with Barkin, Barr, Cook, Hammack, Logan, Kugler & Williams all due on deck. Note, the Fed Beige Book at 19:00BST will be parsed for the impact of Trump's tariff regime at a regional level. DXY sits towards the top end of Tuesday's 97.97-98.69 range.
  • EUR is attempting to atone for Tuesdays’ losses, which saw EUR/USD slip onto a 1.15 handle for the first time since 25th June. French politics moved back into focus yesterday after PM Bayrou unveiled his plans to bolster France's finances. His outline was subsequently met with threats of no confidence from the hard left and far right. EUR/USD sits towards the bottom end of Tuesday's 1.1593-1.1692 range.
  • JPY flat vs. the USD after a recent run of losses, which have lifted USD/JPY from the low seen on July 1st at 142.68 to a multi-month high today at 149.18. The main drivers for the move have been a broad pick-up in the USD and angst over the lack of trade progress between Japan and the US. The next upside level for USD/JPY comes via the 3rd April high at 149.33.
  • GBP has seen some mild support in the wake of hotter-than-expected UK inflation metrics. Y/Y CPI unexpectedly advanced to 3.6% from 3.4% (exp. 3.4%) and the services metric held steady at 4.7% vs. expectations of a decline to 4.6%. Nonetheless, markets still expect the BoE to cut rates next month, but US Jobs data will be in focus on Thursday. Whilst Cable did briefly make its way back onto a 1.34 handle with a session high at 1.3416, the upside was limited by the aforementioned stagflationary outlook facing the UK.
  • Antipodeans are slightly mixed vs. the USD with no obvious driver for the mild discrepancy. Newsflow surrounding both currencies remains light as markets await tomorrow's Australian jobs report.
  • PBoC set USD/CNY mid-point at 7.1526 vs exp. 7.1914 (Prev. 7.1498)

Fixed Income

  • USTs are incrementally firmer/flat (whilst global peers are broadly lower). Currently in a in a very thin 110-08+ to 111-13+ band, awaiting PPI, Industrial Production and Fed speak. PPI will be scoured to see if the series’ internals are evident of tariff-driven price pressures emerging; a slew of Fed speakers are also due.
  • Bunds are modestly lower today, but well off lows in a 129.19-56 band, matching Tuesday’s trough ahead of the 129.12 low from last Friday. The main event today for the bloc is the EU Multiannual Financial Framework (MFF) presentation, i.e. the bloc’s budget for the next seven years. As it stands, Commission President von der Leyen is scheduled to unveil it at 16:00BST.
  • OATs are trading broadly in-line with peers, down by a handful of ticks. In French politics, PM Bayrou’s plan to save EUR 43.8bln from the budget in 2026 in order to get the debt-to-GDP ratio down, in-line with existing commitments/targets. The proposal has already drawn criticism from various political parties, unsurprisingly National Rally (RN) has said they will move to censure Bayrou if he does not change his plans.
  • Gilts are underperforming, opened lower by 19 ticks and then slipped another 21 in short order to a 91.17 base. Notching a new WTD low and taking Gilts back to 91.16 from the first week of June. If breached, then we look to 90.11 from May as the next major point of support. Pressure emerged on the morning’s June inflation. A hotter-than-expected series, driven by motor fuel prices. While hotter, the series has only sparked a relatively modest move in BoE pricing with c. 1bps of implied easing removed from August and only around 3bps by end-2025.
  • UK DMO sells GBP 1.5bln 4.5% 2034 Gilt: b/c 3.32x, average yield 4.553%, tail 0.4bps.
  • Germany sells EUR 1.129bln vs exp. EUR 1.5bln 2.90% 2056 and EUR 0.8bln vs exp. EUR 1.0bln 1.25% 2048 Bunds

Commodities

  • WTI and Brent are currently incrementally lower, and have held a negative bias throughout the European morning. Brent Sept’25 has traded in a very tight USD 68.46-69.09/bbl range, and ultimately awaiting US PPI.
  • Precious metals are mixed with Palladium a little lower whilst spot Gold and Silver post modest gains. Newsflow has been relatively light today and Dollar price-action has been muted. The yellow-metal is seemingly attempting to pare back losses seen in the prior session. XAU/USD currently trades in a USD 3,325.21-3,342.49/oz range, with the low for today incrementally above its 50 DMA (3,323.42)
  • Base metals are broadly lower continuing the downbeat mood seen overnight, in-fitting with the broader risk tone across the equities complex. 3M LME Copper currently trades towards the lower end of a USD 9,613.1-9,663/t range.
  • US Private Sector Inventory data showed (bbls) crude +0.8mln (exp. -0.6mln), gasoline +1.9mln (-1.0mln), distillate +0.8mln (+0.2mln), according to Reuters citing sources.
  • Gulf Keystone Petroleum has temporarily shut in production at the Shaikan field (capacity approx. 55k BPD) following reports over the past two days of explosions at several nearby oil fields.

Geopolitics: Middle East

  • US President Trump's administration asked Israel to stop its strikes on Syrian military forces in the south of the country, while Israel promised that it would cease the attacks on Tuesday evening, according to a US official cited by Axios.
  • US President Trump is to meet with the Qatari PM today to discuss negotiations over Gaza's ceasefire deal and are expected to discuss efforts to resume negotiations between the US and Iran to reach a new nuclear agreement, according to Axios.
  • US, France and Germany agreed that Iran faces stiff sanctions if there is no deal by the end of August, according to Axios.
  • Foreign tanker reportedly seized by Iran for 'smuggling' 2mln litres of fuel, according to SNN.
  • Iranian Parliament issues statement saying negotiations with US cannot begin until preconditions are met, according to ISNA

Geopolitics: Ukraine

  • US President Trump said weapons are already being shipped to Ukraine and NATO will pay them back for everything and won't have boots on the ground, while he added that Iran wants to talk but he is in no rush to talk with Iran.
  • Russia's Kremlin says subject of weapon supplies to Ukraine is high on agenda, via Ifax; phone call with US President Trump not planned but can be organised quickly, via Tass.

US Event Calendar

  • 7:00 am: Jul 11 MBA Mortgage Applications, prior 9.4%
  • 8:30 am: Jun PPI Final Demand MoM, est. 0.2%, prior 0.1%
  • 8:30 am: Jun PPI Ex Food and Energy MoM, est. 0.2%, prior 0.1%
  • 8:30 am: Jun PPI Final Demand YoY, est. 2.5%, prior 2.6%
  • 8:30 am: Jun PPI Ex Food and Energy YoY, est. 2.7%, prior 3%
  • 9:15 am: Jun Industrial Production MoM, est. 0.1%, prior -0.2%
  • 9:15 am: Jun Capacity Utilization, est. 77.4%, prior 77.4%

Central Banks 

  • 8:00 am: Fed’s Barkin Gives Speech in Westminister, MD
  • 9:15 am: Fed’s Hammack Speaks on Community Development
  • 10:00 am: Fed’s Barr Speaks on Financial Regulation
  • 2:00 pm: Fed Releases Beige Book
  • 3:30 pm: Fed’s Bostic Appears on Fox Business Network
  • 6:30 pm: Fed’s Williams Speaks on Economic Outlook, Policy

DB's Jim Reid concludes the overnight wrap

Morning from Berlin. I was at an important dinner last night in this beautiful city and got a phone call from my wife. I said I was at a work dinner and could I call her back later. Before I could finish she said. “It’s an emergency. I have five nine-year-old girls over for a sleepover specifically to see the new Zombies 4 film just released. They’ve all been waiting three years for this day (since Zombies 3) and I can’t get into our Disney+ account. Do you know the password?” I had to make my excuses to leave the table and go through my phone to desperately try to find it. Thankfully I did and the world could move on.

Meanwhile, markets have struggled to move on from the debate as to how inflationary the US tariff policy will be with yesterday’s US CPI providing something for everyone on this topic. On the one hand, the core CPI print was below expectations for a 5th consecutive month, and the S&P 500 even moved up to an intraday record at the open. But as investors digested the print and focused on the more obvious tariff impacts in the various components, Treasuries extended their decline and the 30yr yield (+4.3bps) moved back above the 5% mark again (closing at 5.02%). It’s previously closed above 5% for only 9 days since 2007. 6 days were during the issuance- and Fed-driven Treasury sell-off in autumn 2023, and 3 days were back in May this year after the Moody's downgrade and amid increased focus on the implications of the Republican budget bill that was passing through the House.

In terms of the details of the print, monthly CPI came in at +0.29% in June (vs. +0.3% expected), which was a 5-month high but broadly in line with expectations. Moreover, the core CPI measure was a comparatively softer +0.23% (vs. +0.3% expected), which eased fears that this month would see a big jump thanks to the tariffs. However, there were some concerning signs under the surface, and household appliances (+1.9%) saw their biggest monthly price jump in records back to 1999. And if you looked at core goods (excluding used cars and trucks) there was a decent +0.32% monthly gain that was the strongest since February 2023. So the fear is that as the tariff impact is more fully felt (with plenty more in the pipeline), those increases could become more widespread across the consumer basket. Indeed, those concerns were clear in market pricing too, and the 2yr US inflation swap (+2.0bps) moved up to a fresh two-year high of 2.97%. Watch out for PPI today and importantly the usual read through to those categories that directly feed into core PCE. Our economists are tracking +0.30% for the PPI print after yesterday’s data (see their CPI reaction note for more).

That growing pessimism on inflation meant investors dialled back their expectations for rate cuts this year. They are now pricing in a rate cut by September as only a 58% probability, down from 65% the day before. And for the year as a whole, investors now see just 44bps of rate cuts by the December meeting, down from 48bps the day before. That said, there was another round of calls for rate cuts from President Trump, who posted afterwards that the “Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!” But there was no such urgency in the limited Fedspeak following the CPI print, with Boston Fed President Collins saying that “an ‘actively patient’ approach to monetary policy remains appropriate”. And for markets, the prospect of fewer rate cuts and more inflation helped to push Treasury yields higher across the curve. So the 2yr yield (+4.1bps) was up to 3.94%, the 10yr yield (+4.8bps) hit a one-month high of 4.48%, and the 30yr yield (+4.3bps) closed above 5% for the first time since May 23rd, at 5.02%.

The hawkish implications from the CPI print meant that most equities struggled. The S&P 500 fell by -0.40% in a very broad-based decline that saw 453 stocks lose ground, which was the largest number of decliners in eight weeks. Indeed, the only S&P sector to advance was information technology (+1.27%), which was led by a +4.04% gain for Nvidia, as the chipmaker reached a new all-time high after news the previous evening that it would resume AI chip deliveries to China. The boost for tech stocks meant that the NASDAQ (+0.18%) hit another all-time high, having now surged by +35.4% since its closing low just after Liberation Day. By contrast, banks were among the underperformers after earnings from several US financials, with the KBW Bank Index falling -2.42%. Wells Fargo (-5.48%) and BlackRock (-5.88%) saw sizeable slumps after missing estimates, with JPMorgan (-0.74%) falling back more modestly after their release. On the other hand, Citigroup (+3.68%) rose to its highest since 2008 after beating revenue estimates and announcing increased stock buybacks. S&P 500 and NASDAQ 100 futures are both down by -0.15% this morning.

Elsewhere, the tariff deadline on August 1 remains in focus, although it’s clear that markets aren’t pricing in a full bounceback in the tariffs yet, with the expectation that further trade deals or delays will avoid that outcome. Speaking of which, Trump announced yesterday that he had reached a deal with Indonesia. This will see goods from Indonesia facing US tariffs of 19%, above the 10% interim tariff over the past three months but clearly below the 32% the country faced under the initial Liberation Day tariffs on April 2. Trump later posted that Indonesia also agreed to buy $15bn in US energy, $4.5bn of agricultural products and 50 Boeing jets. Boeing’s shares briefly rallied on the news but were back in the red (-0.22%) by the close. Trump also added that “Transshipment from a higher Tariff Country” via Indonesia would face additional tariffs.

Asian equity markets are mostly lower with the S&P/ASX 200 (-0.92%) leading the way after nearing record highs earlier this week. Additionally, the KOSPI (-0.86%), the CSI (-0.33%) and the Shanghai Composite (-0.13%) are also lower. The Hang Seng (+0.28%) is bucking the regional trend, continuing its strong gains from the previous session, buoyed by NVIDIA's announcement that it will be resuming H20 AI chip sales to China. The Nikkei (+0.55%) is being helped by a Yen at its weakest since April and a JGB rally at the long-end with 30 and 40yr yields -3bps and -8bps, respectively, after yesterday’s slump. 10yr JGBs are +1.5bps, likely catching up with yesterday’s global sell-off that saw the 10yr yield hit its highest intraday level since 2008, and the 30yr yield move to its highest intraday level since that maturity was first issued in 1999. I wrote about this more in my chart of the day yesterday (link here ), and our FX strategists also have a new podcast on the political and policy choices facing Japan and the market impact on the yen. You can listen to it on Spotify here or the DB Research website here. It’s a timely discussion before the Upper House election on Sunday.

Back in Europe, the tone was more downbeat yesterday, with equities losing ground across the continent. That included a 3rd consecutive decline for the STOXX 600 (-0.37%), and a 4th consecutive decline for the DAX (-0.42%). However, sovereign bond yields did move off their highs from the previous day, with those on 10yr bunds (-1.7bps), OATs (-2.6bps) and BTPs (-2.0bps) all moving lower. That outperformance for OATs came as French PM Bayrou proposed some €44bn of measures to reduce the deficit, including ending two public holidays on Easter Monday and VE Day. The leader of the National Rally party Marine Le Pen has threatened to bring down the government unless Bayrou rows back the proposed measures. Meanwhile, in the UK gilts lost further ground, with the 10yr yield up +2.4bps, whilst the 30yr yield (+2.9bps) moved up to its highest since late May, at 5.46%.

There wasn’t much other data yesterday, with Canada’s CPI rising as expected to +1.9% in June. However, the CPI-median measure followed by the Bank of Canada ticked up to +3.1% (vs. +3.0% expected), which led investors to push back the timing of the next rate cut, whilst 10yr government bond yields rose +8.4bps on the day. Meanwhile in Germany, the ZEW survey rose more than expected in July, with the expectations component up to a three-year high of 52.7 (vs. 50.4 expected).

To the day ahead now, and US data releases include the PPI reading for June, along with industrial production and capacity utilisation. In the UK, there’s also the CPI print for June. From central banks, we’ll hear from the Fed’s Barkin, Hammack, Barr and Williams, and the Fed will release their Beige Book. The European Commission will also be releasing its proposal for the next 7-year EU budget running from 2028 to 2034 (see our economists’ preview here). Finally, earnings releases include Bank of America, Morgan Stanley, Goldman Sachs and United Airlines.

Tyler Durden Wed, 07/16/2025 - 07:34

Futures Drop As Tariffs, Earnings And Rising Yields Dent Sentiment

Zero Hedge -

Futures Drop As Tariffs, Earnings And Rising Yields Dent Sentiment

US equity futures and global stocks dropped, but were well off session lows, as a stream of negative tariff headlines and dialed-back expectations for interest-rate cuts prompted doubts about the market’s ability to sustain recent highs and sent 30Y yields above 5%, a level seen as a redline for further stock appreciation. As of 7:00am, the S&P 500 was on track for a second straight decline, with futures down 0.1% after , while Nasdaq futures were 0.3% lower after closing at a record; the small-caps Russell 2000 is seeing an early outperformance bid. Pre-mkt, Mag7/semis are mixed as are Cyclicals with Banks seeing an offer into the next batch of earnings. In Europe, the Stoxx 600 slipped 0.2%, weighed down by technology shares as ASML Holding NV trimmed its growth outlook for next year, citing trade tensions; French car giant Renault slumped 16% after slashing its profit guidance. Treasury yields are flat as is the USD. Commodities are mostly higher with Ags leading, precious metals following while energy is modestly weaker. Today’s macro data focus is the PPI data which will give more clues about how tariffs are affecting companies after mixed CPI numbers. We have another batch of Fedspeakers who will say nothing of importance.

In premarket trading, Mag 7 stocks are mixed (Apple +0.3%, Alphabet +0.2%, Meta +0.3%, Microsoft little changed, Tesla -0.4%, Amazon -0.5%, Nvidia -0.6%). Here are some other notable premarket movers:

  • Crypto-linked stocks rose with Bitcoin prices in premarket trading Wednesday as President Donald Trump said the House will pass the GENIUS Act stablecoin bill on Wednesday after a procedural vote Tuesday failed (Among gainers Strategy +1.5%, Circle Internet Group +1.6%, Coinbase +0.8%, Galaxy Digital +4.1%, Hut 8 +2.3%, Hive Digital Technologies +0.7%, MARA Holdings +1.8%, Cleanspark +1.8%, Riot Platforms +2.1%, Cipher Mining +0.5%, Bitfarms +2.9%, Terawulf +1.6%, Bit Digital +6.4%, SharpLink Gaming +13%, and Bitdeer Technologies +2.6%).
  • ASML ADRs (ASML) fall 8.4% after the chip equipment maker struck a more cautious tone about growth outlook next year.
  • JB Hunt reported 2Q earnings that beat estimates, but flagged “higher professional driver wages and equipment-related costs.” 
  • Brighthouse Financial (BHF) is up 7.4% on light volume after the Wall Street Journal said Aquarian is in exclusive talks to buy the provider of annuities and life insurance, citing people familiar.
  • Global Payments (GPN) is up 6.4%; activist investor Elliott Investment Management has amassed a sizable position in payments services company, according to a person with knowledge of the matter.
  • Renault SA shares sank 16% after the automaker lowered its profitability outlook for the year and named company veteran Duncan Minto interim chief executive officer.
  • Nvidia Corp. boss Jensen Huang anticipates getting the first batch of US licenses to export H20 AI chips to China soon.
  • Barclays Plc was fined £42 million ($56 million) over failures to properly identify financial crime risks with two clients.
  • Huawei Technologies Co. took the top spot in China’s smartphone market for the first time in more than four years.

Among trade headlines, Trump said he was likely to impose tariffs on pharmaceuticals as soon as the end of the month and that levies on chips could come soon as well. Traders further pared bets to their lowest level in a month for two Federal Reserve interest rate cuts this year on anticipation that tariff-related costs are increasingly being passed on to consumers (a continuation of a bet that has so far been dead wrong). Elsewhere, EU’s McGrath says a trade deal between the EU and US can be done by Aug. 1 and expects two weeks of “intense negotiations.” Meanwhile, UBS strategists said US equity investors are complacent in their view that tariffs are predominantly a negotiation tool. They put their S&P 500 year-end target of 5,300 - some 1000 lower than where the S&P is trading now - under review.

Traders trimmed expectations for Fed rate cuts after the CPI data, but the main Fed focus today is on who may replace Powell. Kevin Hassett is the early frontrunner, Bloomberg reported, with Kevin Warsh also in the top two. The Trump administration is also said to be finalizing an executive order that would pave the way for 401(k) retirement savings plans to invest in private equity.

After big bank earnings got off to an underwhelming start on Tuesday, investors will be looking at the next flurry of results with Bank of American Corp., Goldman Sachs and Morgan Stanley reporting today. “We have toned down our risk by a notch,” said Mohit Kumar, chief European strategist at Jefferies International. “However, technicals are still supportive and news flow of more deals being struck over the coming weeks should offset some of the negative trade rhetoric.”

US stocks are back to near-historic premiums over global peers, but bargain hunters must also work harder to find options outside the world’s biggest market, according to Bloomberg Intelligence. The S&P 500 now trades at a 55% forward P/E premium to the Bloomberg Global ex-US Index, more than double the roughly 25% median from 2015-19.

Economic data due later Wednesday is expected to show a similar trend for producer goods. “The tariff inflation shock starts to hit,” wrote Robin Brooks, a senior fellow at the Brookings Institution and former chief currency strategist at Goldman Sachs Group Inc. “This effect will keep building in intensity as pre-tariff inventories are depleted.”

In Europe, the Stoxx 600 is down 0.2%, falling for a fourth straight session after some disappointing corporate updates from the region. Autos are leading declines as Renault shares fall 17% after the French carmaker issued a profit warning. Technology stocks also underperform as ASML shares fall 8% in Amsterdam after the CEO walked back the company’s growth forecast for next year due to trade disputes and global tensions.  Equities have struggled to hit new highs in recent weeks amid lingering uncertainty around the US trade war. Among notable moves, Richemont rises on better-than-expected sales, defying a wider downturn for luxury goods. Renault shares tumble after a profit warning. Here are some of the more notable equity movers:

  • Richemont shares rise as much as 2.4% after the Cartier-owner reported surging sales at its jewelry division despite a tough backdrop for the luxury goods industry.
  • Partners Group climbs as much as 7.3%, after the Swiss private equity company delivers a beat on assets under management in the first half and reiterates its outlook for the full year.
  • Barco shares surge as much as 17%, hitting the highest since April 2024, following the visualization specialist’s first-half Ebitda beat.
  • ASML shares fall as much as 7.3%, the most in three months, after the chip equipment maker cautioned about growth next year.
  • Renault shares fall as much as 17%, the steepest drop since March 2020, after the French carmaker issued a profit warning on Tuesday evening, lowering operating margin guidance for this year and also trimming its free cash flow expectations.
  • AstraZeneca shares drop as much as 1.6%, after its experimental drug for a rare plasma cell disorder failed to delay death or reduce the number of hospitalizations for heart problems.
  • Ontex shares plunge as much as 12%, after the maker of disposable personal hygiene products delivered quarterly results below expectations and cut its full-year earnings outlook.
  • Bakkafrost falls as much as 14%, the most since July 2023, after the seafood group issued a profit warning.
  • Nel falls as much as 8.1%, the most since May, after the hydrogen technology supplier reported a sharp fall in new orders in the second quarter. Citi said weak order intake is a continued concern.
  • Fuchs shares plunge as much as 16%, the biggest drop since 2011, as the lubricant maker cut its annual guidance after second-quarter profit came in lower than expected.
  • DNO shares drop as much as 8.1% after the oil producer said it has temporarily suspended operations at its Tawke license in the Kurdistan region of Iraq following three explosions early this morning.
  • Svenska Handelsbanken declines as much as 8%, the worst performer on the Stoxx 600 Banks Index, after net interest income at the Nordic lender missed analysts estimates for the second quarter.

Earlier in the session, Asian stocks were mixed, as gains in Hong Kong and optimism over the tech sector were countered by dimming prospects for Federal Reserve easing. The MSCI Asia Pacific Index dipped 0.1%. Key gauges declined in Australia and South Korea, while shares rose in Taiwan as well as Hong Kong. TSMC and Alibaba climbed for a second day after news that the US would allow resumption of some AI chip shipments to China. The regional benchmark has traded sideways in July after a three-month rally. Broader sentiment took a hit Wednesday after US consumer price data indicated companies are beginning to pass through some tariff-related costs, with Fed Dallas President Lorie Logan saying. Hong Kong stocks advanced meanwhile, with the Hang Seng Index heading for its highest close since February 2022 on a rebound in risk appetite amid signs of easing US-China tensions. Still, upcoming Chinese corporate results are expected to show weak earnings growth.

In FX, the Bloomberg Dollar Spot Index falls 0.1%. The euro outperforms its G-10 peers slightly with a 0.2% gain. The pound fades post-CPI gains, trading flat versus the greenback just below $1.34.

In rates, Treasuries are steady ahead of more US inflation data later on Wednesday in the form of producer prices. US 10-year yields are flat at 4.48%. Japan’s super-long bonds rebounded following a sharp selloff earlier in the week, as investors weighed the potential for increased fiscal spending after this weekend’s upper house election.  

Gilts fall along the curve after UK inflation unexpectedly rose to its highest level since January 2024, prompting traders to trim bets on easing by the Bank of England this year. UK 10-year yields rise 3 bps to 4.65%. Bunds are little changed.

In commodities, spot gold rises $16 to around $3,340/oz. Bitcoin climbs 2% and back above $119,000. WTI falls 0.5% to near $66.20 a barrel.

Today's US economic data slate includes June PPI and July New York Fed services business activity (8:30am) and June industrial production (9:15am). Fed speaker slate includes Barkin (8am), Hammack (9:15am), Barr (10am), Bostic (3:30pm) and Williams (6:30pm), and Fed releases Beige book at 2pm

Market Snapshot

  • S&P 500 mini -0.1%
  • Nasdaq 100 mini -0.3%
  • Russell 2000 mini little changed
  • Stoxx Europe 600 -0.1%
  • DAX +0.2%
  • CAC 40 little changed
  • 10-year Treasury yield -1 basis point at 4.48%
  • VIX unchanged at 17.38
  • Bloomberg Dollar Index little changed at 1206.71
  • euro +0.2% at $1.162
  • WTI crude -0.3% at $66.32/barrel

Top Overnight News

  • Trump said on Tuesday that Treasury Secretary Scott Bessent could be a candidate to replace Federal Reserve Chairman Jerome Powell, but suggested that might not happen. When asked if Powell’s renovation cost overrun were a fire able offense, Trump said “I think it sort of is.” RTRS
  • President Donald Trump said he was likely to impose tariffs on pharmaceuticals as soon as the end of the month and that levies on semiconductors could come soon as well, suggesting that those import taxes could hit alongside broad “reciprocal” rates set for implementation on Aug. 1. BBG
  • Kevin Hassett, one of President Donald Trump’s longest-serving economic aides, is the early frontrunner to replace Jerome Powell as Federal Reserve chief next year, followed by Kevin Warsh. BBG
  • Trump is expected to sign an executive order in the coming days designed to help open up 401(k)s to private-market investments, according to WSJ.
  • Senator Cassidy said President Trump is to sign Fentanyl Act into law on Wednesday.
  • Defense Secretary Hegseth ordered the release of 2000 National Guard troops from the federal protection mission in LA.
  • Japan’s super-long bonds rose, reversing course after a rout earlier in the week over concern that this weekend’s election will result in higher government spending. BBG
  • Rio Tinto’s macro commentary on the Chinese economy – “industrial activity and net exports grew strongly during the quarter on the back of China’s highly competitive manufacturing sector. Trade diversification continued as the decline in exports to the US was more than offset by shipments to other regions. Retail sales growth was supported by ongoing stimulus measures while the government remains committed to infrastructure investment. However, headwinds such as trade tensions and a soft property market continue to pose challenges."
  • Indonesia’s central bank cut its policy rate by 25bp to 5.25% (analysts were split on the outcome of this meeting, with some anticipating a cut while others felt rates would stay unchanged). WSJ
  • ASML (-7.3% in pre)  walked back growth forecasts for next year due to the trade uncertainty, even as its second-quarter orders beat estimates. The stock slumped. BBG
  • Inflation unexpectedly rose in the U.K., likely keeping policymakers at the BOE cautious despite a limping economy. Headline, core, and services CPI all were higher than anticipated. WSJ
  • Taiwan, Switzerland and India, none of which received letters letters from Trump last week, are all potentially closing in on deals that could be announced in the coming weeks. Politico
  • Fed's Logan (2026 voter) said the base case is that monetary policy needs to hold tight for a while longer to bring inflation down and she wants to see low inflation continue longer to be convinced, while she added that June CPI data suggests PCE inflation, which the Fed targets at 2%, will rise. Logan also commented that softer inflation and a weakening labor market could call for lower rates fairly soon and under the base case, the Fed can sustain maximum employment even with modestly restrictive policy. 

Trade/Tariffs

  • US President Trump they are working on five to six trade deals and there will probably be two to three deals by August 1st.
  • US President Trump said pharma tariffs will probably begin at month-end and initial tariffs on pharmaceuticals will be low, while Trump also said they will release tariff letters for smaller countries soon and will probably set one tariff for all of them over 10%.
  • US President Trump said a great deal for everybody was just made with Indonesia with Indonesia to pay 19%, while the US will pay nothing and similar deals are in the works. Trump later posted that "Indonesia has committed to purchasing $15 Billion Dollars in U.S. Energy, $4.5 Billion Dollars in American Agricultural Products, and 50 Boeing Jets, many of them 777’s."
  • US Trade Representative announced the initiation of a Section 301 investigation of Brazil's unfair trading practices.
  • China's Commerce Ministry said China and Australia signed a memorandum of understanding on the implementation and review of the China-Australia Free Trade Agreement.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued following the lacklustre handover from Wall St owing to an acceleration in US CPI data, while trade uncertainty lingered after President Trump suggested pharma tariffs could begin at month-end and tariff letters for smaller countries could be sent out soon. ASX 200 retreated with nearly all sectors in the red aside from tech and with miners not helped by the indecisive performance in Rio Tinto following its quarterly operations update in which it registered higher iron ore production but a decline in shipments Y/Y. Nikkei 225 traded indecisively in which the index swung between gains and losses amid the lack of pertinent drivers for Japan and some political concerns ahead of Sunday's upper house election as a recent poll showed the ruling bloc was at risk of losing its majority. Hang Seng and Shanghai Comp were mixed in the absence of any major fresh pertinent macro drivers and despite comments from China's Vice Premier He Lifeng who stated that China is accelerating the construction of a modern industrial system and is stepping up efforts to boost consumption.

Top Asian News

  • China's Vice Premier He Lifeng said China is accelerating the construction of a modern industrial system and its industrial upgrading providing support to global industrial and supply chain operations, while He added China is stepping up efforts to boost consumption.
  • Japan's ruling coalition risks losing a majority at the upper house election, according to Nikkei.

European bourses opened mixed/mostly lower, but have traded with an upward bias throughout the European morning, to show a mixed picture. European sectors are mixed, with underperformance in Autos, dragged lower by post-earning losses in Renault (-16.4%) after it cut guidance; Stellantis (-4%) also moves lower after it halted its hydrogen fuel cell technology development programme. Tech has also been pressured by ASML (-8.7%) after its Q2 results; the Co. reported better-than-expected headline metrics, but guidance was light and the CEO said they cannot confirm growth in 2026.

Top European News

  • BoE Governor Bailey said multilateral institutions are essential for good policymaking and they are following financial stability risks closely, while he noted countries with big deficits typically come under most financial market pressure and he is yet to be convinced about the need for a retail CBDC.

European earnings

  • ASML -8.7%: Lowered Q3 rev., margin outlook, does not confirm 2026 growth target.
  • Renault -16.2%: Provided dreary FY guidance, stressed poor retail market.
  • Rio Tinto +1.2%: Pilbara iron ore output rise, copper production exp. at top of FY guidance.
  • Richemont +0.5%: Q1 sales at constant FX rise.
  • Sandvik -0.9%: mixed results, noted of strong momentum noted in mining, highest order intake ever in Q2

FX

  • The dollar is giving back some of Tuesday's gains seen in the aftermath of US CPI data. Further inflation data is due today with Y/Y PPI expected to decline to 2.5% from 2.6%, M/M is expected to pick up to 0.2% from 0.1%. Once released, markets will be able to cement calls for the upcoming PCE report (the Fed's preferred inflation gauge). Today's Fed docket is a busy one with Barkin, Barr, Cook, Hammack, Logan, Kugler & Williams all due on deck. Note, the Fed Beige Book at 19:00BST will be parsed for the impact of Trump's tariff regime at a regional level. DXY sits towards the top end of Tuesday's 97.97-98.69 range.
  • EUR is attempting to atone for Tuesdays’ losses, which saw EUR/USD slip onto a 1.15 handle for the first time since 25th June. French politics moved back into focus yesterday after PM Bayrou unveiled his plans to bolster France's finances. His outline was subsequently met with threats of no confidence from the hard left and far right. EUR/USD sits towards the bottom end of Tuesday's 1.1593-1.1692 range.
  • JPY flat vs. the USD after a recent run of losses, which have lifted USD/JPY from the low seen on July 1st at 142.68 to a multi-month high today at 149.18. The main drivers for the move have been a broad pick-up in the USD and angst over the lack of trade progress between Japan and the US. The next upside level for USD/JPY comes via the 3rd April high at 149.33.
  • GBP has seen some mild support in the wake of hotter-than-expected UK inflation metrics. Y/Y CPI unexpectedly advanced to 3.6% from 3.4% (exp. 3.4%) and the services metric held steady at 4.7% vs. expectations of a decline to 4.6%. Nonetheless, markets still expect the BoE to cut rates next month, but US Jobs data will be in focus on Thursday. Whilst Cable did briefly make its way back onto a 1.34 handle with a session high at 1.3416, the upside was limited by the aforementioned stagflationary outlook facing the UK.
  • Antipodeans are slightly mixed vs. the USD with no obvious driver for the mild discrepancy. Newsflow surrounding both currencies remains light as markets await tomorrow's Australian jobs report.
  • PBoC set USD/CNY mid-point at 7.1526 vs exp. 7.1914 (Prev. 7.1498)

Fixed Income

  • USTs are incrementally firmer/flat (whilst global peers are broadly lower). Currently in a in a very thin 110-08+ to 111-13+ band, awaiting PPI, Industrial Production and Fed speak. PPI will be scoured to see if the series’ internals are evident of tariff-driven price pressures emerging; a slew of Fed speakers are also due.
  • Bunds are modestly lower today, but well off lows in a 129.19-56 band, matching Tuesday’s trough ahead of the 129.12 low from last Friday. The main event today for the bloc is the EU Multiannual Financial Framework (MFF) presentation, i.e. the bloc’s budget for the next seven years. As it stands, Commission President von der Leyen is scheduled to unveil it at 16:00BST.
  • OATs are trading broadly in-line with peers, down by a handful of ticks. In French politics, PM Bayrou’s plan to save EUR 43.8bln from the budget in 2026 in order to get the debt-to-GDP ratio down, in-line with existing commitments/targets. The proposal has already drawn criticism from various political parties, unsurprisingly National Rally (RN) has said they will move to censure Bayrou if he does not change his plans.
  • Gilts are underperforming, opened lower by 19 ticks and then slipped another 21 in short order to a 91.17 base. Notching a new WTD low and taking Gilts back to 91.16 from the first week of June. If breached, then we look to 90.11 from May as the next major point of support. Pressure emerged on the morning’s June inflation. A hotter-than-expected series, driven by motor fuel prices. While hotter, the series has only sparked a relatively modest move in BoE pricing with c. 1bps of implied easing removed from August and only around 3bps by end-2025.
  • UK DMO sells GBP 1.5bln 4.5% 2034 Gilt: b/c 3.32x, average yield 4.553%, tail 0.4bps.
  • Germany sells EUR 1.129bln vs exp. EUR 1.5bln 2.90% 2056 and EUR 0.8bln vs exp. EUR 1.0bln 1.25% 2048 Bunds

Commodities

  • WTI and Brent are currently incrementally lower, and have held a negative bias throughout the European morning. Brent Sept’25 has traded in a very tight USD 68.46-69.09/bbl range, and ultimately awaiting US PPI.
  • Precious metals are mixed with Palladium a little lower whilst spot Gold and Silver post modest gains. Newsflow has been relatively light today and Dollar price-action has been muted. The yellow-metal is seemingly attempting to pare back losses seen in the prior session. XAU/USD currently trades in a USD 3,325.21-3,342.49/oz range, with the low for today incrementally above its 50 DMA (3,323.42)
  • Base metals are broadly lower continuing the downbeat mood seen overnight, in-fitting with the broader risk tone across the equities complex. 3M LME Copper currently trades towards the lower end of a USD 9,613.1-9,663/t range.
  • US Private Sector Inventory data showed (bbls) crude +0.8mln (exp. -0.6mln), gasoline +1.9mln (-1.0mln), distillate +0.8mln (+0.2mln), according to Reuters citing sources.
  • Gulf Keystone Petroleum has temporarily shut in production at the Shaikan field (capacity approx. 55k BPD) following reports over the past two days of explosions at several nearby oil fields.

Geopolitics: Middle East

  • US President Trump's administration asked Israel to stop its strikes on Syrian military forces in the south of the country, while Israel promised that it would cease the attacks on Tuesday evening, according to a US official cited by Axios.
  • US President Trump is to meet with the Qatari PM today to discuss negotiations over Gaza's ceasefire deal and are expected to discuss efforts to resume negotiations between the US and Iran to reach a new nuclear agreement, according to Axios.
  • US, France and Germany agreed that Iran faces stiff sanctions if there is no deal by the end of August, according to Axios.
  • Foreign tanker reportedly seized by Iran for 'smuggling' 2mln litres of fuel, according to SNN.
  • Iranian Parliament issues statement saying negotiations with US cannot begin until preconditions are met, according to ISNA

Geopolitics: Ukraine

  • US President Trump said weapons are already being shipped to Ukraine and NATO will pay them back for everything and won't have boots on the ground, while he added that Iran wants to talk but he is in no rush to talk with Iran.
  • Russia's Kremlin says subject of weapon supplies to Ukraine is high on agenda, via Ifax; phone call with US President Trump not planned but can be organised quickly, via Tass.

US Event Calendar

  • 7:00 am: Jul 11 MBA Mortgage Applications, prior 9.4%
  • 8:30 am: Jun PPI Final Demand MoM, est. 0.2%, prior 0.1%
  • 8:30 am: Jun PPI Ex Food and Energy MoM, est. 0.2%, prior 0.1%
  • 8:30 am: Jun PPI Final Demand YoY, est. 2.5%, prior 2.6%
  • 8:30 am: Jun PPI Ex Food and Energy YoY, est. 2.7%, prior 3%
  • 9:15 am: Jun Industrial Production MoM, est. 0.1%, prior -0.2%
  • 9:15 am: Jun Capacity Utilization, est. 77.4%, prior 77.4%

Central Banks 

  • 8:00 am: Fed’s Barkin Gives Speech in Westminister, MD
  • 9:15 am: Fed’s Hammack Speaks on Community Development
  • 10:00 am: Fed’s Barr Speaks on Financial Regulation
  • 2:00 pm: Fed Releases Beige Book
  • 3:30 pm: Fed’s Bostic Appears on Fox Business Network
  • 6:30 pm: Fed’s Williams Speaks on Economic Outlook, Policy

DB's Jim Reid concludes the overnight wrap

Morning from Berlin. I was at an important dinner last night in this beautiful city and got a phone call from my wife. I said I was at a work dinner and could I call her back later. Before I could finish she said. “It’s an emergency. I have five nine-year-old girls over for a sleepover specifically to see the new Zombies 4 film just released. They’ve all been waiting three years for this day (since Zombies 3) and I can’t get into our Disney+ account. Do you know the password?” I had to make my excuses to leave the table and go through my phone to desperately try to find it. Thankfully I did and the world could move on.

Meanwhile, markets have struggled to move on from the debate as to how inflationary the US tariff policy will be with yesterday’s US CPI providing something for everyone on this topic. On the one hand, the core CPI print was below expectations for a 5th consecutive month, and the S&P 500 even moved up to an intraday record at the open. But as investors digested the print and focused on the more obvious tariff impacts in the various components, Treasuries extended their decline and the 30yr yield (+4.3bps) moved back above the 5% mark again (closing at 5.02%). It’s previously closed above 5% for only 9 days since 2007. 6 days were during the issuance- and Fed-driven Treasury sell-off in autumn 2023, and 3 days were back in May this year after the Moody's downgrade and amid increased focus on the implications of the Republican budget bill that was passing through the House.

In terms of the details of the print, monthly CPI came in at +0.29% in June (vs. +0.3% expected), which was a 5-month high but broadly in line with expectations. Moreover, the core CPI measure was a comparatively softer +0.23% (vs. +0.3% expected), which eased fears that this month would see a big jump thanks to the tariffs. However, there were some concerning signs under the surface, and household appliances (+1.9%) saw their biggest monthly price jump in records back to 1999. And if you looked at core goods (excluding used cars and trucks) there was a decent +0.32% monthly gain that was the strongest since February 2023. So the fear is that as the tariff impact is more fully felt (with plenty more in the pipeline), those increases could become more widespread across the consumer basket. Indeed, those concerns were clear in market pricing too, and the 2yr US inflation swap (+2.0bps) moved up to a fresh two-year high of 2.97%. Watch out for PPI today and importantly the usual read through to those categories that directly feed into core PCE. Our economists are tracking +0.30% for the PPI print after yesterday’s data (see their CPI reaction note for more).

That growing pessimism on inflation meant investors dialled back their expectations for rate cuts this year. They are now pricing in a rate cut by September as only a 58% probability, down from 65% the day before. And for the year as a whole, investors now see just 44bps of rate cuts by the December meeting, down from 48bps the day before. That said, there was another round of calls for rate cuts from President Trump, who posted afterwards that the “Fed should cut Rates by 3 Points. Very Low Inflation. One Trillion Dollars a year would be saved!!!” But there was no such urgency in the limited Fedspeak following the CPI print, with Boston Fed President Collins saying that “an ‘actively patient’ approach to monetary policy remains appropriate”. And for markets, the prospect of fewer rate cuts and more inflation helped to push Treasury yields higher across the curve. So the 2yr yield (+4.1bps) was up to 3.94%, the 10yr yield (+4.8bps) hit a one-month high of 4.48%, and the 30yr yield (+4.3bps) closed above 5% for the first time since May 23rd, at 5.02%.

The hawkish implications from the CPI print meant that most equities struggled. The S&P 500 fell by -0.40% in a very broad-based decline that saw 453 stocks lose ground, which was the largest number of decliners in eight weeks. Indeed, the only S&P sector to advance was information technology (+1.27%), which was led by a +4.04% gain for Nvidia, as the chipmaker reached a new all-time high after news the previous evening that it would resume AI chip deliveries to China. The boost for tech stocks meant that the NASDAQ (+0.18%) hit another all-time high, having now surged by +35.4% since its closing low just after Liberation Day. By contrast, banks were among the underperformers after earnings from several US financials, with the KBW Bank Index falling -2.42%. Wells Fargo (-5.48%) and BlackRock (-5.88%) saw sizeable slumps after missing estimates, with JPMorgan (-0.74%) falling back more modestly after their release. On the other hand, Citigroup (+3.68%) rose to its highest since 2008 after beating revenue estimates and announcing increased stock buybacks. S&P 500 and NASDAQ 100 futures are both down by -0.15% this morning.

Elsewhere, the tariff deadline on August 1 remains in focus, although it’s clear that markets aren’t pricing in a full bounceback in the tariffs yet, with the expectation that further trade deals or delays will avoid that outcome. Speaking of which, Trump announced yesterday that he had reached a deal with Indonesia. This will see goods from Indonesia facing US tariffs of 19%, above the 10% interim tariff over the past three months but clearly below the 32% the country faced under the initial Liberation Day tariffs on April 2. Trump later posted that Indonesia also agreed to buy $15bn in US energy, $4.5bn of agricultural products and 50 Boeing jets. Boeing’s shares briefly rallied on the news but were back in the red (-0.22%) by the close. Trump also added that “Transshipment from a higher Tariff Country” via Indonesia would face additional tariffs.

Asian equity markets are mostly lower with the S&P/ASX 200 (-0.92%) leading the way after nearing record highs earlier this week. Additionally, the KOSPI (-0.86%), the CSI (-0.33%) and the Shanghai Composite (-0.13%) are also lower. The Hang Seng (+0.28%) is bucking the regional trend, continuing its strong gains from the previous session, buoyed by NVIDIA's announcement that it will be resuming H20 AI chip sales to China. The Nikkei (+0.55%) is being helped by a Yen at its weakest since April and a JGB rally at the long-end with 30 and 40yr yields -3bps and -8bps, respectively, after yesterday’s slump. 10yr JGBs are +1.5bps, likely catching up with yesterday’s global sell-off that saw the 10yr yield hit its highest intraday level since 2008, and the 30yr yield move to its highest intraday level since that maturity was first issued in 1999. I wrote about this more in my chart of the day yesterday (link here ), and our FX strategists also have a new podcast on the political and policy choices facing Japan and the market impact on the yen. You can listen to it on Spotify here or the DB Research website here. It’s a timely discussion before the Upper House election on Sunday.

Back in Europe, the tone was more downbeat yesterday, with equities losing ground across the continent. That included a 3rd consecutive decline for the STOXX 600 (-0.37%), and a 4th consecutive decline for the DAX (-0.42%). However, sovereign bond yields did move off their highs from the previous day, with those on 10yr bunds (-1.7bps), OATs (-2.6bps) and BTPs (-2.0bps) all moving lower. That outperformance for OATs came as French PM Bayrou proposed some €44bn of measures to reduce the deficit, including ending two public holidays on Easter Monday and VE Day. The leader of the National Rally party Marine Le Pen has threatened to bring down the government unless Bayrou rows back the proposed measures. Meanwhile, in the UK gilts lost further ground, with the 10yr yield up +2.4bps, whilst the 30yr yield (+2.9bps) moved up to its highest since late May, at 5.46%.

There wasn’t much other data yesterday, with Canada’s CPI rising as expected to +1.9% in June. However, the CPI-median measure followed by the Bank of Canada ticked up to +3.1% (vs. +3.0% expected), which led investors to push back the timing of the next rate cut, whilst 10yr government bond yields rose +8.4bps on the day. Meanwhile in Germany, the ZEW survey rose more than expected in July, with the expectations component up to a three-year high of 52.7 (vs. 50.4 expected).

To the day ahead now, and US data releases include the PPI reading for June, along with industrial production and capacity utilisation. In the UK, there’s also the CPI print for June. From central banks, we’ll hear from the Fed’s Barkin, Hammack, Barr and Williams, and the Fed will release their Beige Book. The European Commission will also be releasing its proposal for the next 7-year EU budget running from 2028 to 2034 (see our economists’ preview here). Finally, earnings releases include Bank of America, Morgan Stanley, Goldman Sachs and United Airlines.

Tyler Durden Wed, 07/16/2025 - 07:34

Renault Shock Profit Warning Sends Shares Crashing

Zero Hedge -

Renault Shock Profit Warning Sends Shares Crashing

Shares of French carmaker Renault, trading in Paris, crashed the most since the early days of the Covid pandemic after the company issued an unscheduled release, warning of lower profits for the year amid slumping demand and fierce competition from Chinese carmakers like BYD Motors.

Renault stated in the release that it had lowered its operating margin forecast for the year to around 6.5%, down from at least 7% previously. It also cut its free cash flow estimate to between 1 billion euros and 1.5 billion euros, down from 2 billion euros. 

It stated that first-half volumes were lower than expected, as the retail market continues to soften, and added that inventories have swelled.  

Renault slashed its full-year forecast:

  • Sees operating margin 6.5%, saw at least 7%, estimate 7.1% (Bloomberg Consensus)

  • Sees free cash flow EU1 billion to EU1.5 billion, saw at least EU2 billion, estimate EU2.09 billion

Renault's preliminary H1 results:

  • Prelim operating margin 6%, estimate 6.8%

  • Prelim revenue EU27.6 billion, estimate EU27.46 billion

The revised guidance underscores Europe's sluggish car market and the competitiveness of Chinese manufacturers, such as BYD, which are flooding the continent with vehicles and putting increased pressure on domestic brands. 

In Paris, Renault shares crashed 17%, the largest daily decline since early March 2020.  

And shares are at their lowest point since 2024

Commenting on the shock profit warning, UBS analyst Justinus Steinhorst told clients:

Renault contributes 60% to the selloff in Autos on the day with the UBS Autos basket {UBXEAUTO} down 2.4% after issuing a profit warning.

Here's what other top desks are saying (courtesy of Bloomberg):

Oddo (outperform, PT to €55 from €60)

  • Analyst Michael Foundoukidis says it's a stark warning and unfortunate timing after CEO departure, leading them to cut their estimates by 10% 

  • "The release suggests an awful June which will likely raise fears around the visibility in the new guide," he adds

  • Says stock will likely be seen as "dead money near term" at least pending new CEO

Morgan Stanley (equal-weight)

  • Analyst Javier Martinez de Olcoz Cerdan says while Renault is the first auto OEM to cut its guidance, the factors behind this profit warning will likely drive more cuts across the sector

  • Guidance implies about 7% cut to consensus Ebit for FY25, with Renault impacted by further commercial pressures

  • 2Q may be bottom of the cycle if tariffs normalize, but if not there is further downside risk to margins and performance

Citi (buy)

  • Commercial pressure in Europe adds to broader headwinds from tariffs and pricing pressures, which Renault had until now been managing better than many peers, analyst Harald Hendrikse writes

  • While the stock does already discount some of the concerns, investors may be wondering if margins are peaking at a time when wider SXAP margins are nearing a trough

  • Appointment of a CEO may be seen as a positive "when the dust settles"

JPMorgan (overweight)

  • Analyst Jose Asumendi says preliminary 1H Ebit 13% below consensus expectations, impacted by volume miss, commercial pressures and higher receivables due to timing impacts

  • Notes that Renault does expect some improvement in 2H, and that several launches are scheduled

  • Will be crucial for Renault to provide clarity on permanent CEO succession

.  .  .

Tyler Durden Wed, 07/16/2025 - 07:20

Renault Shock Profit Warning Sends Shares Crashing

Zero Hedge -

Renault Shock Profit Warning Sends Shares Crashing

Shares of French carmaker Renault, trading in Paris, crashed the most since the early days of the Covid pandemic after the company issued an unscheduled release, warning of lower profits for the year amid slumping demand and fierce competition from Chinese carmakers like BYD Motors.

Renault stated in the release that it had lowered its operating margin forecast for the year to around 6.5%, down from at least 7% previously. It also cut its free cash flow estimate to between 1 billion euros and 1.5 billion euros, down from 2 billion euros. 

It stated that first-half volumes were lower than expected, as the retail market continues to soften, and added that inventories have swelled.  

Renault slashed its full-year forecast:

  • Sees operating margin 6.5%, saw at least 7%, estimate 7.1% (Bloomberg Consensus)

  • Sees free cash flow EU1 billion to EU1.5 billion, saw at least EU2 billion, estimate EU2.09 billion

Renault's preliminary H1 results:

  • Prelim operating margin 6%, estimate 6.8%

  • Prelim revenue EU27.6 billion, estimate EU27.46 billion

The revised guidance underscores Europe's sluggish car market and the competitiveness of Chinese manufacturers, such as BYD, which are flooding the continent with vehicles and putting increased pressure on domestic brands. 

In Paris, Renault shares crashed 17%, the largest daily decline since early March 2020.  

And shares are at their lowest point since 2024

Commenting on the shock profit warning, UBS analyst Justinus Steinhorst told clients:

Renault contributes 60% to the selloff in Autos on the day with the UBS Autos basket {UBXEAUTO} down 2.4% after issuing a profit warning.

Here's what other top desks are saying (courtesy of Bloomberg):

Oddo (outperform, PT to €55 from €60)

  • Analyst Michael Foundoukidis says it's a stark warning and unfortunate timing after CEO departure, leading them to cut their estimates by 10% 

  • "The release suggests an awful June which will likely raise fears around the visibility in the new guide," he adds

  • Says stock will likely be seen as "dead money near term" at least pending new CEO

Morgan Stanley (equal-weight)

  • Analyst Javier Martinez de Olcoz Cerdan says while Renault is the first auto OEM to cut its guidance, the factors behind this profit warning will likely drive more cuts across the sector

  • Guidance implies about 7% cut to consensus Ebit for FY25, with Renault impacted by further commercial pressures

  • 2Q may be bottom of the cycle if tariffs normalize, but if not there is further downside risk to margins and performance

Citi (buy)

  • Commercial pressure in Europe adds to broader headwinds from tariffs and pricing pressures, which Renault had until now been managing better than many peers, analyst Harald Hendrikse writes

  • While the stock does already discount some of the concerns, investors may be wondering if margins are peaking at a time when wider SXAP margins are nearing a trough

  • Appointment of a CEO may be seen as a positive "when the dust settles"

JPMorgan (overweight)

  • Analyst Jose Asumendi says preliminary 1H Ebit 13% below consensus expectations, impacted by volume miss, commercial pressures and higher receivables due to timing impacts

  • Notes that Renault does expect some improvement in 2H, and that several launches are scheduled

  • Will be crucial for Renault to provide clarity on permanent CEO succession

.  .  .

Tyler Durden Wed, 07/16/2025 - 07:20

MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Calculated Risk -

From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey
Mortgage applications decreased 10.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 11, 2025. Last week’s results included an adjustment for the Fourth of July holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 10.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13 percent compared with the previous week. The Refinance Index decreased 7 percent from the previous week and was 25 percent higher than the same week one year ago. The seasonally adjusted Purchase Index decreased 12 percent from one week earlier. The unadjusted Purchase Index increased 11 percent compared with the previous week and was 13 percent higher than the same week one year ago.

“Treasury yields finished higher last week on average despite an intra-week drop, driven partly by renewed concerns of the impact of tariffs on the economy. As a result, mortgage rates rose after two weeks of declines, which contributed to slower application activity,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Jumbo rates were lower than conventional rates for the third straight week, as some depositories may be positioning themselves for growth in balance sheet lending.”

Added Kan, “Purchase applications remained sensitive to both the uncertain economic outlook and the volatility in rates and declined to the slowest pace since May. Refinance applications also dipped because of higher rates, with refinance applications falling, led by VA refinances partially reversing their previous week’s gain, dropping 22 percent.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.82 percent from 6.77 percent, with points remaining unchanged at 0.62 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added
Mortgage Purchase Index Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 13% year-over-year unadjusted. 
Red is a four-week average (blue is weekly).  
Purchase application activity is still depressed, but above the lows of October 2023 and slightly above the lowest levels during the housing bust.  

Mortgage Refinance IndexThe second graph shows the refinance index since 1990.

The refinance index decreased and remains very low.

China's Rare Earths Exports High Highest Level Since 2009

Zero Hedge -

China's Rare Earths Exports High Highest Level Since 2009

China exported 7,742 metric tonnes of rare earths last month, marking the highest peak since 2009.

This is according to newly released customs data.

Additionally, as Statista's Anna Fleck reports, it also marks a 60-percent increase from June 2024 and a 32-percent increase from May 2025.

 China’s Rare Earths Exports High Highest Level Since 2009 | Statista

You will find more infographics at Statista

Total exports of rare minerals for the cumulative first half of 2025 amounted to 32,569 tonnes, up from 29,095 tonnes in H1 2024 (+11.9 percent).

In April, Beijing implemented export restrictions on seven rare earth elements and magnets in a move widely considered a response to increased tariffs from the United States.

These restrictions raised concerns in countries such as the U.S., Japan and European nations over supply chain disruptions, particularly in the defense, energy and automotive sectors.

But in June, Beijing and Washington reached a new set of agreements to speed up rare earth shipments to the U.S. once more. China’s commerce ministry has also said it is willing to accelerate the examination and approval of rare earths exports to the EU.

The customs data reflected in this chart does not specify which rare earths were exported, with a more detailed breakdown expected later this month.

Tyler Durden Wed, 07/16/2025 - 06:55

China's Rare Earths Exports High Highest Level Since 2009

Zero Hedge -

China's Rare Earths Exports High Highest Level Since 2009

China exported 7,742 metric tonnes of rare earths last month, marking the highest peak since 2009.

This is according to newly released customs data.

Additionally, as Statista's Anna Fleck reports, it also marks a 60-percent increase from June 2024 and a 32-percent increase from May 2025.

 China’s Rare Earths Exports High Highest Level Since 2009 | Statista

You will find more infographics at Statista

Total exports of rare minerals for the cumulative first half of 2025 amounted to 32,569 tonnes, up from 29,095 tonnes in H1 2024 (+11.9 percent).

In April, Beijing implemented export restrictions on seven rare earth elements and magnets in a move widely considered a response to increased tariffs from the United States.

These restrictions raised concerns in countries such as the U.S., Japan and European nations over supply chain disruptions, particularly in the defense, energy and automotive sectors.

But in June, Beijing and Washington reached a new set of agreements to speed up rare earth shipments to the U.S. once more. China’s commerce ministry has also said it is willing to accelerate the examination and approval of rare earths exports to the EU.

The customs data reflected in this chart does not specify which rare earths were exported, with a more detailed breakdown expected later this month.

Tyler Durden Wed, 07/16/2025 - 06:55

Global Oil Consumption Reaches All-Time High

Zero Hedge -

Global Oil Consumption Reaches All-Time High

Authored by Robert Rapier via OilPrice.com,

  • Global oil consumption reached an all-time high in 2024, driven primarily by non-OECD countries, with the U.S. remaining the largest consumer.

  • The U.S. continues to lead the world in total oil production, contributing to a record global output despite a slowdown in its growth rate.

  • The 2025 Statistical Review reveals key shifts including declining production in Russia and Saudi Arabia, surging demand in India, and the significant rise of Guyana as an oil producer.

Each year, the Statistical Review of World Energy offers important insights into global energy trends. Now published by the Energy Institute in collaboration with KPMG and Kearney, the 2025 edition—reflecting full-year 2024 data—reveals that global oil production and consumption remained relatively steady, but there are meaningful shifts underway.

These shifts reflect not only changing geopolitics and economic recovery patterns but also longer-term questions around energy security, investment priorities, and the uneven global evolution toward decarbonization.

Global Oil Consumption Hits New High

In 2024, global oil consumption–which excludes biofuels but includes coal and natural gas derivatives–reached 101.8 million barrels per day (bpd). The represents an all-time high that slightly surpassed the 2023 level by 0.7%. On average, oil demand has increased by 1% per year over the past decade, driven almost entirely by non-OECD countries.

The U.S. remains the world’s largest oil consumer, accounting for 18.7% of global demand. Daily consumption in the U.S. fell slightly from 2023, but over the past decade it increased by 0.5% per year on average.  

China was the world’s second-largest oil consumer, accounting for 16.1% of global demand. Its daily consumption fell 1.2% to 16.4 million bpd in 2024. This decline is a marked departure from the average 4% gain per year over the past decade, which means China’s oil demand may be showing signs of plateauing. With economic growth slowing and a push toward electrification of transportation underway, some analysts speculate China may be approaching its long-term oil demand peak.

Meanwhile, India’s oil consumption continues to surge, jumping 3.1% year-over-year to 5.6 million bpd. The nation’s economic expansion and rising middle class continue to drive growth, putting India on track to become the third-largest oil consumer globally within a few years.

OECD nations saw modest changes in oil demand (+0.1%) while non-OECD nations saw demand jump by 1.2%. 

U.S. Leads All Producers to New Record

On the production side, global oil output (including natural gas liquids and other liquids) hit a record 96.9 million barrels per day. That’s 1.8 million barrels more than the pre-pandemic peak, and about 9% higher than the lows seen during the COVID-19 downturn. On the surface, it’s a story of resilience and recovery. But dig a little deeper, and the numbers reveal a more complicated picture.

The United States continues to lead the world in total oil production, clocking in at 20.1 million barrels per day. But that headline figure includes a sizable share of natural gas liquids—byproducts like ethane and propane that aren’t typically directly used as transportation fuels but may function as refinery feedstock. 

Strip those out, and U.S. production of crude oil and condensate—the type of output most analysts consider “true oil”—comes in at 13.2 million barrels per day. Although this was yet another production record, the 2% increase from 2023 was less than half the 4.2% average annual gain over the previous decade, which could be an indication that U.S. production is close to a plateau. 

Russia follows in second place at 10.2 million barrels per day of crude plus condensate. That was down 3.1% from 2023, largely due to the impact of Western sanctions and logistical constraints. However, Russian exports to China and India remained robust, helping the country maintain relevance in global energy markets despite diplomatic isolation.

Saudi Arabia also saw production fall by 4.2%. Saudi was in third place in 2024 with 9.2 million barrels per day, the lowest level since 2011. The drop reflects both voluntary production cuts to support prices and long-term questions about the Kingdom’s spare capacity amid heavy domestic investments in refining and petrochemicals.

Proved Reserves

The Statistical Review also sheds light on global oil reserves, although those are only available for the end of 2020. At that time, the world’s proven oil reserves stood at 1.7 trillion barrels—enough to sustain current production levels for roughly 53.5 years. However, the distribution of those reserves remains highly uneven.

Venezuela still holds the largest proved reserves, at 304 billion barrels, but much of that oil is heavy and difficult to extract. Saudi Arabia is second with 298 billion barrels, followed by Iran at 158 billion. The U.S., by contrast, holds 69 billion barrels—reflecting both a mature production base and a reserve classification system that tends to be more conservative.

Unusual Developments and Emerging Themes

A few notable trends emerged from this year’s data:

  • Saudi Arabia’s Output Decline: The drop in Saudi production is significant not only because it’s the lowest in more than a decade, but also because it signals a shift in how the Kingdom may balance price stability with market share.

  • U.S. Efficiency and NGLs: While the U.S. continues to be the top oil producer, a growing share of that output is in the form of natural gas liquids, which are not suitable for all applications and require different refining infrastructure. This evolution has implications for and refining strategies.

  • Flat Growth in Global Reserves: The relative lack of reserve growth despite strong consumption reflects an investment hesitancy across much of the industry. This could pose long-term supply challenges if demand doesn’t moderate.

  • India’s Ascent: India’s rise as a major demand center—with relatively little domestic production—makes it one of the most strategically important countries in the oil market. Its policy choices on storage, refining, and renewables will shape future demand dynamics.

  • Guyana’s Rise: Guyana’s meteoric rise from zero to over 600,000 barrels daily in just five years is one of the fastest production ramps in oil industry history. With reserves now estimated at 11 billion barrels, Guyana is projected to reach 1 million barrels daily soon, potentially becoming a top-five global producer within the decade.

Outlook: Stability or Strain?

Oil markets in 2024 were defined by an uneasy equilibrium. On the one hand, production and consumption were closely matched, and price volatility was relatively contained. On the other, the factors holding that balance together—OPEC+ coordination, U.S. shale resilience, and subdued global demand growth—are all subject to disruption.

Looking ahead, several questions loom:

  • Will China’s oil demand begin to decline in absolute terms?

  • Can U.S. shale sustain output without massive reinvestment?

  • Will geopolitical risks in the Middle East, Russia, or elsewhere upset the delicate supply-demand balance?

These aren’t just market questions—they are strategic ones that affect global inflation, trade, and energy security.

Final Thoughts

The 2025 Statistical Review confirms that oil is still very much at the center of the global economy. Demand is growing in the developing world, production remains concentrated among a handful of players, and supply vulnerabilities persist.

In the coming weeks, I’ll continue to unpack key findings from the Statistical Review, including natural gas, coal, renewables, and nuclear power trends. But one thing is clear from the oil data: in a world increasingly focused on energy transition, the importance of oil—economically and geopolitically—hasn’t gone anywhere.

Tyler Durden Wed, 07/16/2025 - 05:00

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