With the birthright citizenship opinion handed down, I thought we were done for the term. But at 10:51 ET, NPR posts a story with Nina Totenberg’s byline: “Justice Samuel Alito, who wrote the opinion overturning Roe v. Wade, retires.”
The story had no actual details about the retirement, but included a lengthy profile of Justice Alito. It seems this piece was pre-written just in case of a retirement.
About 15 minutes later, the story was taken down. (I preserved a PDF.) There is now an Editors Note;
Editors Note: Earlier today we erroneously published a story saying that Supreme Court Justice Samuel Alito was retiring. He has not announced his retirement and we have retracted the story.
Why was it published? Did someone make a mistake an erroneously click “submit.” Or did Nina Totenberg green-light the story? I think NPR should provide an explanation of what happened here. These sorts of announcements can move markets and have a huge impact before they are correct.
This mess–up brings to mind the faulty reporting about NFIB v. Sebelius in 2012.
I correctly predicted that Coach Kavanaugh would have the transgender sports cases and the Chief would write birthright citizenship. I was wrong about Alito authoring NRSC, but that means he did not write anything in December, which gives weight to my theory that Alito lost the majority opinion in Hamm v. Smith.
I will have much more to say about today’s cases, and yesterday’s cases, and last week’s cases, in due course.
Today Will Or Won’t See A US-Iran Meeting In Doha Which Will Be “Perhaps Important, Perhaps Not”
By Michael Every of Rabobank
Build ’em up or Burnham down?
In typical form, today will or won’t see a US-Iran meeting in Doha; which will be ‘perhaps important, perhaps not’; and either discussing the MoU or unfreezing $6bn of Iranian assets. So, the ‘peacefire’ continues, as expected, but with little chance this holds permanently. Likewise in Lebanon, where the US is pushing to disarm Hezbollah –which refuses– and Israel won’t leave until that happens. And Gaza, where the Board of Peace is finalising its plans as the IDF warns Hamas is readying for war. And Iraq, which just set a September 30 deadline for pro-Iran militias to disarm. And Libya, where Marco Rubio is fighting another crisis. To give an early Christmas present to Tucker Carlson and Marjorie Taylor Greene, Israel also says it’s developing space lasers.
That’s as South Korea announced a $1.3 trillion AI and IT investment plan to maintain an edge vs. China over the next decade – which is showing footage of a 6G fighter jet and conducting tests of a hypersonic ramjet that can change shape in flight; China has restricted dual use exports to Mitsubishi, Hitachi, Komatsu units; Supermicro’s Taiwan offices were raided in a chip smuggling probe; and a Rakuten-led group is set for state subsidies to build Japan’s answer to Starlink. In short, what we see around us is as about massive, urgent investment in defence and AI as much it is about related energy (i.e., Hormuz), broader commodities, and supply chains.
That’s unbelievably expensive to address. For example, the US is pushing for a $1.5 trillion defence budget, while keeping up with South Korea alone would require Europe to invest $14 trillion to match it equivalently. Tellingly, the UK will today unveil its new defence strategy, which shifts to cheap drones from larger platforms –guided missile destroyers and frigates are cut– as outgoing PM Starmer presides over a plan that will only reach 2.7% of GDP by 2030, not the promised 3.0%; some say he wants to run NATO next (to tell his successor he must reach 3.5%).
So, we may soon require:
Creative book-keeping: Hungary’s new PM claims his predecessor hid half of the budget deficit, which is actually 8% of GDP.
Spending cuts: and good luck with that.
New taxes:France is now looking for EU-wide taxes to fund a planned €2 trillion commission budget, with the idea that foreign firms, like US tech and polluters, could pay more.
Tariffs: last week, US Treasury Secretary Bessent cited Hamiltonian economic statecraft; yesterday, White House macro-maven Miran penned a WSJ op-ed arguing for US tariffs. The EU just gave China an October deadline to address their huge –and predictable– trade imbalance, kicking the can down the road, but pointing to a trade war and/or Hamilton (and Trump) moment ahead, which could prove transformative. Even Paul Krugman is telling the EU to tariff China.
Industrial policy: which is very much back in vogue, even if what this means is vague for many.
A compliant central bank: There, the Supreme Court just overturned precedent to allow the White House to remove heads of federal agencies, greatly empowering the executive. It kept FOMC member Cook in her seat for now until due process plays out but did not address whether “for cause” removals at the Fed are also constitutional or not, allowing Trump to restart the process of trying to fire her over allegations of mortgage fraud and, in time, to potentially relitigate if the Fed is a special case or not.
The ECB’s Lagarde, who years ago said the Bank should work hand-in-hand with governments to overcome geopolitical crises, just stated Europe is getting better at coping with economic shocks due to a better financial framework and the green transition. European refineries’ flexibility on jet fuel helped; but China did more by not importing as much oil, and the US and Japan by draining their SPRs, all due to *their* economic statecraft. Now the risk is rising of a China cut-off of rare earths to Europe, which account for half its total (and Russia a quarter), and of more expensive Chinese imports across the board. What if that transpires from October onwards – and if we get more war vs. Iran after the US midterms?
In the UK, the question is ‘Build ‘em up or Burnham down?’ as the soon-to-be UK PM just called to “rewire” the UK economy. He’s talking about devolution – which hasn’t boosted growth in Scotland; equalisation across regions – which most countries want but fail to achieve; (expensive?) public control of utilities; and reindustrialisation – in a period of protectionism and bloc-based realignment. In short, is the UK going to tariff everybody, or the US, or Europe, or China? Logically, one should start from there, not locally, only to then hit a low tariff ceiling on the attempted way back up.
In short, political economy remains in flux. Markets don’t think things through in such detail or depth: whatever happens is an input into the ‘up or down from here’ binary. However, the scale on which things can move up or down based on how political-economy transforms shouldn’t be understated. JPY is at a 40-year low vs. the dollar at time of writing: where will other crosses go as things unfold?
Yet even as politicians –and central bankers– try to relearn things from first principles, revolutionary change can reshape the architecture which they think they are operating in. For example, regular readers may recall that years ago I floated the idea of letters of marque as a way to channel private sector energies and capital into national security without busting budgets or political constraints like no boots on the ground. On that note, see the following proposal taken from X and think about it seriously:
“A durable solution to the Iran problem is pretty easy:
Form the American Persian Energy Company (APEC)
Give 25% to Exxon and Chevron, who will capitalize it and provide expertise
Ground invasion of Iran, but only with volunteer troops who will be compensated with APEC stock
US military provides air cover and logistical support
Defecting Iranian generals will also be compensated with a quantity of APEC stock dependent on their rank and the number of soldiers they bring with them
All oil and gas rights in Iran are granted to the APEC
New $2 trillion American company is created out of thin air
Iran temporarily governed by APEC CEO while a transition to a suitable civilian government is negotiated”
If you think this kind of thing doesn’t happen (anymore: it used to) then you haven’t noticed how 18th and 19th century thinking is not just back in vogue but is actively winning vs. the post-Cold War political establishment consensus; or how modern mercenaries like Blackwater operate.
Political economy is changing; it will change much, much more; and markets will change with it. The volatility we are seeing in the Hormuz ‘peacefire’ is just a taste of what’s to come. Some assets will be built up. Others will be burned down.
“Right Above The Cockpit”: Drone Strikes JetBlue Plane On Final Approach To JFK
JetBlue Airways Flight 948 reportedly struck a small drone while the narrow-body aircraft was in the traffic pattern on final approach to John F. Kennedy International Airport in New York City.
JetBlue pilots reported striking a drone earlier today as they approached New York – JFK Airport at ASALT, the waypoint in the center of the video, about 11:16:45 UTC. JetBlue #B6948 landed safely from Las Vegas moments later. The FAA is investigating. https://t.co/6p9iO8nCVvpic.twitter.com/aWdCiJSVJ1
A JetBlue pilot could be heard talking with Kennedy Tower about the drone strike. The pilot said the jet collided with a drone during a turn about two miles before landing. When the controller asked for confirmation, the pilot said the object struck “right above the cockpit.”
“Just quickly, I couldn’t talk to approach, but we collided with a drone back there in the turn,” the pilot said.
“You said you collided?” the air traffic controller asked.
“Yep, it hit us right, right above the cockpit,” the pilot said.
This morning, JetBlue Airbus A321-231 (N979JT) operating flight B6948 from Las Vegas to New York JFK reported a drone strike while on approach to JFK.
According to the crew, the drone struck the aircraft just above the cockpit at approximately 3,000 feet around 7:15 a.m. The… pic.twitter.com/VJNVOoBrW5
— Turbine Traveller (@Turbinetraveler) June 29, 2026
The FAA released a statement shortly after the mid-air incident:
The pilot of JetBlue Airlines Flight 948 reported striking a drone at approximately 3,000 feet altitude while on final approach to John F. Kennedy International Airport around 7:15 a.m. local time on Monday, June 29. A post-flight inspection did not reveal any damage to the aircraft. The FAA will investigate. Contact the airline for more information.
FAA Statement
The pilot of JetBlue Airlines Flight 948 reported striking a drone at approximately 3,000 feet altitude while on final approach to John F. Kennedy International Airport around 7:15 a.m. local time on Monday, June 29. A post-flight inspection did not reveal any…
The incident is yet another warning that even some of the most heavily monitored and defended airspace in the country remains highly exposed to small, low-cost drones. It also underscores the urgent need for counter-UAS deployments at major airports and other critical infrastructure nodes, including power grids and data centers, before a devastating drone attack becomes a national story across every front page.
Iran really wants that maritime traffic: “Iran’s Foreign Ministry denied Monday that its negotiators would be meeting with U.S. officials in Qatar on Tuesday after President Trump announced the talks would resume at Tehran’s request,” reports CBS News. “Both sides exchanged strikes over the weekend, testing the fragile ceasefire.”
Meanwhile, Iranian official Kazem Gharibabadi told state TV that the regime really wants to work out a deal with Oman (which borders the south of the strait) to oversee ships passing through Hormuz, but that “if for any reason Oman is not interested in doing so,” Iran will move forward, doing its own.
“We have warned the Omanis that other countries have no right to interfere in this matter,” he added.
“Under the memorandum of understanding signed with Washington on 18 June, substantive talks over Iran’s nuclear programme do not need to start until the lifting of the blockade of the strait—something Iran is required to use only ‘its best endeavours’ to achieve,” writesThe Guardian‘s Patrick Wintour. “Iran is adopting a maximalist interpretation of the memorandum, decreeing that it alone can lift the blockade. Jealously guarding this prerogative, it has been resisting the involvement of any other country or institution in opening the strait.”
“But Oman, a neutral nation by temperament and practice, is in a delicate diplomat spot. It knows that if it ignores Iran’s objections, Tehran is less likely to agree to Oman’s plan for the future of the strait,” adds Wintour. “But if Oman does not take the initiative in helping the humanitarian operation to release thousands of trapped sailors, the less likely it is that its proposals for the strait will be accepted by the region or by the UN—and the more likely it is the US will return to all-out war.”
A deal that means very little: “A security deal between Israel and Lebanon risks entrenching a stalemate rather than resolving Israel’s underlying conflict with Hezbollah by tying Israel’s pullout from southern Lebanon to the Iran-aligned group’s disarmament,” reports Reuters. “At its core is a bargain few see as workable: Hezbollah has flatly rejected disarmament, and no Lebanese government has the power to enforce it.”
Late last week, the Lebanese Ambassador Nada Moawad and the Israeli Ambassador Yechiel Leiter signed a trilateral agreement with the U.S. in Washington, D.C., agreeing to peace between Israel and Lebanon; if Hezbollah—which is distinct from the Lebanese government and backed by Iran—fails to disarm, Israeli Prime Minister Benjamin Netanyahu says Israeli troops can occupy southern Lebanon once again.
Of course, Hezbollah has very little reason to actually do so, and the Lebanese government is not really the party the Israelis must find common ground with here. The fighting between Israel and Hezbollah, which has been going on since Hamas’ infamous October 7 attack on Israel, shows very few signs of truly stopping. And the Lebanese state isn’t powerful enough to curb Hezbollah in a meaningful way.
Scenes from New York: Now look, I know you can’t turn America-celebratin’ into a whole entire week, but forgive me for trying! Where are YOU celebrating America this week and weekend? Tell me in the comments/via email/on X.
Other plans on the docket: a “best of the Midwest” dinner party co-hosted with a few friends (from St. Louis and Chicago) since I’m obsessed with casseroles and toasted ravioli right now; possibly a Founding Fathers–themed reading/house party here in Brooklyn; and, of course, Tex-Mex and surfing and maybe an American flag cake.
QUICK HITS
“It’s a yawn,” said President Donald Trump about the housing bill Congress was hoping he’d sign into law. Trump said “he would sign the bill only if Congress would first pass another bill, the SAVE America Act, which would impose stricter voter ID rules that would make it harder to vote,” perThe New York Times.
The writer Richard Hanania thinks that Jerusalem Demsas (formerly of Vox) “might be the most successful living journalist” by commissioning “articles that take the right-wing position on some policy debate” for The Argument. “This makes me optimistic,” continues Hanania. “It indicates that the reason smart people reject conservatism is that it has the stench of MAGA, racism, conspiracy theorists, and religious fundamentalists. Trump supporters and Republican voters generally want trash content. This repulses smart people.” (Hanania too carries some stench; takes one to know one?) But more to the point: You’d have to be very liberal to think that The Argument‘s arguments are especially right-wing. They seem most like Abundance Agenda centrists, which is distinct from conservative.
Is there a market for smart, right-wing content?
I've gone back and forth on this.
But I'm now convinced that Jerusalem Demsas might be the most successful living journalist in terms of bringing right-wing arguments to a large, highly educated audience that wouldn't otherwise… pic.twitter.com/dJHjYkmzWY
“The Rent Guidelines Board, on which I serve, has just voted to freeze rents on New York City’s roughly 1 million rent-stabilized apartments, fulfilling a key campaign promise by Mayor Zohran Mamdani,” wrote Arpit Gupta—the lone dissenter. “This settles what will happen to rents this October, but raises the question of whether the rent-stabilized stock is still going to be standing, habitable and occupied in 2046. On its current trajectory, a large share of it will not be—especially if Mamdani and his appointees on the Board follow through on the mayor’s pledge to freeze rents every year of his term.”
Iran really wants that maritime traffic: “Iran’s Foreign Ministry denied Monday that its negotiators would be meeting with U.S. officials in Qatar on Tuesday after President Trump announced the talks would resume at Tehran’s request,” reports CBS News. “Both sides exchanged strikes over the weekend, testing the fragile ceasefire.”
Meanwhile, Iranian official Kazem Gharibabadi told state TV that the regime really wants to work out a deal with Oman (which borders the south of the strait) to oversee ships passing through Hormuz, but that “if for any reason Oman is not interested in doing so,” Iran will move forward, doing its own.
“We have warned the Omanis that other countries have no right to interfere in this matter,” he added.
“Under the memorandum of understanding signed with Washington on 18 June, substantive talks over Iran’s nuclear programme do not need to start until the lifting of the blockade of the strait—something Iran is required to use only ‘its best endeavours’ to achieve,” writesThe Guardian‘s Patrick Wintour. “Iran is adopting a maximalist interpretation of the memorandum, decreeing that it alone can lift the blockade. Jealously guarding this prerogative, it has been resisting the involvement of any other country or institution in opening the strait.”
“But Oman, a neutral nation by temperament and practice, is in a delicate diplomat spot. It knows that if it ignores Iran’s objections, Tehran is less likely to agree to Oman’s plan for the future of the strait,” adds Wintour. “But if Oman does not take the initiative in helping the humanitarian operation to release thousands of trapped sailors, the less likely it is that its proposals for the strait will be accepted by the region or by the UN—and the more likely it is the US will return to all-out war.”
A deal that means very little: “A security deal between Israel and Lebanon risks entrenching a stalemate rather than resolving Israel’s underlying conflict with Hezbollah by tying Israel’s pullout from southern Lebanon to the Iran-aligned group’s disarmament,” reports Reuters. “At its core is a bargain few see as workable: Hezbollah has flatly rejected disarmament, and no Lebanese government has the power to enforce it.”
Late last week, the Lebanese Ambassador Nada Moawad and the Israeli Ambassador Yechiel Leiter signed a trilateral agreement with the U.S. in Washington, D.C., agreeing to peace between Israel and Lebanon; if Hezbollah—which is distinct from the Lebanese government and backed by Iran—fails to disarm, Israeli Prime Minister Benjamin Netanyahu says Israeli troops can occupy southern Lebanon once again.
Of course, Hezbollah has very little reason to actually do so, and the Lebanese government is not really the party the Israelis must find common ground with here. The fighting between Israel and Hezbollah, which has been going on since Hamas’ infamous October 7 attack on Israel, shows very few signs of truly stopping. And the Lebanese state isn’t powerful enough to curb Hezbollah in a meaningful way.
Scenes from New York: Now look, I know you can’t turn America-celebratin’ into a whole entire week, but forgive me for trying! Where are YOU celebrating America this week and weekend? Tell me in the comments/via email/on X.
Other plans on the docket: a “best of the Midwest” dinner party co-hosted with a few friends (from St. Louis and Chicago) since I’m obsessed with casseroles and toasted ravioli right now; possibly a Founding Fathers–themed reading/house party here in Brooklyn; and, of course, Tex-Mex and surfing and maybe an American flag cake.
QUICK HITS
“It’s a yawn,” said President Donald Trump about the housing bill Congress was hoping he’d sign into law. Trump said “he would sign the bill only if Congress would first pass another bill, the SAVE America Act, which would impose stricter voter ID rules that would make it harder to vote,” perThe New York Times.
The writer Richard Hanania thinks that Jerusalem Demsas (formerly of Vox) “might be the most successful living journalist” by commissioning “articles that take the right-wing position on some policy debate” for The Argument. “This makes me optimistic,” continues Hanania. “It indicates that the reason smart people reject conservatism is that it has the stench of MAGA, racism, conspiracy theorists, and religious fundamentalists. Trump supporters and Republican voters generally want trash content. This repulses smart people.” (Hanania too carries some stench; takes one to know one?) But more to the point: You’d have to be very liberal to think that The Argument‘s arguments are especially right-wing. They seem most like Abundance Agenda centrists, which is distinct from conservative.
Is there a market for smart, right-wing content?
I've gone back and forth on this.
But I'm now convinced that Jerusalem Demsas might be the most successful living journalist in terms of bringing right-wing arguments to a large, highly educated audience that wouldn't otherwise… pic.twitter.com/dJHjYkmzWY
“The Rent Guidelines Board, on which I serve, has just voted to freeze rents on New York City’s roughly 1 million rent-stabilized apartments, fulfilling a key campaign promise by Mayor Zohran Mamdani,” wrote Arpit Gupta—the lone dissenter. “This settles what will happen to rents this October, but raises the question of whether the rent-stabilized stock is still going to be standing, habitable and occupied in 2046. On its current trajectory, a large share of it will not be—especially if Mamdani and his appointees on the Board follow through on the mayor’s pledge to freeze rents every year of his term.”
Obamacare enrollment declined by nearly 3 million in 2026, sparking renewed debate about the affordability of healthcare in America.
National politicians and policy experts disagreed on the reasons for the dip in enrollment, with some saying that it was driven by rising premiums.
Others said the decline was evidence that program integrity measures taken by the Trump administration were successful in rooting out fraud and waste.
The program grew significantly during the declared National Health Emergency from 2021 through 2024, when eligibility verification requirements were relaxed and participants were automatically reenrolled.
Enrollment peaked at 22.1 million last year and dropped to 19.2 million as of February, according to federal data released June 26.
Though that’s still higher than in any year except 2025, some analysts interpreted the decline as a massive loss of coverage resulting from the One Big Beautiful Bill Act of 2025.
“One year later, the Trump administration’s policies are bleeding the revenue of the American tax system and have left millions of Americans without health coverage and food assistance,” Amina Khalique and Natasha Murphy wrote in a June 25 article for Center for American Progress, writing on the anniversary of the bill’s passage.
Others including Brian Blase, president of Paragon Health Institute, say that the changes mostly reverted to pre-pandemic coverage and policy rules, which had been an incentive for fraud.
“Excessive subsidies and zero-premium plans created unusually strong incentives for improper enrollment, while weak verification systems, permissive enrollment pathways, and insufficient oversight allowed those incentives to be exploited at scale,” Blase wrote in a June analysis.
The Trump Administration has focused on program integrity, preventing about 2.9 million enrollees from receiving Obamacare subsidies that they didn’t qualify for, according to a statement from the assistant secretary for Health and Human Services.
The government estimates that 2.6 million fraudulent enrollments remain in the program, down from an estimated high of 5.6 million last year.
Either way, the changes left millions uninsured, according to some experts.
About 9 percent of 2025 Obamacare enrollees became uninsured as of March, according to a survey conducted by health research group KFF.
“While the Trump administration attributes this drop in enrollment to their attempts to address fraud, this coverage loss happened at the same time millions of people faced steep increases in their premium payments,” Cynthia Cox, a senior vice president at KFF, wrote on social media on June 29.
“Real people lost their health insurance or are now paying more,” Cox said.
The average monthly premium for 2026 is $178, compared to $113 in 2025, according to KFF. However, the 2026 premium is lower than the 2021 premium after adjusting for inflation.
The benchmark silver premium, which is used to set subsidy rates, increased by about 25 percent in 2026, according to KFF.
Democrats seized on the enrollment data to criticize President Donald Trump and Republicans over healthcare affordability.
“Trump and congressional Republicans let healthcare premiums explode and now millions of Americans can’t afford coverage,” Sen. Kirsten Gillibrand (D-N.Y.) wrote on social media on June 29.
“That’s not right,” said Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, responding to the argument that premium increases have forced people off of the program.
“The reality is we have a lot of fake people on the policies,” Oz told Fox News on June 29.
Oz cited that 40 percent of enrollees never use the policies as proof that many either do not want the coverage, do not realize they have it, or were fraudulently enrolled.
Prior to the introduction of the enhanced subsidies in 2021, Obamacare enrollment had declined for four years.
Home prices in America’s top 20 cities were expected to fall MoM for the 3rd straight month in April (the latest reported data from S&P Cotality Case-Shiller) and they did… but only marginally.
Prices fell 0.04% MoM in April (less than the 0.10% decline expected), but the annual change rose modestly from +0.88% YoY to +1.14% YoY…
“Midwest and Northeast markets are still leading moderate growth, while many Sun Belt and Western metros see ongoing declines.
Chicago was again the strongest market with a 6.5% annual gain, trailed by New York (3.8%) and Cleveland (3.2%).
Seattle’s 2.3% year-over-year drop was the steepest in April, with Denver (-1.8%), Tampa (-1.8%), Dallas (-1.6%), and Phoenix (-1.7%) also among the notable decliners.
The nearly 9 percent performance spread between Chicago and Seattle highlights how localized housing trends remain.
On a YoY basis, Chicago reported the highest annual gain among the 20 cities with a 6.5% increase in April, followed by New York and Cleveland with annual increases of 3.8% and 3.2%, respectively.
Seattle posted the lowest return in April, falling 2.3%.
The chart below compares year-over-year returns for different housing price ranges (tiers) in Chicago.
“The affordability pinch remains a key headwind,” Godec concluded.
“After dipping below 6% earlier this year, 30-year mortgage rates climbed back to 6.3% in April, keeping financing costs elevated. In this higher-rate environment, home price growth remains constrained, with housing largely treading water in nominal terms and falling in real terms.”
Finally, with inflation accelerating to 3.8% in April, U.S. home values have now declined in real terms for an 11th straight month, further eroding inflation-adjusted housing wealth.
Stock Futures Flat As S&P Closes Out Best Quarter In 6 Years
US index futures erased an earlier gain following some belligerent Iran headlines, but are still set to end a quarter that is set to be the S&P 500’s best in six years with markets behaving as though period-end dynamics have now completed. As of 8:30am, the S&P 500 was flat, pointing to a calm finish for the index that has surged 14% since the beginning of April. Nasdaq futures rose 0.1% erasing a sizable gain earlier, but on pace to close the quarter with a staggering 24% gain; In premarket trading, semis are mixed, Mag7 are flat, Cyclicals are generally leading Defensives with exceptions being Energy (lower) and Healthcare (higher). European stocks rallied, with gains led by Abivax SA after a clinical-trial update soothed investor concerns. Chipmakers drove Asian shares higher. JPM says with the major US holiday coming up, keep an eye on low liquidity moves in the region. Bond yields reversed an earlier drop to trade higher by 1bp pushing the 10Y yield to 4.39%. The USD is stronger, looking to erase all of yesterday’s losses. Commodities are stronger with crude flat into today’s US / Iran discussions, Metals seeing a bid, and Ags outperforming the other commodities complexes. Today’s economic data calendar includes April Case-Shiller home prices (9am), June MNI Chicago PMI (9:45am, several minutes earlier for subscribers), June consumer confidence and May JOLTS job openings (10am) and June Dallas Fed services activity (10:30am). Fed speaker slate empty for the session. Chairman Warsh participates in an ECB panel event on Wednesday in Sintra
In premarket trading, Mag 7 stocks are mostly higher (Alphabet +0.3%, Amazon +0.1%, Apple unchanged, Meta Platforms +0.3%, Microsoft +0.4%, Nvidia +0.8%, Tesla (TSLA) -0.9%).
AeroVironment (AVAV) soars 30% after the defense company reported fourth-quarter results that topped expectations and forecast 2027 revenue that at the midpoint exceeds estimates. Analysts note strength in its drones business.
Aevex (AVEX) climbs 12% after winning a $50 million contract from the US Air Force to continue expanding unmanned mission‑support capabilities for current operations.
Block (XYZ) inches about 1% higher after Piper Sandler upgraded the digital payments company by two notches to overweight, citing earnings potential.
Concentrix (CNXC) tumbles 23% after the call-center company slashed its full-year outlook. The company’s forecasts for reported revenue and adjusted earnings per share also undershot Wall Street’s expectations.
Patrick Industries (PATK) and LCI Industries (LCII) announced plans to combine in an all-stock merger. LCI shares are up 7%, while Patrick shares are halted.
Replimune (REPL) gains 6% after BMO Capital Markets upgraded the drug developer by two notches to outperform from underperform, citing a clearer regulatory path for the firm’s experimental treatment of advanced melanoma.
Space stocks were among the biggest US premarket gainers. Michael Saylor’s Strategy Inc. eased after Monday’s rally as Bitcoin dipped below $60,000. Microsoft Corp. was firmer, but still on course for its worst month since December 2000.
In other news, biotech company Abivax reported positive ABTECT maintenance part two results for experimental bowel disease drug Obefazimod. Susquehanna is attempting to identify individuals it claims made at least $100 million trading on inside information about a Chinese government crackdown on cross-border brokerages. Millennium will back a new quant hedge fund firm led by former Citadel researcher Paul Dou. Taiwan government agencies raided the offices of Super Micro Computer and several local affiliates as part of an investigation into the alleged smuggling of Nvidia chips into China. Blackstone is selling its stakes in a trio of data centers across Northern Virginia for $3.5 billion, cashing out of part of a bet it made less than three years ago.
Global stocks cemented gains ahead of another strong earnings season that analysts say will be driven by the debt-fueled investment boom in artificial intelligence. A strong macro backdrop will offer added support as falling oil prices help keep worries about inflationary pressures in check.
“US futures are being supported by renewed demand for tech, with investors returning to the view that IT offers one of the few strong and reliable earnings-growth stories,” said Marija Veitmane, head of equity research at State Street Global Markets. “That makes any jitters in tech look like a buying opportunity, and I think that is what we are seeing after last week’s wobble.”
Investors will keep a close watch on peace talks scheduled for Tuesday after Iran reiterated its determination to control maritime traffic through the Strait of Hormuz. Oil prices remain an important part of the inflation outlook, with the Federal Reserve expected to hike interest rates as soon as September.
“The decline in oil prices suggests concerns around energy-driven inflation are largely behind us, but if AI-driven inflation from memory costs starts to materialize over the next two to three months, that will be important,” said Paisley Nardini at Simplify Asset Management. “The other risk is whether cracks start to emerge in the consumer.”
Elsewhere, US technology shares are at risk of declines as overall investor exposure to the cohort is extremely elevated, according to Citigroup strategists. Following last week’s price hikes by Microsoft and Apple, rising costs and component shortages are said to be leading to China’s smartphone brands slashing targets, according to the Nikkei.
“So far there are no signs of profit margins rising outside the tech sector. This is ultimately what we are waiting for, because the value of AI companies today rests entirely on the promise that margins in the S&P 493 will eventually climb,” noted Torsten Slok, chief economist of Apollo Global Management, referring to S&P 500 stocks beyond the Mag 7.
The outlook for US earnings momentum, according to a recent Citigroup indicator, remains positive. AI continues to make an outsize contribution with 44 AI companies projected to contribute around 60% to overall S&P 500 earnings growth across calendar 2026, growing earnings at roughly 40.7% — triple the rate of the rest of the S&P 500, Bloomberg Intelligence’s Nathaniel T Welnhofer recently noted.
In politics, Trump refused to commit to signing a major bipartisan housing bill, heightening uncertainty over the fate of the legislation. The Supreme Court has given Trump the power to fire the heads of independent agencies, overturning a 91-year-old precedent that said agencies must be independent of the president. Billionaire venture capitalist Marc Andreessen got a spot on a top Pentagon advisory board.
European stocks rallied in early Tuesday trading, poised for their best quarter since late 2020 as investors bet on an improved outlook for economic growth, with the Stoxx 600 benchmark set for a jump of nearly 10% in the past three months. Here are the biggest movers Tuesday:
Abivax shares jump as much as 32%, the most since January, after a clinical-trial update soothed some investors’ concerns about whether cancer could be a potential side effect of the French biotech’s most promising experimental drug
Genmab shares rise as much as 7.9% after the Danish biotech company reported positive late-stage trial results for its Epkinly drug combination in patients with relapsed or refractory diffuse large B-cell lymphoma
Siemens gains as much as 3.3%, the most in two weeks, as analysts updated their estimates ahead of the German industrial group’s third-quarter earnings, due on Aug. 6, expecting a strong print from the company
ITM Power shares rise as much as 19% after Berenberg raised its price target on the green-hydrogen equipment maker by 82%, citing a “significant growth opportunity” in its partnership with Rheinmetall
Truecaller gains as much as 13% as DNB Carnegie reiterated its buy recommendation and raised its price target on the caller-ID company, saying its upcoming second-quarter report “should mark another step in Truecaller’s recovery”
Maersk shares gains as much as 5.4%, the most in almost three weeks, after the Danish shipping group upgraded its full-year outlook. While the news is a positive, its seen as broadly anticipated by analysts
Sainsbury’s shares rise as much as 3.5%, the most in seven months, after the British retailer reported 1Q sales that were in line with consensus expectations, avoiding the underperformance of its peer Tesco
Kering shares slid as much as 5.4% on Tuesday, as analysts caution the luxury goods maker’s 1H earnings report is likely to show the turnaround at key brand Gucci remains gradual
Teleperformance shares fall as much as 13% after Concentrix, a US peer of the French call-center operator, slashed its full-year outlook, with forecasts for reported revenue and adjusted EPS missing expectations
Logitech shares fall as much as 4.9% after Bank of America downgraded the stock to underperform from neutral, seeing “demand destruction” for the Swiss firms’ computer peripherals due to price increases in consumer electronics
Asian stocks rose for a second day, driven by gains in technology shares as investors rebalanced portfolios at the end of the quarter. The MSCI Asia Pacific Index climbed as much as 1.5%, bringing its gain for the three months through June to 21%, the strongest quarterly advance since 2009. Japan’s tech-heavy Nikkei 225 marked its biggest ever quarterly advance, while South Korea’s Kospi index posted its best three-month period since 1998. In contrast, the MSCI China index has fallen for a third quarter. Taiwan’s Taiex index was among best performers in the region on Tuesday, with TSMC and MediaTek leading gains after the Philadelphia Semiconductor Index rose 3.8%. Stocks in Japan and South Korea rose. Offshore Chinese stocks continued to lose momentum, with the Hang Seng Index near a technical bear territory. MSCI China has tumbled about 15% this year, amid concerns over a sluggish economy, weak earnings from internet giants and investors’ preference for chipmakers elsewhere in Asia.
The region’s stocks continue to outperform global peers this year, underpinned by the enthusiasm in artificial intelligence. Chipmakers and hardware suppliers across markets such as Taiwan, Japan and South Korea have rallied as investors chase earnings growth and visibility to the AI buildout, while markets like India and China continue to struggle due to the lack of AI exposure.
“Asia is ending the first half with a selective risk-on tone: Taiwan and Japan are carrying the optimism built over the past few months, while weakness in China, Hong Kong and India shows investors are still cautious about markets without a clear AI, earnings or policy-support catalyst,” said Hebe Chen, a market analyst at Vantage Global Prime in Sydney.
In FX, the yen slid to its weakest level against the dollar since 1986, extending its recent losses to weaken beyond 162 against the dollar, a milestone that will generate unease in Japan and put traders on alert for authorities intervening in the market. Finance Minister Satsuki Katayama said Japan will respond to developments in foreign exchange at any time.
In rates, treasuries are mixed ahead of a reading of US job openings for May. Bloomberg Economics expects the JOLTS report to show declining vacancies and a low quits rate. While hiring is supporting personal income growth, wage pressures are likely to remain rather muted. Yields were within a basis point of Monday’s closing levels, after plying small ranges during Asia session and London morning. European bonds provide support after German state inflation gauges slowed in June. US 10-year yields around 4.37% are marginally richer on the day, and curve spreads are likewise little changed; bunds and gilts trade broadly in line with Treasuries. WTI crude oil futures, little changed, also support Treasuries as they head for biggest quarterly decline since the pandemic. IG dollar issuance slate includes four names so far. Four Yankee banks led a $17.2b US investment-grade new issue docket Monday. Borrowers paid about 3bp in new issue concessions on deals that were 3.5 times oversubscribed. Treasury coupon issuance resumes next week with 3-, 10- and 30-year tenors. Focal points of US session include a swath of economic data headed by consumer confidence and JOLTS job openings.
“The next validation point is now macro,” said Florian Ielpo at Lombard Odier Investment Managers. “JOLTS, consumer confidence, ISM and payrolls need to show enough labor resilience to keep the earnings momentum up, but not so much strength that the real-yield ceiling comes back immediately.”
In commodities, oil is headed for the biggest quarterly decline since the pandemic. Brent crude fell 0.3% to about $73 a barrel as flows through the Strait of Hormuz accelerated. Morgan Stanley analysts cut their oil price forecasts for the second time in about two weeks on a faster-than-expected supply rebound, while strong US supply and weak Chinese demand raise the risk of a glut.
Today’s US economic data calendar includes April FHFA house price index and S&P Cotality CS home prices (9am), June MNI Chicago PMI (9:45am, several minutes earlier for subscribers), June consumer confidence and May JOLTS job openings (10am) and June Dallas Fed services activity (10:30am). Fed speaker slate empty for the session. Chairman Warsh participates in an ECB panel event on Wednesday in Sintra
Market Snapshot
Top Overnight News
US and Iranian officials are set to hold peace negotiations in Doha today, but uncertainty hangs over the meeting. Donald Trump declined to say whether he expected a breakthrough and Iran has yet to confirm it’ll attend. Iran reiterated its determination to maintain control over maritime traffic in the Strait of Hormuz. BBG
The unexpectedly rapid retreat in energy prices in the past week has further taken pressure off European Central Bank policymakers to lift interest rates next month but the case for a small hike later on remains firm, four sources told Reuters. RTRS
China’s manufacturing activity expanded in June after remaining flat last month, thanks in part to resilient exports amid robust global demand for artificial-intelligence and green products. The official manufacturing purchasing managers index edged up to 50.3 this month from May’s 50.0. WSJ
China has lifted some restrictions on oil-product exports in the past week, rolling back measures introduced to safeguard domestic supplies shortly after the war began in the Middle East. BBG
Political pressure on the BoJ to slow its interest rate hikes is growing amid a push by Sanae Takaichi’s government to restore dovish policymakers to the bank, a shake-up that could change its long-term policy direction. RTRS
French and Italian inflation cooled more than expected in June, suggesting price pressures are beginning to soften amid falling energy costs due to easing tensions between the U.S. and Iran. WSJ
US retailers have brought forward orders from China by four-to-six weeks to secure their inventories for Black Friday and Christmas holiday sales before expected tariff hikes later this year, shipping executives said. RTRS
Companies investing most heavily in AI are adding workers faster than their peers, according to new research that challenges predictions of broad AI-driven job losses. FT
ECB Chief Economist Philip Lane said knock-on effects from higher energy prices will take a while to show up and that policymakers won’t lock themselves into a rates path. BBG
US House Speaker Johnson said no veto is expected for the housing legislation and that the housing bill will become law, while he noted that President Trump has yet to decide on signing the bipartisan housing package: POLITICO.
Iran News
US President Trump’s envoys Kushner and Witkoff are flying to Doha for talks, while Iran said the Doha mission is focused on ceasefire compliance and is not there for talks with the US, according to NYT.
US Secretary of State Rubio said at a Congress briefing that there is a possibility the nuclear talks with Iran may fail, while he also stated that Iran has not yet received any funds under the MoU.
Iranian President Pezeshkian said “Understanding is a bilateral matter. If the American side adheres to the memorandum of understanding, we will also fulfil our obligations”, while he said their approach to unreasonable boasting and unfounded threats is to rely on rationality and human dignity in decision-making and to defend themselves decisively and fearlessly when taking action.
Iran’s Deputy Foreign Minister Gharibabadi said if they do not reach an understanding with Oman on the routes and arrangements of the Strait of Hormuz, they will, in any case, implement Iran’s new sovereignty and policy in the Strait of Hormuz, while he added that they do not guarantee the safety and security of ships passing through parallel routes in the Strait of Hormuz.
Iran’s acting Defence Minister al-Reza said we do not trust the enemy and our hands are on the trigger in the event of any ceasefire violations, will take appropriate and necessary action.
The framework agreement between Israel and Lebanon has reportedly caused a rift in Iran-Lebanon relations, with Iranian FM Araghchi refusing to visit Lebanon, according to Kan’s Kais citing a Lebanese newspaper.
An explosion was reported in southern Lebanon, which was carried out by Israeli forces, while it was also reported that Israeli forces conducted a strike on town of Deir Sryan in southern Lebanon and that Israeli attacks on Gaza left 48 dead and wounded, according to Tasnim and Mehr News Agency.
A more detailed look at global markets courtesy of Newsquawk
APAC stocks were mixed with choppy price action seen overnight heading into quarter-end, despite the gains in the US, where the DJIA notched a record close, and the Nasdaq outperformed amid strength in tech and communications. ASX 200 traded little changed amid mixed performances of its sectors and after the RBA minutes from the June meeting continued to affirm a hawkish stance. It stated that policy needed to remain restrictive and the RBA will do what is needed to achieve price stability, including raising rates if necessary. Nikkei 225 ultimately rallied, but initially swung between gains and losses, with the index fluctuating through the 70k level, amid a weaker currency, FX intervention risks, and disappointing Industrial Production. Hang Seng and Shanghai Comp lagged as a rebound in tech stocks was counterbalanced by losses in miners and energy majors, while they also failed to benefit from better-than-expected PMI data and another PBoC overnight repo operation.
Top Asian News
Japanese Finance Minister Katayama won’t comment on specific effects levels, but said they will respond appropriately to currency moves at any time as needed, while she added that action could include decisive action as agreed in the joint statement with the US.
Japan’s Chief Cabinet Secretary Kihara said he won’t comment on FX levels, but added that they are always ready to take necessary action on FX.
Decision on reducing Japan’s consumption tax on food products has been postponed until July due to pushback from the opposition parties, according to TBS.
European bourses (STOXX 600 +0.8%) begin the last day of Q2 entirely in the green, with outperformance in the DAX 40 (+1.1%) and AEX (+0.7%). Many indices are set to have their biggest quarterly gain since the end of 2022, with the STOXX 600 just shy of 10% gains for Q2. Focusing on Germany’s DAX, analysts see possible continued underperformance, with any flare-up in EU-China tensions posing a further headwind. Its auto sector has been particularly affected in recent months, with China playing a key role in that narrative.- European sectors highlight the positive bias. Basic Resources (+2.1%), Technology (+1.3%) and Industrial Goods & Services (+1.6%) are the outperformers, while Consumer Products & Services (-0.9%), Food, Beverages & Tobacco (-0.4%) and Telecoms (-0.3%) are the only sectors printing modest losses.
Top European News
UK Government announced a GBP 15bln defence package.
FX
Snapshot: G10s are lower against the USD to varying degrees. The CHF, EUR and JPY are all the laggards this morning, to the tune of c. 0.3%, whilst the Antipodeans are faring a little better vs peers.
DXY is firmer this morning and trades at the upper end of a 101.12 to 101.42 range. No real driver this morning for the index, but comes amidst a tense geopolitical risk-tone and ahead of key US data. The slight strength today can also be explained as a bit of a bounce back, after recent USD strength has faded a touch off recent highs. The high from Monday (101.07) was breached this morning, whereby another bout of strength could see a test of Friday’s high (101.57) and Thursday’s best (101.74).
EUR/USD is amongst the worst performers this morning, as markets digest the sheer amount of ECB speakers at Sintra. Overall, the bias has been hawkish; namely, President Lagarde and Chief Economist Lane have highlighted that the oil price curve remains elevated, and that could suggest higher costs for the economy. Nonetheless, policymakers have broadly reiterated data dependency and avoided any pre-commitment to July/September. On that front, Reuters sources suggested that given recent energy dynamics, September is now seen as more likely than July for another hike; the source clarified that a rate hike is not off the agenda. As it stands, money markets assign a 32% chance of a hike in July and a 70% chance of a move in September.
On the data front, the EUR has had dovish German State CPI metrics to contend with. Broadly speaking they are indicative of a cooler Y/Y print, despite mainland consensus for the headline remaining at 2.6%.
JPY is also amongst the laggards. Overnight, the pair jumped above the 162.00 mark, amidst commentary from Chief Cabinet Secretary Kihara. He initially suggested that he would not comment on FX, which saw the pair breach 162.00. However, a few minutes later, he stated that they are always ready to take necessary action on Forex. The move largely unwound on that jawboning attempt. Thereafter, Finance Minister Katayama also commented. She warned that they will respond appropriately to currency moves at any time as needed, while action could include decisive action as agreed in the joint statement with the US. USD/JPY currently holds within a 161.89-162.41 range.
Fixed Income
Global fixed income benchmarks are firmer across the board, helped by softer energy prices, but also supported by cooler inflation prints in the EZ.
Bund (+13 ticks) upside initially came following the French inflation data, in which HICP softened to 2%, below the expected 2.4% and from the prior 2.8%. This followed the Spanish print on Monday, which came in slightly hotter-than-expected, but saw relief after the core figure cooled. The German state CPIs can give further relief for the ECB, after prices broadly cooled in all states. This comes ahead of the nationwide figure later today; HICP is expected to hold at 2.7%.
Many ECB policymakers were also on the wires this morning at the sidelines of Sintra. President Lagarde kicked off the Sintra conference on Monday. Even though her comments sounded slightly hawkish, it seemed to be an unwind of her dovish stance when she spoke last week in a way to keep all options on the table. Lane was the first GC member to speak today, in which he highlighted that the oil price curve is seen elevated in the coming years, which suggests higher economic costs.
USTs (+2+ ticks) follow its German counterpart higher, albeit to a lesser extent, with focus this week being on comments by Fed Chair Warsh at Sintra on Wednesday and the US jobs report on Thursday.
JGBs (-3 ticks) traded on the softer side in the Asia-Pac seen, however there was some relief following the 2-year JGB auction. The b/c was 4.82x, which was higher than the prior 3.70x and above the 12-month average of 3.74x. The strong auction was also backed by a small price tail. Despite the strong auction, investors remain concerned about further BoJ hikes, and perhaps more aggressively, to stabilise the Yen (USD/JPY recently topped 162.40).
Japan sells JPY 2.15tln 2-year JGBs b/c 4.82 (prev. 3.70), average yield 1.407% (prev. 1.369%).
Commodities
Crude benchmarks are firmer, posting gains of around USD 0.10/bbl at highs of USD 70.88/bbl and USD 74.08/bbl for WTI and Brent, respectively.
In brief, we await any information relating to or stemming from the Doha talks. US envoys Kushner and Witkoff are travelling to Doha. However, Iran has made clear it will not be holding talks with the US “at any level” in the next few days, with the Doha gathering to only discuss ceasefire compliance. Albeit, sources via Pakistani journalist Mallick suggest that talks could occur via Pakistani/Qatari mediators.
Spot gold firmer, but only marginally so. Overnight, pressure was seen alongside a jump in USD/JPY (see FX/morning JPY update for details), action that was exacerbated by a breach of the USD 4000/oz mark to the downside. Sending XAU to a USD 3942/oz base.
In the first part of the European morning this unwound, with XAU climbing back above USD 4k/oz and hitting a USD 4037/oz peak in short order. There wasn’t a specific or fresh fundamental driver behind this, though the move did take place alongside a modest uptick in the fixed income space, marginal downside in energy and a moderation of the performance of both European and US equity futures.
Base metals in focus after the EU increased tariffs on steel. The move will reduce the duty-free import level by an average of 47%. Following the move, an official cited by the FT outlined that the EU hopes to create a “steel club” with the US and others, in order to reduce trade barriers. Broadly, base metals are firmer, reflecting the risk tone and despite the firmer USD.
US President Trump posted “Gasoline Retailers must get their Prices down, IMMEDIATELY! They’re too high considering that Oil is now at $68 a Barrel, and heading south. The Retailers must quickly react to this statement, and do what they know is right”.
Shell (SHEL LN) expects LNG demand to increase by around 65% by 2050, largely driven by APAC nations.
China is said to be easing some refinery fuel export restrictions as domestic supply is ample, according to reports.
Morgan Stanley slashes its Q3 dated Brent forecast by USD 15 to USD 75/bbl as supply returns through Hormuz.
Trade/Tariffs
USTR posted that the US welcomes Switzerland’s progress in implementing elements of a historic Framework Agreement, while it was stated that they will continue to work towards the conclusion of an agreement on fair, balanced, and reciprocal trade that will further remove non-tariff barriers.
China and the EU agreed to maintain global supply chain stability, continue consultations on trade, and solve some intellectual property issues, while China and the EU exchanged market access lists.
EU declared new rule to protect EU steel. The EU’s steel measure, which enters into application on 1 July 2026, reduces duty-free imports of 26 categories of steel products into the EU by an average of 47% as compared with the quotas under steel safeguard.
White House announced temporary suspension of duties on fertilizer from Morocco, according to a Fact Sheet
Central Banks
ECB’s Lane said there has been some improvement in confidence, but not at pre-war levels. He added that the oil price curve sees elevated levels in the years coming, which suggest higher cost for the economy. On the ECB’s rate path, he said July vs September is too narrow a debate but aiming to keep options open by not boxing themselves into a specific meeting.
ECB’s Nagel said it is too early make rate hike calls but rate policy has to stay vigilant as inflation may stay significantly above target.
ECB’s Wunsch said we might need another hike and would rather move quickly if the ECB needs another hike. A quick ECB move does not necessarily mean a July move.
ECB’s Sleijpen said while oil prices have come down, there is still a lot of uncertainty and reiterated the ECB’s data-dependent approach.
ECB sources said a rapid oil price retreat eases pressure on the ECB to hike in July and September is seen as more likely, although a June inflation surprise could reignite talk of a July hike, while sources added that a rate hike is not off the agenda even though it may be delayed, according to Reuters.
BoJ’s Sato said the de-escalation of the Middle East conflict is a welcoming move but uncertainty remains on outlook.
RBA Minutes from the June meeting stated that policy needed to remain restrictive and it will do what is needed to achieve price stability, including raising rates if necessary. The Board saw merit in using the room created by earlier hikes to assess how the economy was faring and noted that leaving rates unchanged would best balance inflation and jobs objectives. Furthermore, it stated that the economy was operating with excess demand and broad-based price pressure, as well as noted that the Middle East conflict still posed material upside risks to inflation and downside risks to activity.
Geopolitics
Russia reported it shot down 419 Ukrainian drones overnight.
US Event Calendar
9:00 am: Apr FHFA House Price Index MoM, est. 0.15%, prior 0.1%
9:45 am: Jun MNI Chicago PMI, est. 55.1, prior 62.7
10:00 am: Jun Conf. Board Consumer Confidence, est. 94.4, prior 93.1
10:00 am: May JOLTS Job Openings, est. 7295.5k, prior 7618k
DB’s Jim Reid concludes the overnight wrap
As we hit the last day of the first half of the year, markets in Asia are largely continuing trends seen in the year and quarter to date. The KOSPI (+3.23%) is leading gains and remains on track for an impressive quarterly rise of over 65% and exceeding 105% YTD. Japan’s Nikkei (+1.70%) is also notably higher, now more than 37% higher for the quarter. Elsewhere the CSI (+1.12%) and Shanghai Composite (+0.20%) are also up but the Hang Seng (-1.19%) and the S&P/ASX 200 (-0.08%) are lower. Minutes from the RBA’s June meeting indicated that policymakers remain cautious about inflation and will continue to evaluate incoming data before making policy adjustments. S&P (+0.14%) and Nasdaq (+0.44%) futures are higher as I type.
In China, manufacturing activity in June slightly exceeded forecasts, supported by strong export demand and continued investment in artificial intelligence. The official manufacturing PMI rose to 50.3, above expectations of 50.1, and up from 50.0 in May. Meanwhile, the non-manufacturing PMI improved to 50.2, surpassing the 49.9 forecast and edging up from 50.1 previously, signaling modest improvement in services activity despite overall subdued demand.
The Japanese yen has weakened further overnight even with officials commenting that intervention could happen at any time. Over the last 24 hours it’s fallen to its lowest level against the US dollar since 1986, closing at 161.94 last night and now trading at 162.40 this morning. So historic times for Japan.
Ahead of all this, markets saw a decent risk-on move yesterday, as a recovery in tech stocks helped to lift US equities more broadly. So the Magnificent 7 (+2.58%) bounced back, which meant the S&P 500 (+1.18%) finally ended a run of 5 consecutive declines. Indeed, with just one day of Q2 left, the S&P is on the verge of its best quarterly performance in six years, back when the index was bouncing back sharply from the pandemic slump. Those moves yesterday included a big advance for Tesla (+8.46%), Alphabet (+4.79%) and Amazon (+3.20%). And the Philly semiconductor index (+3.83%) rebounded after posting its worst week since the post-Liberation Day sell-off last April. It was a more mixed day for the rest of the US stock market, but both the equal-weighted S&P 500 (+0.18%) and the small-cap Russell 2000 (+0.01%) still inched up to new record highs. And over in Europe, equities were basically flat, with the STOXX 600 up +0.04%. European futures are around +0.6% higher this morning.
Perhaps the biggest story yesterday was news on Fed independence, as the US Supreme Court voted 5-4 that Fed Governor Lisa Cook could remain in post while fighting Trump’s attempt to remove her over allegations of mortgage fraud, ruling that the President could not remove her without proof of wrongdoing. It’s worth noting that’s not the end of the story, as they didn’t rule on whether Trump could fire Cook if the allegations were found to be true, but it means she can stay in post for now.
On the broader legal backdrop, the Court also ruled separately that the President can remove senior officials at other independent agencies without needing to meet the longstanding “for cause” standard, effectively overturning a 91-year precedent. In practical terms, that tilts the balance of power back towards the executive, giving the White House greater scope to replace officials across much of the regulatory apparatus. The carve out for the Fed therefore looks quite deliberate, reinforcing its unique independent status, but it also raises the stakes around how durable that distinction proves over time. If anything, it points to a more uncertain institutional backdrop, where independence can no longer be taken as a given across the wider policy framework—even if the Fed remains insulated for now.
Elsewhere, oil prices picked back up yesterday as they reacted to the weekend strikes that took place between the US and Iran, even if the weekend ended in a better place than it started with a halt to tit-for-tat strikes agreed by both sides late on Sunday night. So Brent crude (+1.61%) rose from its 4-month low on Friday, closing at $73.15/bbl, with WTI (+2.20%) back up to $70.75/bbl. That oil move also came as Iran’s Deputy Foreign Minister said that Tehran will control maritime traffic through the Strait of Hormuz with or without Oman. Otherwise, further meetings are set to take place today, with Trump posting that Iran had requested a meeting that would take place in Doha. And separately, Axios reported that the US’ Steve Witkoff and Jared Kushner would be travelling to Doha to meet today with the Qatari PM and other officials. They also reported that the US and Iranian technical teams would meet separately with the Qatari and Pakistani mediators.
That uptick in oil prices meant inflation concerns crept back in a bit yesterday on both sides of the Atlantic. So the US 1yr inflation swap (+4.5bps) was back up to 2.14%, from a 20-month low on Friday. And in turn, investors priced in a more hawkish path for the Fed, with the amount of hikes priced by the December meeting up +1.4bps on the day to 33bps. So that led to another rise in Treasury yields, with the 2yr yield (+1.4bps) up to 4.11%, whilst the 10yr yield (+0.5bps) moved up to 4.38%.
Meanwhile in the Euro Area, there was a similar pickup in bond yields across the continent. That was partly because of the oil move, but we also started to get the flash CPI prints for June, with Spain’s release surprising on the upside yesterday. It showed CPI unexpectedly remaining +3.6% (vs. +3.4% expected), which added to concerns that the other prints might come in on the stronger side too, and that the ECB would need to keep hiking rates. Indeed, market pricing moved in a slightly hawkish direction, with 27bps of hikes now priced by the December meeting, up +2.6bps on the day. And in turn, yields on 2yr bunds (+2.1bps) moved higher, while those across 10yr bunds (+0.7bps), OATs (+0.5bps) and BTPs (-0.4bps) were more stable.
Here in the UK, gilts were a relative outperformer, with the 10yr yield falling -1.5bps to 4.72%. That came as the favourite to be next PM, Andy Burnham, delivered a speech outlining some of his plans, which included a commitment to stick to the current fiscal rules. So that reassured investors who were concerned about looser fiscal policy, and there was also some underwhelming UK data as well. For instance, mortgage approvals for May fell more than expected to 56.2k (vs. 63.0k expected), which is their lowest since December 2023.
Looking at the day ahead, data releases include the flash June CPI prints from Germany, France, and Italy, along with German unemployment for June. Meanwhile, US releases include the JOLTS report for May, the Conference Board’s consumer confidence for June, and the FHFA’s house price index for April. Otherwise from central banks, we’ll hear from the ECB’s Vujcic, Elderson, Schnabel, Cipollone and Lane, along with the BoE’s Breeden. Finally, today’s earnings releases include Nike.
In 2005, when I was 11, my mother and I fled Venezuela because the government was going to arrest her for her reporting. She was among the first investigative journalists to document how President Hugo Chávez and the socialist party were taking control of the judiciary and integrating Cuban operatives into the military and security apparatus. She exposed how Chávez and his cronies were enriching themselves with oil revenues, creating what would become the largest corruption ring in modern world history. In an effort to silence her, the regime fabricated charges that she had orchestrated the murder of a corrupt prosecutor and put out a warrant for her arrest.
My mother’s escape from Venezuela played out like a Hollywood thriller. She hid in safe houses, was transported in the trunk of a car covered with trash bags, and eventually made it out of the country stowed away on a small boat. A family friend shepherded me to Miami to join her a few days later.
My family had already experienced the brutality of “Chavismo.” The police had raided our home, our car had been fired at, and our family bodyguard, Germán Delgado, had been kidnapped and tortured to death by state security thugs. My grandfather was charged with bogus crimes for his journalism. He was arrested by Italian authorities at Interpol’s direction, and eventually joined us in exile. The socialist regime forced the newspaper and magazine he owned to close down by preventing them from importing paper to run their printing presses. One by one, my relatives were forced to flee, including my grandmother, who spent her final years desperate to see her home in Caracas one last time before she died.
A radical leftist government uprooted my family and wrecked my homeland. Yet after I arrived at New York University (NYU) as a freshman in 2013, I became a leftist.
How NYU’s Groupthink Turned Me Into a Leftist
It was all about fitting in.
When we first moved to Miami, I longed for Venezuela. We sang the “Star-Spangled Banner” every morning in school, and I refused to put my hand over my heart. (“That’s not my anthem,” I told my mom.) But I quickly learned English and made friends with gringas. By the time I was a teenager, I wanted nothing more than to be an all-American girl, which entailed sealing off my Venezuelan identity.
At first, I was a moderate liberal Democrat, campaigning for Barack Obama’s reelection in high school. Then I arrived in New York and encountered NYU’s hyperprogressive campus culture. Like my classmates, I became obsessed with social justice. I majored in journalism and politics, and my course load included “The Politics of Inequality,” “LGBT Politics,” and “Latina Feminist Studies.” My professors included militant leftists, an anti-establishment Catalan independence supporter, and a pro-Palestine activist who assigned a book edited by the Marxist historian Vijay Prashad—a defender of Chávez, Nicolás Maduro, and their socialist dictatorships.
The year I arrived on campus, Chávez died of cancer and was succeeded by Maduro, who continued dismantling Venezuela’s democratic institutions and doubled down on Chávez’s socialist policies. I was still a freshman in 2014 when the country erupted in daily protests, with millions occupying the streets across the country. They were driven by a fury and desperation that my classmates at NYU could hardly imagine.
I knew that Chávez and Maduro were socialists, but I wasn’t focused on their economic policies. The problem, I figured, was that Chavez and Maduro were authoritarians who trampled on civil liberties.
In the classic immigrant narrative, the protagonist, who wants nothing more than to be a real American, eventually reconnects with her past through nostalgia or family obligation. I experienced plenty of both, but my transformation was ultimately the result of a profound intellectual dissonance: I couldn’t reconcile what had happened to my family with what I was being taught in my Latin American studies classes.
I was told that U.S. and European colonialism and imperialism were solely to blame for poverty in the region. I was being indoctrinated into the philosophy of tercermundismo, or “Third-Worldism,” as the Venezuelan classical liberal Carlos Rangel dubbed it—a modification to the socialist creed made by Vladimir Lenin. After the proletariat failed to revolt, as Marx had predicted, Lenin recast communism in internationalist terms. Capitalism’s real victims were the uncorrupted peoples of the Third World, whose land had been pillaged by colonialists. They, not the workers, would rise up and overthrow the bourgeois countries. I was assigned Eduardo Galeano’s Open Veins of Latin America, the seminal text of Latin American studies and a manifesto of Third World victimhood, whichChávez had publicly gifted to Obama at the Summit of the Americas in 2009. It tells of how European colonists and American imperialists impoverished Latin America by extracting its resources. But in Venezuela, the nationalization of the oil industry in 1976 marked the end of our most prosperous years. Chávez then dismantled the state-owned oil company’s independence and turned its revenues into his personal piggy bank. He stopped maintaining the oil industry’s basic infrastructure and seized the assets of foreign operators. Our own government was making us poor.
When Campus Politics Collided With My Family’s Story
At NYU, we believed that unconstrained capitalism and “trickle-down economics” were causing the calamity of inequality in the U.S., and it was our moral duty to fight back by promoting social justice and progressive values. We learned about the Iraq war, the Abu Ghraib scandal, and why the U.S. was to blame for the recent right-wing dictatorships in Argentina and Chile.
But this narrative didn’t square with what I knew about Venezuela’s recent history. In 2002, the military had briefly removed Chávez from power; I was taught at NYU that the U.S. government had engineered the failed coup out of fear that Chávez would cut off access to our oil. But my mother had been in the room when members of the Venezuelan media were discussing the possibility of a Chávez overthrow. The U.S. ambassador emphatically told everyone present that the Americans wouldn’t support a coup. Perhaps Latin American history wasn’t as simplistic as I was being taught.
I became acutely aware of how many of my NYU classmates were obsessed with race and identity, and how they believed that silencing Republicans was more important than protecting free speech. It reminded me of how Chávez had shut down the free press (with support from the American and European left) on the grounds that they were a propaganda tool of the oligarchy.
My NYU classmates characterized those who disagreed with them as deserving total exclusion from polite society. They shouted down right-wing speakers. Anyone considered a Republican, or Republican-adjacent, was socially ostracized. I met rich kids who called themselves “antifa,” and heard protest chants like, “How do you spell racist? NYU!” As a Venezuelan in exile, I could see what they couldn’t: U.S. democracy, capitalism, and the rule of law had afforded us unimaginable wealth, freedom, and security.
I was excited when one of my professors encouraged our class to attend a lecture by Alejandro Velasco, an assistant professor at NYU who had grown up in Caracas. Imagine my disappointment when I showed up at the lecture and learned that Velasco was an apologist for the regime. His views are summed up in his 2019 In These Times article characterizing the opposition to Chávez as the “middle-class and elite sectors.” While acknowledging Maduro’s authoritarianism, Velasco advised his fellow progressives “to resist a growing narrative that uses the last five years of economic crisis in Venezuela to retroactively cast the entire chavista project—even socialism itself—as an unmitigated failure.”
Velasco’s version of Venezuelan history didn’t square with my own memories or my mother’s reporting. Socialism was an unmitigated failure.
You’ll never encounter a Venezuelan in the U.S. who supports Chávez—except in academia. The same is true of Cubans. In my senior year, while studying abroad in Madrid, I took a class with the NYU anthropologist Aida Esther Bueno Sarduy, who to this day is the only leftist Cuban I’ve ever met.
I wrote a paper for Bueno Sarduy pointing out the irony that Podemos, a Spanish far-left party that at the time was gaining young followers, had supported the Venezuelan dictatorship, and that its policies were causing Venezuelans to migrate to Spain, spurring a nativist backlash. When it came time to discuss my paper, Bueno Sarduy explained that she had knocked my grade down from an A to an A- because I’d included “false information” about Podemos.
For years afterward, I forwarded her citations showing the direct relationship between Podemos and Chavismo. She shifted her argument, claiming that there was nothing “illegal” about those ties and pointing out that Partido Popular, Spain’s conservative party, was involved in financial crimes. This was completely beside the point, but it was a rhetorical tactic I heard over and over again at NYU: Bring up the topic of leftist authoritarianism and get an earful about the evils of U.S. imperialism.
I Voted for Bernie Sanders Anyway
By my junior year, I was still doing my best to fit in. On April 13, 2016, Sen. Bernie Sanders (I–Vt.) held a massive campaign rally in New York City’s Washington Square Park, with about 27,000 attendees. I remember walking through the crowd, trying to ignore the communist iconography and all the Che Guevara T-shirts. But Sanders called himself a “democratic socialist.” He wanted to make the U.S. more like Norway or Sweden, I reasoned, which had nothing to do with Fidel Castro or Hugo Chávez.
Sam Simmonds/Polaris/Newscom
Except that five weeks before the Washington Square Park rally, Sanders had participated in a Democratic presidential primary debate in Miami against Hillary Clinton, in which he was asked about his past praise of Castro and Nicaraguan socialist dictator Daniel Ortega.
“[The Cubans] are sending doctors all over the world,” Sanders said on the debate stage. “They have made some progress in education.” I’ve met Cuban doctors, who told me that they were forced into service and were paid almost nothing for their labor. Castro’s so-called medical missions were a modern-day slave racket.
Sanders would later defend the claim that Cuba had made “progress in education” in a 60 Minutes interview: “When Fidel Castro came into office, you know what he did? He had a massive literacy program,” Sanders told Anderson Cooper. “Is that a bad thing?” Cuba’s literacy program was a socialist indoctrination program, and its achievements were mostly fabricated.
In his debate with Clinton, Sanders avoided the topic of Ortega, turning the conversation, naturally, to the U.S. government’s culpability, specifically the Reagan administration’s support for the Contras. “The United States was wrong to try to invade Cuba,” Sanders said, and it was “wrong trying to support people to overthrow the Nicaraguan government…[and it was] wrong trying to overthrow in 1954 the…democratically elected government of Guatemala.”
It was the same tactic yet again: When asked about leftist dictators, pivot to talking about the Cuban embargo, the Bay of Pigs, and the overthrow of Jacobo Árbenz in Guatemala. Those episodes had shaped Latin American history in profound ways, but Sanders and the American left use them to avoid acknowledging the crimes of Latin America’s socialist tyrants.
Sanders had praised the Cuban Revolution in 1985, and he had visited Cuba in 1989, trying and failing to meet with Castro. At the time, the Soviet Union was about to crumble, meaning it would soon stop propping up the Castro regime with economic subsidies. In 2000, Chávez came to Cuba’s rescue with regular oil shipments worth billions of dollars. In exchange, Castro helped Venezuela build a network of spies to rat out dissent in the military, and he sent the doctor-slaves whom Sanders so revered.
Growing up in Miami, I had met Cubans with immigration stories similar to my own: Their country had been captivated by a charismatic leader who promised to restore the indigenous, communitarian values that predated the colonial invasion. Once in power, like Chávez, Castro locked up dissenters, shut down the free press, nationalized businesses, destroyed the productive economy, and enriched himself and his family.
How I Finally Broke With the Left
I’m ashamed to admit that after Sanders made his comments in defense of the Cuban and Nicaraguan dictatorships in 2016, I still voted for him in the Democratic primary.
My break from the left didn’t happen until my senior year, when I started having conversations with my relatives and other survivors of socialist dictatorships. By then, Venezuela was experiencing the worst peacetime economic collapse in modern world history, and millions were fleeing the country. When we emigrated in 2005, you’d almost never hear Venezuelan accents around Miami. There was a small community of exiled dissidents who would gather at El Arepazo, the iconic Venezuelan restaurant that opened in the Doral neighborhood in 2004. By the time I graduated from college, Venezuelans were moving into Miami en masse, and Doral was known as “Doralzuela.”
Germania Rodríguez Poleo
After I graduated and was far removed from NYU’s left-wing milieu, I learned about trips organized by the Democratic Socialists of America to Cuba and Venezuela, where participants visited Potemkin villages and soaked up socialist propaganda. I learned that Norway and the other Scandinavian countries were more capitalist than the United States in many respects. I learned that the Democratic Socialists of America were more closely aligned with the tyrannical forces that had destroyed my homeland than I had wanted to accept.
Sanders called for a single-payer healthcare system in America; Venezuela had a single-payer healthcare system that had turned its hospitals into infection-ridden death factories. Curable forms of cancer became a death sentence—except for those with government connections who could arrange for them to jump the line and see a doctor.
True single-payer healthcare would entail forcing private healthcare providers to turn over their businesses to the government, and it reminded me of how Chávez had seized and expropriated private property in Venezuela. In 2010, he famously went on television and declared, “Expropriate that!” while pointing to stores in a historic square of Caracas. Chávez justified seizing private businesses on the grounds that capitalism was based on theft.
I remembered how Chávez had dismantled Venezuela’s oldest and most beloved TV station, Radio Caracas Televisión, turning it into another state-owned channel for disseminating propaganda. I remember how, after my father died, his house had been invaded by squatters sanctioned by the regime. I remembered the withered face of Franklin Brito, who went on a hunger strike after Chávez sanctioned the taking of his family farm. Brito starved to death in 2010. I realized that property rights and human rights are intertwined.
Spreading the Truth About Socialism
When I finally decided that I was done with the left, all I felt was shame. In attempting to assimilate, I had buried the truth about what had happened to my country because I wanted to be accepted into a culture of upper-middle-class privilege. I had been uprooted by the evils of Castro-Chavismo, and yet had done nothing to counter the ignorance of my NYU classmates.
I vowed to do whatever I could to communicate what had happened in Venezuela so that my well-intentioned peers could better understand the reality of socialism and learn to look past their immense privilege. If I could fall for socialist propaganda, anyone could.
I became outspoken about Venezuela on social media to counter the avalanche of misinformation you read online.Through Twitter, I connected with a community of survivors of anti-Western tyrannies. I met refugees of socialism—not just Venezuelans—who were brilliant at explaining how the First World misunderstands what happened to our countries and favors policies that would cause the same tragic errors to repeat.
Some American and European progressives have accused me of being a CIA agent. Others have called me a gusana, an epithet that means “worm” in Spanish and that was popularized by Castro and his comrades as a way to describe Cubans who opposed the 1959 revolution. They have questioned my cultural identity, saying that I’m “white” and “not really a Venezuelan” because I speak perfect English and oppose Chavismo.
The Venezuelans I met online recommended that I read Carlos Rangel’s 1976 masterpiece, From the Noble Savage to the Noble Revolutionary, which is an antidote to Galeano’s Open Veins of LatinAmerica. It helped me to deprogram the propaganda I had been fed at NYU. The book is a manual for understanding leftist ideology, countering the myth of Latin Americans’ victimhood and the claim that we’re all descended from one-dimensional noble savages. It explains why Latin American culture and history have made the region particularly vulnerable to populist strongmen, who are the real culprits in our social and economic backwardness.
I can’t take back my vote for Bernie Sanders, and I still feel shame for all the years I spent defending democratic socialism. I’m now honoring my heritage by spending the rest of my life spreading the truth about the ideology that destroyed Venezuela and caused so much human suffering. Socialism turned the wealthiest nation in Latin America into the site of the worst peacetime tragedy in modern world history. We honor its victims by making sure it doesn’t happen again.
