Tag: finance

Via The Cradle

The Chinese navy on Monday test-launched a strategic missile from a nuclear submarine in the Pacific Ocean in the framework of its annual military exercises.

“At 12.01pm on July 6, a strategic nuclear submarine of China’s People’s Liberation Army Navy successfully launched a… strategic missile carrying a training simulation warhead into the relevant high seas of the Pacific Ocean,” spokesperson Wang Xuemeng said in a statement posted on WeChat.

“This missile test launch is a routine arrangement of China’s annual military training, and relevant countries were informed in advance,” Wang stated, adding that the missile “accurately” landed in the designated area.

China’s official Xinhua News Agency said that the test was a “routine arrangement” within the framework of China’s annual military exercises.

Papua New Guinea’s foreign minister and a New Zealand government source told AFP that China was preparing to test-fire a nuclear-capable ballistic missile.

“Yes, China has briefed me. I was personally called by the Chinese ambassador,” Papua New Guinea Foreign Minister Justin Tkatchenko stated.

After Japan was notified, it strongly urged China to reconsider moving ahead with the test launch.

“We strongly requested a reconsideration of this test launch of the ballistic missile to ensure that it does not pose a threat to Japan’s security, particularly by passing through its airspace,” according to a joint statement issued before the launch by Japan’s ministries of defense and foreign affairs.

The test launch came as China and Russia officially began their annual “Joint Sea-2026” naval exercises on Monday. The exercises are scheduled from 6 to 13 July and are taking place in the waters and airspace off the eastern Chinese port city of Qingdao.

The Chinese People’s Liberation Army (#PLA) Navy’s test launch of a strategic missile by a submarine was a routine military training exercise. It was not targeted at any specific country or target. China notified relevant countries in advance, which is in line with international… pic.twitter.com/Jo7u9ti5P5

— Global Times (@globaltimesnews) July 6, 2026

The bilateral maneuvers aim to address regional security challenges and elevate military cooperation between Beijing and Moscow.

Russian state media reported that a cruiser, a corvette, a diesel-electric submarine, and a rescue vessel from Russia’s Pacific Fleet will participate in the drills. China’s Northern Theater Command said that two destroyers, a frigate, a submarine, a supply ship, and a rescue vessel will participate.

During a visit to Beijing in May, Russian President Vladimir Putin said that Chinese and Russian military and economic cooperation “demonstrate strong momentum.”

Chinese President Xi Jinping praised the strong relationship between Beijing and Moscow.

China and Russia on Monday launched the “Joint Sea-2026” exercise at a military port in Qingdao in east China’s Shandong Province. #XinhuaNews pic.twitter.com/l6t3PNk3iD

— China Xinhua News (@XHNews) July 6, 2026

“We have been able to continuously deepen our political mutual trust and strategic coordination with a resilience that remains unyielding despite trials and tribulations,” Xi said.

Both leaders warned against a global return to the “law of the jungle,” referring to the unprovoked US-Israeli war on Iran.

Anthropic has removed hidden detection code from its Claude Code tool after a developer reverse-engineered the binary and exposed how the company was subtly monitoring users in China.

The code, which Anthropic described as an experiment launched in March, used a form of prompt steganography to signal information about a user’s environment back to Anthropic’s servers. It was designed to help detect unauthorized resellers and attempts by other organizations to distill Claude’s capabilities into their own models.

How The Detection Worked

The mechanism was first spotted by a Reddit user known as LegitMichel777, who stumbled on it while trying to restore a disabled feature in Claude Code. A separate developer known as Thereallo independently confirmed the finding the same day, June 30, publishing a technical breakdown of exactly how it worked.

The checks only ran in one specific situation: when a user pointed Claude Code at a different server instead of Anthropic’s own – something companies commonly do when they route their traffic through internal systems or third-party gateways. From there, it checked two things:

• Whether the user’s computer was set to a Chinese time zone (Shanghai or Urumqi).
• Whether the new server address matched a hidden list of Chinese AI companies (including well-known names like DeepSeek, Zhipu, and Moonshot) or known resale and proxy services.

If either check came back positive, Claude Code would quietly tweak a line of text called the “system prompt” – background instructions the app automatically sends to the AI model with every request, invisible to the person typing. Specifically, it changed how the date was written in that line:

• If the user was in a Chinese time zone, the date switched from using dashes to slashes (e.g., 2026/06/30 instead of 2026-06-30).
• The apostrophe in the phrase “Today’s date is…” was swapped for one of three lookalike characters, each one a different signal, depending on which combination of checks the session had triggered.

None of this was visible to users, or likely even to the AI model itself in normal use – the characters look identical on screen. But Anthropic’s servers could read the difference instantly. The lists of flagged domains and keywords were also scrambled inside the app’s code using a basic encryption trick, so they wouldn’t show up if someone just opened the file and searched for them.

Thereallo called the approach “prompt steganography” – hiding a signal inside ordinary-looking text – and noted it let Anthropic sort and flag sessions without needing any separate, visible tracking system.

Anthropic’s Explanation

Last Tuesday, Anthropic engineer Thariq Shihipar, who works on the Claude Code team, confirmed the feature on X:

“This is an experiment we launched in March that was meant to prevent account abuse from unauthorized resellers and protect against distillation. The team has landed stronger mitigations since then and we’ve actually been meaning to take this down for a while. We merged the PR and this should be fully rolled back in tomorrow’s release.”

Anthropic has stated that unauthorized resellers have been selling access to Claude accounts and subscriptions at steep discounts in certain markets. The company has also publicly documented large-scale efforts by Chinese AI labs to distill its models by querying them at high volume through proxies and fraudulent accounts.

Anthropic removed the detection logic shortly after it became public.

Alibaba Bans Claude Code For Employees

The disclosure prompted a swift response from Chinese technology giant Alibaba. According to internal documents reported by the South China Morning Post, Alibaba added Claude Code to its list of high-risk software and instructed employees to stop using it for work, effective around July 10. The memo cited “back-door risks” following the discovery of the hidden markers.

Alibaba has not publicly commented on Anthropic’s earlier accusations that its Qwen models benefited from large-scale distillation of Claude.

The Wider Context: Distillation And Geopolitical Competition

Model distillation – training a new model on the outputs of a more capable one – is a common technique in AI development. However, Anthropic and other U.S. frontier labs argue that industrial-scale distillation campaigns by foreign entities, particularly Chinese labs, undermine export controls and intellectual property protections.

Anthropic has previously published details of what it described as distillation operations targeting its models by labs including DeepSeek, Moonshot, and MiniMax. Chinese researchers have also published work showing that many leading Chinese models carry detectable signatures consistent with distillation from U.S. systems.

In this environment, companies like Anthropic face pressure to protect their models while maintaining user trust – especially in tools like Claude Code, which are granted significant access to users’ local machines, files, and command execution.

Thereallo’s analysis raises obvious questions about transparency. While the feature wasn’t designed to steal user data or take control of anyone’s computer, hiding this kind of tracking inside the system prompt without telling anyone erodes the trust these coding tools depend on.

“Coding agents already live on the wrong side of a scary boundary,” Thereallo wrote. “Hiding the signal in the system prompt makes every other privacy claim harder to believe.”

Anthropic has not issued a detailed public postmortem on the experiment. The company has emphasized that distillation attacks and account abuse pose risks to model safety standards and U.S. technological leadership, and that it continues to work with government and industry partners on mitigation strategies.

Via American Greatness,

Progressive California education activists are urging the state to recognize “black English” in preschool classrooms, claiming the approach would strengthen literacy development and affirm the language spoken by many black children.

Black Californians United for Early Care & Education (BlackECE), a nonprofit advocacy organization, is promoting what it describes as an effort to challenge “harmful language hierarchies and affirm black English as a legitimate, rule-governed language rooted in black history, culture, and community.”

The group also seeks to “address how language bias shows up in early learning spaces–and how it can be dismantled.”

Ashley Williams, a co-founder of BlackECE, said the initiative is intended to ensure children feel their voices are respected regardless of how they speak.

“I don’t want my son to walk into any room and feel like his voice is not valued or his perspective can’t be heard because he’s not saying it one way or the other,” Williams told PBS.

Williams also reflected on her own experiences, saying speaking black English came with embarrassment because of its slang and grammatical differences.

She said she often felt pressure to “talk white” instead of speaking in the way that felt most natural to her.

BlackECE has developed a 10-point policy agenda focused on black children, families and educators, including proposals related to reparations and early childhood education.

The organization’s campaign follows California’s 2020 plan encouraging early dual-language learning and support for bilingual children. BlackECE argues that black English should also be recognized as part of those efforts.

“We talk about multilinguals, but we don’t include black children who may be African-American English speakers,” Xigrid Soto-Boykin, director of the Children’s Equity Project, said.

According to research cited from the National Library of Medicine, about 20 percent of American children and 44 percent of California children ages 5 to 17 are bilingual. The information also states that 89 percent of African Americans speak only English at home.

Graham Platner’s Senate campaign is imploding after Politico published a detailed account on Monday from Jenny Racicot, a 41-year-old Democrat from Maine, who accuses the progressive darling of rape. Donors are heading for the exits, Democrats are withdrawing endorsements, and calling for Platner to drop out.

But there’s another scandal hiding in plain sight, and it involves the New York Times, which published an exposé last month featuring three women who dated Platner, who had each accused him of domestic abuse.

Racicot also appeared in the New York Times‘ story on Platner last month. The paper interviewed her and spoke with another anonymous woman as well. Yet when the Times published its June report, it omitted the sexual assault allegations from Racicot and the anonymous Democratic woman who had dated Platner. Instead, the story centered on another accuser, Lyndsey Fifield, a Republican operative whose partisan resume became a central focus of the article.

“After the story went up, I began to ask them… wait, where are the stories from the other women? Where are their accusations of sexual assault? Why am I the focus? Why are there 11 paragraphs dedicated to detailing my work history (more than has been published about Graham’s by far)?” Fifield asked after the story was published.

According to Fifield, reporters contacted her in early April and pressured her past her initial refusal. They told her there were other women and they needed to “band together.” They also promised to protect her. She eventually relented. “I bucked all advice from my friends (and resisted my conservative bias) and decided to fully trust the Times journalists,” she wrote on X, turning down other outlets and sitting quiet through weeks of delays.

Then she handed them everything a reporter could want: five friends who could corroborate her story, former roommates who watched Platner stalk her row house from five doors away, screenshots, landlord emails documenting the lease she broke to escape him, and time-stamped diary entries. Reporters called just the two friends who could confirm the relationship timeline rather than the abuse, and told her they saw no need to contact the ex-fiance she confided in during pre-marital counseling since the diary covered it.

The published story claimed nobody could corroborate her account. “Why does it say ‘nobody could corroborate’ when I offered them sources that COULD corroborate?” Fifield asked. Friends had confirmed to the Times that she disclosed the abuse years before Platner announced a run for anything. That corroboration never made print.

Three women who had never met, Fifield, Racicot, and the third anonymous accuser, described the same cycle of intimate partner violence, coercive control, and love-bombing. The Times had all of it but gave readers mostly a deep dive on the Republican woman’s employment record instead. “It dawned on me that this really was a set up all along,” Fifield wrote. “The journalists I trusted who convinced me to share a story I never wanted to tell methodically delayed and twisted this into a gift to the Platner campaign. Violating the trust of his victims. Shattering the trust I placed in them with the most vulnerable story of my life.”

I bucked all advice from my friends (and resisted my conservative bias) and decided to fully trust the Times journalists. As they left my home they asked that I not talk to any other outlets and I insisted then and repeatedly over the following weeks that I would keep my word and only share this story with them.

— Lyndsey Fifield (@lyndseyfifield) June 5, 2026

Politico’s Adam Wren appeared on MSNOW’s “Morning Joe” to walk Mika Brzezinski through the vetting of Racicot’s story. Brzezinski noted the absence of any police report and asked, “Given the very high standards Politico has before they write something like this and publish it, what aspects of this story brought it to the level of publishable?” Wren explained how Racicot “had confided into a number of people, including her therapist, in almost real time.” The corroboration consisted of “email exchanges between she and her therapist” and conversations with people she confided in during the months that followed.

When Brzezinski pressed Wren on what tied Platner to the act itself, he cited an Instagram message Racicot sent the next day, as well as messages to others afterward. Therapist emails and secondhand descriptions of unrecovered messages cleared Politico’s bar, but eyewitness roommates, screenshots, landlord emails, timestamped diaries, and friends confirming contemporaneous disclosures fell short at the New York Times, which lied to America by claiming nobody could corroborate Fifield’s story, and completely omitting Racicot’s claims of sexual assault.

Morning Joe spends 5 minutes grilling Politico’s @adamwren for running a story on Platner’s ex accusing him of rape. “Given the very high standards Politico has before they write something like this and publish it, what aspects of this story brought it to the level of… pic.twitter.com/JgLW17ZF4y

— Tom Elliott (@tomselliott) July 7, 2026

Platner’s campaign will likely die in the coming days, but the New York Times’ credibility went first.

Authored by Matthew Vadum via The Epoch Times,

A federal appeals court ruled July 6 that convicted sex offenders retain a fundamental constitutional right to live with their own children.

The new ruling by the U.S. Court of Appeals for the 11th Circuit arises out of an Alabama case but could help reshape strict sex offender residency laws in the other two states in the circuit—Florida and Georgia—and serve as persuasive authority elsewhere.

At the heart of the case is the constitutional doctrine of substantive due process, which protects certain fundamental rights that are not explicitly listed in the U.S. Constitution but deeply rooted in U.S. history and tradition, including the right of parents to live with and raise their children.

The court ruled 8–5 in favor of the plaintiff, Bruce Henry, in the case known as Henry v. Sheriff of Tuscaloosa County.

The majority opinion was authored by Circuit Judge Robin Rosenbaum.

In 2013, Henry pleaded guilty to “knowingly possess[ing] … any book, magazine, periodical, film, videotape, computer disk, or any other material that contains an image of child pornography.”

The opinion recounts that the federal district court sentenced him to 70 months in prison and 60 months of supervised release.

He served five years before being released in March 2018.

He finished a qualified Sex Offender Treatment Program, along with individual and group counseling, and continues to attend weekly meetings of Sex Addicts Anonymous. In addition, he has a steady job, attends church, and volunteers.

He violated the terms of supervised release twice by viewing pornography. He reported the violations to his sexual offender treatment provider but did not inform his probation officer. The officer filed a petition to revoke his supervised release, but the district court declined, choosing instead to extend the duration of the supervised release period through March of this year, according to the opinion.

Since the last incident in December 2019, Henry has followed the terms of his release. In August 2021, he and his wife had a son, but because he was a sex offender, the Alabama Sex Offender Registration and Community Notification Act barred him from living with the child.

The Act prohibits a sex offender from residing with or conducting overnight visits with any minor, but it contains a family exception that allows the offender to live with or stay overnight with their own children, grandchildren, step-children, siblings, or step-siblings.

That protection is removed for any adult convicted of a sex offense involving a child or any offense involving child sexual abuse material, legally referred to as child pornography.

“Alabama law affords no offramp to Henry or anyone else: the Act contains no mechanism for offenders to challenge its prohibitions on residing or staying overnight with their own children,” the opinion said.

After Henry’s son was born, he sued officials in Alabama under federal law to block enforcement of the Act’s prohibition against him living with his son. The district court agreed that the prohibition was unconstitutional and enjoined its enforcement.

A panel of the U.S. Court of Appeals for the 11th Circuit ruled largely for Henry, finding that the Act’s prohibition against a parent living with his own child interfered with Henry’s “fundamental right to live with and raise [his] child,” and vacated the district court’s injunction.

The full 11th Circuit then reheard the case and ruled for Henry.

The Supreme Court has recognized that parents have a fundamental right to live with their children, and this right is “perhaps the oldest of the fundamental liberty interests” that the 14th Amendment protects, the opinion said.

By contrast, Alabama argued that not all parents enjoy this right and that entire categories of parents enjoy “no fundamental rights at all because they committed state-defined ‘misconduct’ years before their children were even born.” The Supreme Court has recognized that even a parent convicted of possessing “child pornography” still retains a fundamental right to live with his son, the opinion said.

“That does not mean that Alabama can’t regulate or even abrogate that right. But to do so, Alabama must show that its legislation is narrowly tailored to further its compelling interest in the safety of children,” the appeals court said. Abrogation is the act of formally annulling a law or legal provision.

The appeals court returned the case to the district court for reconsideration.

Chief Circuit Judge William Pryor filed a dissenting opinion, criticizing the majority for undermining Alabama’s child-protection efforts.

“All agree that parents generally enjoy a fundamental right to ‘make decisions concerning the care, custody, and control of their children,’” Pryor said.

“But this appeal presents a different question: whether the Due Process Clause [in the 14th Amendment] grants child-sex convicts, not parents generally, a fundamental right to reside with their children. Of course not.”

Pryor said that using the majority’s reasoning, a father who raped his young child still enjoys the fundamental right to live with that child unless he has been judicially determined to be dangerous.

Pryor also said the doctrine of substantive due process creates a “treacherous field,” and the Supreme Court has directed courts to “exercise the utmost care whenever … asked to break new ground,” to avoid usurping the authority that the Constitution entrusts to elected legislatures.

Authored by Eric Utter via AmericanThinker.com,

The View’s preternaturally ignorant and repulsive Sunny Hostin recently stated:

There are times when I walk into a community and I see American flags all over the community and I suddenly feel unsafe because there’s a section of this country that has coopted the American flag and they equate being an American or an American flag with white supremacy and that should never be the symbol of white supremacy, but they have weaponized [it].

No, Sunny, you have equated the American flag with white supremacy, and you have weaponized it to fit your false narrative. 

You have attempted to demean it, cheapen it, demonize it … and everyone who fought and died for it. All for cheap praise from morons and Marxists.

I’m guessing Sunny would feel far less safe if she were surrounded by a plethora of North Korean flags, Iranian flags, Russian flags, or perhaps even Antifa flags. If not, she’s even dumber than she appears, which would be truly miraculous.

I feel a bit uneasy, a tad concerned, when I am amongst a bunch of Palestinian flags, as I was at my daughter’s college graduation. Nor do I feel comfortable when mobs of misfits are waving the LGBTQ flag or trans flag in my face. The Satanic Flag/Baphomet Church of Satan flag gives me the creeps. Any communist flag makes me sick to my stomach.

Conversely, when I am surrounded by Old Glory, I get a sense of place, belonging, and peace. I know that the folks flying them likely recognize and appreciate freedom, history, sacrifice, and the unalienable rights granted to us by our Creator. How could any flag make one feel better than that?

So, “Sunny,” how do you think the American flag made slaves feel during the Civil War? Guessing the Union banner gave them hope and courage. (Say, didn’t one or more of Sunny’s ancestors own and trade slaves?)

The American flag has given more hope to more people around the world than any other.

That is inarguable. It has made more people feel “safe” and protected than any other. Perhaps if Sunny had been in France when American and allied troops liberated it, she would have known this. Maybe if she had been in Ohrdruf, Dachau, or Buchenwald when American troops liberated those still alive in these Nazi concentration camps, she would feel a bit differently.

The stupefying ignorance of the chattering class is almost impossible to comprehend.

It is akin to trying to rationally process the size of the universe. Worse yet, this ignorance is now paired with sheer, unadulterated evil.

Those who hate America, capitalism, entrepreneurship, excellence, decency, the Judeo-Christian work ethic, Christianity, the Founders, limited government, the rule of law, and the concept of unalienable rights granted by our Creator — among other aspects of a successfully functioning democratic republic — actually despise “democracy,” liberty, tolerance, inclusion, and empathy.

Conversely, they worship themselves, and their own hatred of success and competence. And their desire to destroy all that has come before them. In their unique and misplaced attempt to trash history and elevate themselves to deity status, they reveal themselves to be some of the most contemptible and pathetic folks ever to trod the Earth.

Up until now, the politicization of AI models generally ran in one direction with US “frontier” LLM providers such as Anthropic and ChatGPT complaining consistently that Chinese open-sourced models were “distilling” (i.e. reverse-engineering) their products. And whether true or not, China has certainly been able to catch up dramatically to the US, with China’s latest open-model, GLM 5.2, viewed as just barely behind the latest comparable US offerings, while the average gap between US and Chinese models has shrunk to almost nothing.

As complaints on both sides have become more vocal (amid occasional bans of the latest Anthropic model by the White House admin), last week we reported that for the first time, China’s tech giant Alibaba banned employees from using Anthropic’s Claude ‌Code at work after the tool drew scrutiny for features that can help identify China-linked users, Reuters reported.

Fast forward to today when the Reuters reported that in the latest escalation, Beijing is preparing to fully flip the script on the US tech sector as Chinese authorities have held meetings with top tech firms over the past month about potentially restricting overseas access to China’s most advanced AI models, including those yet to be released. 

The talks follow a number of steps by Beijing to keep homegrown ‌AI within the country and underscore how China, like the US, is now treating cutting-edge artificial intelligence as a critical national asset that needs controls. Companies present at the talks included ‌tech giants Alibaba and ByteDance as well as startup Z.ai, creator of the GLM-5.2 mode, said Reuters’ sources. 

Since the emergence of DeepSeek’s R1 model last year, Chinese AI models have made massive ​inroads globally thanks to their low costs and increasing capabilities. Any decision by Beijing to limit access to those products could ripple across AI markets as costs for many businesses would likely increase. It would be a boon to AI supplier stocks  which have plunged in recent days as a result of fears that US users of LLMs may gravitate to much cheaper, if just as capable, Chinese alternatives leading to huge revenue declines at US frontier companies. 

At the meetings, led by China’s Ministry of Commerce, participants discussed putting limits on the most advanced AI models, both closed-source and more open versions, according to two of the sources.

Officials talked about making any leak or theft of proprietary AI technology an offense under China’s stringent national security law. The officials also raised the possibility of implementing new measures to restrict who ‌can fund domestic AI startups, the source added.

The scope of the ⁠potential restrictions is still being discussed, two sources said, adding that they may only apply to future models. It was not immediately clear when or even if they would come into force.

All three leading Chinese AI companies – Alibaba, ByteDance and Z.ai – have a range of AI models, some closed-source while others are open-weight, meaning users can download, run and customise the underlying systems. Alibaba’s Qwen and ByteDance’s Doubao are two of the most widely used AI models in China. Z.ai has recently set Silicon Valley abuzz as the capabilities of its ​GLM-5.2 ​model come close to leading U.S. offerings but at a fraction of the cost. 

Trump’s administration has also been deeply concerned about national security ‌implications of AI, in particular the potential for American AI products to be misused by military intelligence in China, Russia and other countries of concern. In June, it ordered that foreign nationals not have access to Anthropic’s most advanced Fable and Mythos models, which prompted the company to disable the models for all users globally as nationality could not be verified in real time.

Export controls for Fable, which is designed for the general public, have since been lifted after new safeguards were put in place. But Mythos, designed for cybersecurity professionals, is still only available to some “trusted” U.S. organizations.

Some US AI experts have also said the US needs to regulate the use of Chinese AI models. According to two of the sources, Chinese authorities are deeply worried about the ‌potential for Mythos to exploit software vulnerabilities and that Washington might deploy the model against Chinese interests.

That echoes ​concerns publicly voiced by state media and Zhou Hongyi, founder of cybersecurity firm 360, a major vendor to government ​and enterprise clients, who has said China needs to develop its own Mythos.

Amid the rising techno-nationalism, China has implemented numerous measures to protect homegrown AI this year. In April, the country’s state planner ordered Meta to unwind its $2 billion acquisition of Chinese-founded AI startup Manus. In ‌early June, authorities issued sweeping new rules, tightening control of overseas deals ​that involve Chinese investors, technology, data and national security.

China ​had also launched investigations this year into Manus and other local AI startups that had moved abroad, seeking to establish whether they have broken export control laws, according to two of the sources and a third person.

In its report, Reuters says that it was not able to learn how any potential new restrictions on overseas access to Chinese ​AI models might work. But some hints might be gleaned from a May ‌roundtable of Chinese legal experts on regulations governing open-source AI.

According to a summary of the discussions published in an official Supreme People’s Court journal, participants proposed a ​tiered system: basic open-source tools subject to a simple filing, more advanced technologies facing security reviews, and the most sensitive frontier models barred from public release or restricted ​to domestic use. 

If indeed China is about to start its own AI “firewall”, the question is what happens then? Recall, in blowback to the short-lived tokenmaxxing idiocy, a growing number of American enterprises are quietly gravitating toward cheaper Chinese models.

But if China itself limits access to US clients, does this mean that the balance of power shifts back to US LLMs which will then become the only available AI vendors to US corporations. If so, is Beijing making a big mistake depriving its nascent AI ecosystem of US client revenues, and instead allowing US models – which recently found themselves on the defensive in response to much cheaper Chinese alternative – to take an even bigger lead for round 2? 

With yields blowing out today as they followed the sharp increase in oil prices after Iran struck no less than 3 ships crossing the Hormuz Strait (with a Trump response sure to follow), we doubt there was much focus on today’s 3Y auction. Which is unfortunate because despite the selloff in the secondary market, the auction itself was quite solid. 

The sale of $58BN in 3 Year paper, the week’s first coupon auction, priced at a high yield of 4.179%, down modestly from 4.192% in June which was the highest since Feb 2025. It also stopped through the When Issued 4.185% by 0.6bps, and followed two tailing auctions.

The bid to cover was 2.600, down from 2.645 and below the recent average of 2.645 although as shown in the chart below, the BTC for the tenor appears to have flatlined between 2.5 and 2.7 over the past 6 years. 

The internals were stronger, with Indirects awarded 67.5% of the auction, up from 63.71% last month and the highest since April (also well above the recent average of 62.5%). And with Directs taking 7.7%, down notably from 15.3% a month ago, Dealers were left with 24.75% of the auction, the highest since February. 

Overall, this was a very strong 3Y auction which curiously comes in a very ugly day for the bond complex, which seemingly oblivious of the strong primary demand, has pushed 10Y yields to a session high of 4.523%, the highest since June 10, and rising fast. 

A flurry of Wall Street analysts is turning incredibly bullish on SpaceX, with 12-month price targets ranging from Raymond James’ $800 to Arete Research’s $401 and Morgan Stanley’s $300.

The average price target across 34 analysts tracked by Bloomberg now sits at around $236, implying massive upside from current levels of about $150 and reinforcing the view that analysts are beginning to value SpaceX less as a rocket company and more as a foundational AI, satellite broadband, and next-generation infrastructure company.

Raymond James is the most bullish among analysts covering SpaceX, initiating coverage with a “Strong Buy” rating and a Street-high 12-month price target of $800, about 500% above its IPO price.

“Just as railroads, electric grids, and the Internet reshaped prior economic eras, we believe SpaceX is building the foundational platform for the next generation of industrial capacity,” Raymond James analyst Brian Gesuale wrote in a note to clients.

JPMorgan analyst Doug Anmuth told clients Tuesday that his team initiated coverage on SpaceX with an “Overweight” rating and a $225 12-month price target.

“SpaceX’s ambitions are bigger than any company’s we’ve seen – to make life multi-planetary, leverage the Sun to build out AI in space, & build bases on the Moon and cities on other planets,” Anmuth wrote in the note.

He continued:

In our view, no other company is as well positioned to go after the combined anticipated TAM of $28T+. Launch is the key enabler & differentiator, with ~670 orbital launches, a 99%+ success rate, & 80%+ of all mass to orbit since 2023. Starship should deliver a 10x cost improvement & ~4x higher payload vs. Falcon 9 and enable the company to pursue entirely new markets. Connectivity drives current financials via Starlink, the largest LEO constellation (9,600+ satellites, 12M+ active customers, 164 markets), where we project broadband subscribers growing from 9M in 2025 to 95M+ in 2030. Importantly, AI is expected to be the long-term driver, as SpaceX is modeled to ramp terrestrial compute ~8x to 8GW by the end of 2028 & pursue orbital compute towards ~75GW by the end of 2031. We believe significant upside potential remains as the company quite literally builds out the next frontier.

Edison Yu at Deutsche Bank told clients earlier today that SpaceX “represents in our view the apex of civilizational ambition, oftentimes expressed in steel and fire, bending the arc of history to make humans multiplanetary by building foundational infrastructure across transportation, connectivity, and AI.”

“In short, across nearly every category, we struggle to find competitors that can challenge SpaceX’s moat and therefore initiate coverage with a Buy rating and $255 price target,” Yu said.

SpaceX shares fell 5.5% on Tuesday morning to $151 and now trades down 31% from the June 16 intraday high of $218. Shares have been basing around the $150 level since June 24.

Another major bull on the stock is Morgan Stanley, which has a $300 12-month price target, with analysts at the bank stating that the company stands to gain from AI demand.

RBC Capital Markets analyst Tom Narayan raised Tesla’s 12-month price target on the view of a SpaceX-Tesla merger on the horizon.

Narayan continued:

Our view: In this report, we raise our Tesla PT to $500 by incorporating a 25-30% premium to current trading levels, (and a 15% premium to the stock’s intrinsic value), owing to a potential SpaceX acquisition scenario based on unconfirmed media reports. We also sharpen our pencils on our Tesla intrinsic valuation. We believe our robotaxi work in particular is unique in both in its approach and detail.

Meanwhile, Morningstar analysts remain the most bearish on SpaceX, with a “Sell” rating and a 12-month price target of $62.

Professional subscribers can read the full SpaceX coverage from leading desks here at our new Marketdesk.ai portal. 

We suggest starting with: 

1. Deutsche Bank: Apex of Civilizational Ambition

2. Needham: Launch King Secures Its Rule in Orbital Infrastructure; Initiate Buy

3. RBC Capital Markets: Space, the final frontier, repriced; initiating at Outperform with a $225 price target

4. Morgan Stanley: AI’s Final Frontier; Initiate at Overweight, PT $300

5. JPMorgan: The Next Frontier; Initiating Coverage with an Overweight Rating & $225 PT

Index inclusion could provide support for SpaceX around the $150 level. Bloomberg Intelligence analysts estimated that inclusion in the Nasdaq-100 and FTSE Russell could generate at least $5.4 billion in demand from index-tracking funds.

Inflation as measured by the CPI may have peaked, but Americans’ expectations for inflation over the near and medium term rose notably in June according to a Federal Reserve Bank of New York survey released Tuesday, with strong increases anticipated for medical care costs and rent,

Consumers now see inflation at 3.7% over the next year, up from 3.5% in May, the highest since September 2023. Expectations for inflation in three years increased to 3.3%, the highest since June 2022, up from 3.1%, while estimates for inflation in five years remained steady at 3%. 

After months of facing higher energy costs, consumers said they see gas prices rising at the lowest rate since mid-2022. Their outlook for food prices also improved slightly in June, though households expect higher bills for medical care and rent. As shown below, median year-ahead commodity price change expectations increased by 0.5% point for the cost of medical care to 9.4%, and by 0.9 percentage point for rent to 8.3%. Median year-ahead price change expectations decreased by 0.8 percentage point for food to 5.0%, by 2.3 percentage points for the cost of college education to 5.7%, and by 3.5 percentage points for gas to 1.5%. The June reading for gas is the lowest since August 2022.

Energy prices have declined in recent weeks, following an interim peace deal between the US and Iran. Earlier on Tuesday, New York Fed President John Williams said he now sees a positive near-term outlook for inflation, which rose 4.2% in May from a year earlier.  

Despite the jump in near-term inflation expectations, sentiment improved when it comes to jobs: the mean perceived probability of losing one’s job in the next twelve months decreased by 1.0% to 14.1%, and the mean perceived probability of finding a job if one’s current job was lost increased by 1.2% to 44.9%.

The data also pointed to an improvement in consumers’ finances. The share of households saying their financial situation was better than last year increased in June, a smaller share of households reporting a worse financial situation and a larger share reporting a better financial situation, and expectations for future finances also improved.

…. however, expectations for future credit availability deteriorated slightly, with a larger share of respondents expecting that it will be harder to obtain credit in the year ahead.

The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 2.9 percentage points to 40.9%, the highest level of the series since April 2021.

Some more details from the report:

Labor Market

• Median one-year-ahead earnings growth expectations increased by 0.1 percentage point to 2.8% in June. This is the highest reading since March 2025.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—decreased by 1.5 percentage points to 41.7%, remaining above the 12-month trailing average of 41.3%.
• The mean perceived probability of losing one’s job in the next 12 months decreased by 1.0 percentage point to 14.1%, falling below the 12-month trailing average of 14.5%. The mean probability of leaving one’s job voluntarily in the next 12 months (or the expected quit rate), declined by 3.5 percentage points to 17.3%, falling below the 12-month trailing average of 18.6%.
• The mean perceived probability of finding a job if one’s current job was lost increased by 1.2 percentage points to 44.9%, though it remains below the 12-month trailing average of 46.3%. The increase was driven by respondents with household incomes under $50,000.

Household Finance

• The median expected growth in household income increased by 0.2 percentage point to 3.0% in June. The series has been moving in a narrow range between 2.8% and 3.0% since June 2025.
• Median one-year-ahead nominal household spending growth expectations remained unchanged at 5.0%.
• Perceptions of credit access compared to a year ago improved, with the net share of households reporting it is harder to get credit decreasing. Expectations for future credit availability deteriorated slightly, with a larger share of respondents expecting it will be harder to obtain credit and a smaller share expecting it will be easier to obtain credit in the year ahead.
• The average perceived probability of missing a minimum debt payment over the next three months decreased by 1.8 percentage points to 10.8%, the lowest reading since April 2023. The decline was broad-based across age and education groups.
• The median expectation regarding a year-ahead change in taxes at current income level remained unchanged at 3.1%.
• Median year-ahead expected growth in government debt decreased by 0.4 percentage point to 9.5%, remaining above the 12-month trailing average of 8.7%.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 2.0 percentage points to 26.6%.
• Perceptions about households’ current financial situations compared to a year ago improved, with a smaller share of households reporting a worse financial situation and a larger share of households reporting a better financial situation. Year-ahead expectations about households’ financial situation also improved, with a smaller share of households expecting a worse financial situation and a larger share of households expecting a better financial situation in one year from now.

The report comes as some investors see the Fed raising rates later this year to address elevated inflation, although others such as Morgan Stanley are pretty steadfast the Fed will not hike. Fed officials have kept interest rates steady in 2026, though economic projections released last month showed nine officials see the need for at least one rate increase by year end.