The US just stepped in to support Japan's currency—without selling dollars
The US Treasury reportedly bought Japanese yen for the first time since 2011, funding the move by selling euros rather than dollars. The goal: help stabilize the yen while avoiding downward pressure on the US dollar. Why does this matter? Japan owns about $1.19 trillion in US Treasuries, making it the largest foreign holder. If the yen weakens too much, Japan may need to sell Treasuries to raise dollars and defend its currency. More Treasury selling can push US bond yields higher, increasing borrowing costs across the economy—from mortgages to auto loans. Japan can also tap the Fed's FIMA Repo Facility, allowing it to borrow dollars against its Treasury holdings instead of selling them outright. That could reduce pressure on the US bond market. Reports suggest the US and Japan may announce a coordinated currency policy in the coming days. Source: Hedgie
The Nasdaq just posted its worst July in 22 years
The Nasdaq-100 fell 6.6% in July, while semiconductor stocks led the decline, with SOXX down 22.1%, its worst month since 2002. Unlike previous selloffs driven by a single catalyst, this correction reflects concerns over AI valuations, crowded positioning, and rising Chinese competition. Yet investors continue to buy the theme: Goldman Sachs estimates nearly $13 billion flowed into semiconductor ETFs during the decline. Meanwhile, gains in the equal-weight S&P 500 and software stocks suggest capital is rotating rather than leaving equities. The correction has reduced leverage and valuations, but conviction in the long-term AI story remains intact. Source: Bull Theory
In case you missed it... US Q2 GDP came in at +1.5% vs. expectations of +2.1%
While it looks as a miss, let's keep in mind that underlying private domestic demand was strong, with real final sales to private domestic purchasers rising 3.9 percent in Q2 from 1.7 percent in Q1, showing solid private-sector momentum despite the "softer" headline GDP. More importantly, government spending fell. Source: Daniel Lacalle
Apple customers in the U.S. will soon be able to lease an iPhone for up to two years at a price starting at $17.99 per month, the company announced on Tuesday
The program, called Upgrade, is a partnership with Klarna, a provider of buy now, pay later loans, that will be offered at Apple’s physical retail stores as well as its online store. After passing a soft credit check, customers will be offered a one- or two-year lease on an iPhone. There will be a similar option for an Apple Watch, or a two- or three-year lease available for Macs and iPads. Source: CNBC
U.S. fossil fuel power investment is now outpacing China's for the first time in decades
Source: Hedgeye, FT, IEA
America isn't retiring anymore. It's working longer than ever
One in three Americans aged 55 and older is still working or looking for work, and that share has been climbing for nearly 40 years. The biggest change is among older workers: • Ages 65–69: participation has nearly doubled since the late 1980s, now above 30%. • Ages 70–74: from under 10% to almost 19%. • Ages 75+: participation has doubled to roughly 8%. The numbers are striking. Nearly 11.9 million Americans aged 65+ were employed last year, more than double the level of three decades ago. Between 2015 and 2024, the 65+ workforce expanded 33%, while the overall labor force grew by less than 9%. Longer life expectancy is part of the story. But so are disappearing pensions, rising living costs, and Social Security benefits that no longer stretch as far. Retirement is increasingly becoming a luxury rather than the default. Source: hedgeye
The US has said it will hit Canada with tariffs of 50 per cent on a wide range of goods in a move that threatens to reignite Donald Trump’s trade war
Senior Trump administration officials accused Canada of engaging in unfair trade practices, saying its provinces had halted the purchase of US alcohol, slapped tariffs on US cars and discriminated against American cheese. “At the outset of the president’s trade policy, which he implemented earlier last year, there were only two countries that retaliated against the United States: the People’s Republic of China and Canada,” said a senior administration official. Trump’s move on Monday risks re-inflaming a global trade skirmish that had eased after the US Supreme Court earlier this year knocked down the president’s global emergency tariffs. Canada is the US’s second-biggest trading partner, with trade between the two amounting to $716bn last year. Source. FT
Bi Tech's AI debt may be far larger than investors realize.
A Nikkei investigation found that Alphabet, Microsoft, Amazon, Meta, and Oracle have $1.65 trillion of off-balance-sheet obligations, exceeding the $1.35 trillion of debt they officially report. These commitments—GPU contracts, data center leases, and joint ventures—remain largely invisible under current accounting rules until facilities become operational. Meta alone reportedly has $420 billion in hidden obligations, while Oracle's exposure has exploded over the past four years. The key risk? Investors focusing on earnings may be seeing only part of the picture. As AI infrastructure comes online, these commitments will gradually move onto balance sheets. If AI demand falls short of expectations, expensive assets could face write-downs, with losses ultimately flowing to shareholders and the private credit investors who financed the AI buildout. Source: Hedgie
