General Market News

Boeing, Anduril, and General Atomics are competing to build autonomous uncrewed fighter jets for the U.S. Air Force's Collaborative Combat Aircraft program, which plans to procure over 150 aircraft by decade's end. Boeing showcased its operational Ghost Bat drone at the Farnborough Airshow, while rivals displayed full-scale models. The market could reach hundreds of aircraft annually by the mid-2030s, with each costing a third or less of an F-35's $80 million price tag.

• The U.S. Air Force selected Anduril and General Atomics in June to build its first semi-autonomous wingmen fleet, with a primary provider award planned by summer 2027 for over 150 aircraft by 2030
• Boeing's Ghost Bat is the most mature design, having completed over 100 test flights and participating in the first multinational military exercise for this aircraft class, with a $528 million Australian contract for seven units
• European companies like Airbus are developing competing designs (U760 Ravenstorm operational by early 2030s), while U.S. firms partner with German manufacturers to target European military contracts by 2029

Major U.S. tech companies including Microsoft, Alphabet, Amazon, Meta, and Oracle are projected to spend more on capital expenditures than they generate in free cash flow by 2027 due to massive AI infrastructure investments. Analysis shows these firms will add $534 billion in capex by 2027 while generating only $340 billion more in operating cash flow, creating investor concerns about returns on AI spending. Oracle's capex already reached 174% of its operating cash flow in fiscal 2026, highlighting the strain on Big Tech's historically asset-light business model.

• The five hyperscalers are expected to invest $1.57 for every $1 of additional cash flow generated by 2027, with total capex estimates rising from $485 billion in January to $730 billion by July 2024
• Oracle represents the most extreme case, with capex surging from 47% of operating cash flow in fiscal 2022 to 174% in fiscal 2026 ($55.7 billion capex vs. $32 billion operating cash flow)
• Microsoft reported $37.5 billion in capex versus $35.8 billion in operating cash flow in Q2, while Amazon's free cash flow fell to just $1.2 billion despite 30% growth in operating cash flow, raising concerns about shareholder returns and buyback sustainability

Swiss pharmaceutical manufacturer Lonza raised its full-year core profit margin guidance to 33-34% from a previous target of more than 32%. The world's largest contract drug manufacturer cited strong operational execution and contributions from maturing growth projects as drivers for the improved outlook.

• Core EBITDA margin target increased to 33-34% of sales for the full year, up from the previous guidance of 'more than 32%'
• The upgrade reflects strong operational performance and positive contributions from growth projects that are reaching maturity
• Lonza is the world's largest dedicated contract drug manufacturer, specializing in cell and gene therapy production

Japanese companies Toto, Nittobo, and Ajinomoto, traditionally known for toilets, textiles, and MSG seasoning respectively, have become unexpected winners of the AI boom through their semiconductor-related businesses. All three reported sharp growth in chip-related segments for the fiscal year ended March 31, 2025, as AI and data center demand drove sales of their specialized materials used in semiconductor manufacturing and packaging.

• Toto's advanced ceramics business (which makes electrostatic chucks for semiconductor equipment) saw 34% revenue increase and 42% jump in operating profit, offsetting declines in its core housing equipment unit.
• Nittobo's electronic materials segment contributed 91% of the company's total net sales increase, with operating profit jumping 39.7% year-over-year driven by demand for its T-glass product used in AI servers and semiconductor substrates.
• Ajinomoto's 'Healthcare and Others' segment, which includes ABF insulating film for high-performance chips, saw business profit surge 45.1% and now surpasses the company's frozen food segment in both revenue and profit.

President Trump announced a phased tariff plan on imported generic drugs, offering a two-year grace period starting August 1 with zero tariffs, followed by a 100% levy in August 2028 that escalates to 200% a year later. The policy aims to incentivize pharmaceutical companies to relocate manufacturing to the United States. Patented and branded drugs remain exempt from these new tariffs.

• The escalating tariff structure serves as 'a penalty' for companies that fail to build U.S. manufacturing facilities within the two-year grace period, while patented and branded drugs face no changes
• India's pharmaceutical sector faces significant impact as Indian companies supply billions in pharma exports annually to the U.S., mostly generic drugs, while Chinese firms dominate active ingredient production
• Over a dozen major drugmakers including major pharmaceutical companies have signed pricing agreements with Trump that exempt them from tariffs for three years in exchange for lowering drug prices

Shelton Capital Management's mid-2026 review highlights a resilient U.S. economy with private sector activity outpacing headline GDP and corporate earnings tracking above 24% growth. Despite moderating GDP momentum and weak inflation-adjusted income growth, the firm maintains an overweight equities position, citing tight labor markets, cooling inflation that likely peaked in May, and strong S&P 500 earnings revisions as key supportive factors.

• Labor market tightness driven by worker scarcity should keep unemployment near all-time lows even as job creation slows, with the broader unemployment measure for all Americans 16+ at historic lows
• S&P 500 earnings growth for 2026 is tracking above 24% with estimates being revised upward, representing a genuine bright spot that can support higher equity prices despite potential volatility
• Portfolio positioning emphasizes U.S. equities with targeted overweights in healthcare services, industrials, regional banks, and AI infrastructure, while favoring high-quality asset-backed and mortgage-backed securities in the 2031-2032 maturity range within fixed income

Japan's exports grew 19.3% year-over-year in June 2024, the fastest pace since November 2022, exceeding economist expectations of 18.6%. The growth was driven by semiconductor equipment shipments amid the AI boom and supported by a weak yen hovering at 163 against the dollar. Imports also surged 25.4%, beating forecasts and marking the strongest growth rate in over 18 months.

• Semiconductor equipment exports boosted performance, with major manufacturers like Tokyo Electron seeing gains between 50% and 93% year-to-date due to AI demand
• Japan's economy grew 0.5% sequentially in Q1 with exports remaining a key economic driver, while concerns over economic slowdown have subsided
• The weak yen at multi-decade lows near 163 per dollar has significantly contributed to export competitiveness and strong trade performance

President Trump announced a phased tariff plan for generic drugs imported into the U.S., starting with zero tariffs for two years beginning August 1. After this period, tariffs will escalate dramatically to 100% in year three and 200% thereafter, creating significant uncertainty for pharmaceutical imports and drug pricing.

• Generic drug imports will maintain 0% tariffs from August 1 for a two-year grace period
• Tariffs will jump to 100% in the third year, then escalate further to 200% in subsequent years
• The aggressive tariff schedule could substantially impact drug costs and pharmaceutical supply chains after the initial two-year window

Prediction market platforms like Kalshi and their opponents in the casino and gaming industry are significantly increasing lobbying spending in Washington as they face heightened scrutiny from Congress and regulators. Kalshi spent $990,000 on direct lobbying in the first half of 2026, approaching its full-year 2025 total, while the American Gaming Association spent $1.39 million. The lobbying battle centers on whether prediction markets' sports contracts constitute regulated financial instruments or gambling.

• Kalshi's total lobbying spending including outside firms reached nearly $1.8 million in H1 2026, while the American Gaming Association spent a similar amount, up 30% from the same period in 2025
• Prediction markets face controversy over insider trading concerns, including trades made ahead of U.S. military actions and bets allegedly based on nonpublic political information
• Legislation is unlikely in 2026 despite bipartisan concerns, with the key regulatory focus remaining on the CFTC's proposed rule for prediction markets currently in public comment period

Mexico's Grupo Financiero Banorte reported a 6% increase in second-quarter net profit to 15.55 billion pesos ($888.64 million), slightly exceeding analyst estimates. The growth was driven by strong consumer loan demand and higher fee income, with revenues rising 12% year-over-year to 43.15 billion pesos.

• Return on equity expanded to 25.7%, up 209 basis points year-over-year, indicating improved profitability
• Consumer loan portfolio showed strong growth with auto and payroll loans each rising 4% sequentially and credit card loans up 2%
• Banorte appointed Tomas Lozano, a 19-year company veteran, as new CFO while Rafael Arana retains COO role

JPMorgan CEO Jamie Dimon warned investors about stock market risks and advised against buying long-term treasuries, predicting the 10-year bond should yield 4% to 4.5%. While investors continue pouring record sums into equity ETFs, flow data shows they have already shifted toward short-term treasury funds, aligning with Dimon's bond market call. The move reflects concerns about persistent inflation, potential rate hikes, and deficit levels.

• The 10-year treasury currently yields 4.6%, with Dimon warning against long-dated bonds as prices remain under pressure from inflation uncertainty and deficit concerns
• ETF flow data shows investors withdrew funds from broad bond funds like Vanguard Total Bond Market (BND) and iShares Core U.S. Aggregate Bond (AGG) over the past year while piling into short-term treasury funds
• Short-term treasury fund SGOV ranked No. 5 among all ETFs in flows for June 2026, continuing a trend backed by investors like Warren Buffett who recommends 10% short-term treasuries allocation

US stocks rallied sharply on Tuesday, with the Dow Jones climbing 384 points and the Nasdaq gaining 1.26%, driven by a strong rebound in semiconductor stocks. The rally occurred ahead of major Big Tech earnings reports and despite ongoing US-Iran conflict and elevated oil prices, with nearly 88% of S&P 500 companies beating earnings expectations so far this quarter.

• Semiconductor stocks led the gains with the VanEck Semiconductor ETF up 4%, Micron surging 12%, Intel rising 8%, and Marvell climbing 6% ahead of key tech earnings from Alphabet, IBM, Intel, and Texas Instruments
• Corporate earnings season continues strong with 88% of 66 reporting S&P 500 companies exceeding analyst expectations; 3M gained 5% on better-than-expected results
• Markets largely overlooked geopolitical tensions as US conducted 10th consecutive night of strikes on Iran and oil prices rose to five-week highs near $85 per barrel for WTI and $91 for Brent crude

Schroders analysts report that Asian investors and central banks continued buying gold in June while Western investors sold, creating an East/West market split as gold prices fell nearly 12%. The firm believes central bank gold demand, particularly from China and emerging markets, has a 'very long runway' that will support gold prices for years to come, driven by geopolitical shifts and reserve diversification goals.

• China's PBOC increased monthly gold purchases more than 7x from 2 tonnes in February (at $5,000/oz) to 15 tonnes in June (at $4,250/oz), signaling they view current prices as attractive value
• At current prices, China would need to maintain June's 15-tonne monthly purchase pace for 33 years to reach a 30% gold-to-total-reserves ratio, up from the current 8.3%
• Schroders argues the U.S. is in an era of 'fiscal dominance' with $8-10 trillion in debt rollover plus $2 trillion in deficit financing over the next 12 months, limiting the Fed's ability to raise rates and supporting the gold bull market

Oil prices are surging as ongoing military strikes between the U.S. and Iran escalate tensions in the Middle East, threatening supply through the Strait of Hormuz. WTI crude is testing resistance near $86-$92 while Brent crude approaches the psychologically important $100 level. Iran-backed Houthis have announced a maritime blockade on Saudi Arabia, further supporting oil prices as mediators fail to bring parties back to negotiations.

• Yemen's Houthis announced a maritime blockade on Saudi ports and warned shipowners about dangers, while mediators from Qatar and Pakistan failed to broker a 10-day ceasefire between U.S. and Iran
• WTI crude is targeting resistance at $86.00-$86.50 with potential to reach $91.50-$92.00, while Brent crude tested $90.50-$91.00 with sights on $95.00-$95.50 and ultimately $100
• Control over the Strait of Hormuz, the world's key oil supply route, is the primary focus of the conflict, while Israel has remained on the sidelines and Iran has not targeted Israeli interests

A coal industry advisory council urged the Trump administration to provide financial support, including DOE loan guarantees and grants, for existing and new coal power plants. The National Coal Council, reinstated by Trump and comprising executives from coal companies like Peabody Energy, made 19 recommendations to boost the struggling coal sector. This represents a shift for the DOE's loan office, previously focused on renewable energy and electric vehicles under Democratic administrations.

• The council recommended DOE grants and loans for coal plants and supply chains, federal power purchase agreements, and removal of regulatory barriers to new plant construction
• U.S. coal production rose 3% in 2024 to about 528 million tons, with coal generating approximately 17% of U.S. electricity in 2025, up slightly from the prior year
• The council also called for EPA to finalize repeal of greenhouse gas regulations for coal plants and streamline federal coal leasing through the Department of the Interior

Asian refiners are rerouting Saudi crude oil shipments from the Red Sea port of Yanbu through the Suez Canal and around Africa after Yemen's Houthis threatened attacks on Saudi Arabia. This redirection, prompted by escalating tensions from the U.S.-Israeli war with Iran, could add up to four weeks to shipping times and significantly increase freight and fuel costs compared to the typical eastbound route through the Arabian Sea.

• The Liberia-flagged vessel Rodos loaded at Yanbu and signaled Suez Canal transit to India's west coast, while South Korean refiner Hyundai Oilbank sought a VLCC with Suez Canal and SUMED pipeline options
• The longer route via Suez and around the Cape of Good Hope could add up to four weeks to transit times and raise freight and fuel costs substantially
• The disruption comes at a critical time as Saudi crude and products transiting Bab el-Mandeb reached a record high of over 4 million barrels per day last month

JPMorgan Chase CEO Jamie Dimon stated he would not purchase stocks or long-term Treasury bonds at current prices, citing underestimated geopolitical and fiscal risks. He believes investors are not fully accounting for ongoing global conflicts, rising defense spending, and growing budget deficits that could keep interest rates elevated and cause market turmoil.

• Dimon expects the 10-year Treasury yield should be 4% to 4.5% even if inflation returns to the Fed's 2% target, with current yields around 4.6% and little upside for bond prices.
• He expressed caution about stock market valuations at current highs, preferring to look for individual company investments rather than broad market exposure.
• Dimon compared AI investment surge to the internet boom, noting companies are spending 'huge' amounts that may not quickly deliver expected returns, though it will likely pay off long-term.

The European Commission proposed new carbon charges on international flights departing Europe and landing within 5,000 km, starting in 2029, affecting routes to the Middle East, Turkey, and North Africa while excluding transatlantic flights. Airlines and trade groups, including Emirates and Airlines for America, strongly oppose the measure, arguing it creates a 'double whammy' alongside the existing global CORSIA emissions offset program and violates international agreements.

• The EU proposal would impose carbon costs on flights measured from central Europe to destinations up to 5,000 km away, impacting Middle East, Turkish, and North African routes starting in 2029
• Emirates President Tim Clark criticized the plan as duplicative since airlines already participate in CORSIA, the 2016 UN-brokered global deal requiring carriers to offset rising emissions from international flights
• Airlines for America and IATA denounced the proposal as a 'fragmented approach' that violates international agreements, with the UN's aviation agency warning it would undermine the global CORSIA framework

Venezuela's state oil company PDVSA is shifting its sales model to prioritize direct contracts with refiners and joint-venture partners over trading intermediaries like Vitol and Trafigura. U.S. and Asian refiners including Phillips 66 and Reliance Industries have begun direct purchases from PDVSA for the first time since 2019 sanctions were imposed. This change aims to secure better prices for Venezuela while diversifying buyers as the country's oil exports have rebounded to 1.2 million barrels per day.

• Trading houses Vitol and Trafigura currently control agreements for over 100 million barrels over six months, but their dominance is being challenged by direct refiner deals
• Phillips 66 resumed buying Venezuelan crude in May after a seven-year pause, while Reliance Industries also began direct purchases; Valero and Tipco Asphalt are expected to follow
• Chevron increased exports to 293,000 bpd in Q2 from 223,000 bpd in Q1, while Repsol and Eni have also expanded direct loading as Venezuela targets 1.37 million bpd output by year-end

Egypt is negotiating long-term LNG supply contracts with major energy companies including Shell, TotalEnergies, and BP to secure 15-18 monthly cargoes for at least three years. The deals come as Egypt's domestic gas production declines while demand rises, and could cost the country $8-11 billion annually. Egypt's natural gas import bill has nearly tripled to $1.65 billion monthly due to regional conflicts affecting shipping and market competition.

• Egypt's monthly natural gas production has fallen to 4.4 billion cubic feet per day in fiscal year 2025-26 and is expected to decline further to 4.2 billion cubic feet per day in the current fiscal year
• The proposed multi-year LNG deals could cost Egypt between $8 billion and $11 billion annually, based on recent pricing at approximately $1.5 above the European TTF benchmark
• Egypt's total gas imports are projected to increase from 985 billion cubic feet (July 2025-June 2026) to 1,081 billion cubic feet (July 2026-June 2027), reflecting continued production shortfalls despite efforts to clear foreign companies' arrears