We are taking a break to recharge the batteries and full service will resume on September 3rd.

When we took the first step of starting this journey we did not think our note would be received and read by over 23,516 professionals.

Humbly, we’re thankful as it confirms the investment world has more cynics & sceptics than just us.

We hope that more rational investing days will return! When the money runs out, those day will arrive!

Until the 3rd of September, wishing you all the best.

The MacroStrategy Team

Commodities –> Chinese imports of Russian crude rose 5% y/y in July to 2.16m bpd and were up 10% m/m. Imports from Indonesia rose 51.8% y/y to 740,000bpd. Imports from Malaysia, the largest transhipment hub for Iranian sanctioned oil, were down 64.3% y/y at 350,000bpd.

Technology –> Broadcom is in talks with a group of lenders to raise up to USD100bn in debt for an AI chip financing deal that will benefit Anthropic, sources said. The financing could include a USD30bn junior tranche, and a senior secured tranche that could range from EUR60bn to EUR70bn, part of which it could guarantee. Blackstone and Apollo are in talks to participate in the financing. The potential financing follows a partnership that Broadcom, Apollo and Blackstone struck in June to finance a USD35bn expansion of Anthropic’s computing capacity using Broadcom’s chips and networking solutions. The initial commitment was expected to add one gigawatt of computing capacity, while the partnership overall aims to enable more than 20 gigawatts of compute power for leading AI labs by 2028.

On the other hand, Samsung plans to return up to KRW110trn (USD79bn) to shareholders. Sources said the discussion is between KRW90trn and KRW110trn.

Benchmark DRAM prices fell for the second day running, the first such 2 day decline since September last year and before that November 2024. Obviously, on these prior occasions it was just noise before continuing to soar.

Technology –> Bank of Mexico minutes signalled it is likely to keep rates unchanged for some time even as inflation eases. It said inflation in services such as restaurants, hotels and travel remains a concern. It also pushed back its timing for inflation to return to target, saying inflation is now seen converging to 3% in the fourth quarter of 2027.

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United States of America –> Treasury Secretary Scott Bessent said he may further increase the size of the government’s Treasury repurchase plan. He said the recent increase in long dated yields was unwarranted against the vibrancy of the economy. “Part of it is signalling here, and to show that we believe that the yields don’t reflect the underlying fundamentals. This Iran conflict, we will get on the other side of this, we don’t know when”. He said White House budget director Russell Vought will be embarking on a new fiscal consolidation effort directed by President Trump, and that combined with efforts to cut waste, fraud and abuse, savings of several hundred billion dollars could be found. There was nothing “magic” about the USD40trn threshold and they will grow its way out of the debt.

Walmart fell 9% after reporting its slowest quarterly sales growth in 6 years and warning that shoppers were likely being squeezed by high gasoline prices. It raised its annual sales and profit forecast, saying aggressive price cuts would boost demand later this year, but investors were unconvinced. It announced price rollbacks on 11,000 products to be financed in part by USD2.9bn in tariff refunds. Average spending per transaction grew 1.1% vs 3.1% a year earlier. It expects fiscal 2027 net sales to grow between 4% and 5%, up from its earlier target of 3.5% to 4.5%. It expects annual eps of between USD2.80 and USD2.87 from USD2.75 – USD2.85.

Reuters says that U.S. corporate debt issuance in the first 7 ½ months of the year totalled USD1.68trn, up 27% y/y. Issuance so far in August has already hit USD153.2bn, more than July’s USD147.7bn. “High technology” has accounted for 12.8% of issuance so far this year, well behind financials which is a massive 45.2% market share, but AI and Big Tech borrowing is growing very quickly. Issuance in 2026 has already topped USD220bn, and forecasts are for it to rise further next year. Much of the borrowing is long term, adding to the duration risk of the market, the Dallas Fed has said. “Duration is duration. If more corporate duration is issued, its going to increase the term premium for U.S. Treasuries”, Professor Ben Chabot said.

Britain –> The July budget deficit was GBP1.8bn vs a balanced figure expected. July typically gets a boost from scheduled payments of self-assessed income tax. The Office for National Statistics said that borrowing in the first 4 months of the fiscal year was GBP56.7bn, GBP2.3bn more than expected. (U.K. banks warned Prime Minister Burnham against introducing a “damaging” windfall tax on the finance industry. Any such tax on the sector would threaten to undermine his plan to “deliver growth in every postcode”. It warned that “increasing taxes on banks would ultimately risk undermining the very tax base the Government seeks to protect and grow, as well as damaging the UK’s international competitiveness”).

July retail sales, a real figure, fell 0.5% m/m, in line with expectations. They were up 1.6% y/y vs 2.2% expected. Ex fuel, retail sales were down 0.9% m/m vs -0.5% expected, with the annual growth rate down to 2.3% against 3.3% expected.

The CBI’s monthly order books balance rose to -25 from -45 which had been the joint lowest since COVID. While still signalling a deterioration in order books, the 20 point jump marked the sharpest improvement in more than 5 years and was one of the biggest since records began in the 1970s. The survey’s gauge of expectations for output in the months ahead also improved and export orders came out of negative territory for the first time since June 2022. “Stronger global demand is providing some welcome relief for manufacturers, with export order books improving sharply and lifting overall orders”. The GFK Consumer Confidence index also rose to -14 from -17, a 2 year high.

Europe –> Commerzbank estimates that German government bond supply will hit a record high of EUR400bn in 2027 in gross terms, up from EUR349bn this year. “We’re talking about a general situation where there’s a lot of money that needs to be raised in bond markets, and yields area adjusting to reflect that”, Vanguard said. Barclays estimated last month that gross Eurozone bond supply will hit a new record of EUR1.54trn next year, though it flagged significant spending uncertainties. Net issuance, however, is set to be slightly lower than this year at EUR574bn. It said France will face close scrutiny with its budget deficit set to stay above 5%. The ECB is also shrinking its balance sheet. It is down EUR2.9trn since the 2022 peak but is still EUR1.22trn above its pre COVID level. Bloomberg highlights that bond sales this week are expected to be at least EUR38.5bn. (The Swedish Riksbank kept rates unchanged at 1.75% as expected, saying it was ready to tighten policy if inflation picked up).

Japan –> July headline CPI rose to 1.9% from 1.6%, in line with expectations. Ex food and energy was also up 1.9%, in line with expectations. Goods price inflation was 2.7% while services inflation was 1.2% from 1.1% in June. “Core consumer inflation is likely to re-accelerate given renewed tension in the Middle East, which will push up crude oil prices and add to price pressures from a weak yen”, Sompo Institute said. Other data showed the manufacturing PMI the strongest since 2018 at 55.1 from 54.5. “While we saw growth momentum pick up across both manufacturing and service sectors, factories continued to lead growth, registering sharp increases in both production and new orders”. Overseas manufacturing demand was the highest in 8 ½ years, driven by demand for semiconductors and AI related industries.

China –> Vice Finance Minister Liao Min said China will roll out additional fiscal policy measures in response to economic developments as growth slows. A greater share of fiscal spending will be directed towards households and consumption. It will also step up coordination between its fiscal, monetary and industrial policies. He said policymakers were preparing new fiscal financial support measures for H2, while working with the PBOC and regulators to improve economic policy coordination. China has expanded loan interest subsidies for small private firms and consumers. The scheme will subsidise 1 percentage point of interest on all eligible small business loans for up to 2 years and extend subsidy to credit card instalment products, while raising subsidy caps.

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MARKETS MATRIX

Commodities –> The U.S. EIA reported U.S. crude and product inventories up a combined 3.566m barrels. They are now up 11.4m over the past 5 weeks, and only down 21.2m over the past 10 weeks, which compares with the 149.9m draw over the past 20 weeks, ie, down 128.7m in the first 10 of those 20 weeks. Production was 13.83m bpd, up 3.3% y/y and up an annualised 3.8% over the past 3 months.

Technology –> Benchmark DRAM (4GB 512M X 8) prices fell 6 cents to USD12.27. This was the first daily fall since the 9^th April and only the 3^rd fall since 12^th September last year. The scale of the fall compared with 2 cents on each the 9^th April and 30^th March and 1 cent on the 12^th September. In percentage terms, the fall was 0.49% the biggest since the September fall. It is probably just noise, but it could suggest the demand supply imbalance is starting to ease, and if so, for what reason.

Canada –> President Trump told reporters we will “probably have a deal with Canada” while Prime Minister Carney said the two sides were “moving towards an agreement”. The US and Canada are closing in on a trade deal in which auto tariffs could be cut to 15% from 25%, sources said. Canada is pushing for that to drop to 10%. The tariff would come before deductions for the value of US produced content, bringing the effective rate substantially lower. The proposed deal would also halve the top line tariff on steel and aluminium to 25%, although would apply with a quota limit. Bloomberg said the proposed deal has caught Mexico off guard, and now Mexico would like a deal of its own.

United States of America – The Treasury announced it would double its long end buybacks to at least USD4bn per operation, presumably to limit yields going higher. The operation will apply to 10 years out to 30 years and will be effective from September 9^th through November 4^th. It was the second time this month that Treasury Secretary Scott Bessent has stepped in to counteract market moves, with the first being the yen intervention. “This doesn’t solve the underlying issues around deficits, inflation, or Treasury supply”, Savvy Wealth said. “But it buys some time and, perhaps more importantly, signals that (the) Treasury has tools available and is willing to use them when market conditions warrant”. At MacroStrategy, we interpret this as the Treasury is starting to feel under pressure,

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Commodities –> Iraq approved mechanisms for exporting oil through international and local companies via multiple export routes, the government said. The new contracts will run for 3 months from September 1^st. It has been working to develop routes through Turkey and Syria. The government did not provide details of the volumes to be exported, or the specific export outlets.

Reuters says that, thanks to exports from the Fujaurah terminal in the UAE and from Saudi’s Red Sea coast, Middle East exports averaged 9.5m bpd this month, less than half during the same period last year. Those figures may understate or overstate the true figure because more regional oil appears to be moving in the shadows. Evidence is building that Gulf producers are relying on vessels that disable tracking systems. The UAE, in particular, appears to have built a network of “dark tankers” that shuttle crude through Hormuz before transferring cargoes in the Gulf of Oman. The result is that UAE exports have averaged 3.38m bpd so far in August compared with 3.2m in 2025. How much oil is reaching consumers has become one of the market’s biggest unknowns. U.S. refiners are operating at record utilisation rates. A structural reshaping of global oil trade is gradually occurring.

Saudi Aramco resumed oil loadings from inside the Strait of Hormuz last week and has more tankers waiting. It is offering ship to ship transfers off Fujairah in the UAE. The resumption of Sausi exports could ease the tight supply of heavier crudes that produce more residual fuel.

Chinese exports of refined products fell 12.9% y/y in July but were up 6.7% m/m as export curbs on refiners eased. In July, refined oil exports totalled 4.65m metric tons, up from 4.36m in June when exports jumped 29% from May. Diesel exports are roughly back to the level of a year ago after rising 88% m/m to 810,000 tons.

Technology –> The LLM Token Expenditure Index reached the lows since it was first started at the end of last year. It is now down 49% since its peak at the end of May. As the second chart below shows, the growth rate peaked in January and has been slowing ever since. Having turned negative in June, the rate of decline is now -34% m/m; the pace of decline is deteriorating rapidly.

Canada –> President Trump said he was putting a 3 day pause on the new 50% tariffs, saying the two countries had reached an agreement. The pause was “based on the fact that Canada and the USA, subject to finalisation of documents, have a DEAL”. There was no immediate confirmation from Canada.

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Adjusting for the government’s net borrowing requirement, the net national savings rate has fallen to -3.7% of GDP. The U.S. net national savings rate as a percentage of GDP has been trending down since the very early 1970s after the US abandoned Bretton Woods. Other than a single month decline in April 1987, it first started going negative on a regular basis in 2004 and then during the GFC. It has now been continuously negative since January 2021, averaging -3.13% a year ever since. The trend line has declined about 0.18 percentage points per year on average, so based on the present trajectory, the trend net national savings rate will be about -4.5% within the next 5 years which seems perfectly reasonable, and perhaps even conservative, given projections of budget deficits, the aging population and increasing dependency ratio.

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The declining savings rate clearly reflects an unproductive allocation of capital, leaving less available to invest and grow. Ultimately, this comes down to constructivist government allocating capital other than in accordance with the utility it creates. In doing so, it destroys or consumes capital, reducing potential growth and eventually causing economic decline. The falling savings rate is just a path through which the cost of such unproductive government has materialised. One area you can see the cost of this is the declining labour force participation rate and consequent declining labour share of GDP, which is now at a record low going back to 1947. With such waste, the economy does not have the ability to save. This is why AI will not work if the humans it replaces, do not find new productive jobs from which to afford the AI. If those that are laid off have to rely on taxing the AI to survive, then the AI itself will be starved of the capital needed to sustain itself.

Compounding the data over time, the cumulative net national savings rate since 1968 peaked in Q4 2003, plateauing until 2009, before falling 18.5%. Having initially fallen during the GFC, the cumulative savings started to recover until 2019 but has since fallen heavily as the large government deficits seen during COVID became normalised under Biden and then Trump.

The consequence has been that the U.S. net international investment position started to go negative in the 1990’s and then collapse post the GFC. As of the end of last year, the U.S. net international investment position, or rather its net international liabilities, rose to USD21.8trn or 67.4% of GDP. That was made up of USD43.37trn of gross foreign assets less USD64.64trn of gross foreign liabilities.

In the 1990’s, people used to play down the deficit by saying that the US was earning a higher return on those foreign assets than it was paying on its liabilities. That is no longer the case. The U.S. is running both a primary and secondary income deficit. Any superior return on foreign assets has been overwhelmed by the weight of borrowing which is now requiring a higher cost of capital to compensate. As these income balances deteriorate, they will add to the net international liabilities rather than subtract from them.

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Central banks are also favouring gold for their reserve assets, leaving private investment to make up the balance. This suggests a growing distrust from foreign central banks of the U.S. government’s ability to service its debt other than in devalued dollars. As U.S. finances deteriorate, its ability to project power externally, or even to maintain order domestically, such as protecting its own borders, will also fail as we are seeing. Such economic, social, political and geopolitical ruptures will further deter international investors and raise the cost of capital. The preference for gold by the central banks, and the increased competition for funds from AI, has lifted U.S. real yields – (breakeven yields have been falling) - and pushed up term premiums.

While imports are subtracted from the GDP calculation – (GDP = Consumption + Investment + Government Spending + (Exports – Imports)) – the associated capital flows either represent the sale of an asset, and its associated revenues, or a new international liability that needs to be serviced and eventually repaid. Less of U.S. output will be owned by American citizens. Adjusting for these foreign owned assets, U.S. domestically owned GDP – (the compound rate of GDP growth plus net national savings rate) – has flatlined since COVID and only risen 17%, or 0.89% per annum compound, since Q2 2008, falling in each of the last two quarters. Sixty percent of all U.S. GDP growth since Q2 2008 has been borrowed or purchased from abroad, financed with debt or asset sales, and just over 100% since the end of 2020. The more the U.S. net international liabilities increase relative to GDP, the lower the U.S. owned share of domestically produced output, and therefore the lower potential capital accumulation and growth.

With the net national savings rate -3.7% and averaging -3.13% since January 2021, compared with real GDP up just 2.1% y/y and averaging 2.85% per annum over the period, the U.S. is not going to be able to grow out of this unless the economy can deliver much higher returns than we have seen for many years. Instead, sustaining the economy and servicing the debt will become increasingly dependent on more international borrowing. The U.S., like all Western economies, needs to restructure, the one thing politicians refuse to do.

Although the U.S. has been running a current account deficit for many years, giving people the impression that it can continue indefinitely, the current account doesn’t look at what the money is being used for. Whilst the current account just looks at international flows, the net national savings rate measures the percentage of a nation’s income that is saved after accounting for consumption and capital depreciation. Although calculated differently, the current account is fundamentally equal to national savings minus national investment, while the net national savings rate does not subtract domestic investment. The decline of the net national savings rate relative to the current account deficit reflects the decline in the net domestic investment rate.

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Commodities –> Chinese coal production fell 10.1% y/y in July to 343.21m tons on the back of a mining accident which, together with new regulations, weighed on operations. It was the lowest monthly production since September 2021. Galaxy Futures forecast a 7% - 9% y/y drop in August production and a 3% - 5% full year decline as tighter scrutiny forces mines to curb previously undisclosed production.

Whilst energy prices – fossil fuels grossed up to 100% of the mix - remain relatively muted at 5.95% of world GDP, with record crack spreads at 2.2% of GDP, the combined cost is 8.15% of GDP. That is now 105bpts above the post 2000 average although just 50% of the peak reached in 2022.

Technology –> Nvidia has agreed to provide a guarantee of up to USD105bn to help OpenAI lease a data centre in Ohio being developed by SoftBank-owned SB Energy. The new deal is the latest example of Nvidia financing the infrastructure built around its chips. CEO Jensen Huang said the new deal was not circular financing and that Nvidia is using “its scale and long-term visibility” to help. Nvidia will be the exclusive chip provider for the facility. The site could contribute as much as USD200bn to Nvidia’s revenue.

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Commodities –> Copper prices were up 1.7% at USD672.8 a pound, the highest on record and up 50.4% y/y. Total LME warehoused stocks in London have plunged by nearly 50% over the past 3 months as material is pulled into the U.S. ahead of potential tariffs on imports of refined copper. “Shorts are having to buy nearby contracts to close or roll positions amid tight availability of deliverable metal”, CRU said.

Technology –> The U.S. is preparing to tell dozens of countries they must pick sides in the artificial intelligence race with China, warning they will be excluded from a U.S. led coalition if they also sign up for Beijing’s competing framework. “To be part of everything is to be part of nothing. Signature of the Pax Silica Declaration is not merely a membership subscription, but a commitment”. “It cannot be held alongside membership in duplicate initiatives whose expectations conflict with our own”.

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Commodities –> Reuters asks if global oil inventories are big enough to weather another 6 months of Iranian war. Saudi Aramco believes the world has lost 2.6bn barrels of oil since the start of the war, making it the largest supply disruption ever in cumulative terms apart from the 1979 Iranian revolution. With China cutting demand, however, analysts believe the shortfall is about 5m bpd. This deficit might have widened in July after Ukranian drones closed down the Kazakh CPC pipeline, pumping 1.8m bpd. IEA stocks stand at 1.5bn barrels, enough to cover a 5m bpd loss for 300 days. That figure, however includes 600m commercial stocks held under government obligation, which they cannot order the release of, reducing the total to 900m barrels, enough for 180 days. The US Government Accountability Office warned in May that its SPR infrastructure was deteriorating fast and that a quarter of reserves is no longer available. Energy Aspects thinks a new IEA release is unlikely as many countries have limited stocks left.

United States of America –> Chicago Fed President Austan Goolsbee said the latest inflation data was a “little better”, and was hopeful that as the effects of tariffs and higher oil prices fade, inflation can continue to improve. “If we can get some of this stuff into the rearview mirror then I think we get back on what I was calling the golden path, which is inflation heading back to 2%”. “The overall level being in the 3%, that’s too high; that’s not great. The good news is the new information that’s been coming in has been a little better”. “Inflation has been too high, and our progress stalked out a little bit and was going the wrong way”. “But now, for a couple of months, we’ve been getting a little better readings and hopefully that will continue. But we’re in that delicate space where the overall economy feels fairly stable and we’re mostly watching the inflation component”. Cleveland Fed President Beth Hammack reiterated her view that the Fed should raise rates immediately to restrain overheated investment. Tom Barkin said it is not clear whether the Fed will have to raise rates or not to bring inflation back to target.

The Fed announced it would halt its Reserve Management Purchases to zero from August 14^th through September 14^th. Its stamen said the RMP’s would now only be done “when appropriate”. The Fed’s balance sheet has expanded by USD224bn since it started its RMP programme in mid December, so about USD28bn a month on average. Over the period, it has accounted for about 22% of broad monetary growth, so the ending of it is a tightening of policy.

Fitch said it expects the general government deficit to widen to 7.4% of GDP in fiscal 2026 and remain at that level in 2027, the highest among AA rated sovereigns. Higher military and interest costs, along with rising Medicare and Social Security spending, would limit efforts to reduce the deficit. While saying the economy remained resilient, it forecast growth of 1.9% for 2026-27, down from 2.8% in 2025, and noted weakening labour demand and a significant slowdown in job creation. It expects inflation to average 3.4% this year.

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Reuters says the rising real yields reflect the scale of issuance, both from governments worldwide and from AI. “There’s a competition for capital which is relatively unprecedented in recent times”, BlackRock said. “Because of things like the AI buildout ramping ever up, that capital scarcity dynamic is accelerating and you’re seeing that play out in bond yields”. The US budget deficit is set to run at around 6% of GDP, France’s at 5% and the UK’s at 4%. “In Europe, defence spending, energy security and infrastructure investment are more important drivers than AI spending specifically”, Mirabaud Asset Management said. Central banks are also no longer buying bonds, which previously had suppressed bond yields, favouring gold instead. While the promise from AI is driving increased borrowing, lifting real yields, at some point the higher cost of capital, together with the cash burn, will be felt. “We expect real yields to continue rising until they choke off the borrowing which has been driving them, and the rotation into risk which has been fuelling the equity rally”, Satori Insights said. What the article doesn’t say is that the U.S. household savings rate has also been collapsing, reducing the supply of funds available for investment.

Britain –> As widely expected, Nigel Farage won his by-election with 62.8% of the vote, with Count Bin Face second with 26.7%. Voter turnout was just 44.37%, but nevertheless, Farage got 22,239 votes, up from 22,239 when he won the seat in the 2024 election.

The Telegraph reports that U.K. investors withdrew GBP1.6bn from equity funds in July, with the total outflows over the past 12 months GBP13.9bn. Unsurprisingly, the bulk of the outflow is from UK focussed funds. Since June 2020, GBP52.6bn has been withdrawn from UK focussed equity funds, with only 4 months of inflows over that period.

Japan –> Sources say the BOJ is set to raise rates in September and is considering hiking more aggressively thereafter from the current pace of roughly twice a year. “An early rate hike has come into sight”, one source said, signalling a strong chance of a move on September 17^th. “The BOJ could also accelerate the pace of rate increases”, a view echoed by a second source.

China –> The PBOC injected CNY349bn (USD51.7bn) of liquidity through overnight reverse repos. With CNY1bn of 7 day contracts maturing, it was a net injection of CNY348bn, the first such addition this month. Analysts see the injection as a tactical adjustment, to meet liquidity demand for tax payments, rather than a policy shift.

Reuters (Breakingviews) said Beijing is drastically widening its tax net. It recently unveiled a 20% levy on assets placed in offshore trusts and the income they generate. Insurance policies, property, cryptocurrencies and other assets may be next. Armed with AI tools, tax officials are gaining the confidence to target assets previously out of their reach. The tax authorities have also rolled out unusually tough compliance measures, such as citizens that move overseas but retain economic interests in China will be treated as local tax residents. This is all seen as part of a broader campaign to stem capital flight and bolster fiscal coffers.

Australia –> As the banks have been reporting, Q2 home loans fell by 5.2% q/q, compounding a 3.4% drop in Q1. Higher interest rates and proposed changes on taxes on investment cut demand. Loans for owner occupiers fell 1.9% while those for investment properties were down 10.2%.

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MARKETS MATRIX

Russian President Putin said that Russia will respond in kind if European countries start to seize Russian merchant vessels. The commander of Russia’s Pacific Fleet said his forces were ready to “inspect and detain” foreign vessels from what he called hostile states.

Commodities – The U.S. EIA reported U.S. crude and product inventories up a combined 9.623m barrels last week as exports slumped. They are now up 18.1m barrels over the past 5 weeks, reducing the 10 weeks decline to 38.3m barrels and the 20 weeks decline to 156m barrels. Production was 13.8mbpd, up 3.6% y/y and an annualised 2.8% over the past 3 months. Given what’s at stake, this inability to lift production meaningfully would seem to have significant longer-term implications, confirming what many of the shale companies have said that production would plateau for the next few years before starting an inexorable decline. Maybe a higher price would limit the decline, but of course a higher price could not be afforded by the economy.

China’s refined copper output will post an annual decline in August for the second month running due to an acute shortage of feedstocks, state backed research house Antaike said. Based on survey data from companies that represent 82% of Chinese capacity, production is forecast down 2.83% y/y after July’s -3.18%. Persistent supply tightness in raw materials propelled smelters to reduce their capacity utilisation rates. “China’s copper concentrate market is experiencing one of its most severe supply shortages in recent years”, Mysteel said.

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Pakistan’s defence minister said the US and Iran are “close to some sort of arrangement” over the Strait of Hormuz. Talks between Iran and Oman about reopening the strait to some maritime shipping have reached an advanced stage, according to a Qatari Foreign Ministry spokesperson.

Technology –> CoreWeave jumped 14% after hours. The company lifted its annual capex spending target to $32bn - $39bn from $31bn - $35bn after beating Q2 estimates on surging demand for its AI cloud computing. It also lifted its targets for 2026 revenue and adjusted operating profit, encouraged by a ballooning order book. Revenue backlog increased to USD104.2bn from USD99.4bn. On top of that, it has secured more than USD25bn of net new customer commitments. “The massive, contracted backlog guarantees rare multi-year revenue visibility. This quarter feels like a pivotal one for CoreWeave” according to Zacks Investment Research.

Apollo (HedgieMarkets) says AI’s money runs backward. Chipmakers are booking huge profits while the model makers bleed, and the profits come from investors rather than customers. Chipmakers earn a

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Commodities – Zero Hedge reports that the U.S. Strategic petroleum Reserves fell by 6.1m barrels last week to 298.7m barrels, the lowest since January 1983, below the generally accepted operational floor. Between 250m barrels and 300m, it becomes more difficult to pump the oil due to not enough in pipelines etc for the pumps to work properly. The article says that, according to unconfirmed reports, Iran has “completely ruled out any future negotiations with the Trump administration”, declaring it will wait out President Trump until January 2029. “Trump will not reach an agreement with us. We will accompany him until his term ends”, Majid Shakeri, advisor to Parliament Speaker Ghalibaf said. He posted: “The path to victory is neither fighting nor a deal — it is managing the process of neither war nor peace, up to the point of victory. Publicly confirming negotiations with the U.S. is sheer folly. The winning approach is denial, ambiguity, and strategic patience.”

Codelco saw a 14% drop in copper output in Q2. It produced 292,300 tons down from 338,200 a year earlier. June’s output was down 5.4% y/y although up from May. Judging by a Bloomberg chart, production has been declining since 2019. Along with declining ore grades, Bloomberg says the miner is struggling with long delays to overhaul its aging operations. Copper prices are up 49% y/y.

Technology – Nvidia said it had partnered with 6 major financial institutions to launch compute financing platforms aimed at raising over USD500bn in third party capital for AI infrastructure. CEO Jensen Huang said Nvidia has the option to backstop USD125bn of the potential deals. It has signed memorandums of understanding with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR for the financing platforms. The initiative is intended to broaden access to Nvidia-based infrastructure among frontier developers. What of the economics? Nvidia’s 5 year CDS widened on the news, showing the cost of capital increasing, while DRAM prices continued to soar but LLM token expenditure continued to fall, now down 44% from its high.

Intel said it was planning to raise USD15bn –

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Commodities –> The U.S. EIA reported U.S. crude and product inventories down a combined 811,000 barrels last week. Over the past 5 weeks they were down just 1.686m barrels, with the 10- and 20-week totals down 58.493m barrels and 157.274m respectively. Production was 13.804m bpd, up 3.9% y/y or an annualised 9.1% over the past 6 months. (Crack spreads further eased yesterday to USD56.50bbl).

Technology –> Whilst I think we already knew this, new disclosures from Microsoft confirm that most of its artificial intelligence revenue comes from OpenAI. It recorded USD24.1bn in sales from OpenAI during the year ended June, with OpenAI accounting for more than half of its actual AI sales. Bloomberg says that OpenAI’s share of Microsoft’s business is about 70% of its actual AI sales during the past fiscal year. See Julien Garran’s recent video in which Ed Zitron starts by highlighting OpenAI as the single point of failure as the primary load bearing foundation on which the whole AI trade and investment has been built.

Bloomberg says that AI not only has very high power demand, but that demand is also very volatile, swinging around much more dramatically. “Its like over revving your car wears out the engine faster than keeping a constant speed”. Power increments equivalent to the consumption of factories, towns or even cities can appear and disappear within seconds, creating repeated shocks that connected equipment struggle to absorb. A gigawatt data centre is equivalent to a city the size of Boston, half of which can flicker on and off every few seconds. Some of the AI campuses planned in Texas and the Midwest are more than 5 times bigger, consuming nearly as much power as New York City.AI sees power usage spike as much as 50% above its design capacity, “so a 1 gigawatt facility may use 1.5 gigawatts for a split second”. Most equipment isn’t designed for such swings – its like driving a Ferrari and shifting straight from 6^th gear to 1^st – which puts huge strain on equipment from power generation and turbines through batteries and even semiconductors. While the article highlights the cost of loss of compute time from equipment failure, another way of looking at it is a shorter depreciation rate and therefore a higher cost of the technology.

Argentina –> Zero Hedge reports that President Milei’s latest initiative is

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Commodities – China eased limits on refined fuel exports for a second month in August, giving refiners temporary approval to ship 2.7m metric tons. Refiners are also allowed to roll over some of the August allowances to September because of the tight timeline. Including shipments to Hong Kong, the programme is estimated to reach 3.6m tons. The quotas cover gasoline, diesel and jet fuel. Nymex crack spreads are now down 20% from their high, although still remain very elevated.

Technology – Samsung Electronics and SK Hynix are evaluating chip making tools from China’s Advanced Micro Fabrication Equipment for possible use in their Chinese factories as they hedge against the risk of tighter export controls. Reuters says the trials underscore the paradox that U.S. measures designed to constrain Beijing’s semiconductor ambitions are creating opportunities for Chinese rivals to gain a foothold in foreign owned fabs operating in China.

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Technology –> DRAM prices continued to soar, with the benchmark 4GB 512M X 8 USD11.97, up 65% over the past 3 months alone. This suggests much of the increase in capex is being absorbed by higher prices, with real capex increasing at a slower pace than the headline figures suggest, or even falling. With the token expenditure index down 28.5% over the same 3 months, the economics of AI appears to be deteriorating rapidly.

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Commodities –> Energy’s share of GDP has fallen back to 5.58%. Whilst the threat of the strait remaining closed could see prices soar from here – (U.S. crude and product inventories are near the lows of the past 36 years) - for the moment at least they remain well below the post 2000 average of 6.3% and far closer to the lows than the highs.

Canada –> May GDP rose 1.7% y/y vs 1.4% expected. It was up 0.3% m/m, 10bpts more than expected. StatsCan estimated June to have increased 0.2% m/m, which together with a 0.6% increase in April would apparently indicate an annualised Q2 growth of 3.4%, the highest since Q1 2023. “The economy appears to have found ways to navigate the current cloud of uncertainty relating to trade with the United States”, Desjardins said.

United States of America –> U.S. Money supply - (bank deposits + retail money market funds + currency in circulation) - rose a 3-month annualized 5.2% - (1 month annualized -2.2%). It was up USD314.7bn, made up of base money up USD37.0bn and commercial money up USD277.8bn, made up of a USD419.9bn increase in bank deposits, partially offset by a USD140.6bn build in the TGA account and a USD1.5bn build in the reverse repo. With Q2 nominal GDP growth of 7.9%, there was no change in monetary velocity during the quarter.

Britain –> Job hiring fell in H1 with job postings for graduates the lowest since 2020 when the economy was locked down, a survey from recruitment platform Indeed showed. “The UK’s labour market is under sustained pressure. Hiring demand is falling across most parts of the economy, while posted wage growth is gradually cooling”. Job postings fell 11% between the start of the year and July 17^th and were 32% lower than before COVID. Advertised wage growth cooled to 3.9% in Q2, the slowest since February 2022.

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In the UK, Lord Maurice Glassman compiled a song and video, showing what life used to be in Iran before the 1979 revolution, calling for the bringing back of the Shah as he works with the Iranian people. Although very low key, this kind of action is clearly trying to encourage a second front against the Iranian regime.

Iran ruled out Oman’s proposal for regional joint management of the Strait of Hormuz, a senior Iranian official said, hitting hopes of a swift diplomatic breakthrough in the war. China has held direct talks with Yemen’s Houthis to enable its tankers to sail through the Red Sea without being attacked.

Commodities – The U.S. EIA reported U.S. crude and product inventories down a combined 7.5m barrels last week. Whilst this followed 2 weeks of increase, they have fallen 7.2m barrels over the past 5 weeks, 75.1m over the past 10 weeks and 156.0m over the past 20 weeks. Production rose to 13.796m bpd, up 3.6% y/y and up an annualised 6.3% over the past 3 months.

Technology – Microsoft jumped 8% after hours. It forecast a fiscal 2027 Q1 sales range with a midpoint of USD90.4bn, above market estimates of USD89.66bn. It also forecast Azure growth of 45% on a constant…

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