Wednesday Watch

Around X:

• @Business  

• Kushner and Witkoff held positive discussions with regional leaders in Qatar and technical talks with Iran are moving ahead, according to a senior administration official, as the countries seek to ease tensions in the wake of recent clashes. 
• Confidence among Japan’s large manufacturers rose to the highest level since 2018, supporting the Bank of Japan’s stance to keep raising interest rates. 
• CIA Director John Ratcliffe vowed to step up the agency’s efforts to deploy artificial intelligence and quantum computing, stressing that rapid developments in emerging technologies are changing the nature of geopolitics.
• The biggest buyer of Bitcoin is selling the cryptocurrency, upending many of the core principles that underlie the digital-asset world. 
• Donald Trump reported earning at least $1.2 billion in 2025 from crypto and memecoin-related businesses, according to his latest annual financial disclosure.
• NASA selected three more companies to send robotic landers to the moon as part of efforts to establish a lunar base before the end of the decade. 
• Get up to speed on what's moving global markets. 
• Here’s what you need to know to start your day.  

• @ZeroHedge

• RFK Jr. Announces He's Ending Emergency Liability Protection For COVID-19 Vaccine Makers. 
• El Nino Heat Wave Fuels HVAC Boom: Goldman Maps The Trade.
• San Francisco Archdiocese Agrees To $395 Million Abuse Settlement.
• Over the past two weeks, we have worked closely with Anthropic to analyze and approve Fable 5 to ensure alignment across the US Government and strengthen America’s leadership in AI.
• Everyone Sold Tech. Then This Happened.
• It’s Time To Stop Pretending That Migrants Are Entitled To Equal Citizenship.
• Democrat Politicians Are Being Attacked By The Woke Mob They Helped Create.
• Whistleblower Documents Highlight Serious Safety Concerns For NIH Virus Lab In Montana.
• Largest US Power Grid Declares Emergency To Prevent Blackouts.
• IRAN STATE TV CUTS OFF GHALIBAF LIVE, EXPOSING THE RIFT WITHIN ITS OWN REGIME. Iranian state TV abruptly cut off Parliament Speaker Mohammad Bagher Ghalibaf during a live interview as he addressed critics opposing negotiations with the United States. State TV later claimed the second part of the interview will air tomorrow. Iran’s political wing is trying to manage negotiations. The IRGC hardliners are signaling war. (video)                 
• *TRUMP OWNED AT LEAST $5M IN APPLE SHARES, DISCLOSURE SHOWS. *TRUMP BOUGHT AT LEAST $100,001 IN PLTR SHARES, DISCLOSURE SHOWS.
• Buffett Delays Midyear Donation To Gates Foundation Amid Epstein Controversy.
• Oman delivered a proposal to the US and other allies on the future of the Strait of Hormuz: CNN. The diplomat said the proposal, which has not been finalized, outlines a plan for shipping companies to pay service fees to use the strait, but they would not be called tolls. The diplomat did not elaborate on the difference between a service fee and a toll. Significant disagreements remain over the proposal, the diplomat said noting it is expected to be one of the topics discussed in Doha this week. Another regional source with knowledge of the negotiations said Oman is not pushing for a fee-based system in the strait. The US source said American negotiators have concerns about the proposal that they intend to discuss with the Omanis, though the source added that Oman has maintained its commitment to no tolling and that the proposal does not include mandatory tolls.
• The New Socialists: Elite, Ungrateful, And Toxic As Ever.
• U.S. HAS NOT RELEASED ANY OF THE $6B IN IRANIAN FROZEN FUNDS FOR HUMANITARIAN GOODS AS STIPULATED IN MOU AND WILL NOT DO SO UNTIL TEHRAN FULFILLS ITS OBLIGATIONS - NEW YORK POST CITING U.S. ADMINISTRATION OFFICIAL.
• *MAG 7 INDEX DROPS 8.9% IN JUNE, WORST MONTH SINCE MARCH 2025.
• War, Warsh, AI Worries, & Leverage Unwinds; Manic Markets Make Multi-Year Records In Q2/H1.                

• @CNBC

• CNBC Daily Open: AI demand fuels investors' portfolios while oil posts biggest monthly decline. 
• Wednesday's big stock stories: What’s likely to move the market in the next trading session.
• China-linked actors target more than technology as AI competition with U.S. intensifies.
• Dow futures dip after blue-chip index posts strongest first-half performance since 2021: Live updates.
• Palo Alto, CrowdStrike wrap best quarter ever as AI threats bolster cyber demand.
• Anthropic launches AI drug discovery program, joining tech giants in betting on healthcare.
• Amazon Web Services on Tuesday announced it is investing $1 billion in a new Forward Deployed Engineering unit that will help its customers build and roll out artificial intelligence systems. A forward-deployed engineer, or an FDE, is an employee who is embedded directly within a different business to try and accelerate a technical transformation. Defense contractor Palantir coined the term more than a decade ago, but it’s seen a resurgence among software vendors looking to boost adoption by taking talent directly into clients’ facilities.         

• @TheTranscript

• Nike CFO: "We delivered fourth quarter results in line with our expectations, demonstrating financial discipline in an increasingly challenging operating environment, where sell-through remains challenged". $NKE: -3% AH. 
• $AMZN Vice President of Agentic AI: "In Q1 of this year alone, Amazon Bedrock processed more requests than all the previous years combined".

• @WallStEngine

• $NKE Q4’26 EARNINGS HIGHLIGHTS.  Revenue: $10.972B (Est. $10.85B) ; -1% YoY.  Gross Margin: 49.2%; +890 bps.  EPS: $0.72; includes $0.52 benefit from expected IEEPA tariff recovery.  Wholesale: $6.6B; +4% reported.  NIKE Direct: $4.1B; -7% reported.  Net Income: $1.1B; +407% YoY...
• Bloom Energy $BE and Brookfield expanded their AI infrastructure power partnership from $5B to $25B, a fivefold increase since October 2025. 
• Physical AI stocks are having a big day today. “The next frontier of AI is physical AI. AI is now beginning to understand the laws of physics.” — $NVDA CEO Jensen Huang. 

Night Trading 

• Asian equity indices are -.5% to +.5% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.75 unch. 
• China Sovereign CDS 37.25 unch.
• China Iron Ore Spot 97.80 USD/Metric Tonne -1.3%. 
• Crude Oil 69.75/bbl. +.4% 
• Gold 3,997.0 USD/t oz. -1.0%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.40 -.03%.
• Bloomberg Emerging Markets Currency Index 34.69 -.09%.
• Bloomberg Global Risk-On/Risk Off Index 124.0 +.7%.
• US 10-Year Yield 4.47% unch.
• Japan 30-Year Yield 3.97% +3.0 basis points. 
• Volatility Index(VIX) futures 18.2 +1.4%.
• Euro Stoxx 50 futures -.14%. 
• S&P 500 futures -.28%.
• NASDAQ 100 futures -.36%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly higher, boosted by technology and industrial shares in the region. I expect US stocks to open modestly lower and to rally into the afternoon, finishing mixed.  The Portfolio is 100% net long heading into the day.