Wednesday Watch

Around X:

• @Business  

• Treasury Secretary Scott Bessent signaled confidence in newly installed Federal Reserve Chairman Kevin Warsh during remarks Tuesday, and predicted that inflation will retreat as the Iran conflict subsides. 
• The Bank of Japan signaled the need for further increases to the benchmark interest rate in a summary of opinions from a last week’s board meeting, when authorities raised the policy rate to the highest since 1995. 
• South Korea’s central bank reinforced its hawkish shift, saying higher interest rates will be needed at an appropriate time as rising home prices, household debt and leveraged investment threaten to stoke financial imbalances.
• Australia’s core inflation remained above the top of the Reserve Bank’s target in May, reinforcing expectations policymakers will maintain a hawkish stance on interest rates. 
• Oil held declines as more tankers openly cross the Strait of Hormuz, with the US and Iran making progress toward ending the war.
• Here’s what you need to know to start your day.  

• @ZeroHedge

• Lutnick Eyes Crackdown On Chinese Humanoid Robots. 
• Today, the first milestone test of Golden Dome for America (GDA) was a full mission success — and I was honored to witness it firsthand. Cutting edge directed energy was harnessed and the Dynamic Defense Autonomous Defeat (DDAD) system flawlessly and autonomously cued, targeted, and eliminated a multitude of incoming threats. This test was executed on schedule — and dynamically defeated every threat. I watched our elite warfighters integrate with next-generation technology to stop incoming drones and cruise missiles dead in their tracks..
• CBRS CEO Andrew Feldman: "biggest challenge right now is getting enough data center space. It’s a grand irony that after all this technology that we’ve invented, and Nvidia’s invented, buildings are the limiting factor." 
• Hedge fund mood remains dire. The GS Hedge Fund VIP less Most Shorted basket (80:20 L/S proxy) is at 3 year lows after declining non stop since early 2025. Why momentum is only strategy that works: HFs pile into a handful of names (to catch up) then unpile. Rinse, repeat. 
• *BESSENT: US HOUSING IS CONUNDRUM, AFFECTED BY RATE-LOCK OWNERS.
• *BESSENT: ALREADY SEEING THE ECONOMIC GROWTH THAT AI CAN BRING.
• *ICE COURTHOUSE ARRESTS BLOCKED NATIONWIDE BY COURT: BLAW.
• Morgan Stanley's private credit fund, the North Haven Private Income Fund, is latest to gate investors in Q2 (it also did so in Q1) after getting 11.6% in redemption requests, up from 10.9% in Q1.
• Also, it looks like the AI capex spending recipients are about to start a massive capex spending spree of their own: Samsung Electronics and SK HYNIX are reviewing ways to expand semiconductor cluster investments in the Honam and Chungcheong region, southern provinces of the country. Investment on the scale of hundreds of trillions of won is said to be discussed including both memory & semi production plants: Chosun.
• Everyone about to dump on Korea retail: Goldman's top 5 buy/sell names by group.
• Trump Admin Kicks Off American Nuclear Renaissance With $17.5 Billion Loan Program For Reactor Projects.
• According to Syrian TV, a group of Israeli soldiers, along with five military and personnel carriers, have entered the village of Al-Mashida in the south of Quneitra province: IRNA.
• *TREASURY SECRETARY BESSENT CALLS FOR US SUPPLY CHAIN SECURITY *BESSENT: US MUST AVOID VULNERABILITY TO ANY FOREIGN CHOKEPOINT.
• Automakers Race Into Humanoid Robots As Timeline For Blue-Collar Job Disruption Emerges.
• Biden’s pardon of Fauci is unconstitutionally vague, covers 10 years of potential crimes, and was signed by autopen without Biden’s direct authorization. -@SenRandPaul.
• KOSPI index volatility is implying daily moves of nearly 6%. Now apply leverage….
• Nothing is broken yet. But the number of things that need to go right is increasing. 
• DXY has broken out. The last time the setup looked this similar was autumn 2021.
• The Decline Of Mainstream Media: From COVID To Capital Markets.         
• China’s CXMT Is Set to Challenge DRAM Incumbents. CXMT IPO, SK Hynix, Micron, Samsung Competition, Process Node Deficit, China HBM, Wafer Adds, Memory LTAs.
• From Bartenders To Builders: Data Centers Drive America's Blue-Collar Comeback.
• How Can We Restore Trusted Elections?
• damage control. *SAMSUNG JUMPS 10% AFTER REPORT ON 90T WON SHARE BUYBACK PLAN. *SAMSUNG MAY ANNOUNCE 90T WON SHARE BUYBACK FOR BONUSES: YONHAP.
• US Tech Trounced, Bonds Bid As A Korean Butterfly Flaps Its Wings....     

• @CNBC

• Wednesday's big stock stories: What’s likely to move the market in the next trading session.          
• MSCI keeps South Korea as emerging market, delays Indonesia review amid downgrade risk. 
• S&P 500 futures tick higher as traders look to recover from tech-led sell-off: Live updates.
• Alphabet added to Dow Jones Industrial Average, replacing Verizon.
• Stocks making the biggest moves after hours: FedEx, Cerebras, KB Home & more.
• Bill Gates testimony on Jeffrey Epstein ties released by House oversight panel.
• FedEx posts strong earnings results in last quarter with freight business.
• Cerebras reports 92% revenue growth in chipmaker's first earnings report since IPO.     

Night Trading 

• Asian equity indices are -.75% to +.25% on average. 
• Asia Ex-Japan Investment Grade CDS Index 67.75 +1.5 basis points. 
• China Sovereign CDS 38.0 unch.
• China Iron Ore Spot 97.95 USD/Metric Tonne +.53%. 
• Crude Oil 72.33/bbl. -1.2% 
• Gold 4,073.40 USD/t oz. -1.8%. 
• Swiss Franc/Offshore Chinese Renminbi Cross 8.39 +.04%.
• Bloomberg Emerging Markets Currency Index 34.82 -.07%.
• Bloomberg Global Risk-On/Risk Off Index 121.2 +.3%.
• US 10-Year Yield 4.49% -1.0 basis point.
• Japan 30-Year Yield 3.88% +3.0 basis points. 
• Volatility Index(VIX) futures 19.6 +.2%.
• Euro Stoxx 50 futures -.38%. 
• S&P 500 futures -.10%.
• NASDAQ 100 futures -.11%.

Morning Preview Links

BOTTOM LINE: Asian indices are mostly lower, weighed down by technology and industrial shares in the region. I expect US stocks to open mixed and to weaken into the afternoon, finishing modestly lower.  The Portfolio is 25% net long heading into the day.