Wisconsin Supreme Court Votes 4–3 To Invalidate State Abortion Law

Authored by Matthew Vadum via The Epoch Times,

The Wisconsin Supreme Court voted 4–3 on July 2 to strike down the state’s 176-year-old almost-total ban on abortion.

Justice Rebecca Frank Dallet wrote the majority opinion.

“We conclude that comprehensive legislation enacted over the last 50 years regulating in detail the ‘who, what, where, when, and how’ of abortion so thoroughly covers the entire subject of abortion that it was meant as a substitute for the 19th century near-total ban on abortion,” Dallet wrote.

“Accordingly, we hold that the legislature impliedly repealed [Section] 940.04(1) as to abortion, and that [Section] 940.04(1) therefore does not ban abortion in the State of Wisconsin.”

The new ruling came three years after the U.S. Supreme Court issued its ruling in Dobbs v. Jackson Women’s Health Organization. Dobbs overturned Roe v. Wade (1973), holding that the U.S. Constitution does not guarantee a right to abortion. The rule returned the regulation of the procedure to the states.

The Dobbs ruling prompted a blizzard of state-level legislation either to restrict or preserve abortion access.

Planned Parenthood, along with several women using pseudonyms, asked the court in February 2024 to invalidate Wisconsin’s current abortion law.

They argued that it violated the rights of patients and medical doctors under the state’s constitution.

The Wisconsin Supreme Court agreed in July 2024 to hear two lawsuits challenging the state’s 1849 abortion law. The statute states that anyone “other than the mother, who intentionally destroys the life of an unborn child is guilty” of a felony.

“In granting this case, this court is doing what many other state courts have done, both before and after Dobbs v. Jackson—considering a state constitutional challenge to an abortion-related statute,” Justice Jill Karofsky wrote in the court order a year ago.

“Deciding important state constitutional questions is not unusual - it’s this court’s job.”

Tyler Durden Wed, 07/02/2025 - 14:00

Iran Reportedly Made Plans To Litter Strait Of Hormuz With Naval Mines

The U.S. launched "Operation Midnight Hammer" on June 22, deploying stealth bombers to strike Iran's nuclear facilities at Fordow, Natanz, and Isfahan using Massive Ordnance Penetrator bombs. President Trump declared the sites were "totally obliterated." In retaliation, Iran's parliament voted to authorize the closure of the Strait of Hormuz—a critical maritime chokepoint through which 20% of the world's oil flows—sparking renewed anxiety among global energy traders over the threat to vital tanker lanes.

As readers understand, any move by Iran to close the critical waterway would instantly disrupt nearly one-fifth of the world's oil shipments and trigger substantial—and potentially cascading—economic harm (energy inflation) worldwide. However, those threats ultimately fell short in the days that followed, and Brent crude futures have since returned to the $67-a-barrel level, effectively roundtripping the entire move.

Iran has several military and asymmetric tools at its disposal to disrupt or close the Strait of Hormuz, including:

• Naval Mines

• Fast Attack Boats & Swarm Tactics

• Anti-Ship Missiles

• Submarine Operations

• Seizing or Boarding Tankers

• Shore-Based Artillery or Rocket Attacks or Drone Strikes 

• GPS Scrambling 

• Cyberattacks on Port Infrastructure

• Coordinated Proxy Attacks

In the lead-up to and during Operation Midnight Hammer, widespread GPS interference was reported across the Strait of Hormuz. Multiple sources we highlighted indicated a noticeable slowdown in tanker traffic, as navigation systems were degraded and insurance premiums for vessels surged.

A new Reuters report, citing anonymous U.S. officials, reveals that intelligence indicated Tehran was preparing to blockade the Strait of Hormuz using one of its most effective and low-cost tactics: littering the narrow shipping corridor with naval mines.

More color on the report:

The previously unreported preparations, which were detected by U.S. intelligence, occurred some time after Israel launched its initial missile attack against Iran on June 13, said the officials, who requested anonymity to discuss sensitive intelligence matters.

The loading of the mines - which have not been deployed in the strait - suggests that Tehran may have been serious about closing one of the world's busiest shipping lanes, a move that would have escalated an already-spiraling conflict and severely hobbled global commerce.

. . . 

Reuters was not able to determine precisely when during the Israel-Iran air war Tehran loaded the mines, which - if deployed - would have effectively stopped ships from moving through the key thoroughfare.

It is also unclear if the mines have since been unloaded.

The sources did not disclose how the United States determined that the mines had been put on the Iranian vessels, but such intelligence is typically gathered through satellite imagery, clandestine human sources or a combination of both methods.

. . .

The two officials said the U.S. government has not ruled out the possibility that loading the mines was a ruse. The Iranians could have prepared the mines to convince Washington that Tehran was serious about closing the strait, but without intending to do so, the officials said.

Israel's 12-day war with Iran and Tehran's ultimately hollow threat (so far) to close the Strait of Hormuz appear to have had limited lasting impact on global oil markets, reflected in Brent crude trading around $68 on Wednesday afternoon.

Tyler Durden Wed, 07/02/2025 - 13:40

RFK Jr. Says Officials 'Revolutionizing The Vaccine Injury Compensation Program'

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Federal officials are working on revamping the program that provides compensation for people who suffer injuries from vaccines, Health Secretary Robert F. Kennedy Jr. said on June 30.

Health Secretary Robert F. Kennedy Jr. testifies on Capitol Hill in Washington on June 24, 2025. Madalina Kilroy/The Epoch Times

“We just brought a guy in this week who is going to be revolutionizing the Vaccine Injury Compensation Program,” Kennedy said during an interview with former Fox News host Tucker Carlson.

The National Vaccine Injury Compensation Program was established as part of the National Childhood Vaccine Injury Act of 1986. That law also granted vaccine manufacturers immunity from lawsuits. Under the program, injury claims are lodged with judges, who decide whether to grant payouts after hearing from petitioners and the government.

Department of Justice attorneys, representing the Department of Health and Human Services—the department Kennedy heads—often present evidence opposing the claims.

The program has since 2006 awarded money, drawn from surcharges on vaccines to more than 13,000 people.

Claims of injury from COVID-19 vaccines are currently filed with the Countermeasures Injury Compensation Program, a separate program established by a 2005 law. The Department of Health solely administers that program by receiving petitions, analyzing them, and making determinations, creating what researchers said in 2022 was a potential conflict of interest.

The department has rejected claims from some people whose doctors diagnosed them with vaccine injuries, The Epoch Times reported in 2023. Just 39 COVID-19 vaccine claims have been compensated as of June 1, with all but four receiving less than $9,000.

Multiple lawmakers and lawyers have advocated moving COVID-19 vaccines to the Vaccine Injury Compensation Program so that people with injuries have a better chance of receiving compensation and, if they’re paid, can receive more money.

“We’re looking at ways to enlarge that program so that COVID-vaccine-injured people can be compensated,” Kennedy told Carlson.

Kennedy also said officials are looking at methods to enlarge the statute of limitations, which is currently only three years.

“A lot of people don’t discover their injuries until after that,” he said.

“And there’s no discovery in that program, there’s no rules of evidence. The program has devolved into lawyers from the justice—you’re not suing the vaccine company, you’re petitioning my agency, and it’s represented traditionally by the Department of Justice—and the lawyers in the Department of Justice, the leaders of it were corrupt, and ... they saw their job as protecting the trust fund rather than taking care of people who made this national sacrifice. And we’re going to change all that.”

The Department of Justice did not respond to a request for comment.

Safety of mRNA

Carlson asked Kennedy later about whether he’s satisfied that messenger ribonucleic acid (mRNA) technology is safe.

“I am not satisfied,” Kennedy said. “My opinion about that is irrelevant, but we will be doing those studies, and I would say there’s a lot of skepticism in this agency about mRNA vaccines.”

Two of the three vaccines against COVID-19 utilize mRNA technology, while regulators with the Food and Drug Administration, a division of Kennedy’s department, recently approved a third for certain populations. They said the vaccine protects against COVID-19 and that recipients have a small chance of suffering side effects.

Regulators previously approved the two existing vaccines after clinical trials found they conferred shielding against COVID-19. Participants who received a vaccine were more likely to experience adverse events such as headaches.

Some additional safety issues have since been identified, including heart inflammation.

Kennedy said that safety studies “simply have not been done, but there is [sic] enough anecdotal reports of people getting profound injuries that may or may not be associated with it, and we’re going to answer those questions.”

A Department of Health and Human Services spokesperson told The Epoch Times in May that “mRNA technology remains under-tested” and has been linked to “legitimate safety concerns.”

The vaccine manufacturers have maintained that their vaccines are safe and effective.

Tyler Durden Wed, 07/02/2025 - 13:20

Not Just The EPA: Despite Warnings, Biden's Energy Department Disbursed $42 Billion In Its Final Hours

Authored by James Varney via RealClearInvestigations,

In its last two working days, the Biden administration’s Energy Department signed off on nearly $42 billion for green energy projects – a sum that exceeded the total amount its Loan Programs Office (LPO) had put out in the past decade.

The frenzied activity on Jan. 16 and 17, 2025, capped a spending binge that saw the LPO approve at least $93 billion in current and future disbursements after Vice President Kamala Harris lost the 2024 election in November, according to documents provided by the department to RealClearInvestigations. It appears that Biden officials were rushing to deploy billions in approved funding in anticipation that the incoming Trump administration would seek to redirect uncommitted money away from clean energy projects.

The agreements were made despite a warning from the department’s inspector general, urging the loan office to suspend operations in December over concerns that post-election loans could present conflicts of interest. 

In just a few months, some of the deals have already become dicey, leading to fears that the Biden administration has created multiple Solyndras, the green energy company that went bankrupt after the Obama administration gave it $570 million. These deals include:

• Sunnova, a rooftop solar outfit that thus far had $382 million of its $3.3 billion loan guaranteed, filed for bankruptcy this month. The company did not respond to a request for comment.
• Li-Cycle, a battery recycling facility, had a $445 million loan approved in November, but since then, the company was put up for sale and has filed for bankruptcy. The Energy Department said no money has been disbursed on that deal. Li-Cycle did not respond to a request for comment.
• A $705 million loan was approved on Jan. 17 for Zum Energy, an electric school bus company in California, and its “Project Marigold.” At $350,000 and more, electric school buses currently cost more than twice as much as their diesel counterparts. So far, Zum has received $21.7 million from the government, according to usaspending.gov. The company did not respond to a request for comment.
• A $9.63 billion Blue Oval SK loan on Jan. 16 was the second largest post-election deal, topped only by a $15 billion loan the next day to Pacific Gas & Electric, with most of that for renewables. The Blue Oval project in Kentucky – a joint venture between Ford Motor Co. and a South Korean entity – has been dealing with numerous workplace complaints, and construction of a second EV battery manufacturing plant there has been delayed. More than $7 billion has been obligated on that deal, according to the Energy Department. Blue Oval did not respond to a request for comment.

The money and the hasty way in which it was earmarked have drawn the attention of the Trump administration. “It is extremely concerning how many dozens of billions of dollars were rushed out the door without proper due diligence in the final days of the Biden administration,” Energy Secretary Chris Wright said in a statement to RCI. “DOE is undertaking a thorough review of financial assistance that identifies waste of taxpayer dollars.”

The enormous sums came from the 2022 Inflation Reduction Act, which injected $400 billion into the LPO, a previously sleepy Energy Department branch originally intended to spur nuclear energy projects. That total represented more than 10 times the amount the LPO had ever committed in any fiscal year of its existence. Prior to the post-election blowout, the office’s biggest fiscal year was 2024, when it committed $34.8 billion, records show.

Even with the rush to push billions out the door in its last months, close to $300 billion of the Inflation Reduction Act money remains uncommitted by the LPO. Trump administration officials have already nixed some smaller deals. Secretary Wright recently urged Congress to keep the money in place as the LPO now aims to use it to further the Trump administration’s energy policy, particularly with nuclear projects.

That unprecedented gusher of cash from the LPO echoes the efforts of the Biden administration’s Environmental Protection Agency to push $20 billion out the door before it left office. As RCI has previously reported, the EPA – which had never been a consequential grant-making operation – was tasked with awarding $27 billion in Inflation Reduction Act funding through the Greenhouse Gas Reduction Fund and Solar For All programs. It did so in less than six months in 2024, including an unorthodox arrangement in which Biden officials parked some $20 billion outside the Treasury’s control. That money was earmarked for a handful of nonprofits, some of which had skimpy assets and were linked with politically connected directors.

The LPO’s post-election bonanza was put together in even less time. The Energy Department deals, however, involve mostly for-profit enterprises, which raises questions about whether the Biden administration was propping up companies that would not have survived in the private marketplace. Should any of the companies hit it big in the future, shareholders could get rich, while taxpayers will receive only the interest on the loan.

“The loan office should not be in the virtual venture business,” said Mark Mills, executive director of the National Center on Energy Analytics. “But in a few cases, it could make sense to serve as a catalyst or backstop for viable and important projects from a national security or policy perspective.”

RCI spoke with several Trump administration officials who declined to comment on the record, given the extensive ongoing review of both the LPO’s post-election arrangements and other Energy Department projects linked to Biden’s climate agenda.

“They wanted to get the billions to companies that probably wouldn’t exist unless they could get money from the government,” one current official said. “The business plans, such as they were, were ‘how do we secure capital from the government?’”

During Biden’s tenure, the office was run by Jigar Shah, who on June 17 was named to the board of directors of the nonprofit Center for Sustainable Energy. Bloomberg News reported last month that Shah “helped select roughly 400 companies with development plans to receive grants and loans upwards of $100 million each.” In response to the Trump administration’s pushback on green subsidies, Bloomberg reported that Shah is working to help some of the companies he bankrolled shift operations to Europe.

The Center relies chiefly on government contracts instead of donations, and it saw that revenue jump from $274.1 million in 2023 to more than $500 million in 2024, according to tax records. The center did not respond to a request to speak with Shah.

Thus far, no entity has received the entire amount of the deals the Biden administration struck since last November, according to the Energy Department and usaspending.gov. In a handful of cases, companies have come to the current administration and opted out of the deals.

Still, millions of taxpayer dollars have already been distributed, in some instances, to deals the department listed as “conditional commitments.”  Wright has said there are “reasons to be worried and suspicious” about the post-election binge, and vowed some of the deals will be scrubbed. 

In 2023, the Biden administration made subtle changes to the LPO’s regulations, cutting strings and stipulations that traditionally attach to loans. Consequently, the office cut deals after the election on terms more favorable to the recipient than the taxpayer, and in several cases, making a “conditional commitment” the same as a loan, according to Trump officials. The changes also moved money that a later administration could have cut into “obligated” silos, making the deals harder to cancel, according to the current Energy Department.

“Essentially, they had the Loan Program Office operating like a graveyard energy venture capital fund,” one Trump official told RCI. “This was all tied to the religious fervor for any green energy project in the prior administration, and the goal was not to get the government repaid but to advance the ‘green new deal.’”

The $93 billion under review represents a separate “green bank” from smaller Biden administration deals that the Energy Department has already canceled. Last month, the Government Accounting Office said the department was not on track to “issue loans and guarantees before billions of dollars of new funding expires.”

As part of the review, Wright issued policy guidelines in May that he said offer more protection to taxpayers. The department may now require significantly more information from loan recipients and applicants, such as “a project’s financial health, a project’s technological and engineering viability, market conditions, compliance with award terms and conditions and compliance with legal requirements, including those related to national security.”

The department declined to provide the terms of specific deals, again citing the ongoing review. Trump administration officials claim the business plans for many of these deals were threadbare, that term sheets were essentially tossed out, and the entire process could be described, in the words of a Biden EPA official in December, as “throwing gold bars” off the Titanic “as an insurance policy against Trump winning.”

Despite these dubious outcomes and the alleged removal of taxpayer protections that accompanied the deals, Trump administration officials said they remain committed to the LPO. The office has a valuable role to play in fulfilling energy policy goals, which include nuclear projects, strengthening the nation’s power grid, and limiting the U.S. reliance on Chinese supply chains for key minerals and elements.

“It’s as if you went away and the kids threw a rager in the house,” one official told RCI. “You may need some new furniture and the like, but it’s still a really nice home. The Office can be a critical resource for the manufacturing base of this country, and our goal is not to end the LPO but to improve it.”

The Trump administration could face some of the same financial issues if it rejiggers the LPO along lines that support its energy policy goals, particularly within the nuclear industry. Projects there have been marred by unprofitable plants and massive cost overruns and delays in construction, making federal loans to the section inherently risky. 

Prominent voices – and investors –  like Bill Gates have also encouraged the government to back new sources of energy and minerals. Geothermal projects are one such field, and there appears to be bipartisan support in Washington for capital that will shore up U.S. energy independence. On Jan. 15, the Biden administration approved a $1.2 billion “conditional commitment” with a subsidiary of EnergySource Minerals LLC (ESM), which hopes to extract lithium from geothermal brine.

A deal with ioneer Ltd. appears to match some of the professed goals of the Trump administration, but it has also been plagued by financial setbacks since Biden’s LPO approved it in its final days. The company's deal grew from an original $700 million "conditional commitment" in 2023, to the $996 million approved on Jan. 17, 2025."

The Rhyolite Ridge project is a mining and manufacturing center in Nevada to produce lithium and boron. Those elements have implications for defense and national security in addition to energy, according to ioneer Vice President Chad Yeftich. 

“Ioneer believes government policy should encourage projects if we want critical minerals developed domestically,” Yeftich said. “Time is the key risk for development as China continues to provide financial support to its critical minerals industry and dump critical minerals into the market thereby depressing the price.”

Yeftich noted Rhyolite Ridge has secured $200 million in private capital, but in February, its chief private equity partner broke ties with the project. Finance professionals familiar with big deals told RCI that such a rupture so close in timing to the loan would likely deep-six the arrangement, but Trump officials said Biden’s LPO stripped such boilerplate language from many of the post-election deals. 

Secretary Wright told RCI that these maneuvers suggested the previous administration was more interested in disbursing funds than protecting taxpayers. “Any reputable business would have a process in place for evaluating spending and investments before money goes out the door, and the American people deserve no less from their federal government.”

Tyler Durden Wed, 07/02/2025 - 12:40

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure.

More recently, immigration policy has become a negative for rentals.

Apartment List: Asking Rent Growth -0.7% Year-over-year ...

The national multifamily vacancy rate currently stands at 7%, the highest reading we've recorded in our index. We're past the peak of a multifamily construction surge, but the market is still absorbing all of the new units, and vacancies are still trending up.

Realtor.com: 22nd Consecutive Month with Year-over-year Decline in Rents

In May 2025, U.S. median rent posted its 22nd consecutive year-over-year decline, dropping 1.7% for 0-2 bedroom properties across the 50 largest metropolitan areas.

This is much more in the article.

July 4th Gas Prices Lowest In 4 Years

Authored by Wesley Brown via The Epoch Times,

Nearly 72 million people are expected to travel during the Fourth of July holiday, likely leading to crowded highway traffic and congested airports across the United States. However, holiday travelers should also see lower gas prices and airfares as they go to their Independence Day destinations, experts say.

Nationally, AAA Travel, the travel‐services arm of the American Automobile Association, forecasts that 72.2 million people will travel at least 50 miles from home during the Independence Day holiday period from June 28 to July 6. This year’s domestic travel projection is 1.7 million more travelers than last year and 7 million more than in 2019.

“Summertime is one of the busiest travel seasons of the year, and July 4th is one of the most popular times to get away,” Stacey Barber, vice president of AAA Travel, said.

“Following Memorial Day’s record forecast, AAA is seeing strong demand for road trips and air travel over Independence Day week. With the holiday falling on a Friday, travelers have the option of making it a long weekend or taking the entire week to make memories with family and friends.”

AAA’s annual Independence Day forecast now includes two weekends instead of one, better reflecting the flow of holiday travelers, officials said. However, the U.S. Transportation Security Administration’s travel projections for the airline industry run from July 1 through July 7, with the highest passenger volume—about 2.9 million—expected on July 6.

According to Transportation Security Administration (TSA) officials, airports across the United States expect the highest passenger numbers ever for the nation’s 249th birthday. TSA staff at airports nationwide said they are prepared to screen more than 18.5 million travelers at the country’s security checkpoints.

Already on June 22, the TSA reported that it screened nearly 3.1 million travelers, the busiest single day number in the agency’s history, and more than 40 days after REAL ID enforcement came into full force at airport checkpoints nationwide on May 7.

“TSA continues to work closely with our industry partners and ensure our airport security checkpoints are fully staffed and prepared to handle the heavy rush of traffic,” TSA acting Administrator Ha Nguyen McNeill said in a statement provided to The Epoch Times.

“We are deploying technologies and procedures to improve security and enhance the passenger experience, including for families. We ask travelers to pack their patience, especially during peak travel days, as we work to provide maximum hospitality to our customers,” McNeil said, noting that nearly 94 percent of passengers are presenting a REAL ID or another acceptable form of ID to travel domestically in the United States.

Ahead of the holiday travel season, the Federal Aviation Administration (FAA) is predicting the busiest Fourth of July week in 15 years, with July 3 expected to see more than 51,000 domestic and international flights. Airlines for America (A4A) is also forecasting another record-breaking summer travel season, projecting that the nation’s top airlines will carry 272 million passengers from June 1 through August 31.

To accommodate this demand, A4A spokeswoman Amanda Maile told The Epoch Times that U.S. airlines are operating 27,000 flights daily—up by 4 percent from last year.

“Premium and international demand this summer are expected to remain strong, with the top foreign destinations for U.S. airlines projected to be Mexico, Canada, Dominican Republic, United Kingdom and Italy,” she said.

Meanwhile, U.S. motorists on the busy highways will notice slightly higher gas prices compared to a month ago, but still significantly lower than the Fourth of July travel period in 2024, according to AAA’s weekly gas price report.

As of this week, the national average for a gallon of regular gasoline is $3.22, five cents more than a month ago before crude oil prices started rising again after U.S. airstrikes targeted Iran nuclear facilities.

However, pump prices remain 27 cents cheaper than this time last year and the lowest for the July 4th weekend since 2021...

The nation’s 10 most expensive gasoline markets are California ($4.62), Hawaii ($4.47), Washington ($4.45), Oregon ($4.06), Nevada ($3.81), Alaska ($3.74), Illinois ($3.49), Idaho ($3.43), Pennsylvania ($3.39), and Utah ($3.37).

The 10 least expensive markets are Mississippi ($2.73), Oklahoma ($2.81), Texas ($2.82), Tennessee ($2.82), Louisiana ($2.82), Arkansas ($2.83), Alabama ($2.84), Missouri ($2.85), South Carolina ($2.91), and Kansas ($2.91).

For electric vehicle drivers, the national average price per kilowatt-hour of electricity at a public EV charging station remained steady this past week at 36 cents, according to AAA data.

The top 10 most expensive states for EV charging rates per hour are West Virginia (51 cents), Alaska (51 cents), Tennessee (47 cents), Montana (46 cents), Hawaii (45 cents), North Dakota (42 cents), New Hampshire (42 cents), Kentucky (42 cents), South Carolina (42 cents), and Louisiana (42 cents).

The nation’s top 10 least expensive states for EV rates during the holiday are Kansas (26 cents), Missouri (27 cents), Maryland (27 cents), Nebraska (30 cents), Delaware (30 cents), Utah (30 cents), Iowa (32 cents), Washington, D.C. (32 cents), Colorado (33 cents), and North Carolina (33 cents).

Tyler Durden Wed, 07/02/2025 - 11:25

Trump Announces Trade Deal With Vietnam; Includes 20% Tariffs, 40% Tax On Transshipping

With just one week left until the July 9 trade deal deadline, which some suspect could have a similar adverse impact on markets as the first Liberation Day - even if stocks are completely oblivious to the risk - moments ago Trump gave a stark reminder just how high the trade stakes are when he announced that the US has made a trade deal with Vietnam.

According to the terms, Vietnam will pay the United States:

• 20% Tariff on any and all goods sent into our Territory,
• 40% Tariff on any Transshipping, which is squarely aimed at China which uses Vietnam as a reshipment/tolling hub.  

Of the two, one can argue that the transshipment clause is more important because in recent weeks China had threatened that any country that makes a deal with the US at its expense would make it very angry. Which means that Xi is now terribly vexed. 

 

In any case, in return for the tariffs, Trump said that "Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will “OPEN THEIR MARKET TO THE UNITED STATES,” meaning that, we will be able to sell our product into Vietnam at ZERO Tariff."

Which is hardly a big deal, since the US barely exports to Vietnam.

what does matter is that a deal has been struck however, and now many other Asian countries will scramble to do the same, even if it is at terms that antagonize China (like in this case). Amusingly,  Trump said that as a result of the deal, US SUVs will be a "wonderful addition" to various product lines within Vietnam.

It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure. 

While stocks initially dipped on seeing the 20% print, they have since rebounded and recovered all losses, and trade at session highs, as algos remain completely oblivious that behind the scenes, huge tension is once again building up between the US and China, which is negotiating deals that Beijing will view as offensive, making the odds of an actual trade deal with Beijing much lower than most expect. 

Tyler Durden Wed, 07/02/2025 - 11:04

Centene Crashes Most On Record, Sparks Selloff In Managed Care Stocks

Update (1100ET):

Centene, one of the largest health insurers in the U.S., crashed in early trading in New York after withdrawing its 2025 guidance, citing new data from an independent actuarial firm that revealed weaker-than-expected trends in its Affordable Care Act marketplaces and mounting Medicaid costs.

Shares in New York crashed as much as 40% by 10:30 a.m. ET—marking the largest single-day decline in the stock's history. Centene first traded in its initial public offering on December 13, 2001, at $14 per share.

Roundtrip.

Latest analyst ratings via Bloomberg data.

Who owns the most of Centene stock?

Centene's shockwave sparked selling across the healthcare sector. 

*  *  * 

 

Centene shares crashed in premarket trading after the health insurer withdrew its 2025 guidance due to weaker-than-expected trends in the Affordable Care Act Marketplace and ongoing Medicaid cost pressures. The health insurer warned of a $1.8 billion earnings headwind, prompting downgrades from Wall Street. 

Centene, one of the largest health insurers in the U.S., disclosed on Tuesday evening new data from an independent actuarial firm, Wakely, covering about 72% of its ACA Marketplace membership, revealed significantly worse-than-expected results.

Wakely's data reveals:

• Lower-than-expected market growth and

• Much higher aggregate morbidity than Centene had assumed for its risk adjustment revenue.

As a result, Centene now preliminarily estimates a $1.8 billion reduction in its net risk adjustment revenue for 2025, translating into a $2.75 hit to adjusted diluted EPS. According to FactSet data, Wall Street analysts had expected full-year adjusted earnings of around $7.28 a share. 

"The Company does not have information or estimates for its remaining seven Marketplace states, but anticipates, due to the morbidity trends observed in the 22 states, an additional reduction to its net risk adjustment revenue transfer expectation with a corresponding adjusted diluted EPS impact," Centene stated in a press release.

Another industry bellwether, UnitedHealth, recently slashed its full-year guidance and replaced its chief executive. Higher-than-expected medical costs have sparked broader concerns across the entire insurance sector.

Analysts were full of gloom, with UBS cutting its rating on Centene to neutral, citing significantly weaker near-term earnings.

Here are first takes from Wall Street (courtesy of Bloomberg):

UBS (neutral)

• UBS cuts Centene to neutral from buy immediately following the withdrawn guidance; broker now sees 2025/2026 EPS at $3.25, representing a 55% decline

• "With the unexpected risk adjustment results in Marketplace and persistent Medicaid cost trends, the company's risk near term earnings has been significantly reduced"

JPMorgan (neutral)

• Analyst John Stansel cuts to neutral from overweight following news; says new price target of $48 from €75 reflects estimated ACA headwinds as well as "incremental" Medicaid pressure, "assuming that CNC is able to reprice at least a portion of its book into 2026"

• Says any information on Centene's approach to the ACA Marketplace in 2026 and recent regulatory changes will be key when company reports earnings on July 25

Barclays (equalweight)

• Analyst Andrew Mok calls ACA update "materially negative;" says it comes after recently-received industry data that showed Centene's cited membership growth was lower than expected, "likely driven by integrity rules"

• Adds that implied morbidity was "significantly higher" than Centene's expectations, driving an earnings headwind of as much as $1.8 billion for 2025, representing a $2.75 EPS impact

Jefferies (hold)

• Analyst David Windley says Centene's move confirms Jefferies fears that the prior-year 2025 risk pool is "deteriorating and plans have mispriced the risk pool" with firms assuming healthy growth

• "Investors should remember that CNC's risk adjustment is moving unfavorably because others' books are feeling claims pressure," Windley flags

Centene shares plunged as much as 27% in premarket trading in New York, hitting levels last seen in 2017. As of Tuesday's close, the stock was down roughly 6.5% year-to-date.

. . .

Tyler Durden Wed, 07/02/2025 - 11:00

Tariff Derangement Syndrome(s)

By Michael Every of Rabobank

Stocks continued to hit all-time highs yesterday even as the balance of op-eds in financial media talk about the collapse of the liberal world order and threats to liberal democracy itself. Both can be true simultaneously, but caveat emptor on the asset and op-ed side. German stocks sold off when Hitler assumed power then rallied until the Battle of Stalingrad… at which point those trades literally blew up; and if every op-ed writer who deserved it got real egg on their face, the price of that staple would be soaring again. Yet today Bloomberg claims stock traders fear missing out on this rally more than any looming tariffs, “because markets.”

In their corner now is “Main Street not Wall Street’ US Treasury Secretary Bessent, who just attacked the Fed’s “Tariff Derangement Syndrome” to also call for rate cuts. That’s as Fed Chair Powell admitted the FOMC had gone on hold due to the size of the US tariffs being floated, then hinted at a rate cut as soon as this month.

Who can blame markets for a ‘buy all the things’ response to such a potential pivot? Yet there is that pesky tariff issue to overcome first, and de range of potential outcomes there is de syndrome we need to focus on. What we’ve seen in data so far reflects a universal tariff of 10% for everyone but China, who faces around 50%, and Beijing then dumping goods that were heading to the US on the EU, acting as a deflationary force – but one that will ultimately be rejected by trade actions. If tariffs change, the data will change. In short, for markets if not central banks, wait and see is not necessarily a bad option in a potentially crucial week.

Indeed, President Trump just said he won’t extend the July 9 deadline to strike trade deals, and even close allies like Japan could face higher tariffs. Moreover, while we just had insider whispers that the EU accepts the best it can get is a 10% universal tariff and quota exemptions for sectoral tariffs, there are others that it will now take a harder line. Clearly, different journalists are being fed different lines by different stakeholders – and that lack of unity is Europe’s problem in a nutshell. However, it's also the Fed’s… and the ECB’s, BOJ’s, BOE’s, BOC’s, PBOC’s, etc.

Also note China’s People’s Daily reports CCP Chairman Xi just argued the country needs to “govern the disorderly competition of enterprises at low prices in accordance with laws and regulations” – in other words, stop race-to-the-bottom price cuts on EVs and solar panels, etc.

Meanwhile, fiscal policy doesn’t say major monetary loosening is appropriate…. except if fiscal dominance necessitates it, which implies financial repression to follow. For three examples:

• The Senate narrowly passed Trump’s Big Beautiful Bill, to Elon Musk’s fury. It now goes back to the House, where it faces a potentially difficult passage for its self-imposed 4 July deadline. That’s as Trump mused that he’d DOGE Musk’s firms and even look into deporting him if he makes political trouble over the BBB, and Treasury Secretary Bessent stated: “If Elon sticks to rockets, I'll stick to finance." Until he gets stuck running the Fed(?)
   
• UK PM Starmer managed to pass his welfare bill, but only with massive concessions to rebels that will boost the fiscal deficit significantly. There appears no appetite for any more spending cuts if we were to see the global negative impact of a trade war ahead; and
   
• The French PM survived a no confidence vote over proposed cuts to welfare there too, but only because the far-right National Rally propped him up, again showing their new parliamentary muscle - and they say they reverse at any point that suits them.

Moreover, as populism rises and the ‘free’ movement of goods is undermined, Poland introduced border checks with Germany and Lithuania inside Schengen, weakening the free movement of people, and the FT bewails less free movement of capital re: the US (and UK) carve-outs from the G7 minimum corporate tax agreement, as each locality tries to keep its revenues for itself.

As in geoeconomics, wait and see is also evident in geopolitics.

On the upside, Israel has reportedly agreed to a 60-day ceasefire with Hamas, to which it has yet to respond, in what looks like a move that will free remaining hostages and allow broader regional peace deals. There’s also been a sharp decline in Houthi missile and drone attacks on Israel following hits to Yemen’s ports and to Iran.

On the downside, the US says Iran loaded naval mines onto its ships during its recent threat to block the Strait of Hormuz(!), and satellite images show it’s built a new access road at Fordow and moved in construction equipment - will the US or Israel have to hit it again? True to form, the EU says talks on Iran’s nuclear program should “restart as soon as possible.” Close by, Turkey told Europe its stand behind its joint maritime claim with Libya --which effectively bisects the eastern Mediterranean-- and that’s on top of Ankara’s other recent claim on Greek waters.

The Pentagon has halted scheduled shipments of air defence missiles and other precision munitions to Ukraine on worries US stockpiles are too low after being expended in the Middle East. This is a critical problem for Ukraine, and for Europe by proxy – and an expensive one for both of them. As a US spokesperson noted, “This decision was made to put America’s interests first following a DoD review of our nation’s military support and assistance to other countries across the globe. The strength of the US Armed Forces remains unquestioned - just ask Iran.”

As stressed here for many years, this is critical for markets overall: our global financial architecture ultimately rest on US military hegemony, but it has whittled down the US ability to produce enough weaponry to push-back against the axis of forces now trying to undermine it. Something will have to give, and markets won’t like it either way: the emerging argument is it’s either tariffs, higher defence spending, and possible financial repression, or something potentially worse – not ‘peace through strength’ but risks of ‘war through weakness’.

Yet as an example of how the US can use still realpolitik to push back for now, and will try to do so more ahead, it’s mused the recent Democratic Republic of Congo-Rwanda peace deal will effectively see the former grant the US access to $2 trillion of key minerals it holds as quid pro quo for D.C. stopping a Rwandan militia it had helped fund. By contrast, Europe is in the middle of an offsite to form a committee to set up a working group to create a new acronym to help it access key minerals in unstable places like Africa. I exaggerate, of course, but you get the point.

But do central banks get it? From those who talk to them, no, they really don’t. They apparently can’t even hear the word ‘tariffs’ without suffering from a form of derangement syndrome, and the thought of political, economic, and military statecraft is still alien to them after a career of bean-counting, physics-envy maths black magic, and portentous prognostication.

So, do markets get it? Do we need to ask? They are busily plotting out future rate cuts and buying all the things, even when only some of the things would be worth buying in that kind of environment. That’s a tariff derangement syndrome of another sort.

Tyler Durden Wed, 07/02/2025 - 10:50

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the June 2025 seasonally adjusted annual sales rate (SAAR) of 435 thousand.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Click on graph for larger image.

Heavy truck sales were at 435 thousand SAAR in June, down from 450 thousand in May, and down 1.4% from 442 thousand SAAR in June 2024.
This is the lowest sales rate since January 2022.  
Year-to-date (NSA) sales are down 6.2%.
Usually, heavy truck sales decline sharply prior to a recession and sales were a little soft recently.  

Tesla Deliveries In-Line, Production Beats As Musk Takes Over Sales In US And Europe After Key Exec Departs

Tesla's Q2 delivery numbers came in at 384,122 vehicles, just below the estimate of 389,407. While estimates had been lowered multiple times, the number is still better than whisper numbers as low as 350k or 360k that were starting to make their way around the street over the past week. As a result, Tesla stock has popped this morning by almost 7%.

Production beat expectations. Tesla built 410,244 vehicles, compared to the forecast of 400,083. 

Model 3 and Model Y deliveries totaled 373,728, slightly under the estimate of 377,295.

The “Other Models” category — including the Model S, X, and Cybertruck — showed Tesla delivered 10,394 vehicles, below the expected 14,644.

Production of these models also came in slightly under, at 13,409 compared to the estimate of 13,616.

Model 3 and Y production reached 396,835 units, higher than the expected 383,567, suggesting Tesla had ramped up output of its most popular models.

Ahead of Tesla’s Q2 2025 delivery report, expectations were subdued amid signs of continued demand weakness and investor concerns over the company’s growth trajectory. Analysts widely anticipated another disappointing quarter, despite hopes pinned on the rollout of a refreshed Model Y and the company’s long-term robotaxi ambitions.

The Bloomberg consensus projected Tesla would report global deliveries of 395,328, representing an 11% year-over-year decline, though still higher than the 336,700 vehicles delivered in Q1. Production was expected to hit 443,321 units, up from 410,800 in the same period last year.

However, some firms were significantly more bearish. Wells Fargo predicted a 21% drop in deliveries from a year ago, estimating just 343,000 units — far below consensus. JPMorgan cut its estimate to 360,000, calling it a “sizable” 8% miss versus consensus. UBS was only slightly more optimistic, forecasting 366,000 units.

Expectations were tempered by hard data from Tesla’s largest markets. In Europe, Tesla registrations fell 27.9% in May, despite overall EV registrations in the region growing 25%, according to the European Automobile Manufacturers Association (ACEA). Year to date, Tesla’s European sales were down 37.1%.

In the U.S., April registrations dropped 16% to 39,913 units. Meanwhile, Chevrolet’s EV registrations surged 215%, overtaking Tesla in growth, while Ford saw a 33% drop.

At the start of Q2, analysts were still optimistic, projecting 444,000 deliveries — in line with the same period in 2024. That forecast steadily declined as market data revealed Tesla wasn't production-constrained, but rather grappling with a demand problem, despite aggressive discounts and 0% financing offers on the Model 3 and Model Y.

Ahead of this morning's data, Bloomberg reports that Elon Musk has assumed direct oversight of Tesla’s sales operations in the United States and Europe, following the recent exit of longtime executive Omead Afshar.

Afshar, who left the company in late June, previously led sales and manufacturing across both regions.

The leadership shift comes as Tesla faces continued sales declines. Musk is now overseeing North American and European sales, while Senior Vice President Tom Zhu retains control of Asia and takes charge of global manufacturing. Zhu, who joined Tesla in 2014 and led the launch of its Shanghai Gigafactory, will now oversee factory heads including Hrushi Sagar in Fremont and Jason Shawhan in Austin. Meanwhile, Troy Jones, Tesla’s vice president of North American sales, now reports directly to Musk.

Musk’s hands-on role in Europe is especially notable. He has previously described the continent as Tesla’s “weakest market.” Sales data supports that: vehicle registrations across Europe dropped 28% in May and are down 37% for the year so far, while Chinese rivals like BYD continue to gain ground.

“Tesla’s sluggish sales” are again under scrutiny as more affordable models are delayed and consumer sentiment remains mixed. With another year of declining deliveries likely, investors are bracing for a second consecutive annual drop.

After a stint overseeing global operations from the U.S., Zhu returned to China last year due to regulatory issues tied to Tesla’s driver-assist features.

Since then, Chinese authorities have proposed new data guidelines that may help Tesla expand its advanced driving systems in the country.

Tyler Durden Wed, 07/02/2025 - 09:15

'Teary' UK Chancellor Reeves Is Safe For Now But The Gilt Market Maybe Not

Ten-year gilt yields just spiked by more than 10 bps on rumors that UK Chancellor Rachel Reeves was about to resign or be ousted.

The pressure on Reeves comes after Starmer — in a dramatic climbdown on Tuesday — abandoned controversial plans to restrict benefit payments to some disabled people, a reform pushed by the chancellor which would have saved some £5 billion ($6.9 billion), and was key to meeting her self-imposed budgetary rules at her spring statement in March.

Bloomberg reports that the welfare reform package was widely opposed by Labour MPs, with more than 120 originally threatening to vote against the policy in parliament.

Even after the last-ditch decision to drop the most contentious changes, 49 Labour MPs still voted against the bill on Tuesday, a sign of the scale of discontent.

The rebellion and U-turn are a serious blow to Starmer’s political authority as he approaches the first anniversary of Labour’s election win last July.

The decision to ditch the welfare reforms also leaves Reeves facing a widening fiscal hole of more than £6 billion to fill, including the need to fund a separate about-turn on a plan to cut winter fuel payments to pensioners.

As Bloomberg further reports, Starmer’s press secretary, Sophie Nazemi, quickly clarified his position to reporters after PMQs, saying that Reeves was going nowhere.

“She has the prime minister’s full backing,” Nazemi said.

“He’s said it repeatedly.”

The combination of Starmer’s failure to back his chancellor, and Reeves’ tears, prompted speculation about her position until the Treasury clarified that the reason for her demeanor was a personal issue.

“It’s a personal matter, which - as you would expect - we are not going to get into,” the Treasury said in a statement.

“The chancellor will be working out of Downing Street this afternoon.”

A tear just rolled down the Chancellor’s cheek at #PMQs as the PM refuses to answer whether or not she’ll stay in her job.

Hayfever, or something else? pic.twitter.com/HPXXQlDNo9

— Paul Brand (@PaulBrandITV) July 2, 2025

But, as Bloomberg's Simon White notes, the rapidity of the move shows the precariousness of the UK’s debt situation.

The government had planned a series of cuts to welfare and sickness benefits, but had to drastically scale them back in the face of huge opposition from backbench MPs.

The watered down changes are estimated to deliver no savings overall.

A new chancellor might drop Reeves’ commitment to not borrow more for day-to-day activities, or increase spending, justifying a deepening concern for the gilt market.

Cable tumbled...

Yields are still near their day’s highs, while a risk measure for the UK, based on asset swaps, country bond spreads and basis swaps, has widened notably.

Keep watching.

Tyler Durden Wed, 07/02/2025 - 08:59

The BEA reported this morning that light vehicle sales were at 15.34 million in June on a seasonally adjusted annual rate basis (SAAR).

This was down 1.7% from the sales rate in May, and up 2.3% from June 2024.

Note that sales in June 2024 were depressed by a cyberattack impacting dealers’ online systems. This makes the YoY comparison look better.

Click on graph for larger image.

This graph shows light vehicle sales since 2006 from the BEA (blue) through June (red).
Vehicle sales were over 17 million SAAR in March and April as consumers rushed to "beat the tariffs".

Since then, sales have declined for two consecutive months.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.

Sales in June were below the consensus forecast of 15.5 million SAAR.

US Halting Some Weapons Shipments To Ukraine As Own Military Stockpiles Plummet

The Trump administration could finally be willing to bring real pressure to bear on the Zelensky government, as on Tuesday the White House confirmed that it its halting some weapons shipments to Ukraine.

White House spokesperson Anna Kelly told CBS News that in the context of the Russia-Ukraine war the "decision was made to put America's interests first following" a Defense Department "review of our nation's military support and assistance to other countries across the globe."

Getty Images

This comes after many reports over the last couple years sounding the alarm that US military stockpiles are falling too low, and that they will continue to be depleted based on past Ukraine policy.

While it's unknown precisely which weapons will be halted, or in what quanitites, Kelly asserted that "The strength of the United States Armed Forces remains unquestioned — just ask Iran."

However, we should note that the massive B-2 bomber raids sent against Iran's nuclear facilities was widely questioned among the US public for not exactly being 'America first'. Instead it appeared to prioritize the defense of Israel first.

Still, all the usual 'options' are on the table, we are assured by the Pentagon:

Elbridge Colby, Defense Department under secretary for policy, said in a separate statement Tuesday night in response to the move that the "Department of Defense continues to provide the President with robust options to continue military aid to Ukraine, consistent with his goal of bringing this tragic war to an end. At the same time, the Department is rigorously examining and adapting its approach to achieving this objective while also preserving U.S. forces' readiness for Administration defense priorities."

A potential draw down or limitation of arms sent to Ukraine is likely also driven by the reality that the battlefield hasn't changed substantially due to Washington and US-taxpayer funded assistance.

If anything the Russians keep advancing, now with an eye on Sumy and expanding the Putin-ordered buffer zone. Ukrainian sources say that that Russian forces have successfully expanded their occupation.

DeepState, a Ukrainian group of military analysts, has freshly written, "The trend from May, unfortunately, continued in June. As a reminder, during the most critical month for us – November – the Russians advanced by 730 sq km.

"The largest advances were recorded on the Novopavlivka and Pokrovsk fronts – 29% and 27% respectively. Sumy Oblast also ranks among the top with 18%. This means three-quarters of all advances took place in just three areas," the group said. "The remaining quarter is distributed almost evenly across other sectors of the front (4–6% per sector)."

Is Trump getting serious about a drastic shift in Ukraine policy this time?

Not a spicy viral clip, but Rubio gave some highly clarifying remarks at his Senate hearing this week. He confirms that not a single sanction against Russia has been lifted, and US arms continue to flow to Ukraine. So in other words, these Biden Admin policies continue unchanged pic.twitter.com/PhbSR2oXFB

— Michael Tracey (@mtracey) May 22, 2025

Meanwhile, there hasn't been progress on the peace negotiation front. But this could change if Kiev begins running woefully low on US weapons, or sees a halt altogether, creating a new urgent incentive to possibly make territorial concessions at the negotiating table. But it remains that the Europeans have been consistently seeking to step up their support of late.

Tyler Durden Wed, 07/02/2025 - 08:50

From ADP: ADP National Employment Report: Private Sector Employment Shed 33,000 Jobs in June; Annual Pay was Up 4.4%

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, chief economist, ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”
emphasis added

This was well below the consensus forecast of 110,000 jobs added. The BLS report will be released Thursday, and the consensus is for 129,000 non-farm payroll jobs added in June.

ADP Reports Biggest Drop In Service-Provider Jobs Since COVID Lockdown

Having trended weaker for the last two months, analysts expected a modest bounce back in the ADP Employment Report for June (following the mixed picture from ISM/PMI for employment and another mixed bag from Challenger, Grey Job Cuts data this morning).

BUT... The headline print saw a 33k DROP in jobs in June (and a downward revision to +29k in May) - the biggest/first drop since March 2023

Source: Bloomberg

That is a 5 sigma miss from expectations...

And the biggest miss since Aug 2022 (third monthly miss in a row)...

"Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month," said Nela Richardson Chief Economist, ADP.

After losing 2k jobs in May, Goods-Producing firms managed 32k job additions in June but Services providers saw jobs drop 66k - the biggest drop since COVID lockdowns...

Source: Bloomberg

The job losses were dominated by smaller businesses...

Job gains were dominated by Manufacturing and Transportation while job losses were dominated by 'Professional and Business Services'...

"Still, the slowdown in hiring has yet to disrupt pay growth."

• Year-over-year pay growth for job-stayers was little changed for June at 4.4 percent compared to 4.5 percent in May.

• Pay growth for job-changers was 6.8 percent in June, down slightly from 7.0 percent last month.

Of course this will all be blamed on Trump's tariffs but it's hard to see how that makes any sense given the surge in Manufacturing jobs (where the tariffs 'would' hit) while Services (which we do not import) saw major job losses.

So, will Powell consider rate-cuts now?

Tyler Durden Wed, 07/02/2025 - 08:22

Futures Erase Overnight Gains As July 9 Trade Deadline Looms

US equity futures are flat, after trading in a narrow overnight range, with small caps outperforming as we see more signs of a Value rotation as H2 kicks off and after yesterday's dramatic momentum plunge. As of 8:00am ET, S&P futures are fractionally in the red, reversing an earlier 0.3% gain as President Donald Trump’s July 9 tariff deadline gets ever closer — Trump said on Tuesday he won’t delay the date for imposing higher levies on trading partners; Nasdaq futures drop 0.1% with Mag7 names mixed in premarket trading. Futures for the small-cap Russell 2000 rose 0.9% to outperform as Tuesday’s rotation out of high-momentum stocks extended, which helped Cyclicals led by Financials continue to outperform.  European equities advanced 0.4%. Bond yields are higher as the curve bear steepens and USD catches a bid which accelerates as US traders walk in. Commodities are rallying across all 3 complexes, with Brent trading back over $68. Yesterday, stocks fell into the bell on Trump comments about not extending the July 9 deadline and possibly not reaching a deal with Japan but recovered their initial losses. Today’s macro data focus is on ADP though it has not been a reliable predictor of NFP. 

In premarket trading,Apple climbs 0.7% following an upgrade at Jefferies (from Sell to Hold) while Tesla (TSLA) rises 0.8% as the company saw its first increase in vehicle deliveries from its Shanghai factory this year. The rest of the Mag 7 is mixed (Amazon -0.2%, Meta -0.1%, Alphabet -0.9%, Nvidia -0.6%, Microsoft -0.2%). Here are some other notable movers: 

• BrightView (BV) declines 8% after the commercial landscaping company cut its revenue guidance for the full year.
• Cava Group Inc. (CAVA) inches 2% higher after KeyBanc initiated coverage of the Mediterranean restaurant chain with a recommendation of overweight as it sees growth opportunities.
• Centene Corp. (CNC) tumbles 27% after the health insurer pulled its 2025 guidance, citing insurance market trends that veered from its assumptions and threaten $1.8 billion in revenue.
• Crocs (CROX) slips 1% after Goldman Sachs started coverage of the footwear company with a sell rating.
• Oscar Health (OSCR) falls 10% as Barclays initiates coverage at underweight, with the broker saying the stock presents assymetric downside risk after shares gained more than 50% in June alone on “speculative retail interest” despite elevated policy risks. Shares are also being hurt after peer Centene withdrew its 2025 guidance.
• Verint Systems (VRNT) gains 9% after Bloomberg News reported that the call-center software maker is in talks with buyout firm Thoma Bravo to acquire the company, according to people familiar, who also said there is no certainty the parties will reach an agreement.

The stocks of US banks including JPMorgan, Goldman and Bank of America all rose in premarket trading after boosting their dividends. Wall Street’s largest lenders passed this year’s Federal Reserve stress test, with regulators softening some requirements set in previous years.

As the US continues talks with key trading partners, Trump has turned up pressure on Japan and reaffirmed he won’t delay his tariff deadline, now just a week away. While markets swung wildly on trade headlines in April, equity indexes are now signaling diminished concern with stocks near record highs. The following comment helps explain why: Trump’s warning to Japan “is a non-event,” said Karen Georges, equity fund manager at Ecofi in Paris. “The next two possible catalysts for the markets will be the jobless claims and the deadline for tariff negotiations.”

Elsewhere, data so far this week has affirmed the resilience of the US economy in the face of Trump’s tariff agenda. Wednesday’s ADP Research employment numbers and tomorrow’s non-farm payrolls will offer investors additional insight into the labor market and the likely path of interest rates. 

In Europe, the Stoxx 600 rises 0.4%, set for its first gain this week, with mining, bank and energy shares leading the advance. Here are the biggest European movers:

• Santander rises as much as 2.8% after agreeing agreed to buy Banco Sabadell SA’s UK unit for £2.65 billion ($3.64 billion).
• Spectris shares rise as much as 5.3%, trading higher than the value of an agreed offer from KKR, buoyed by the prospect of a bidding war for the company.
• Tate & Lyle shares rise as much as 4.3% after the ingredients company outlined a “clear picture for future growth” at its capital markets event in London on Tuesday, according to analysts at Goodbody.
• Avanza gains as much as 15%, after newspaper Dagens Industri reported its biggest shareholder Sven Hagstromer’s family is in talks with a private equity firm to take the comapny private.
• Alfen shares rose as much as 1.2% after the firm announced Chief Executive Marco Roeleveld will retire early due to his health and depart at the end of this year.
• Hellenic Exchanges Athens shares gain as much as 14%, the most since 2020, as Euronext says it is in talks to buy the Athens stock market operator.
• European mining shares gain, as iron ore and steel surged, after China’s top leadership vowed to crack down on “disorderly” low-price competition and phase out some industrial capacity.
• European renewables stocks rally after a US excise tax seen as an existential threat to the solar and wind industry was stripped from the Senate GOP tax megabill that passed the chamber in a tie-breaking vote Tuesday.
• Bytes Technology shares fall as much as 27%, after the UK software provider issued a profit warning, citing a challenging macroeconomic environment that has led some customers to defer buying decisions.
• Jet2 shares fall as much as 3.7% as Panmure Liberum cuts its rating on the stock to hold from buy, seeing limited upside after the travel firm’s strong re-rating in recent months.
• ConvaTec shares extend decline in biggest two-day drop since August 2021, after the US Centers for Medicare & Medicaid Services filed a proposal for certain chronic care products to be included in the Competitive Bidding Program.
• Greggs shares drop as much as 15% to approach a three-month low after the food-on-the-go retailer said full-year operating profit could be “modestly” below last year due to hot weather in Britain.

Earlier in the session, Asian equities traded in a narrow range as fresh tariff threats from President Donald Trump weighed on sentiment.  The MSCI Asia Pacific Index declined as much as 0.5% before paring most of the losses, with Nintendo, Mitsubishi Heavy and Advantest among the biggest drags. Japanese shares slid after Trump threatened to impose levies of 30%-35% on imports amid dim prospects for a deal before next week’s deadline. Benchmarks also declined in South Korea, India, and Indonesia. Trump’s comments spurred caution over a recent rally driven by anticipation of progress in trade deals, hopes for dollar-driven foreign inflows and prospects for interest-rate cuts by the Federal Reserve. 

“There is a lot more risk of things falling apart than is being priced in by the market,” said Zuhair Khan, a fund manager at UBP Investments. “There is always the risk of a policy blunder by either side.”

In FX, the Bloomberg Dollar Spot Index rises 0.2%. The yen is nursing the largest decline against the greenback among the G-10 currencies, falling 0.5% which takes USD/JPY above 144. The pound also underperforms as it weakens 0.4%.

“The dollar usually loses value when the global economy is in decent shape and the Fed is cutting rates,” noted Nicholas Colas, co-founder of DataTrek Research. “Both factors are relevant now.”

In rates, treasuries fall for a second day heading into a double whammy of labor data, following an unexpected jump in US job opening numbers. US 10-year yields rise 5 bps to 4.29%. European bonds also decline, with gilts faring slightly worse than their German counterparts. UK 10-year borrowing costs rise 4 bps to 4.50%. Swaps now imply about 63 basis points of Fed policy easing by year-end, down from 67 basis points on Tuesday before data unexpectedly showed that US job openings rose to the highest since November.

In commodities, spot gold is steady around $3,342/oz. WTI rises 0.8% to near $66 a barrel.

Looking at today's calendar, US economic data slate includes June Challenger job cuts (7:30am) and ADP employment change (8:15am); no Fed speakers are scheduled

Market Snapshot

• S&P 500 mini +0.1%
• Nasdaq 100 mini little changed
• Russell 2000 mini +0.8%
• Stoxx Europe 600 +0.4%
• DAX +0.4%
• CAC 40 +1.1%
• 10-year Treasury yield +4 basis points at 4.28%
• VIX little changed at 16.82
• Bloomberg Dollar Index +0.2% at 1191.33
• euro -0.3% at $1.1769
• WTI crude +0.7% at $65.89/barrel

Top Overnight News

• A handful of hard-line House conservatives are threatening to tank a Wednesday procedural vote for the party’s reconciliation bill, a revolt that would bring the lower chamber to a screeching halt and potentially derail GOP leadership’s plan of clearing the legislation by July 4. The Hill
• US House Speaker Johnson said the Senate went a “little further than many of us would have preferred” in amending the bill, according to Punchbowl. It was later reported that US House Speaker Johnson said voting on the bill will be on Thursday at the latest, according to a Fox News interview.
• Punchbowl says the Reconciliation Bill schedule is to bring the US House back at 09:00ET/14:00BST today and vote as soon as possible. Punchbowl spoke to several people on the House GOP whip team Tuesday night, they expressed alarm about what they’re seeing on their whip cards. Sources said that they were racking up no’s from lawmakers who they didn’t expect would be opposed to the bill. Reports that a "bunch" of House Freedom Caucus members are saying they’ll vote no. Elsewhere, on the Democratic leader Jeffries' Magic Minute, sources suggest it will be around one hour long.
• The Pentagon has halted shipments of some air defense missiles and other precision munitions to Ukraine due to worries that U.S. weapons stockpiles have fallen too low. Politico
• Israel has agreed to “conditions to finalize” a 60-day ceasefire with Hamas in Gaza according to Trump (Hamas said its ready for a ceasefire, but wants a complete end to the war). NYT
• Private employers in the US probably added 98,000 jobs in June, up from just 37,000 in the previous month, ADP data is expected to show. BBG
• Chinese artificial-intelligence companies are loosening the U.S.’s global stranglehold on AI, challenging American superiority and setting the stage for a global arms race in the technology. OpenAI’s ChatGPT remains the world’s predominant AI consumer chatbot, with 910 million global downloads compared with DeepSeek’s 125 million, but other Chinese companies have started to snatch customers by offering performance that is nearly as good at vastly lower prices. WSJ
• Xi Jinping addressed the price wars that plague many industries in China, saying that enterprises’ “disorderly low-price competition” needs to be regulated. SCMP
• Japan said it’s engaging in trade talks in good faith with the US after Trump reiterated his July 9 deadline. PM Shigeru Ishiba said Japan will work to reduce the deficit, but noted that the US needs to produce cars that meet the country’s safety standards. BBG
• China’s largest ports received almost 1.4 million barrels per day of Iranian crude from January to June, according to Kpler, highlighting a significant gap in US efforts to uphold existing sanctions. BBG
• Crude inventories at Cushing fell by 1.42 million barrels last week, the API is said to have reported. If confirmed, that would be the biggest decline since January and also cut holdings at the hub close to minimum operating levels of 20 million. BBG 
• Netflix (NFLX) is reportedly discussing music-related events with Spotify (SPOT), via WSJ citing sources.    
• Apple (AAPL) is facing a "hurdle" after supplier Foxconn (2317 TW) has pulled Chinese staff from India, according to Bloomberg.

Tariffs/Trade

• Japan's tariff negotiator Akazawa is arranging a US visit as early as this weekend for trade talks, according to TV Asahi; Japan and the US are continuing vigorous trade talks. Notes that staff level talks were held on June 30th, reiterates that an agreement that would hurt Japan's national interests for the sake of timing should not be made, will not deny possibilities of travelling to the US, but has no specific schedule to do so
• Canada's Ambassador to Washington said Canada still aims to lift all Trump tariffs as part of a deal with the US, according to the Globe and Mail.
• South American bloc Mercosur concluded talks for a free-trade agreement with European bloc EFTA, while the blocs are set to announce finalisation of a free trade agreement on Wednesday, according to Brazilian sources cited by Reuters.
• EU Trade Commissioner Sefcovic is to visit China in August, via SCMP citing sources; his team is reportedly compiling a list of specific "asks" that would seek from China; in turn, Sefcovic has been asked to be more specific with his requests. Chinese investment within Europe is seen as a potential area for discussion. On this, the SCMP piece references EVs and battery plants.
• Maersk (MAERSKB DC) says many customers are reassessing shipment timings in light of potential reintroduction of US-China tariffs in August, making Q3 planning more complex.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mixed following a similar handover from the US where participants digested data, trade commentary and a slew of central bank rhetoric. ASX 200 gained as strength in the mining, materials and real estate sectors offset the losses in tech and financials, but with further upside contained by disappointing Australian Retail Sales and Building Approvals data. Nikkei 225 declined amid trade uncertainty after President Trump noted doubts about a deal with Japan and suggested Japan could pay 30% or 35% tariffs. Hang Seng and Shanghai Comp traded mixed with the Hong Kong benchmark underpinned on return from the holiday closure as gambling stocks surged owing to the jump in Macau gaming revenue for June, while the mainland was contained after the PBoC's open market operations resulted in a net CNY 266.8bln drain.

Top Asian News

• Japanese government issues emergency earthquake warning, near Tokara; with a 5.1 magnitude earthquake reported off the coast of Japan's Kagoshima prefecture, via NHK; Earthquake hit around 15:26 JST (07:26BST). No tsunami warning.

European indices opened in the green, shrugging off a mixed APAC lead. Euro Stoxx 50 +0.5%; newsflow has been a little light, primarily focussed on trade. European sectors were entirely in the green, Banks outperforming initially, bolstered by numerous equity specifics; however, strength has faded with sectors now mixed, Real Estate lags given the elevated yield environment.

Top European News

• UK PM Starmer won the vote in parliament on welfare reform; was forced to back down on certain aspects of his proposal. Savings under the plan are now expected to be closer to GBP 2bln vs. initially planned GBP 5bln.
• EU reportedly blocks Britain's attempts to join the pan-European trading bloc, according to the FT.
• ECB's Centeno says the ECB remains cautious on the rate path.
• ECB's Rehn says the ECB should be mindful of the risk that inflation stays persistently below 2% target; says joint EU borrowing to finance defence could also boost EUR's role by creating new safe asset.
• ECB's Wunsch says there is an argument for providing a mildly supportive policy stance; not uncomfortable with market rate expectations.
• BoE's Taylor says a soft landing on interest rates is at risk, don't think bigger cuts are needed or desirable. UK neutral real rate to be around 0.75-1.0%, putting the nominal rate around 2.75-3.0%. In Q1, reading of the deteriorating outlook suggested that the BoE needed to be on a lower rate path, needing five cuts in 2025 rather than the market-implied quarterly pace of four. QT is not on a pre-set path, like rates.

FX

• USD is attempting to atone for recent pressure with the DXY firmer and eyeing 97.00 to the upside, having breached Tuesday's 96.94 peak. Today's data slate sees Challenger layoffs and ADP employment, ahead of tomorrow's NFP print with markets likely to be particularly sensitive to any downside surprise.
• G10 peers are all lower vs the USD. The CAD fares best and is essentially flat on return from holiday and benefitting from crude strength.
• JPY lags, USD/JPY above 144.00 in a 143.33 to 144.24 band. Hit by the increasingly sour tone from the US administration regarding US-Japan trade talks. To recap, US President Trump said he doubts they'll have a deal with Japan; suggested Japan could pay 30% or 35% tariffs.
• Sterling under pressure against the USD, Cable below 1.37 to a 1.3689 trough, and also the EUR. Macro focus on the Welfare Reform vote which required another u-turn to ensure its passage, highlighting concern around the fiscal backdrop for the UK.
• While the EUR outpaces GBP, it is softer against the USD with EUR/USD below 1.18 and taking a breather from the 1.1830 multi-year peak that printed on Tuesday. Ongoing remarks from the Sintra conference, but nothing that has moved the dial thus far.
• PBoC set USD/CNY mid-point at 7.1546 vs exp. 7.1623 (Prev. 7.1534).

Fixed Income

• In the red, Gilts lag after further concessions on the Welfare Reform Bill. Concessions that increase the odds of tax increases and calls into question the government's fiscal credibility, writes IFS. Lower by over 50 ticks on the session, but above support at 92.85 and 92.83 from last Friday and this Monday, respectively.
• A softer session for EGBs as well. Specifics light with nothing groundbreaking from Sintra just yet. Bunds at the low-end of a 130.08 to 130.50 band. One that is 10 ticks below Tuesday’s base but a similar amount clear of the WTD 130.00 base. If breached, we look to 129.92 and then 129.30 from the last two weeks of May.
• USTs also lower, though to a slightly lesser degree than the above peers. Holding at the low-end of a 111-20+ to 111-30+ band. A tick below Tuesday’s base and notching a fresh WTD low by half a tick. If the move continues, there is a bit of a gap until 110-25 from the week before.
• UK sells GBP 5bln 4.375% 2028 Gilt: b/c 3.46x (prev. 3.08x), average yield 3.847% (prev. 4.062%) & tail 0.1bps (prev. 0.3bps)
• Germany sells EUR 4.557bln vs exp. EUR 6bln 2.60% 2035 Bund: b/c 1.6x, average yield 2.63%, retention 24.05%

Commodities

• Crude benchmarks are in the green and continuing to climb as the session progresses. Magnitude of strength initially in-line with that seen in European equity benchmarks but has since extended. Newsflow this morning light, handful of updates on the geopolitical front and no sustained follow through to the surprise private inventory build last night.
• WTI resides in a USD 65.23-65.93/bbl range while its Brent counterpart trades in a USD 66.94-67.75/bbl range.
• Precious metals somewhat mixed, XAU and XAG wane from peaks set in APAC trade, hit this morning as the USD gains ground. Though, for XAU, parameters are not too pronounced as participants await the next macro inflection point and look to Challenger Layoffs before ADP.
• Base metals mostly but modestly firmer, upside capped by discussed USD strength. For copper, attention on reports of mining disruptions in Peru while LME on-warrant aluminium stockpiles have hit a 2025 peak.
• US Private inventory data (bbls): Crude +0.7mln (exp.-1.8mln), Distillate -3.5mln (exp. -1.0mln), Gasoline +1.9mln (exp. -0.2mln), Cushing -1.4mln.

Geopolitics

• US President posted that his representatives had a long and productive meeting with the Israelis on Gaza and Israel agreed to the necessary conditions to finalise a 60-day ceasefire during which they will work with all parties to end the war. Furthermore, the Qataris and Egyptians will deliver this final proposal and he hopes, for the good of the Middle East, that Hamas takes this deal, because it will not get better and will only get worse.
• US officials said Iran made preparations to mine the Strait of Hormuz last month although mines were not deployed in the strait, according to Reuters.
• "Iranian Minister of Communications: Internet outages in the country caused by external attacks", according to Al Jazeera.
• "Advisor to the Commander-in-Chief of the IRGC: The war has stopped, but the United States and Israel have not achieved their goals", according to Iran International.
• US Pentagon has halted shipments of some air defence missiles and other precision munitions to Ukraine due to worries that US weapons stockpiles have fallen too low, according to Politico.
• Quad joint statement expresses serious concern over the situation in the East China Sea and South China Sea, while they called for the perpetrators, organisers and financiers of the April 22nd attack in Indian Kashmir to be brought to justice.

US event calendar

• 7:00 am: Jun 27 MBA Mortgage Applications, prior 1.1%
• 7:30 am: Jun Challenger Job Cuts YoY, prior 47%
• 8:15 am: Jun ADP Employment Change, est. 98k, prior 37k

DB's Jim Reid concludes the overnight wrap

My rain dance continues as it's so hot the kids can't sleep, my wife can't sleep, Brontë the dog can't sleep and I can't sleep. The kids have come in to our bedroom a few times this week, waking us up just to tell us they have an itchy bite on their legs. That then leads to a 10 minute conversation about there being nothing we can do about it but ultimately leads to a trip downstairs for some bite cream. An hour later we may get back to sleep. Meanwhile I've had more diet cokes to help cool me down over the last few days than the fridge can hold in the Oval Office. 

Markets also seemed to wilt a little in the heat yesterday and struggled to keep up their recent momentum, with the S&P 500 (-0.11%) slipping back from its record high even if it did get a small boost from news that the tax bill finally passed the Senate with VP JD Vance providing the casting tie-break busting vote (51-50). The bill now goes on to the House of Representatives, and both chambers have to pass the same version of the bill before it can reach President Trump’s desk. Remember that the first House vote was also very tight, with just a 215-214 margin, and the Republicans only have a 220-212 majority to start with. So there’s not much room for manoeuvre if they want to pass this by Trump’s July 4 deadline. There is a vote scheduled for later today, but already a handful of GOP lawmakers who voted for the first version of the bill are signaling opposition to the Senate changes. So it's not going to be easy. If it ultimately passes, the bill would extend the Trump tax cuts from the first term, and it also includes a $5tn increase in the debt ceiling, so it would remove that risk coming up later in the summer too.

One of the most important developments of the last 24 hours was the latest JOLTS report of job openings in the US, which pointed to a tighter labour market than previously thought. On one level, it demonstrated continued resilience and strong labour demand, but investors responded by lowering the likelihood of rate cuts this year, which led to a small spike in Treasury yields across the curve. So the 10yr Treasury yield (+1.4bps) ultimately pared back its early decline (4.185% at the lows) and moved back up to 4.24% after getting as high as 4.275% as London went home. The 2yr yield (+5.3bps) moved up to 3.77% from a low of 3.696% before the data.

In more detail, the JOLTS report showed job openings were up to a 6-month high of 7.769m in May (vs. 7.3m expected). So that pushed back against the narrative of a softening labour market, and it raised the ratio of vacancies per unemployed individuals to 1.07. Moreover, the details pointed in a similar direction, with the quits rate of those voluntarily leaving their jobs back up to 2.1%. So collectively, that countered the dovish trend of recent days, where Fed cuts were looking increasingly likely, particularly after a few speakers floated the idea of a cut as soon as the next meeting in July. But with that JOLTS report, investors dialled back the likelihood of aggressive cuts, with the amount priced in by the December meeting down -2.2bps on the day to 64bps. Admittedly, there was some other data yesterday, including the ISM manufacturing. But the numbers were broadly as expected, with the headline index at 49.0 (vs. 48.8 expected), so they didn’t really shift investors’ perception of the outlook.

We did hear from Fed Chair Powell at the ECB’s Sintra forum, but he stuck to his cautious mantra, saying on inflation that “We’re watching. We expect to see over the summer some higher readings”. He also added that if not for the worries about inflation rising due to tariffs, the Fed would likely already have lowered the policy rate further. Meanwhile, Trump continued his own attacks on Powell, saying that “Anybody would be better than Powell” and that he had “two or three top choices” to succeed the current Fed Chair but failed to expand further.

Otherwise, the big focus has been on trade, with just a week left until the 90-day reciprocal tariff extension runs out on July 9. There were optimistic noises around a trade deal with India, with Treasury Secretary Bessent saying they were “very close” to a deal, whilst India’s External Affairs Minister Subrahmanyam Jaishankar said in a Newsweek interview that "I believe it's possible, and I think we'll have to watch this space for the next few days”. Separately, Stephen Miran, who chairs the White House Council of Economic Advisers, said he was “optimistic” on an EU deal. President Trump again struck a negative tone on the trade deal with Japan in comments to the press, saying they should “pay 30%, 35% or whatever the number is that we determine, because we also have a very big trade deficit with Japan.” On whether the US would push back the July 9th deadline, the president noted he was “not thinking about the pause” and that he could be “writing letters to a lot of countries.” 

This backdrop proved a trickier one for equities, and the S&P 500 fell -0.11% by the close. However, that was influenced by a sharp fall for Tesla (-5.34%), which fell after Trump posted that Elon Musk “may get more subsidy than any human being in history, by far” and “Perhaps we should have DOGE take a good, hard, look at this? BIG MONEY TO BE SAVED!!!” So that meant the Magnificent 7 fell -1.17% yesterday, which helped drag down US equities more broadly. Indeed, if you look at the equal-weighted S&P 500 (+1.10%), it was actually a very positive day and the index hit a 6-month high, so it wasn’t all bad news.

Over in Europe, the tone was generally more positive than in the US, with sovereign bonds rallying across the curve. That came as the flash Euro Area CPI print came in at +2.0% in June, exactly in line with the ECB’s target. Core was a little bit higher, at +2.3%, but that was also as expected. So that added to the sense that the ECB would still have the space to cut rates again this year. Moreover, ECB Vice President de Guindos commented that if the Euro moved above $1.20, then “that would be much more complicated. But $1.20 is perfectly acceptable.” So that again offered a potential justification for more rate cuts, particularly as a stronger appreciation for the euro would bring down import prices and dampen inflation. Indeed, the amount of further ECB cuts priced by the December meeting moved up +1.0bps on the day to 24.7bps. So that supported a bond rally across the continent, with yields on 10yr bunds (-3.3bps), OATs (-3.3bps) and BTPs (-2.7bps) all coming down. Nevertheless, equities still struggled and the STOXX 600 fell -0.21%. In addition, the Euro gained for a ninth straight session to its highest level since September 2021.

While much of the market is focused on US politics, here in the UK Prime Minister Starmer faced a tough vote on the government’s welfare reform last night. After a week of watering down the welfare cuts in the bill, the government decided at the last minute to offer more concesssions. This is remarkable for a government in its first year and with a huge majority. It potentially creates a £5bn funding black hole that may need to be closed with tax rises in the autumn, just as many countries launch tax cuts to combat the new tariff era. 

Asian equity markets outside of China are on the weaker side this morning given a little more concern over trade. The KOSPI (-0.85%) stands out as the largest underperformer, while the Nikkei (-0.21%) is slipping on trade concerns although both indices have rallied back a fair amount as I've been typing this morning. By contrast, the Hang Seng (+0.77%) is defying the trend, with mainland Chinese equities broadly flat. S&P 500 (+0.27%) and NASDAQ 100 (+0.34%) futures having been edging higher while this paragraph has evolved. 

To the day ahead now, and central bank speakers will include ECB President Lagarde, Vice President de Guindos, the ECB’s Cipollone and Lane, and the BoE’s Taylor. Otherwise, data releases include the ADP’s report of private payrolls in the US for June, along with the Euro Area unemployment rate for May.

Tyler Durden Wed, 07/02/2025 - 08:20

After Spain Imports Record Amount Of Diesel From Morocco, Experts Point To Russian Sources

Via Remix News,

A record-breaking increase of diesel imports from Morocco to Spain has raised suspicions within the energy industry that some of the fuel may be of Russian origin. In just two months, from March to April 2025, Spain imported 123,000 tons of diesel from Morocco, more than the entire historical total.

The shipments are raising questions about how honest the EU’s energy policy is, which claims it is working to cut off Russian energy but in reality, is often sourcing it through middle countries.

According to Spanish newspaper El Pais, there are a number of factors that raise the likelihood that Spain is buying Russian diesel through the backdoor.

Besides the sudden increase in diesel from Morocco, a country that Spain does not typically import substantial amounts of diesel from, industry sources say Morocco did not impose sanctions on Russian energy resources after the invasion of Ukraine.

El Pais noted that since the beginning of 2025, Morocco has imported over 1 million tons of Russian diesel, accounting for 25 percent of its total imports. It could also be that Morocco is importing diesel from other countries that are also importing Russian diesel and repackaging it to hide its true source.

Experts believe the diesel is sent to Morocco and there it is blended with other diesel oils, making it untraceable back to its source.

The suspicion is that this fuel is being imported by Rabat, the capital of Morocco, at a lower cost and then re-exported to Spain with a North African country’s certification to mask its origin.

This practice is being investigated by the Spanish government, which has been trying to prove the Russian origin of the fuel since at least 2023. However, the government has so far been unable to provide definitive proof.

El Pais also pointed out that since the start of the Russian invasion of Ukraine, Spain’s diesel imports have increased from other countries that were not previous suppliers, including Singapore and Turkey.

This follows a 2024 investigation into a “Diesel mafia,” whose fraud activities were estimated at €1.9 billion, involving oil imported from sanctioned countries like Iran, Russia, and Syria, with altered certificates of origin from Turkey and Morocco.

Notably, many EU countries have criticized Hungary and Slovakia for stating the EU still needs Russian energy. Meanwhile, many of these EU countries either continue to directly import Russian energy, or in the case of Spain, are likely importing it through middle countries.

To add insult to injury, El Pais notes that Russia’s economy remains red hot. Despite predictions Russia would collapse under sanctions, the IMF noted that Russia grew by 4.1 percent in 2024, which is more than the United States, the EU, and Spain. The global average was 3.3 percent.

Russia’s wartime economy is also driving its economic engine, but the BBC also writes that despite sanctions, oil tankers continue to flow to India and China, which is driving significant revenue into Russia’s coffers.

Read more here...

Tyler Durden Wed, 07/02/2025 - 08:05

California Moves Forward With Higher Marijuana Excise Tax

Authored by Jill McLaughlin via The Epoch Times,

Buying legal weed and marijuana products in California will get slightly more expensive starting July 1 after state legislators failed to stop a state excise tax increase on the industry this month.

Effective Tuesday, marijuana retailers will pay 19 percent of gross receipts from cannabis and cannabis product sales—a jump of 4 percentage points.

The excise tax is paid in addition to state sales tax and any city or county taxes applicable to the business’s location.

California Cannabis Industry Attorney Jared Schwass said the decision to move ahead with the tax was “disappointing.”

“California legislators fail to act,” Schwass posted on X last week. “Due to that failure, the California cannabis tax is still on schedule to increase from 15 percent to 19 percent on July 1st. It is disappointing to read that [Sen.] Mike McGuire was against freezing the automatic increase because his constituents, who are already struggling to stay in the regulated market, will feel the pain of this increased tax.”

McGuire, a Democrat from Ukiah in Northern California, is leader of the California State Senate.

The state Assembly unanimously approved Assembly Bill 564 by Assemblyman Matt Haney of San Francisco on June 2. The legislation, as introduced, would have repealed the proposed tax hike. It was amended by lawmakers, however, to delay the implementation until the 2030–2031 fiscal year.

The bill then stalled in a Senate committee this month, and the delay allows the tax hike to kick in.

The United Food and Commercial Workers (UFCW) Western States Council applauded the bill’s passage in June.

“California’s plans to raise the cannabis excise tax rate to 19 percent will only increase the number of failed legal cannabis businesses,” UFCW Local 1167 President Joe Duffle said in a statement. “As the leading cannabis union, UFCW sees how difficult it is for businesses that play by the rules.”

Duffle said freezing the cannabis excise tax would give legal cannabis businesses a “fighting chance” to stay afloat in the struggling industry.

“Without this bill, the illicit cannabis industry will only flourish more and keep putting untested, untaxed and unregulated cannabis products into the hands of consumers,” he added.

A baker sells marijuana cookies at the medical marijuana farmers market at the California Heritage Market in Los Angeles on July 11, 2014.  David McNew/Reuters

The California Cannabis Operators Association, the largest industry association in the state, started a petition to urge legislators to pass the bill.

“Sacramento politicians decided that you should now pay 25 percent more in excise taxes on safe and regulated cannabis products at your local dispensary,” the association wrote in the petition. “This short-sighted policy decision will only drive more consumers to the illicit market, accelerate the ongoing market collapse, and (ironically) reduce overall tax revenue, hurting the community programs that rely on these funds.”

The organization said the tax increase falls on consumers and patients at a time when many are struggling with inflation and cost-of-living challenges. The group also said it puts public health and safety at greater risk by driving even more Californians to the illegal black market.

“For nearly five years, California’s licensed cannabis market has been in a steep decline,” the organization stated.

On a statewide level, however, Haney’s legislation faced strong opposition from a coalition of 98 organizations, including Youth Forward, Getting it Right from the Start, Child Action Inc., and other nonprofits that favored raising the excise tax.

The groups said they risked losing at least $150 million per year for childcare, youth, and environmental programs if the tax increase was stalled.

“This translates into thousands fewer childcare slots for low-income children, fewer youth benefiting from substance abuse prevention programs, continuing environmental degradation of our watersheds, and other harms,” the organizations told the state, according to a legislative analysis.

Indigenous Justice, a nonprofit tribal organization, also opposed the bill, saying it would strip critical funding from tribal-focused grants that support cultural revitalization, land restoration, youth substance use prevention, sacred site access, and tribal youth leadership development, according to a legislative analysis.

California receives millions each year in cannabis excise tax revenue that pays for childcare programs, health initiatives, and environmental programs.

The state’s Legislative Analyst’s Office projected in March that the state would receive $607 million in cannabis tax revenue between July 1, 2024, and June 30, 2025.

Tyler Durden Wed, 07/02/2025 - 07:20

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey

Mortgage applications increased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 27, 2025. Last week’s results included an adjustment for the Juneteenth holiday.

The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13 percent compared with the previous week. The Refinance Index increased 7 percent from the previous week and was 40 percent higher than the same week one year ago. The seasonally adjusted Purchase Index increased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 10 percent compared with the previous week and was 16 percent higher than the same week one year ago.

“Mortgage rates were lower across all loan types last week, with the 30-year fixed rate declining to its lowest level since April at 6.79 percent. This decline prompted an increase in refinance applications, driven by a 10 percent increase in conventional applications and a 22 percent increase in VA refinance applications,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “As borrowers with larger loans tend to be more sensitive to rate changes, the average loan size for a refinance application increased to $313,700 after averaging less than $300,000 for the past six weeks. Purchase activity was essentially flat over the week, as overall uncertainty continues to hold homebuyers out of the market. However, purchase activity still remains 16 percent higher than last year’s pace.”
...
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) decreased to 6.79 percent from 6.88 percent, with points decreasing to 0.62 from 0.63 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
emphasis added

Click on graph for larger image.

The first graph shows the MBA mortgage purchase index.

According to the MBA, purchase activity is up 16% year-over-year unadjusted. 
Red is a four-week average (blue is weekly).  
Purchase application activity is still depressed, but above the lows of October 2023 and is 10% above the lowest levels during the housing bust.  

The second graph shows the refinance index since 1990.

The refinance index increased but remained very low.