Ten Stories Moving the Market

Ten Stories Moving the Market:

Iran’s interior ministry said there are no negotiations with the U.S. currently, only messages; it said the U.S. violated the terms of the June 17 memorandum of understanding and should implement it – Bloomberg. (Why you should care – while the two sides may not be in active negotiations, there is still dialogue going back and forth between mediators)

The U.S. is surging forces, medics, and weaponry to the Middle East to give President Trump more muscular military options as he considers expanding the conflict against Iran; in the past week, special-operations forces have deployed to the region from their U.S. bases, squadrons of jet fighters have been staged across the Middle East, and bomber aircraft at bases in the U.S. and U.K. are on high alert to ramp up operations, according to officials - WSJ. (Why you should care – a similar surge was seen just prior to the initial strikes on Iran in late February)

U.S. Secretary of State Marco Rubio said Iran is not serious about peace negotiations; Rubio said the White House is ready to hold a real discussion when Tehran is prepared to do the same - Reuters. (Why you should care – Rubio said the U.S. will do whatever it takes to protect its own interests as well as those of its allies)

Google parent company Alphabet posted 24% revenue growth year-over-year in the second quarter, fueled by its booming cloud business, but the company continued to burn through cash building data centers for artificial-intelligence computing - WSJ. (Why you should care – despite the cloud unit’s fastest ever quarterly growth, CEO Sundar Pichai said the company can’t build out capacity fast enough to meet customer needs, pointing to continued strong demand for AI components)

ServiceNow raised its forecast for annual subscription revenue for the second time after beating second-quarter revenue and profit estimates, driven by growing demand for its AI-powered software – Reuters. (Why you should care – management said backlog increased 21% year over year, boosted by rising federal contract demand) 

With its eye on an AI and robotics-driven future, automaker Tesla grew its spending to $5.8 billion in the second quarter; the company reported negative free cash flow of $1.1 billion in the second quarter, while its net income fell 5% - WSJ. (Why you should care – uptake of physical AI is likely to drive even more demand for data center compute capacity)

IBM cut its annual revenue growth forecast, days after shocking Wall Street with ‌a warning that corporate spending was shifting toward AI-focused data-center gear at the expense of its software and mainframe computers – Reuters. (Why you should care – CEO Arvind Krishna said a third of those deferred client orders had already closed in the third quarter)

The Houthis, a militant group in Yemen who have been threatening to open another front in the Iran war, said they had targeted two oil tankers in the Red Sea; the Red Sea has emerged as a vital workaround for crude exports, particularly from Saudi Arabia, amid disruptions to shipping through the Strait of Hormuz – Bloomberg. (Why you should care – stopping vessels from transiting into the Gulf of Aden could hamper oil supplies to Asia, causing cargo costs to rise as a longer route to the north is used)

The Federal Communications Commission voted to bar sales of devices ​in the U.S. that contain key hardware from Chinese companies deemed to ‌be national security risks;t he U.S. telecom watchdog maintains a list of firms — including Chinese telecom company Huawei and ZTE — whose equipment is barred for sale in the ​U.S. over national security concerns – Reuters. (Why you should care – given the decision, it’s unlikely the current administration is likely to support the widespread use of Chinese open-source AI models by U.S. businesses)

White House Office of Science and Technology Policy Director Michael Kratsios accused China’s Moonshot of improperly using U.S. artificial intelligence models and Nvidia chips to create the Kimi K3 system that stunned the tech industry last week with its advanced capabilities - Bloomberg. (Why you should care – if true, such an outcome would point to the lead U.S. based technology has over its international rivals)

Economic Calendar:

Earnings: AMP, BX, DLR, FCX, HON, INTC, LMT, NDAQ, NSC, RTX, SAP, TMUS, UNP

European Central Bank Monetary Policy Announcement (8:15 a.m.)

U.S. – Chicago Fed National Activity for June (8:30 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

ECB’s Lagarde (President) Speaks (8:45 a.m.)

Eurozone – Consumer Confidence for July (10 a.m.)

U.S. – KC Fed Manufacturing Index for July (11 a.m.)

Treasury Auctions $21 Billion in 10-Year TIPS (1 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)

Japan – CPI for June (7:30 p.m.)

Japan – Au Jibun Bank Japan Manufacturing, Services, Composite PMI (Preliminary) for July (8:30 p.m.)