🔔 Opening Bell: Xi Jinping Warns Chinese Officials Against Over-Investment in AI and EVs
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On Thursday, the S&P 500 closed at 6,297.36, up 0.57%, while the NASDAQ was up 0.61%, closing at 20,885.65. The Dow Jones Industrial Average closed the session at 44,484.49, up 0.62%.
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Earnings Today
American Express (AXP): Actual EPS: $4.08 (Beat by 5.42%), Forecast EPS: $3.87, Actual Revenue: $17.86B (Beat by 0.90%), Forecast Revenue: $17.7B, Market Cap: $215.41B
Charles Schwab (SCHW): Actual EPS: $1.14 (Beat by 4.59%), Forecast EPS: $1.09, Actual Revenue: $5.85B (Beat by 2.63%), Forecast Revenue: $5.7B, Market Cap: $175.36B
3M (MMM): Actual EPS: $2.16 (Beat by 7.46%), Forecast EPS: $2.01, Actual Revenue: $6.3B (Beat by 3.28%), Forecast Revenue: $6.1B, Market Cap: $83.77B
Truist Financial Corp (TFC): Actual EPS: $1.19 (Beat by 29.35%), Forecast EPS: $0.92, Actual Revenue: $5.04B (Beat by 0.40%), Forecast Revenue: $5.02B, Market Cap: $58.48B
Schlumberger (SLB): Actual EPS: $0.74 (Beat by 1.37%), Forecast EPS: $0.73, Actual Revenue: $8.55B (Beat by 0.35%), Forecast Revenue: $8.52B, Market Cap: $46.38B
Huntington Bancshares (HBAN): Actual EPS: $0.34 (Beat by 3.03%), Forecast EPS: $0.33, Actual Revenue: $1.95B (Missed by 1.02%), Forecast Revenue: $1.97B, Market Cap: $24.23B
Regions Financial (RF): Actual EPS: $0.60 (Beat by 7.14%), Forecast EPS: $0.56, Actual Revenue: $1.91B (Beat by 2.69%), Forecast Revenue: $1.86B, Market Cap: $23.29B
Headlines
Xi Jinping Warns Chinese Officials Against Over-Investment in AI and EVs
Chinese President Xi Jinping has issued a warning to government officials regarding excessive investment in artificial intelligence and electric vehicles, marking a notable shift in China's technological development strategy. During a recent meeting of the Chinese Communist Party's Central Financial and Economic Affairs Commission, Xi emphasized the need for more calculated and sustainable approaches to technological advancement.
In a striking statement, Xi cautioned that "blindly following suit and rushing into projects will inevitably lead to overcapacity." The warning comes amid concerns about potential market saturation and resource allocation in China's rapidly expanding AI and EV sectors, where local governments have been aggressively pushing for development. This strategic pivot suggests a more measured approach to technological investment, focusing on quality over quantity and sustainable growth rather than unchecked expansion.
Donald Trump Calls for Release of Jeffrey Epstein Testimony
President Donald Trump has publicly demanded the release of all testimony related to the late financier. This call for transparency comes amid growing public interest in the sealed documents containing names and information about Epstein's associates and activities.
Trump took to social media to declare, "RELEASE EVERYTHING, INCLUDING ALL INFORMATION ON THE SO-CALLED 'CLIENTS.' THE PUBLIC HAS A RIGHT TO KNOW!" His statement reflects the intense public scrutiny surrounding the case, particularly as a federal judge has ordered the unsealing of court documents that could potentially reveal names of numerous individuals connected to Epstein's activities.
Pentagon's China-Style Rare Earths Deal Triggers Industry Backlash
The Pentagon's recent move to establish a China-style rare earths processing facility has sparked significant controversy within the industry. The Department of Defense's decision to partner with MP Materials and award substantial funding for domestic rare earth processing capabilities has raised concerns about market intervention and competition dynamics.
The initiative, aimed at reducing U.S. dependence on Chinese rare earth supplies, has drawn criticism from industry stakeholders who worry about the government's direct involvement in the market. "This is essentially creating a state-sponsored enterprise that could distort market dynamics," said a senior mining industry executive who requested anonymity. The deal represents a significant shift in U.S. industrial policy, mirroring China's approach to critical minerals management, but has raised questions about its long-term implications for free market competition.
EU Hits Russia with Fresh Sanctions Aimed at Banking and Energy
The European Union has unveiled a new package of sanctions targeting Russia's financial and energy sectors, marking the 13th round of punitive measures since the invasion of Ukraine. The sanctions specifically target banks and entities involved in circumventing previous restrictions, demonstrating the EU's continued commitment to maintaining pressure on Moscow's economy.
EU Commission President Ursula von der Leyen emphasized the significance of these measures, stating: "We continue to stand firmly with Ukraine, and these new sanctions will further weaken Russia's ability to fuel its war machine." The package includes measures to close existing loopholes in the financial sector and introduces stricter controls on energy-related technologies that could benefit Russia's military capabilities.
Shares in Non-Chinese Graphite Producers Rally After US Unveils 93.5% Tariff
Shares of graphite producers outside of China experienced a notable surge following the United States' announcement of substantial tariffs on Chinese graphite imports. The US Department of Commerce's decision to impose a 93.5% tariff on Chinese graphite has created a dramatic shift in the market dynamics for this crucial material, which is essential for electric vehicle batteries and various industrial applications.
The market reaction reflects growing concerns about supply chain dependencies on China and highlights the strategic importance of developing alternative sources for critical minerals. The tariff announcement has particularly benefited companies in North America, Australia, and Africa, as investors anticipate these firms will gain market share and see increased demand for their graphite production. This move aligns with broader efforts by Western nations to reduce reliance on Chinese supplies of critical minerals and strengthen domestic supply chains.
UK Places Sanctions on Russian Spies Over Cyber and Poison Attacks
The United Kingdom has taken decisive action against Russian intelligence operatives by imposing new sanctions in response to a series of cyber attacks and poisoning incidents. These measures target members of Russia's Federal Security Service (FSB) who were allegedly involved in multiple malicious activities against British interests and individuals.
The sanctions represent a significant escalation in the UK's response to Russian hostile activities, particularly focusing on cyber warfare and chemical weapons use. The British government's move aligns with its broader strategy to counter Russian aggression and protect national security interests, while also demonstrating solidarity with international allies in confronting state-sponsored attacks.
EU Lowers Price Cap for Russian Crude Under New Sanctions Package
The European Union has reached a significant agreement on its 18th sanctions package against Russia, featuring a notable reduction in the price cap for Russian crude oil. The new dynamic price cap will be set at approximately 47 dollars per barrel at current market prices, marking a decrease from the previous $60 per barrel threshold established in December 2022. This adjustment aims to further restrict Russia's oil revenues while maintaining global market supply stability.
EU Commission President Ursula von der Leyen emphasized the strategic importance of these measures, stating "We are striking at the heart of Russia's war machine. Targeting its banking, energy and military-industrial sectors and including a new dynamic oil price cap." The sanctions package also includes, for the first time, measures against Russian oil producer Rosneft's largest refinery in India, demonstrating the EU's commitment to expanding the scope of its pressure on Moscow's energy sector. The move comes as Russia's crude production averaged 9.19 million barrels per day in June, with China and India remaining primary buyers of Russian oil.
Trump Asks Bondi to Seek Release of Grand Jury Testimony in Epstein Investigation
President Donald Trump has publicly requested Attorney General Pam Bondi to unseal pertinent grand jury testimony related to the accused sex trafficker's investigation. The request comes amid growing pressure for transparency and follows the Justice Department's recent memo stating no evidence of a "client list" or murder was found in Epstein's case.
The announcement has sparked mixed reactions, particularly after The Wall Street Journal's report about a controversial birthday letter to Epstein allegedly bearing Trump's signature. Attorney General Bondi responded swiftly to Trump's request, stating "President Trump—we are ready to move the court tomorrow to unseal the grand jury transcripts." The Department of Justice is expected to file a request in federal court in Manhattan, though experts note that convincing a judge to release additional material may be challenging due to protections for victims and accusers.
China Pledges to Crack Down on Illicit Capital Flows and Speculation
China's top financial regulators have announced a comprehensive campaign to combat illegal capital flows and market speculation, marking an intensified effort to maintain financial stability. The initiative, spearheaded by the State Administration of Foreign Exchange (SAFE), aims to strengthen supervision of cross-border capital movements and prevent risks in the foreign exchange market.
SAFE's deputy head Wang Chunying emphasized the authority's commitment, stating "We will resolutely prevent and defuse risks in key areas and maintain the safety bottom line of no systemic risks." The regulator plans to implement stricter monitoring of foreign exchange transactions, particularly focusing on underground banking operations and fraudulent trade activities that facilitate illegal capital transfers.
ACA Health Insurance Will Cost the Average Person 75% More Next Year, Research Shows
A comprehensive analysis by KFF, a nonpartisan health policy research group, reveals a dramatic increase in health insurance premiums for Americans purchasing coverage through Healthcare.gov or state-based marketplaces. The expiration of enhanced premium tax credits implemented during the COVID-19 pandemic is driving this substantial price hike, which could see the average premium rise by 75% in 2026.
The impact of this change could be severe, as explained by Cynthia Cox, director of the Program on the Affordable Care Act at KFF: "Pretty much every insurance company is talking about the expiration of enhanced premium tax credits in the ACA markets." The situation is particularly concerning as enrollment had reached a record 24 million people, with significant growth in southern states like Texas, Florida, and Georgia. The Congressional Budget Office projects that 8.2 million current ACA insurance holders may become uninsured due to these changes and other modifications implemented through the One Big Beautiful Bill Act.
Chevron Seals $53bn Hess Takeover After Exxon Fails to Torpedo Deal
Chevron has successfully finalized its $53 billion acquisition of Hess Corporation, overcoming attempts by ExxonMobil to derail the deal. The merger represents one of the largest oil and gas deals of recent years, significantly expanding Chevron's global energy portfolio and strengthening its position in key markets.
The deal's completion comes despite ExxonMobil's efforts to exercise pre-emptive rights over Hess's assets in Guyana, where Hess holds a 30% stake in the prolific Stabroek Block. Chevron's CEO Mike Wirth emphasized the strategic importance of the acquisition, stating, "This acquisition strengthens our advantaged portfolio and is expected to deliver higher returns and lower carbon."
US Passes First Major National Crypto Legislation
The US Congress has passed its first major national cryptocurrency legislation, focusing on stablecoins regulation. The Genius Act, which received bipartisan support and is expected to be signed into law by President Trump, establishes a regulatory framework requiring stablecoins to be backed one-to-one with US dollars or other low-risk assets.
The legislation marks a dramatic shift in the cryptocurrency landscape, particularly given Trump's evolution from crypto skeptic to supporter, influenced by his business ties to firms like World Liberty Financial. While supporters argue the bill provides needed clarity for the growing industry, critics warn it could introduce new risks into the financial system. As noted by Terry Haines of Pangaea Policy: "This is the end of crypto's wins for quite a while - and the only one. When the easy part, stablecoin, takes ~4 to 5 years and barely survives industry scandals, it's not much to crow about."
Trump Calls Fed Chair a 'Numbskull' Who Makes It Difficult for People to Buy a House
President Donald Trump has launched another scathing attack on Federal Reserve Chairman Jerome Powell, criticizing his leadership of the central bank and its impact on the housing market. Trump expressed particular frustration over the Fed's maintenance of higher interest rates, which he claims are making home purchases increasingly difficult, especially for younger buyers. The criticism comes amid rising U.S. house prices and ongoing debates about monetary policy.
In a particularly notable statement, Trump declared Powell's appointment as "truly one of my worst appointments" and criticized President Biden for reappointing him. The controversy has escalated further with revelations about a $1.9 billion Fed headquarters refurbishment project that is approximately $600 million over budget. The situation has drawn attention from the White House, which is now calling for an inspection of renovation costs, while G20 finance ministers have responded by emphasizing the importance of central bank independence in their latest communique.
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