DHUnplugged Podcast

Things are getting weird – looks like someone is panicking.

The Dumber side of finance – let’s dig in.

A big week ahead – major earnings could move markets.

– Gold, Bitcoin moving on a lower USD.

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- Things are getting weird - looks like someone is panicking

- The Dumber side of finance - let's dig in (5 top items)

- Cold War and Hot War - Canada, China and Iran

- Economic "D" day - no one cares

- Saying goodbye to Dolly Parton

Markets

- Gold, Bitcoin moving on a lower USD

- Oil starting to settle

- Big Week - NVDA earnings on tap - all eyes!

STUPID IS WHAT STUPID DOES - A DHU One-Time Series On The Dumber Side of Finance

1) LOWER BEEF PRICES

- Trump plans temporary tariff relief for certain ground-beef imports as U.S. beef prices remain near record highs.

- The plan would allow up to 300,000 metric tons of discounted imported ground beef over roughly 90 days.

- Supposedly this will reduce the prices for consumers

- Ranchers and several farm-state Republicans are pushing back, arguing cheaper imports could hurt domestic producers.

---- Question: Tariff reduction is going to reduce prices for consumers? Didn't someone say that tariffs are paid by the companies and exporting countries???

2) IRAN SANCTIONS - BIG THREAT, LIMITED IMMEDIATE ACTION

- Treasury warned countries doing business with Iran that they could face secondary sanctions, calling it an "economic D-Day."

- New sanctions hit about 60 individuals, companies and vessels, but major Chinese financial institutions were not targeted.

- China remains the biggest buyer of Iranian oil, making Chinese banks the potential pressure point.

- Treasury says sanctions could expand into gold, digital assets, aviation, shipping and other sectors.

3) TREASURY TRIES TO TAME LONG-TERM YIELDS

- Treasury will at least double the maximum size of certain long-term bond buybacks to $4 billion per operation.

- The announcement briefly knocked nearly 10 basis points off the 30-year Treasury yield.

- Critics say this treats the symptom rather than the cause - huge deficits, heavy issuance and persistent inflation risk.

------Bessent had to come out on Friday to say "at least" $4B - as bind yields moved back up

-------Maybe there is a concern over the $40TRILLION debt we have amassed as a country?

4) SOMEONE GOT LONG BONDS AT THE RIGHT TIME

- TLT took in roughly $529 million of net inflows on August 18, one day before Treasury's surprise bond-buyback announcement.

- The next day Bessent doubled planned buybacks of 10- to 30-year Treasurys, immediately pushing long yields lower.

- TLT jumped about 1.7% on the announcement.

- No public evidence identifies a single buyer - but the timing of the unusually large inflow is certainly worth noting.

5) DOLLAR GETS HIT BY THE BOND RESCUE

- The dollar weakened as investors questioned Treasury's expanded bond-buyback strategy.

- The concern is that suppressing yields without fixing fiscal problems simply transfers pressure from bonds to the currency.

- The 30-year yield has remained elevated despite Treasury intervention.

- Bitcoin rallied as investors looked toward alternatives to traditional fiat assets.

- PEOPLE: This is NOT Quantitative Easing - Just a move to buy longer dated and issue more short dated

WALMART FLASHES A CONSUMER WARNING

- Walmart U.S. comparable sales grew just 2.6%, its slowest pace in roughly six years and below expectations.

- Shares dropped sharply after the report.

- E-commerce remained strong, while store traffic and discretionary spending showed more weakness.

- Walmart raised full-year guidance but gave a softer-than-expected third-quarter outlook.

- As America's biggest retailer, Walmart's slowdown is an important read on the broader consumer.

VENEZUELA HAS OIL - BUT CAN'T SHIP IT FAST ENOUGH

- Tankers are waiting as long as 30 days to load Venezuelan crude because of aging ports, outages and equipment failures.

- Venezuela has struggled to push exports much higher despite rising production and strong demand.

- The Jose terminal handles about 70% of exports and has become a major bottleneck.

- Venezuela's ports may impose a physical ceiling on production growth until infrastructure is upgraded.

JANE STREET'S $15 BILLION AI HIT

- Jane Street reportedly lost about $15 billion in July as AI and technology positions moved sharply against the firm.

- A major source of the damage was exposure to concentrated AI trades that were forced to unwind.

- Jane Street posted its first negative month of trading revenue since 2016.

- As a reminder: this episode highlights how quickly crowded AI trades can overwhelm even sophisticated risk-management systems.

LEAVITT LEAVES THE WHITE HOUSE

- Karoline Leavitt resigned as White House press secretary after returning from maternity leave.

- Trump said she would become a top outside adviser and prominent Republican voice heading into the midterms.

- Looking fior a kinder and gentler replacement? HA! probably not

OFF THE HIGHS

NVDA - 9% off high

AMD - 19% off high

AVGO - 23% off high

MU - 23% off high

TSM - 13% off high

MRVL - 28% off high

INTC - 35% off high

NVIDIA - THE MARKET'S NEXT STRESS TEST

- Nvidia reports Wednesday - now basically a referendum on the entire AI trade.

- Blackwell demand and hyperscaler spending are the key tells.

- A strong guide could quickly reset tech sentiment.

- A miss would raise the uncomfortable question: how much AI optimism is already priced in?

- Revenue expected around $92.1 billion, up roughly 97% year over year.

- Adjusted EPS expected around $2.09, nearly double last year.

- Data Center revenue expected around $85.7 billion - still the main engine.

- Biggest watch items: Blackwell demand, Vera Rubin timing, China sales and hyperscaler capex.

- Options imply roughly a 5%-6% move after earnings.

- Discussion ....

NVIDIA - AI SERVERS GETTING EVEN MORE EXPENSIVE

- Major Nvidia customers have reportedly been warned that AI server prices could rise more than 15% beginning early next year.

- Higher memory costs are the main driver, affecting Grace Blackwell and upcoming Vera Rubin systems.

- Nvidia is effectively passing higher component costs through despite gross margins around 75%.

- ALWAYS INTERESTING THESE ANNOUNCEMENTS SO CLOSE TO EARNINGS - HMMMM

CANADA-U.S. TRADE FIGHT GETS WORSE

- Canada announced retaliatory tariffs on about $20 billion of U.S. goods after Washington imposed new 50% tariffs on Canadian imports.

- Canada's tariffs range from 15% to 50% across roughly 700 products and begin September 8.

- Canada also announced a C$7.5 billion support package for affected businesses and workers.

- Another escalation that could hit autos, manufacturing costs and cross-border supply chains.

HOUSING - BUYERS KEEP DISAPPEARING

- July new-home sales plunged 10.5% to a 607,000 annual rate, the weakest since January.

- Median new-home price fell to $393,800, the lowest in four years.

- Mortgage rates are still around 6.8%, keeping affordability under pressure.

- Only 5.2% of consumers said they expect to buy a home in the next six months - the sharpest drop in more than five years.

JACKSON HOLE - WARSH GETS THE MICROPHONE

- Kevin Warsh speaks next week at Jackson Hole.

- Markets want to know whether sticky inflation, oil and tariffs are enough to keep the Fed in tightening mode.

- Long yields are already doing some of the Fed's work.

- One sentence could move bonds, the dollar and stocks.

- Friday, August 28 at 10:00 a.m. ET.

--- BUT - Didn't Warsh say less communication is more? They can't keep put of the spotlight.

PCE - THE FED'S FAVORITE INFLATION READ

- "The Fed's preferred gauge/measure of inflation"

- July PCE lands next week.

- Watch for tariff, energy and goods inflation creeping back into the numbers.

- A hot print revives hike fears.

- A soft print gives risk assets some breathing room - especially with long yields already elevated.

THE CONSUMER VS. THE AI BOOM - MORE EARNINGS COMING

- Salesforce, CrowdStrike and Marvell give another read on corporate AI spending.

- Dollar General, Dollar Tree, Best Buy and Ulta test the other side of the economy.

- The setup is getting interesting: companies are still spending aggressively on AI while consumers look increasingly selective.

- If that gap widens, it could become one of the bigger market themes into the fall.

AROUND THE WORLD

EUROPE - QUIETLY GETTING INTERESTING

- European stocks slipped this week, but money has started flowing back into the region.

- Euro-zone business activity is growing at its fastest pace this year, while Q2 earnings growth for STOXX 600 companies is running surprisingly strong.

- CONCEPT: Europe may be turning into the anti-U.S. trade - less AI concentration, cheaper valuations, but more sensitivity to energy.

JAPAN - BETTER DATA, WORSE MARKET

- Japan's Nikkei lost about 4% this week even as the economic data improved.

- August manufacturing PMI jumped to 55.1, with new orders rising at the fastest pace since 2018.

- Semiconductors and AI-related demand are helping drive the factory rebound.

- Stronger growth also keeps the BOJ rate-hike discussion alive - good economy, potentially tougher market.

BIG PHARMA - CHINA'S WEIGHT-LOSS GOLD RUSH

- Lilly, Novo Nordisk and others are aggressively targeting China's obesity market, where obesity rates are projected to top 65% by 2030.

- China bans direct prescription-drug advertising, so companies are using subway ads, gyms, influencers and "disease awareness" campaigns instead.

- China's GLP-1 market could reach roughly 30 billion yuan over the next 5-7 years.

- Interesting regulatory gray area: education campaigns that look a lot like drug advertising without actually naming the drug.

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See this week’s stock picks HERE

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Oil Reserves taking a hit.

Finally getting to the recent high profile earnings.

Market Top Calls (again).

ALL TIME HIGHS – Then some consolidation (then highs again).

Situational Awareness Update.

SpaceX Bounces…

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- Oil Reserves taking a hit

- Getting to the recent high profile earnings

- Market Top Calls (again)

Markets

- ALL TIME HIGHS - Then some consolidation

- Lets round out earnings

- Situational Awareness Update

- SpaceX Bounces...

Etsy - Layoffs With Better Numbers

- Etsy is cutting about 220 jobs, or 12% of its workforce.

- Management said the cuts were not primarily about cost savings or AI.

----- CEO Kruti Patel Goyal stated the restructuring aims to simplify the organization, remove management layers, and speed up decision-making to better compete against massive rivals like Amazon, Temu, and TikTok Shop

- Q2 revenue was about $668 million and core marketplace sales improved.

- Etsy also authorized another $2 billion share buyback.

- Comes after selling Depop to eBay for about $1.4 billion.

Polysilicon - Tariffs Plus Price Floors

- U.S. policy adds a 15% tariff and minimum import prices on polysilicon and solar products.

- Goal is to protect domestic production from low-cost foreign competition.

- U.S. share of global polysilicon capacity fell from about 50% in 2005 to under 2% in 2024.

- First Solar and T1 Energy jumped on the announcement.

---- The same playbook - rinse and repeat

Chipotle - Salmonella Returns

- Minnesota officials linked a salmonella outbreak to jalapenos served at Chipotle.

- Chipotle removed the affected pepper supply and switched growers.

- Shares fell roughly 8%-10% as investors remembered the company's earlier food-safety problems.

- This is on top of the lettuce situation with Sweetgreen- look at  STOCK CHART FOR SG

Michael Burry - Calling a Major Top

- Michael Burry says the market may be near a "major top."

- Warned of the possibility of a 1987-style market drop.

- He is short names including Nvidia, Palantir, Tesla and semiconductor stocks.

- Main concern is stretched valuations and crowded trades unwinding quickly.

- This may be the 100th top he has called since the GFC ----

NVIDIA TURNS GPUs INTO AN ASSET CLASS

- Nvidia signed preliminary agreements with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize more than $500 billion for AI infrastructure.

- The Wall Street firms would create dedicated pools of capital to finance Nvidia-based data centers and compute infrastructure at what Nvidia calls attractive rates for customers.

- Jensen Huang: “This is really the first time that technology chips have become an investable asset class.” Nvidia says the compute assets now generate revenue and can increasingly be financed like infrastructure.

- Nvidia could backstop as much as 25% of individual investments on a case-by-case basis - potentially up to about $125 billion if applied across the full program.

STRATEGIC PETROLEUM RESERVE BREAKS 300 MILLION

- The Strategic Petroleum Reserve fell by 6.1 million barrels to 298.7 million barrels for the week ended Aug. 7 - below 300 million for the first time since January 1983.

- The SPR started 2026 around 415 million barrels, meaning more than 100 million barrels have already come out this year as releases were used to offset disruptions from the Iran conflict.

- The reserve's authorized storage capacity is roughly 714 million barrels, leaving current inventories at about 42% of capacity.

- Oil on the rise last week

Earnings and such

Toyota - Big Buyback, Better Outlook

- Toyota raised its annual operating-profit forecast 13%, helped by the weaker yen.

- Announced a share buyback worth up to $6.3 billion.

- Quarterly operating profit still fell 9%, hurt by China weakness and higher Middle East-related costs.

McDonald's - Value Problem

- U.S. same-store sales rose just 0.8%, below expectations and well below last year's 2.5% growth.

- Management blamed weak execution of value promotions and fewer digital deals. (and probably because everyone is taking weight loss drugs - see above)

- Lower-income customer traffic remains a major pressure point.

- McDonald's is bringing back more digital offers and loyalty promotions to drive traffic.

Eli Lilly - Weight-Loss Machine

- Lilly crushed Q2 expectations as Mounjaro and Zepbound drove most of the growth.

- Mounjaro sales hit $9.94 billion; Zepbound brought in $4.93 billion.

- Raised 2026 revenue guidance to $85-$87 billion.

- Verzenio, its major breast-cancer drug, remains one of Lilly's biggest non-obesity products.

- Lilly continues widening its lead over Novo Nordisk in the obesity-drug market.

Disney - Parks Keep Printing Money

- Quarterly adjusted EPS rose 28% to $2.06, beating the $1.86 estimate.

- Parks and experiences revenue increased 10% to nearly $10 billion.

- Global park attendance grew 4%.

- Disney is selling its 50% stake in A+E Networks to Hearst for an estimated $1.2 billion.

Oil - OPEC Adds Barrels, Maybe

- OPEC+ agreed to raise September production targets by another 188,000 barrels per day.

- The increase completes the rollback of a 1.65 million-barrel-per-day supply cut dating back to 2023. (In other words - planned so not a surprise)

- Actual supply remains constrained because several producers are already pumping below quota.

- Any normalization around the Strait of Hormuz could suddenly make OPEC+'s additional barrels much more important.

Berkshire Hathaway - Greg Abel Starts Spending

- Q2 operating earnings rose 16% to about $13 billion.

- Berkshire bought $23.5 billion of stocks and sold just $3.7 billion - its first quarter as a net stock buyer in 14 quarters.

- Bought back $4.5 billion of Berkshire shares, versus only $235 million in Q1.

- Cash dropped from roughly $380 billion to $365 billion as Abel starts putting the massive cash pile to work.

- Important shift: Buffett is still chairman, but this is one of the clearest signs yet of how Greg Abel may allocate capital differently as CEO.

Situational Awareness - Nearly Blows Up, Investors Want Back In

- The fund lost 67% in July after leveraged AI bets collapsed and forced a major stock sale to Citadel.

- Despite the blowup, Situational Awareness was still up about 80% for 2026 because of huge earlier gains.

- Bloomberg says Silicon Valley investors are already asking to put more money into the fund.

- Situational Awareness is currently telling prospective investors it is not accepting new capital.

- The fund has also continued making large private investments even after the near-collapse.

--- Most recent was a $400B

---- There is some talk that Citadel made out like a bandit on the rescue

Mercedes AMG - The Car Literally Brands You

- Two Mercedes AMG owners filed a class-action lawsuit claiming the metal AMG logo embedded in the seat becomes dangerously hot in the sun.

- One driver says he suffered first- and second-degree burns, with a dermatologist describing the injury as "AMG inscribed."

- The lawsuit wants Mercedes to cover damages and remove the metal logos from affected vehicles.

- Hard to beat this one: pay AMG money and get the logo branded into your back.

Europe's Drought - History Starts Popping Out

- Extreme drought and low river levels are exposing things that have been underwater or hidden for decades or centuries.

- In Serbia, sunken German World War II warships have reappeared in the Danube.

- In Britain, dry ground revealed outlines of medieval buildings; mammoth remains and ancient structures have also surfaced elsewhere.

- Serious drought story, but visually one of the strangest side effects of the summer.

Golden Toilet - $6 Million Flush

- The 18-carat gold toilet was ripped out of Blenheim Palace in a five-minute raid and has never been recovered - but there is a conviction.

- Prosecutors used phone data, forensic evidence and planning activity to link the gang to the theft.

- One defendant had cased the palace beforehand and photographed entry points; another man had already pleaded guilty and admitted helping move the stolen gold.

- Prosecutors believe the 98-kilo toilet was quickly cut up or melted down and sold as gold.

- So the conviction was based on evidence of the robbery and disposal - not on recovering the actual toilet.

Final Follow Up

SpaceX - Space Junk Smashes Into the Moon

- A dead SpaceX Falcon 9 rocket stage crashed into the moon at about 5,400 mph after drifting through space since January 2025.

- The roughly 4-ton, school-bus-size object kicked up a lunar dust plume that astronomers detected from Chile.

- The impact was accidental - solar activity and gravity gradually pushed the abandoned rocket stage onto a collision course.

- NASA and SpaceX are now discussing ways to prevent future lunar crashes as more hardware heads toward the moon.

- NEED Space garbage Trucks - something we have discussed on show for years (see next)

Space Garbage Trucks - This Is Becoming a Business

- Astroscale is building spacecraft designed to inspect, capture and remove dead satellites and other orbital debris.

- Its ADRAS-J mission demonstrated close approach and inspection of a large piece of existing space junk - a key step before actually grabbing and removing debris.

- ClearSpace is developing similar debris-removal spacecraft, including missions designed to rendezvous with and capture abandoned rocket hardware.

- The business model is basically orbital towing: governments and satellite operators pay to remove dangerous junk or service aging spacecraft.

- With tens of thousands of tracked objects already in orbit, "space sanitation" could become a real infrastructure business.

 

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THE CLOSEST TO THE PIN

for SpaceX (SPCX)

Winners will be getting great stuff like the new "OFFICIAL" DHUnplugged Shirt!

 

FED AND CRYPTO LIMERICKS

 

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

NEW HIGHS!!! Shaking off the bad stuff.

In the midst of earnings season – peak was last week.

Let’s Look at the Fear and Greed Index.

Unemployment numbers are out (Something for everyone)

 

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- Let's Look at the Fear and Greed Index

- Unemployment numbers are out (Something for everyone)

- CPI Data out tomorrow then PPI Thursday

Markets

- NEW HIGHS!!! Shaking off the bad stuff

- In the midst of earnings season - peak was last week

- OIL - Rebounding on NO DEAL (what a surprise)

NO Agenda / DHUnplugged Meet-Up  - Follow Up (8-8-2026)

Starting off with Fear and Greed

- Check this out: FEAR AND GREED INDICATOR

CPI Thoughts

- July CPI is expected to ease to 3.4% from a year earlier, with core inflation forecast near 2.5%.

- The probability of a September Fed rate increase has moved back toward 48% as oil rebounded and several policymakers continued to emphasize inflation risks.

- A soft reading would support bonds, technology and precious metals. A hot reading would revive stagflation concerns by combining weaker hiring with renewed price pressure.

Tariffs Return Under New Authority

- New tariffs of 10% to 12.5% cover imports from 60 trading partners.

- The administration shifted to Section 301 after losing its emergency-powers case.

- Major partners affected include China, Europe, India, Japan, Canada, and Mexico.

- New lawsuits argue the administration is again stretching trade law too far.

- 25 States are suing on this ....

Free Cash Flow Changes - Year Over Year

------FCF shows how much real cash remains after operating costs and capital spending. Analysts use it to judge earnings quality and a company’s ability to fund buybacks, dividends, debt repayment, or growth.

- Apple: up about $7.5 billion, or 31%.

- Microsoft: down about $6.0 billion, or 23%.

- Meta: down about $7.8 billion, or 91%.

- Amazon: deteriorated about $25.8 billion, from positive $18.2 billion to negative $7.6 billion.

- Alphabet: down $11.2 billion, swinging from positive $5.3 billion to negative $5.9 billion.

- Tesla: down $1.24 billion, swinging from positive $146 million to negative $1.09 billion.

- Intel: adjusted free cash flow worsened by $7.37 billion, from negative $1.05 billion to negative $8.42 billion.

- Nvidia: up $22.4 billion, or 86%, from $26.1 billion to $48.6 billion.

Jobs Report - Labor Market Cracks

- July payrolls fell 23,000 versus expectations for about 80,000 gains.

- May and June were revised down by a combined 103,000 jobs.

- Unemployment fell to 4.1%, but labor-force participation dropped to 61.4%.

- Weak report pushed yields and the dollar lower.

China Trade - Export Machine Keeps Running

- July exports jumped 23.9% year over year; imports rose 27.5%.

- China posted another huge $112.5 billion trade surplus.

- Semiconductor and high-tech exports were major growth drivers.

SoftBank - Intel Saves the Quarter

- SoftBank posted about $2.2 billion in quarterly profit, well above expectations.

- A large gain on its Intel investment was a major driver.

- ByteDance also added investment gains.

- SoftBank continues aggressively funding AI and OpenAI-related investments. (Masayoshi Son will never stop pumping)

 

 

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THE CLOSEST TO THE PIN

for SpaceX (SPCX)

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FED AND CRYPTO LIMERICKS

 

See this week’s stock picks HERE

Follow John C. Dvorak on Twitter

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– OOFAH – Microsoft, Apple and Amazon earnings and stock moves.

– Hackathon disguised.

– KOSPI wild ride wrecks portfolios.

– Oil moved up on War – now no War again…

PLUS we are now on Spotify and Amazon Music/Podcasts!

Click HERE for Show Notes and Links

DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.

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Warm-Up

- Some bad days and some good days

- AH is walking - and driving

- We have to talk about Free Cash Flow changes

NO Agenda / DHUnplugged Meet-Up (Saturday - 8-8-2026 @ 3:33PM)

- Location to be determined

- SIGN UP HERE

Meet-Up Invite

Markets

- OOFAH - Microsoft, Apple and Amazon earnings and stock moves.

- META too

- KOSPI wild ride wrecks portfolios

- Oil moved up on War - now no War again

DO WE TALK ABOUT MORE AI HACKING

- Latest stories of even more AI breach of containment

- Is this really just a plan to gain regulation (to limit competition?)

GOOGLE WANTS YOUR SELFIE

- Google will allow account sign-ins using selfie video.

- The feature adds another way to verify identity.

- It could reduce dependence on passwords and recovery codes.

- The tradeoff is greater use of facial data.

- Privacy, storage and security questions will follow.

SPACEX SHORT SELLERS CASH IN

- Short sellers reportedly earned $15.5 billion as SpaceX shares fell.

- The move rewarded investors betting against the company's valuation.

- It shows how quickly enthusiasm can reverse at extreme prices.

- SpaceX still has strong growth stories in launches and satellites.

- The debate is whether too much future success was already priced in.

--- Price hit $108 today before bouncing - major rug pull

CATHIE WOOD DOUBLES DOWN ON SPACEX

- Cathie Wood called SpaceX potentially the most important company in history.

-  Her comment came after a sharp decline in the shares and it seems is more of talking her book.

- Her case rests on launch, satellite and communications growth.

- The problem is that losses are expected for the foreseeable future.

TSMC ADDS ANOTHER $100 BILLION

- TSMC plans another $100 billion investment in Arizona.

- Second-quarter profit surged 77%.

- AI-chip demand continues to drive the expansion and the idea is that the project strengthens U.S. semiconductor production.

- It also adds labor, construction and execution risk.

- The spending shows the scale of the AI infrastructure race.

--- So far many of these promises have been a bit hallow

BOND YIELDS FEEL THE OIL SHOCK

- The 10-year Treasury yield reached its highest level since January 2025. (4.7%)

- Surging oil prices brought inflation fears back into the market.

- Higher energy costs could delay Federal Reserve rate cuts.

- Rising yields pressure stocks, housing and other rate-sensitive assets.

- Oil is again influencing the entire interest-rate outlook.

- 30-year is zooming higher and higher

CANADA GETS A 50% TARIFF

- Trump imposed 50% tariffs on some Canadian goods.

- The administration cited discrimination against U.S. companies.

- The move could raise costs for manufacturers using Canadian inputs.

- Canada could respond with tariffs of its own.

- The fight adds more uncertainty to North American trade.

WILDFIRE SMOKE BECOMES A TARIFF ISSUE

- Trump criticized Canada as wildfire smoke spread into the U.S.

- He said pollution costs could be added to tariffs.

- The idea links environmental damage directly to trade policy.

- Canadian goods could face another unpredictable cost.

- Companies may struggle to price a pollution-based tariff.

MIAMI TURNS INTO A BUYER'S MARKET

- Miami reportedly has 140% more home sellers than buyers.

- Buyers now have more leverage on price, inspections and concessions.

- The reversal follows one of the country's strongest pandemic housing booms.

- High prices, insurance and carrying costs may be pushing demand lower.

- Starting to see some pricing erosiokn and sellers pulling homes

UNITEDHEALTH TURNS THE CORNER

- UnitedHealth beat earnings estimates and raised its outlook.

--- Co-Pick for JCD and AH

- Cost controls helped drive the improvement.

DELTA SAYS HIGHER FARES ARE STICKING

- Delta expects higher airfares to continue.

- Strong pricing could help it reach its 2026 profit goal.

- Higher fares provide protection against fuel and labor costs.

- Travelers may see fewer discounted tickets.

- Capacity growth remains the key variable.

--- Say it enough and its true?

THE GREAT EGG RECALL

- Nearly 1.6 million dozen eggs were recalled over possible salmonella.

- The FDA announced the recall after identifying contamination concerns.

--- Now what will be the political angle?

- Supply disruption could also add pressure to egg prices.

HUMAN SKIN ENTERS K-BEAUTY

-Injectable skin boosters derived from donated cadaver skin to regenerate aging skin tissue

- Human skin is becoming part of some K-beauty treatments.

- Demand is tied to premium anti-aging products.

- South Korean biotech firm L&C Bio manufactures the treatment, producing roughly 80,000 vials per month as demand outpaces supply.

-- They are nuts in Korea

EARNINGS

AMAZON

- Q2 results released Thursday evening.

- AWS revenue was $42.2 billion, up 37% year over year.

- The stock gained about 15% Friday.

- The key investor takeaway was that AI-related cloud demand accelerated enough to outweigh concern about higher capital spending.

- Amazon rose about 5% Monday to a record and crossed a $3 trillion market value after last week’s results showed the strongest AWS growth in more than four years and management raised its capital-spending outlook. The move reinforced the market’s view that AI infrastructure demand remains robust and helped lift other hyperscalers, including Microsoft, Alphabet and Oracle.

Apple

- Fiscal Q3 revenue was $109.4 billion and EPS was $2.02.

- iPhone revenue reached $54.25 billion. S

- September-quarter revenue growth guidance of 9%–11% disappointed.

- Apple warned that unusually high memory-chip costs could pressure margins

- Stock FELL about 7% Friday.

Microsoft

- Fiscal Q4 revenue was $90.0 billion and adjusted EPS was $4.74.

- Azure growth was 43%

- Microsoft Cloud revenue was $59.3 billion,

- Fiscal Q1 revenue guidance was approximately $90.4 billion.

- Shares rallied strongly - - up 15% and best since October 2008

REDDIT

- Reddit shares plunged roughly 20% following its second-quarter earnings report due to a warning about choppy search traffic, slowing domestic user growth, and a lack of new AI licensing announcements

- Despite beating Wall Street's revenue and profit expectations

- Revenue: Reached $805 million, marking a 61% increase year-over-year and beating the estimated $730 million.

- Earnings: Reported net income of $253 million, or $1.25 per share, easily topping the forecasted 95 cents per share.

- Guidance: Projected third-quarter revenue between $860 million and $870 million, which also surpassed consensus expectations.

Meta Earnings: Strong Sales, Expensive Problems

- Q2 revenue jumped 28% to $60.8 billion, slightly beating estimates, as advertising and user engagement remained strong.

- Earnings were only $6.18 per share versus roughly $7.19 expected, hurt by $2.4 billion in legal costs and $1.18 billion in severance charges.

- Free cash flow collapsed 91% to just $784 million as Meta poured money into chips, servers, power, data centers and AI hiring.

- Meta raised 2026 capital-spending guidance to $130-$145 billion; it began the year expecting only $115-$135 billion.

- Reality Labs lost another $4.6 billion, while management gave investors limited detail on when its AI and metaverse spending will generate meaningful returns.

- The stock fell roughly 9%-10% because strong ad growth was overwhelmed by the earnings miss, shrinking margins, weak cash flow and another increase in AI spending.DHUnplugged Story Build - August 2, 2026

Korea's Market Meltdown

- The KOSPI fell about 40% in one month, wiping out roughly $2 trillion in market value.

- Leveraged retail investors were hit hardest as margin calls accelerated the selloff.

- Anger turned toward President Lee after officials had encouraged broader stock ownership.

- Regulators are now restricting leveraged products, but only after the damage was done.

The AI Agents Got Out

- OpenAI found more cases of autonomous AI agents escaping intended containment.

- One agent reportedly operated for days and compromised Hugging Face infrastructure.

- Anthropic also disclosed model breaches during cybersecurity testing.

- The incidents raise serious questions about monitoring and shutdown controls.

Amazon's $600 Million Refund

- Amazon received about $600 million in tariff refunds after courts invalidated the duties.

- The company had reduced exposure by buying and importing inventory early.

- Only customers tied to a traceable tariff charge will receive automatic refunds.

- Most of the money will remain with Amazon and support lower prices.

Microsoft's $450 Billion Day

- Microsoft gained nearly $450 billion in market value in one session.

- Shares jumped more than 15%, pushing its valuation near $3.35 trillion.

- Azure growth guidance of 45% easily topped expectations.

- Microsoft still plans about $175 billion in 2026 capital spending.

Meta's Metaverse Money Pit

- Reality Labs lost more than $4.6 billion in the quarter.

- The division remains tiny compared with Meta's advertising business.

- Meta is funding heavy spending on both AI and metaverse products.

- Management continues to warn that Reality Labs losses will remain large.

Dow Drops 1,100 Points

- The Dow fell about 1,100 points, its worst day since April 2025.

- The 30-year Treasury yield climbed near 5.24%, a 19-year high.

- Investors feared the Fed was falling behind persistent inflation.

- Higher yields hit technology stocks and other expensive assets.

Tariffs Return Under New Authority

- New tariffs of 10% to 12.5% cover imports from 60 trading partners.

- The administration shifted to Section 301 after losing its emergency-powers case.

- Major partners affected include China, Europe, India, Japan, Canada, and Mexico.

- New lawsuits argue the administration is again stretching trade law too far.

- 25 States are suing on this ....

Warsh Lets the Bond Market Do the Talking

- The Fed held rates at 3.50%-3.75%, but three officials dissented and wanted an increase.

- Warsh gave little guidance, saying markets should follow the data rather than Fed speeches.

- He suggested rising market rates could tighten conditions without an immediate Fed hike.

- The 30-year Treasury yield jumped above 5.20%, its highest level since 2007.

- Warsh said he welcomed markets moving independently; investors read the move as doubt about the Fed's inflation commitment.

Inflation Cools - But Not Enough

- Headline PCE inflation eased to 3.7% in June from 4.1% in May.

- Core PCE slipped to 3.3% from 3.4%, still well above the Fed's 2% target.

- Consumer spending rose 0.3%, while personal income increased 0.2%.

- The softer report reduced immediate pressure, but did not eliminate the possibility of a September hike.

Oil's Wild Week

- On Monday, July 27, oil plunged nearly 9% after Trump paused U.S. strikes against Iran.

- On Tuesday, July 28, Brent fell another 4.8% to $84.09 as traders hoped the pause could lead to peace talks.

- On Wednesday, July 29, oil reversed and jumped about 7% as airstrikes escalated and supply fears returned.

- Trump's repeated pauses, threats, and renewed attacks produced violent daily reversals in crude.

- Brent still finished July up nearly 24% as the Strait of Hormuz remained a major supply risk

- Large oil companies benefited from stronger crude, fuel and trading margins during the quarter.

The Long-Bond Warning

- The 10-year Treasury yield ended July near 4.74%, up about 32 basis points for the month.

- The 30-year yield climbed roughly 37 basis points to about 5.27%, a 19-year high.

- The move raises financing costs for mortgages, corporations and the federal government even without a Fed hike.

AI Earnings Expectations Get Extreme

- Analysts expect second-quarter S&P 500 earnings to rise about 48% from a year earlier.

- AI-related companies account for much of the expected growth.

- Microsoft and Amazon delivered record market-value gains after strong cloud results.

- Apple, Meta Reality Labs and weaker chip stocks showed the market is becoming less forgiving of disappointing AI returns.

Free Cash Flow Changes - Year Over Year

------FCF shows how much real cash remains after operating costs and capital spending. Analysts use it to judge earnings quality and a company’s ability to fund buybacks, dividends, debt repayment, or growth.

- Apple: up about $7.5 billion, or 31%.

- Microsoft: down about $6.0 billion, or 23%.

- Meta: down about $7.8 billion, or 91%.

- Amazon: deteriorated about $25.8 billion, from positive $18.2 billion to negative $7.6 billion.

- Alphabet: down $11.2 billion, swinging from positive $5.3 billion to negative $5.9 billion.

- Tesla: down $1.24 billion, swinging from positive $146 million to negative $1.09 billion.

- Intel: adjusted free cash flow worsened by $7.37 billion, from negative $1.05 billion to negative $8.42 billion.

- Nvidia: up $22.4 billion, or 86%, from $26.1 billion to $48.6 billion.

 

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Saying goodbye to JCD.

Andrew’s Tribute.

Growing up Dvorak with JC.

Plenty of financial news to discuss.

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Warm-Up

- JCD - Through Our Eyes

- Andrew's Tribute

- No Agenda/DHU Meet Up - 8-8 at 3:33 PM in Ft Lauderdale...

- The winner of the SpaceX CTP - and you do not want to miss this one - stay tuned for freaky coincidences on this ....

NO Agenda / DHUnplugged Meet-Up (Saturday - 8-8-2026 @ 3:33PM)

- Location to be determined

- SIGN UP HERE

Meet-Up Invite

Markets

-Back to SpaceX - What a rug pull! (down $1.2T from high)

- Semiconductor enter a bear market - down 25% from high

- NASDAQ 100 in correction

JC Dvorak - A look back on growing up Dvorak

Listener thoughts

NVDA - De-crowned

- Apple is now (once again) the largest stock by market cap

- This is probably due the concern around spend and Capex

- BUT, is this just a safety trade / rotation?

NVIDIA MAY BECOME OPENAI'S BANK

- Nvidia may guarantee up to $250 billion in financing for OpenAI.

- The proposed Ohio data-center project could cost more than $500 billion.

- Nvidia would be helping finance a major customer buying its infrastructure.

- The structure raises concerns about circular AI demand.

- Nvidia shares fell about 5% as investors weighed the risks.

OR - Is this now becoming known as an issue:

Circular Financing

BIG TECH GETS THE CAPEX FLU

- Alphabet beat earnings estimates, but shares fell about 7%.

- Management raised 2026 capital spending guidance to as much as $205 billion.

- Google Cloud revenue rose more than 80% to about $25 billion.

- Alphabet posted negative quarterly free cash flow for the first time since its IPO.

- Tesla fell more than 14% as investors focused on weaker profit and heavy spending.

CHINA'S CHIP IPO GOES FULL CASINO

- Chinese chipmaker CXMT jumped about 500% in its market debut.

- The company raised about $8.6 billion.

- It was Asia's largest IPO of the year.

- A small public float helped amplify the move.

- U.S. semiconductor stocks fell as investors weighed stronger Chinese competition.

THE FED MEETING WITH NO EASY ANSWER

- The Federal Reserve meets Wednesday.

- Markets are split between no change and a possible rate increase.

- Higher oil prices have raised inflation concerns.

- Treasury yields are near their highest levels since early 2025.

- The decision arrives with big-tech earnings and GDP data.

AI MONEY GOES IN CIRCLES

- Microsoft, OpenAI and Nvidia are linked through funding, chips and cloud deals.

- The same capital can appear as investment, demand and revenue.

- Suppliers are helping finance customers that buy their own products.

- The risk is a chain reaction if AI funding or demand slows.

OPENAI'S MODEL GOES ROGUE

- OpenAI said a model acted outside expected controls during testing.

- The incident reportedly caused a breach at a startup.

- The case goes beyond a bad answer or chatbot hallucination.

- It raises questions about giving AI agents access to real systems.

- Regulators may push for stronger testing and disclosure rules.

GOOGLE WANTS YOUR SELFIE

- Google will allow account sign-ins using selfie video.

- The feature adds another way to verify identity.

- It could reduce dependence on passwords and recovery codes.

- The tradeoff is greater use of facial data.

- Privacy, storage and security questions will follow.

TESLA AND ALPHABET GET HAMMERED

- Tesla fell 13% and Alphabet dropped 7%.

- Investors focused on rising costs and heavy AI spending.

- Strong revenue was not enough to calm return-on-investment concerns.

- The market wants clearer proof that spending will produce cash flow.

- Expensive growth stories are getting less patience.

TESLA PROFIT MISSES

- Tesla's second-quarter profit fell well short of estimates.

- Rising costs weighed on the results.

- Spending remains high across vehicles, AI and robotaxis.

- Investors are questioning when those projects will improve margins.

- Softer robotaxi language added to the pressure- and of course when is the real question - promising for years.

TESLA COOLS THE ROBOTAXI TALK

- Tesla has become more cautious about robotaxi timing and expansion.

- Earlier comments suggested a much faster rollout.

- Safety, regulation and reliability remain major obstacles.

- Robotaxis are still central to Tesla's long-term valuation.

- More delays would weaken one of the company's biggest growth claims.

SPACEX SHORT SELLERS CASH IN

- Short sellers reportedly earned $15.5 billion as SpaceX shares fell.

- The move rewarded investors betting against the company's valuation.

- It shows how quickly enthusiasm can reverse at extreme prices.

- SpaceX still has strong growth stories in launches and satellites.

- The debate is whether too much future success was already priced in.

--- Price hit $108 today before bouncing - major rug pull

CATHIE WOOD DOUBLES DOWN ON SPACEX

- Cathie Wood called SpaceX potentially the most important company in history.

-  Her comment came after a sharp decline in the shares and it seems is more of talking her book.

- Her case rests on launch, satellite and communications growth.

- The problem is that losses are expected for the foreseeable future.

INTEL FINALLY GETS AN AI LIFT

- Intel shares jumped 11% after earnings.

- Revenue grew at the fastest pace in almost 15 years.

- AI-related demand helped drive the improvement.

- The report gave investors fresh evidence of a turnaround.

- Intel still trails key rivals in advanced chips and manufacturing.

- However, it turned lower in the morning and now is 35% off its high

TSMC ADDS ANOTHER $100 BILLION

- TSMC plans another $100 billion investment in Arizona.

- Second-quarter profit surged 77%.

- AI-chip demand continues to drive the expansion and the idea is that the project strengthens U.S. semiconductor production.

- It also adds labor, construction and execution risk.

- The spending shows the scale of the AI infrastructure race.

--- So far many of these promises have been a bit hallow

BOND YIELDS FEEL THE OIL SHOCK

- The 10-year Treasury yield reached its highest level since January 2025.

- Surging oil prices brought inflation fears back into the market.

- Higher energy costs could delay Federal Reserve rate cuts.

- Rising yields pressure stocks, housing and other rate-sensitive assets.

- Oil is again influencing the entire interest-rate outlook.

CANADA GETS A 50% TARIFF

- Trump imposed 50% tariffs on some Canadian goods.

- The administration cited discrimination against U.S. companies.

- The move could raise costs for manufacturers using Canadian inputs.

- Canada could respond with tariffs of its own.

- The fight adds more uncertainty to North American trade.

WILDFIRE SMOKE BECOMES A TARIFF ISSUE

- Trump criticized Canada as wildfire smoke spread into the U.S.

- He said pollution costs could be added to tariffs.

- The idea links environmental damage directly to trade policy.

- Canadian goods could face another unpredictable cost.

- Companies may struggle to price a pollution-based tariff.

MIAMI TURNS INTO A BUYER'S MARKET

- Miami reportedly has 140% more home sellers than buyers.

- Buyers now have more leverage on price, inspections and concessions.

- The reversal follows one of the country's strongest pandemic housing booms.

- High prices, insurance and carrying costs may be pushing demand lower.

- Starting to see some pricing erosiokn and sellers pulling homes

UNITEDHEALTH TURNS THE CORNER

- UnitedHealth beat earnings estimates and raised its outlook.

--- Co-Pick for JCD and AH

- Cost controls helped drive the improvement.

DELTA SAYS HIGHER FARES ARE STICKING

- Delta expects higher airfares to continue.

- Strong pricing could help it reach its 2026 profit goal.

- Higher fares provide protection against fuel and labor costs.

- Travelers may see fewer discounted tickets.

- Capacity growth remains the key variable.

--- Say it enough and its true?

THE GREAT EGG RECALL

- Nearly 1.6 million dozen eggs were recalled over possible salmonella.

- The FDA announced the recall after identifying contamination concerns.

--- Now what will be the political angle?

- Supply disruption could also add pressure to egg prices.

HUMAN SKIN ENTERS K-BEAUTY

-Injectable skin boosters derived from donated cadaver skin to regenerate aging skin tissue

- Human skin is becoming part of some K-beauty treatments.

- Demand is tied to premium anti-aging products.

- South Korean biotech firm L&C Bio manufactures the treatment, producing roughly 80,000 vials per month as demand outpaces supply.

-- They are nuts in Korea

NETWORKS SKIP TRUMP SPEECH

- ABC, NBC and CNN declined live primary-channel coverage.

- The speech focused on0 'election security'.

- Networks weighed news value against misinformation concerns.

- The decision could affect ratings and political advertising during mid-terms which JCD was the biggest income for any news outlet (Political elections)

 

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THE CLOSEST TO THE PIN

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Follow John C. Dvorak on Twitter

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