A double-edged political commitment for Elon Musk

Economic

Summary:

Elon Musk’s launch of the “America Party” and political clash with Trump sparked an 8% drop in Tesla shares, raising investor concerns over his divided focus and Tesla’s weakening global position.

Tesla shares fell nearly 8% on Monday, shaken by Elon Musk's announcement of the creation of a new US political party called the "America Party." This controversial initiative, launched after a public standoff with President Donald Trump, is fueling doubts about the billionaire's commitment to his company, which is already weakened by a steady decline in sales.

Best friends... but not forever

The businessman, who became the richest man in the world thanks to his companies Tesla and SpaceX, spent hundreds of millions of dollars on Donald Trump's re-election campaign and was appointed to his administration earlier this year to head the new Department of Government Efficiency, tasked with "cutting" federal spending.

But the once idyllic relationship between Donald Trump and Elon Musk turned sour when Musk threatened in early June to fund campaigns against Republican Congress members who would approve the US president's sweeping budget plan, which he called a "repugnant abomination."

This was followed by a heated exchange, during which the Tesla boss notably supported the impeachment of the US president. Donald Trump had already threatened to cut federal funding for Musk's companies.

After a few weeks of calm, the clash resumed with a vengeance last week. A few days before the tax bill was voted on, Elon Musk once again criticized the plan. In response, Donald Trump suggested that DOGE investigate the subsidies received by Musk's companies. "Maybe we should put DOGE on Elon (...) DOGE is the monster that could in turn eat Elon. Wouldn't that be great?"

In response, Elon Musk renewed his call for the creation of a new political party, arguing that "we live in a one-party country – the PIGGIE PARTY!!".

No threesome

At the weekend, Elon Musk made good on his threat: "Today, the America First Party is founded to give you back your freedom," the billionaire said in a post on his social network X, one day after asking his followers if a new American political party should be created.

It was an idea that Donald Trump immediately attacked. "I think it's ridiculous to want to create a third party," Donald Trump told reporters on Sunday before boarding Air Force One in Morristown, New Jersey. "Starting a third party just adds to the confusion... He can play with that idea, but in my opinion, it's ridiculous."

In American politics, the idea of creating a third party to compete with the Republican/Democrat duopoly is a recurring theme. So far, no one has succeeded in establishing a genuine third political force.

Donald Trump himself tried it with the Reform Party in 2000. At the time, he justified his candidacy with the opposite arguments, but with the same conclusion: "They don't want anyone to come in and take down the Democrats and Republicans, anyone to disrupt the rules they themselves have set up. It's ridiculous." The campaign ultimately ended after four months.

It therefore seems difficult to see the "America's Party" gaining traction. Nevertheless, Elon Musk could have significant disruptive power over the Republicans. With only a few candidates in the November 2026 midterms, he could cause the Republican Party to lose certain districts. A few seats could tip the balance of power in the House or Senate.

The CEO rather than the politician

What is certain is that shareholders did not appreciate this new foray into politics. On Monday on Wall Street, Tesla shares ended the day down 7%.

To fully understand Tesla's recent stockmarket performance, we need to go back a year. Elon Musk pledged his support for Donald Trump in the summer of 2024. This commitment benefited Tesla's stock during the end of the campaign and in the weeks following the election. At the time, investors were betting that Elon Musk's proximity to the president would lead to more favorable regulations to accelerate the rollout of autonomous driving, one of the main drivers of Tesla's narrative.

But little by little, Elon Musk's political involvement and controversial statements damaged the brand's image, particularly in Europe, where sales collapsed. As a result, the stock price plummeted. Since peaking in mid-December, Tesla has lost about a third of its value.

The current situation is perfectly summed up by Wedbush analyst Dan Ives: "The fact that Musk is becoming more involved in politics... is exactly the opposite direction Tesla investors and shareholders want him to take." Faced with the company's difficulties, investors would like the CEO to focus fully on turning it around rather than "spreading himself too thin" in politics.

This is especially true given that the brand is also struggling in China, where it faces stiff competition. And the rift with Donald Trump could further weaken its position in the country. However, as reported by the Wall Street Journal on Monday, the break between Elon Musk and Donald Trump limits Elon Musk's "value" in the eyes of the Chinese government.

In short, his proximity to the president made him a strategic asset for the Chinese authorities. In January, during a visit to Washington, Chinese Vice President Han Zheng reportedly told Musk that Beijing hoped he would play a "constructive role" in Sino-US relations. Now, the Tesla boss can clearly no longer play the go-between.

Elon Musk's political engagement has therefore come at a serious cost to Tesla's ambitions. A few months ago, he proudly held up a chainsaw in the air to illustrate his desire to reduce public spending, following the example of Argentine President Javier Milei. However, the only significant cut he ultimately made was to Tesla's market capitalization.

Source :marketscreener

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Thomas

Political

President Putin continues playing hardball and sending tough signals in the face of Trump administration criticisms, and after on Monday the White House confirmed it is reversing course on its recent pause on weapons to Ukraine, as it will instead send more.

Russia overnight launched an unprecedented 728 Shahed drones as well as decoy drones, accompanied also by 13 cruise and ballistic missiles, Ukraine's air force announced Wednesday.

Source: State Emergency Service of Ukraine

Ukrainian President Volodymyr Zelensky described that the northwestern city of Lutsk, near the borders with Poland and Belarus, suffered the most intense attacks and damage, and ten other regions were also targeted.

Lutsk hosts military airfields frequently used by Ukrainian cargo planes and fighter jets, and has long been a region crucial to military logistics and a hub for foreign military.

Zelensky said that the Kremlin was "making a point" with this fresh attack, especially as it comes so closely on the heels of the Pentagon U-turn concerning weapons shipments to Kiev.

"This is a telling attack — and it comes precisely at a time when so many efforts have been made to achieve peace, to establish a ceasefire, and yet only Russia continues to rebuff them all," he wrote on X.

"Our partners know how to apply pressure in a way that will force Russia to think about ending the war, not launching new strikes," Zelensky added, and called for more Western anti-Moscow sanctions, particularly targeting its energy sector.

Russia's Defense Ministry meanwhile later confirmed it launched "long-range" and "precision" strikes on Ukraine overnight Tuesday, seeking to take out military airfield infrastructure. The statement claimed that "all designated targets were destroyed."

The bar on these massive drone swarm attacks keeps getting set higher, as earlier this month Russia sent a record over 500 UAVs. Never before has a single night's assault reached this level of over 700 drones and missiles.

The Ukrainian president's chief of staff, Andriy Yermak, pointed out on social media, "It is quite telling that Russia carried out this attack just as the United States publicly announced that it would supply us with weapons."

The tempo of attacks is definitely and very noticeably increasing

Geopolitical and war monitor blog Moon of Alabama observes of this trend:

That's nearly 100 long range drones per day which target Kiev and other bigger cities. These are by the way no longer Iran made Shahed drones but a third generation development based on the original design. These drones are now bigger. They have new engines and fly faster and higher. Their load of explosives is now about 90 kilogram, double that of the original version. For each of these drones launched against Ukraine there is an additional decoy drone flying along. The decoys look similar but are not armed and much cheaper. They are to attract the air defenses while the real drones pass through.

Recent targets have been Ukrainian refineries, industrial objects and, during the last days, recruiting offices of the Ukrainian military.

These offices are in public buildings. Their addresses are naturally known as the whole mobilization process for additional soldiers is being run by them. The recruiters are hated by the population. Ukrainians are published the addresses of mobilization offices with requests to Russia to hit them.

If true that would suggest unprecedented domestic anger directed at the Zelensky government and its notoriously harsh recruitment tactics, which have for years seen young men get nabbed on the streets and forced into vans by recruitment officers.

Source: Zero Hedge

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Olivia Brooks

China–U.S. Trade War

Economic

Political

Trump Tariffs Live Updates: Trump Unveils New Batch Of Tariff Letters Ahead Of Aug. 1 Deadline_1

President Trump is again amping up his trade threats, unveiling a new batch of letters to country leaders outlining tariffs on goods imported from their countries beginning in August.

Trump on Wednesday posted to social media six letters, highlighted by one to the president of the Philippines dictating a 20% tariff. He also sent letters to the heads of Brunei, Moldova, Algeria, Iraq, and Libya. Those tariffs ranged from 20% to 30%.

On Tuesday, Trump said he would be imposing 50% tariffs on copper imports to the US, matching duties on aluminum and steel. He also suggested tariffs as high as 200% on pharmaceuticals.

On Wednesday, COMEX copper (HG=F) futures fell over 3%, as traders reacted to Trump's tariff threat. Trump's plan to impose heavy duties has pushed costs for US factories up, with New York futures rising 25% above other global prices on Tuesday.

Trump posted 14 letters to countries on Monday, including South Africa, Malaysia, and Thailand, outlining tariffs ranging from 25% to 40%.

Meanwhile, China warned Trump on Tuesday against restarting trade tensions and that it would hit back at countries that make deals with the US to exclude China from supply chains.

Here is where things stand with various other partners:

Vietnam: A deal with Vietnam will see the country's imports face a 20% tariff — lower than the 46% Trump had threatened in April. He also said Vietnamese goods would face a higher 40% tariff "on any transshipping" — when goods shipped from Vietnam originate from another country, like China.

European Union: The EU has signaled it is willing to accept a 10% universal tariff on many of its exports but is seeking exemptions for certain sectors. The bloc is racing to clinch a deal this week.

Canada: Canada has scrapped its digital services tax that was set to affect large US technology companies. The White House said trade talks between the two countries had resumed, with a deal by mid-July in focus.

Source: Yahoo Finance

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Adam

Commodity

Oil fell as a large gain in US crude stockpiles undermined comments by the United Arab Emirates and Saudi Arabia about tight market conditions.

West Texas Intermediate futures declined about 0.2% to trade near $68 a barrel, following two days of advances. US crude stockpiles rose 7.1 million barrels, the biggest gain since January, the Energy Information Administration said Wednesday.

The inventory gain threw some cold water on UAE Energy Minister Suhail Al Mazrouei’s comments that a lack of major inventory buildups shows the market needs the production that OPEC+ is reviving, while Saudi Aramco sees healthy global demand despite trade challenges and tariffs.

“Current market conditions are reasonably tight,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S. “But I’m still somewhat concerned a surplus will grow into the autumn months as demand slows.”

Source: Bloomberg

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Adam

Commodity

Gold and silver prices are lower in early U.S. trading Wednesday. Less risk aversion in a quieter, summertime trading atmosphere at present is bearish for the safe-haven metals. Gold and silver markets bulls need a new spark to ignite price rallies. August gold was last down $21.20 at $3,295.70. September silver prices were last down $0.064 at $36.685.

Asian and European stocks were mixed overnight. U.S. stock indexes are pointed to slightly higher openings today in New York. Risk aversion in the general marketplace receded recently amid a calmer geopolitical atmosphere and amid notions the U.S. is taking a more measured approach to any new trade tariffs.

The U.S. data point of the day is the early afternoon release of the minutes from the last FOMC meeting of the Federal Reserve. Traders will glean the minutes in an effort to extract any new clues on the trajectory of U.S. monetary policy.

The key outside markets today see the U.S. dollar index slightly up. Nymex crude oil futures prices are slightly up and trading around $68.50 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently at 4.407%.

Other U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, monthly wholesale trade and the weekly DOE liquid energy stocks report.

Price pressure on gold amid better risk appetite in marketplace_1

Technically, August gold futures bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $3,400.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $3,200.00. First resistance is seen at the overnight high of $3,316.50 and then at this week’s high of $3,355.60. First support is seen at the overnight low of $3,290.20 and then at $3,275.00. Wyckoff's Market Rating: 6.5

Price pressure on gold amid better risk appetite in marketplace_2

September silver futures bulls have the overall near-term technical advantage but trading has turned choppy and sideways at higher levels recently. Silver bulls' next upside price objective is closing prices above solid technical resistance at the June high of $37.73. The next downside price objective for the bears is closing prices below solid support at $35.00. First resistance is seen at $37.00 and then at this week’s high of $37.435. Next support is seen at this week’s low of $36.325 and then at $36.00. Wyckoff's Market Rating: 7.0

Source :kitco

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Warren Takunda

Cryptocurrency

Key points:

Bitcoin tries and fails to crack $110,000 as overhead liquidity thickens.

Traders say that more signs of strength are needed to reignite bull market momentum.

Macro cues include next week’s CPI print as a potential volatility date.

Bitcoin attempted a run on $110,000 around the July 9 Wall Street open as sellers lined up to keep the price in place. Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_1

Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Bitcoin bulls stumble before reaching $110,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $109,777 on Bitstamp before reversing.

Still wedged in a narrow range, the pair was contained by exchange order-book liquidity, which strengthened around the move.

Data from monitoring resource CoinGlass showed bid and ask liquidity strongest at around $108,500 and $110,500, respectively. Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_2

Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_2

BTC liquidation heatmap (screenshot). Source: CoinGlass

Reacting, crypto market participants hoped that the stage was being set for a long-anticipated assault on all-time highs.

“Almost all liquidity is to the upside. Stops above $110k are not safe,” popular trader Jelle wrote in part of an X post on the topic.

Jelle predicted a trip to $130,000 should bulls succeed in cracking the $110,000 mark, which had not seen a daily close since June 11. Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_3

Bitcoin to Test $110K as Macro Analysis Tells Traders to 'Buckle Up'_3

Continuing, fellow trader BitBull flagged relative strength index (RSI) data as key to determining Bitcoin’s potential next move.

“3D RSI and price are both forming an inverse head and shoulder pattern,” he told X followers, referring to a classic bullish chart feature.

“For breakout, we need one of these 2 things. Either a 3D close above $110K or a 3D RSI close above 70. After that, we'll experience an up-only rally for 3-4 weeks.”BTC/USDT 3-day chart with RSI data. Source: BitBull/X

“Stage is set” for crypto, risk-asset volatility

With the US trade-tariff debacle still unfolding, macro analysis turned to upcoming volatility triggers for crypto and risk assets.

In its latest bulletin to Telegram channel subscribers on the day, trading firm QCP Capital highlighted next week’s Consumer Price Index (CPI) print as part of the ongoing US inflation story.

This, it argued, would weigh on market expectations for Federal Reserve interest-rate cuts, potentially altering sentiment in the process.

“Last week’s hot jobs data dampened rate cut optimism,” the bulletin observed.

“Markets have scaled back expectations to two cuts in 2025, down from 2.5 previously. A July cut is all but priced out. September odds have slipped from 90% to 70%.”Fed target rate probabilities (screenshot). Source: CME Group FedWatch Tool

QCP described Bitcoin as “well bid,” noting US dollar weakness and consistent institutional inflows despite the precarious macro picture.

“With a reignited trade war, a more hawkish Fed, and tightening liquidity conditions, the stage is set for elevated volatility,” it concluded.

“Macro catalysts are lining up. Buckle up.”

Source: Cointelegraph

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Adam

Commodity

Crude oil prices have now risen in the past three days, although with waning momentum as macro concerns linger. But with oil trading at its highest levels in about two weeks, when there is so much bearish news out there, you might be wondering what has supported prices? After all, bearish speculators argue, there was a larger-than-expected OPEC+ increase for the month of August just at the weekend.

Despite this urgency to bring back more supplies online, oil prices have stopped falling further since that sharp de-escalation in the conflict between Israel and Iran a couple of weeks ago. What’s driving prices, and what’s in for the months ahead?

So Why Have Oil Prices Bounced Back?

One explanation behind the recent recovery in oil prices can be attributed to the fact that there were worries about demand owing to trade concerns hurting the global economy. Instead, trade fears have receded sharply, judging by the reaction in equity markets in the last couple of months (we saw benchmark stock indices surge from their April lows to hit record highs).

Granted, tariff uncertainty could flare up with Trump now saying he won’t extend deadlines beyond August 1 again. Meanwhile, inflation hasn’t picked up either, as had been feared due to the higher tariffs, and many central banks have been cutting rates in recent months.

At the same time, the US has passed a big budget and tax bill into law, which should boost economic output in the short term, all else being equal, even if it ultimately adds trillions to the national debt, which is probably not in the interest of the economy in the long term.

In the US, they are also nearing peak driving season when demand for gasoline surges. According to Reuters, citing travel industry statistics, a record number of Americans were set to travel for the Fourth of July holiday by road and air. Ahead of peak driving season, we have seen several sharp drawdowns in US oil stocks, pointing to strong demand.

Globally, the macro backdrop hasn’t been too great, but the fact that Saudi Arabia raised the August price for its flagship Arab Light crude to a four-month high for Asian customers at the weekend, this goes to shows that demand for oil remains strong there.

So, the crude oil has been supported in part because of receding fears about demand. But this alone won’t be enough to sustain higher prices. Supply is the main factor driving oil prices.

And What About Those OPEC+ Cuts?

The OPEC+ agreed to raise production by 548,000 barrels per day in August. This was more than the 411,000-bpd hikes they made for the earlier three months. As a result, the group has returned nearly half of the 2.2 million-bpd voluntary cuts from eight OPEC producers back into the market. Further production hikes are expected for September, which, according to Goldman Sachs, will amount to 550,000 bpd.

The key question is whether this was the right move and in the best interest of OPEC+. Clearly, the group doesn’t want to lose market share to non-OPEC producers. In fact, the US hasn’t been able to ramp up production meaningfully in recent months and therefore looks set to produce less oil in 2025 than previously expected.

That’s according to the Energy Information Administration, which forecasts the world’s largest oil producer to pump 13.37 million barrels per day of oil this year instead of last month’s forecast of 13.42 million bpd. In part, this due to the lower oil prices discouraging drilling activity.

Indeed, the number of oil and natural gas rigs have been plunging according to energy services firm Baker Hughes (NASDAQ:BKR). The latest data from the company shows rig counts falling to 425 from around 780 rigs in 2022’s peak, marking a dramatic reversal and the lowest since October 2021.

It can be argued, therefore, that this might be the perfect opportunity for the OPEC+ to raise output as much as possible while the US drilling is not “drill-baby-drill”-ing.

Longer Term Outlook Remains Bearish

However, in the longer run, supply growth will need to be matched by equally strong demand growth to allow for sustainably higher prices. Given that Iran is now allowed to export more freely and the OPEC+ is ramping production, and Trump urging US producers to pump more oil, the long-term outlook remains bearish, which means the upside should be limited from here on, barring another supply-side shock.

WTI Technical Analysis and Levels to Watch

WTI has bounced back from the neckline of the double bottom pattern between $63.60 to $65.00 area (shaded in grey on the chart). This area remains crucial for long-term support, given that the lows of May 2023 and September 2024 were previously formed here, and now we are above it. Should WTI break back below this zone, the technical outlook would turn negative once again, which could encourage fresh selling below that zone.

Crude Oil Reclaims Key Support but Bulls Need Break Above $70 to Take Control_1

One short-term support above this zone worth pointing out is now seen at $67.50, marking resistance from last week.

At the time of writing, WTI was now testing potential resistance in the $68.50 region. As well as former support, the 200-day moving average also comes into play here, making it a key battleground. Above this zone, the next potential resistance is the psychologically important handle of $70.00.

All told, WTI is bang in the middle of its range, which should keep both the bulls and bears interested. In this sort of trading environment, trading oil from level to level makes most sense to me, rather than applying a swing strategy.

Source: investing

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