Circle’s Meteoric Stock Rise Draws Wall Street Warning Amid Valuation Fears

Economic

Stocks

Summary:

Despite a 500% surge in stock price since its June IPO, Circle (CRCL) faces a downgrade from Compass Point, which warns of overvaluation, margin pressure, and rising competition in the stablecoin market....

Downgrade Signals Reality Check for Circle After Post-IPO Rally

Shares of Circle (CRCL), the stablecoin giant behind USDC, plunged nearly 8% on July 22 after investment firm Compass Point issued a stark warning, downgrading the stock from “Hold” to “Sell” and slashing its price target from $205 to $130. The call came amid growing concerns that the company’s soaring valuation may not be sustainable in the face of competitive and macroeconomic headwinds.

The downgrade followed a remarkable 500% rally in Circle’s share price since its June 5 IPO, driven largely by optimism surrounding the GENIUS Act, a landmark piece of legislation signed by President Donald Trump that legitimized fiat-backed digital assets under a transparent regulatory framework. While the bill initially sent digital asset-related stocks soaring, analysts now warn that the exuberance may have peaked.

Analysts Caution: "Sell the News" Pattern Emerging

Compass Point’s Ed Engel argued that crypto markets have a history of pulling back following major regulatory wins, as traders shift from speculative optimism to fundamental scrutiny. He cited looming margin pressure caused by increasing revenue-sharing arrangements with Circle’s distribution partners, alongside intensifying competition from both traditional banks and fintech startups entering the stablecoin space.

Additionally, Circle’s core revenue stream interest earned from short-term U.S. Treasury holdings backing USDC is heavily exposed to shifts in Federal Reserve monetary policy. Any decrease in Treasury yields could directly reduce Circle’s profitability, particularly if issuance growth slows while operational costs rise.

Divergent Views on Circle’s Valuation

While Compass Point adopts a bearish outlook, other firms remain bullish. Seaport Research Partners recently raised its price target to $280, labeling Circle a “pure play” on the future of stablecoins and one of the biggest winners in the post-GENIUS Act environment.

As of mid-afternoon on July 22, Circle stock was trading at $199.24, reflecting a 7.80% decline on the day.

Circle’s steep post-IPO ascent has turned it into a symbol of investor enthusiasm around crypto regulation, but it now stands at a crossroads. The divergence in analyst sentiment underscores the growing debate: is Circle’s valuation a reflection of long-term potential in a newly legitimized industry, or a premature rally vulnerable to correction? Investors will be watching closely for Q3 earnings and clarity on how Circle manages both margin challenges and intensifying competition in a maturing market.

Source: Reuters

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Gerik

Economic

Toyota and Honda Lead Market Rally After Trump Confirms Tariff Cut and Investment Deal

Shares of major Japanese automakers surged sharply on Wednesday following U.S. President Donald Trump's announcement of a new trade agreement with Japan, which includes a scaled-back 15% tariff on automobile exports to the United States down from the previously threatened 25%. This decision, coupled with a promise of $550 billion in Japanese investments into the U.S., sent a wave of optimism through Tokyo markets.

Toyota Motor Corp. saw its stock leap 13.46%, while Honda Motor Co. gained 9.50% in response to the announcement. The jump reflects investor relief over the reduced tariff rate, which significantly alleviates fears of deep disruptions in the critical U.S. auto market a primary export destination for Japanese carmakers.

Although President Trump did not name automakers directly in his post on Truth Social, Japan's public broadcaster NHK reported that the tariff cut applies specifically to auto exports, a key sticking point in U.S.-Japan trade negotiations over the past several years.

Market Interprets Deal as a Diplomatic and Economic Win-Win

The market interpreted the move as a dual win: preserving Japanese access to the American market while giving Trump a large, symbolic investment figure to tout during a politically sensitive time. The $550 billion Japanese investment, although vague in detail, is expected to be directed toward manufacturing facilities, infrastructure projects, and possibly electric vehicle-related innovation within the U.S.

While the agreement’s full scope remains unclear, the reduction in tariff pressure has removed a major overhang for Japanese exporters. As markets digest further details, the momentum could spill into related industries such as logistics, parts suppliers, and steel, all of which are deeply integrated into the auto manufacturing supply chain. The deal highlights the continuing strategic alignment between the U.S. and Japan in balancing economic interdependence with geopolitical positioning.

Source: Reuters

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Frederick Miles

Today, Trump has once again pestered Jerome Powell over interest rates. This time around, he has said that the Fed chair will leave his office in 8 months. However, Powell’s tenure as the chair will come to a close in 10 months, but he will continue to serve as a Fed board member up to 2028.

In a meeting at the White House with Philippine President Ferdinand Marcos Jr., Trump said, “I think he’s done a bad job, but he’s going to be out pretty soon anyway. In eight months, he’ll be out.”

TRUMP: POWELL IS GONNA BE OUT SOON ANYWAY, 8 MONTHS

As I said, Trump can’t fire Powell. However, understand that next May we are likely getting the most political Fed Chair in history. This is headed in one direction.

Trump has been on Powell’s neck for months for not cutting rates. He has frequently raised the possibility of ousting him. However, it has been nothing but wishful thinking. This is because the president cannot remove a governor by law except “for cause.” That is a legal term that means he would have to show that the person had done something wrong.

The White House has already tried this approach. Trump pushed for a review of the Fed’s renovation of two buildings in Washington, which they say are inappropriately lavish and may not have followed planning protocols.

However, Powell repeatedly said he would not leave the post early. This means that he is determined to stay as chair till May 15, 2026, and as a board member till January 2028.

Who is leaving the Fed next?

According to the law, the president nominates a Fed chair and two vice chairs for four-year terms. They are confirmed by the Senate for those positions in a vote distinct from their confirmation as Fed Board of Governors members.

In this case, Jerome Powell, a Barack Obama nominee, and Michelle Bowman for the vice chair post. She was nominated by President Trump and took office for a four-year term on June 9, 2025.

On the other hand, the president and Senate have no say in picking presidents of the 12 regional Fed banks. They’re chosen by their private sector boards of directors, subject to the approval of the Fed Board of Governors in Washington.

In this case, Biden nominees for the Fed board that may not favor Trump long-term are Lisa Cook, confirmed by the Senate twice for a term that expires in 2038, and Adriana Kugler, confirmed for a term that expires in 2026.

Other board members are Christopher Waller, confirmed till January 2030; Michael Barr, confirmed till January 2032; Michelle Bowman, confirmed till January 2034; and Philip Jefferson, confirmed till January 2036.

Finally, Presidents of the regional Fed banks can serve until they’re 65 unless appointed after turning 55, in which case they can serve for a maximum of 10 years or until they’re 75.

They are up for reappointment every five years. Meanwhile, all twelve are leaving earliest in 2028 or latest in 2038. The Fed Board of Governors in Washington could replace any of them, though it hasn’t ever done so.

Trump calls Powell’s rate cut move political

According to Trump, Powell has refused to lower costs for political reasons. This is controversial because he said he would hire someone to lower interest rates. He said that Europe has lowered its interest rates regularly, but “Mr too late” has not lowered those of the US.

To that end, whoever the successful candidate is could carry the specter of being there simply to do Trump’s bidding on interest rates.

Rumors continue to put more pressure on Powell. This time, not from Trump. Federal Housing Director Pulte says he believes Fed Chair Jerome Powell “will be resigning soon, but today is not the day.” Contrary to the time frame, reports emerged today that Powell had resigned.

There are currently reports circulating that Fed Chair Powell has "officially resigned."

These reports are FAKE.

Fed Chair Powell has yet to even discuss a possible resignation.

And, in his comments this morning, Powell did NOT discuss any topics pertaining to a resignation.

They were debunked in no time. Fed Chair Powell has yet even to discuss a possible resignation.

Source: CryptoSlate

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Samantha Luan

Political

Economic

The anchoring effect is one of the sneakiest tools companies use to make us spend money.Here's how it works. Let's say we're shopping for a smartphone manufactured by Dapple, which has just released two new models: a $1,200 model with a big screen and a $900 one that is more compact. The more expensive smartphone will serve as the "anchor" by which we make comparisons, so the $900 model will appear to be value for money — even if it is costly in absolute terms. But we're likely to feel good about choosing it because we've "saved" $300 on our purchase.

This scenario seems to be what's happening with the U.S-Japan trade agreement freshly announced late Tuesday stateside. U.S. President Donald Trump said Washington would gain access to Japan's markets for rice and cars — which had been sticking points during negotiations — while the latter would pay 15% tariffs on its exports to America.

At first glance, that doesn't sound too positive for Japan. But, in comparison with the 25% tariff Trump slapped on Tokyo earlier this month, it's a big improvement. As Brian Jacobsen, chief economist at Annex Wealth Management, said, "It's a sign of the times that markets would cheer 15% tariffs. A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief." That, in essence, is the anchoring effect at play.

What you need to know today

Trump announces 'massive' trade deal with Japan. Under the agreement, Japan's exports to the U.S. will face a 15% tariff, and the country will "open" its market for cars and rice, Trump said. Japan will reportedly pay 15% tariffs on autos, lower than the universal 25% the U.S. imposed on cars built outside the country.

Tariff suspension with China likely to be extended. The U.S. and China's 90-day tariff pause expires on Aug. 12. However, U.S. Treasury Secretary Scott Bessent said the U.S. will be "working out what is likely an extension."

Bessent says Jerome Powell doesn't need to resign. However, Bessent reiterated his call for the Fed Chair to conduct an internal review of the central bank. On the flipside, Mohamed El-Erian, chief economic advisor at Allianz, called on Powell to step down.

The S&P 500 ticks up to a fresh record. That's the index's 11th record close in 2025. The Dow Jones Industrial Average rose 0.4%, but the Nasdaq Composite lost 0.39% as chip stocks slipped. The Stoxx Europe 600 fell 0.41%, led by a sell-off in defense stocks.

[PRO] Goldman Sachs is getting worried over the U.S. economy. Economists at the investment bank expect growth to slow, real income to "drag" and inflation to heat up in 2025 — all of which will raise the firm's projected recession risk.

How Europe's 'trade bazooka' could be a last resort against Trump's tariffs

The European Union appears to be considering whether to deploy its "Anti-Coercion Instrument" — characterized as a "nuclear option" to try to deter trade disputes — as the threat of a 30% tariff on EU imports looms large.

The measures could see the EU restrict U.S. suppliers' access to the EU market, excluding them from participation in public tenders in the bloc, as well as putting export and import restrictions on goods and services, and limits on foreign direct investment in the region.

Source: CNBC

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Risk Warnings and Disclaimers

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George Anderson

What to Know:

● Probe into Powell's testimony on Fed building renovation costs.

● Impacts on financial markets remain unclear.

● Potential leadership changes could affect monetary policy.

Powell's Testimony and Market Reactions

Jerome Powell, the Federal Reserve Chair, is facing a criminal referral over alleged perjury during testimony on Fed headquarters renovations. The matter could affect stability in financial markets, with potential changes influencing monetary policy direction.

Lawmaker Accuses Powell of Misleading Congress Over Renovation

Rep. Anna Paulina Luna has initiated a criminal referral against Jerome Powell for alleged perjury concerning the $2.5 billion renovation of the Federal Reserve Building. Powell, appointed Fed Chair in 2018, allegedly misled Congress about project details, claimed Luna.

"Chairman Powell knowingly misled both Congress and executive branch officials about the true nature of a taxpayer-funded project. Lying under oath is a serious offense—especially from someone tasked with overseeing our monetary system and public trust." - Rep. Anna Paulina Luna, Congresswoman

Market Yet to React to Powell Perjury Allegations

The criminal referral has prompted scrutiny of Powell's actions, though financial markets show no immediate reaction. Comments criticize the project's transparency and cost management. Powell confirmed efforts were made to oversee work carefully.

Past Leadership Struggles: Fed Chair History and Impact

Comparatively, disputes between Fed chairs and political figures are rare, with the Nixon-era controversies being similar historical examples. If Powell's leadership ends prematurely, it could unsettle markets and incite volatility, echoing past reactions to abrupt Fed changes.

"We have taken great care to ensure the project is carefully overseen since it was first approved by the Board in 2917...I will not resign before my term as chair expires." - Jerome Powell, Federal Reserve Chair

Source: CryptoSlate

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MarketPulse by OANDA Group

Economic

Forex

Stocks

It has been the second day where North Americans see no particular market-moving data after last week's key releases, but this hasn't stopped the session from being volatile.Today has seen some heavy reshuffling in stocks from Tech and Semiconductor Sectors to Healthcare, FInancial and Real Estate sector in what seems to be some closing of positions as we approach the Key earnings releases for some of the biggest names in American Markets: Tesla and Google earnings are awaited tomorrow.

The Nasdaq closes down 0.60% and the Dow up 0.40% –Even the Russell 2000 has seen some new flows towards the smaller-cap index in the session.Except for these reshufflings, some further fears of FED's Powell getting ousted before the end of its term, some Hawkish RBA Minutes and a rejection of the top in USDJPY, the Greenback has been getting hammered.Metals have also had a strong day, particularly with Gold, up close to 1.50% on the session, being back to $50 from its all-time highs. Palladium, Silver and Copper also have had a decent performance.Other commodities and cryptos have been a bit more mixed in what seems to be more profit taking after a streak of good days.

Daily Cross-Asset performance

USD Corrects Further and Equities Reshuffle – Market Wrap for the North American Session - July 22_1

Cross-Asset Daily Performance, July 22, 2025 – Source: TradingView

Ether is now the worst performing asset on the session with the ongoing general profit-taking seen in markets (same for Nasdaq), leaving some space for Bitcoin, Gold and US Treasuries to rally back.The USD and European stocks have also seen quite a retracement today.

A picture of today's performance for major currencies

USD Corrects Further and Equities Reshuffle – Market Wrap for the North American Session - July 22_2

Currency Performance, July 22 – Source: OANDA Labs

The US Dollar had started the session on strong selling, particularly profiting to the Yen but the Japanese currency actually gave up some of its strength towards the NA afternoon.The CHF and NZD which had lost some ground since the past week finish the session on top of majors.

Earnings Season: Who is releasing their numbers tomorrow

USD Corrects Further and Equities Reshuffle – Market Wrap for the North American Session - July 22_3

Earnings Calendar for July 23rd – Source: Nasdaq.com

Expect big names tomorrow, with AT&T releasing earnings at the pre-open, Google and Tesla will be releasing their own numbers after the close.

A look at Economic Data releasing in tomorrow's session

USD Corrects Further and Equities Reshuffle – Market Wrap for the North American Session - July 22_4

Tomorrow's economic data releases should be relatively thin, with another focus on Australian data with their own PMI releases in the evening session at 19:00 and RBA Governor Bullock speaking at 23:05.Still, do not forget the mid-tier Exisiting Home Sales at 10:00 A.M. in the US, but tends to not be a major market mover.

Source：OANDA

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Risk Warnings and Disclaimers

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Isaac Bennett

China–U.S. Trade War

US President Donald Trump said he had reached a trade deal with Japan on Tuesday.

Under the new terms, the US will place a 15% tariff on goods imported from Japan, down from a previously threatened 25% tariff.

"This deal will create hundreds of thousands of jobs — there has never been anything like it," Trump posted on Truth Social.

He added that the United States "will continue to always have a great relationship with the country of Japan."

After Trump's post, Japanese Prime Minister Sherigu Ishiba said he was ready to meet or speak over the phone with Trump after being briefed on the details by Japan's top trade negotiator Ryosei Akazawa, who has been in Washington for talks.