South Korea Factory Activity Shrinks For 6th Month On Tariff Concerns, PMI Shows

Summary:

South Korea's factory activity contracted for the sixth straight month in July, as uncertainty over U.S. tariffs weighed on output and orders, a business survey showed on Friday.

The Purchasing Managers Index (PMI) for manufacturers in Asia's fourth-largest economy, released by S&P Global, fell to 48.0 in July, from 48.7 in June.

The index has stayed below the 50-mark, which separates expansion from contraction, since February.

"July PMI data signalled that the South Korean manufacturing sector experienced a stronger deterioration in operating conditions," said Usamah Bhatti, economist at S&P Global Market Intelligence.

"Both production volumes and new orders fell at a steeper rate than that in June, with anecdotal evidence indicating that weakness in the domestic economy was compounded by the impacts of U.S. tariff policy."

The survey was conducted from July 10 to July 23, before South Korea reached on Wednesday a trade deal with the U.S. lowering tariffs to 15% from a threatened 25%.

In July, output and new orders fell at steeper rates than the month before, although the decline in new export orders contracted at the mildest rate in four months, sub-indexes showed.

Anecdotal evidence pointed to declining export order volumes in the U.S. and Japan in particular, according to the survey.

South Korean manufacturers turned pessimistic about the outlook for the year ahead for the first time in three months, citing concerns over the timing of a domestic economic recovery and ongoing uncertainty surrounding U.S. tariff policy.

Source: Yahoo Finance

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James Whitman

Economic

President Donald Trump will impose a 39% levy on imports from Switzerland, according to an executive order he signed Thursday night.

Switzerland was among the countries that have not yet finalized trade frameworks with the US before the Aug. 1 deadline for so-called reciprocal tariff rates to take effect.

The outcome is higher than the 31% tariff rate Trump initially threatened to levy in April when he unveiled duties on dozens of trading partners, only to hold off to allow time for negotiations. That negotiating period was set to end earlier in July and was extended again to August as Trump only secured a handful of agreements.

The rate on Swiss exports to the US is markedly higher than other trading partners who were able to negotiate frameworks with the US, such as the European Union, Japan and South Korea receiving 15% levies.

Trump in his second term has carried out a sweeping tariff agenda aimed at pressuring countries and industries to reshore manufacturing in the US and to reduce global trade imbalances. The US had a $38 billion trade deficit with Switzerland last year, just outside a ranking of top 10 trading shortfalls.

The country had been a priority in international negotiations and had hoped to be among the first to clinch a deal.

The impact of additional tariffs Trump has threatened on the pharmaceutical industry remain uncertain. The Swiss economy rests on large contributions from industry giants Novartis AG and Roche Holding AG.

Trump’s tariff rate comes despite months of high-stakes diplomacy intended to complete an agreement, negotiations that forced Bern to balance its commitment to global openness against the protection of domestic agriculture. The industry represents less than 1% of the economy but commands out-sized political influence, and farmers’ lobbyists had threatened to fight any settlement affecting Swiss high-tariff barriers in the area.

Trump’s April 2 tariff announcement had put Switzerland’s exporters in a double bind as it also caused a sharp Swiss franc appreciation. That prompted the Swiss National Bank to cut interest rates to zero after it had previously signaled it was done with easing.

President and Finance Minister Karin Keller-Sutter expressed careful optimism at the end of June that the nation would be able to secure a deal, saying American officials had accepted that Switzerland doesn’t manipulate its currency. During Trump’s first term, the Treasury Department had put the country on a list of jurisdictions it accused of doing so.

Source: Bloomberg

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Manuel

Cryptocurrency

Stocks

Michael Saylor isn’t backing down. The Strategy co-founder is preparing to sell $4.2 billion more in preferred stock to fuel his latest Bitcoin bet — while throwing a lifeline to investors worried he’s diluting them into oblivion.

The plan, unveiled with second-quarter earnings on Thursday, is Saylor’s latest answer to the big question hanging over his stock: how long can he keep using a lofty premium to fund ever-larger Bitcoin buys?

To reassure shareholders, Strategy pledged it won’t issue new common shares at less than 2.5 times its net asset value, except to cover debt interest or preferred dividends. At the same time, Saylor will keep tapping the market “opportunistically” when the premium is high, turning equity sales into fresh Bitcoin buys.

The move does two things at once: it locks in a floor aimed at reassuring any skeptical shareholders and arms the company with a larger war chest to keep buying Bitcoin. It’s a double play that pits Saylor directly against hedge fund managers like Jim Chanos, who have been betting the company’s premium will collapse.

“That would put common shareholders who are concerned about potential dilution at ease,” said Brian Dobson, managing director for Disruptive Technology Equity Research at the brokerage firm Clear Street. “The market is reacting positively to Strategy’s equity products. The demand is there as evidenced by their substantial capital raises.”

It’s the latest in a string of financial maneuvers that have transformed a once-obscure software firm into a leveraged Bitcoin proxy.

The dual move showcases Saylor’s mastery of capital markets during these bullish digital-asset times: using a self-imposed floor to placate critics, while simultaneously arming the company with fresh ammunition to keep buying Bitcoin.

The company - which is known formally as MicroStrategy Inc. — has already raised more than $10 billion this year through stock and structured offerings, feeding a balance sheet now holding $74 billion in Bitcoin. Its stock has surged 3,300% since Saylor’s first crypto purchase, outpacing Bitcoin itself and forcing hedge funds into a high-stakes battle over whether his premium-fueled strategy can last.

Since Strategy’s first Bitcoin purchase in 2020, Saylor has sold equity, issued various types of debt and layered stacks of preferred shares on top. In the process, he has encouraged a fleet of imitators and spurred a new industry of public companies following a so-called treasury strategy dedicated to buying and holding cryptocurrencies.

Good Times

Since Strategy trades so far above the value of its Bitcoin, the company can sell stock at rich levels, buy more Bitcoin, and in turn reinforce that premium. It’s a reflexive loop that critics warn would snap if sentiment shifts. For now, Saylor’s ability to turn equity markets into a Bitcoin funding engine has made his firm both a proxy for the cryptocurrency and a pressure point for critics betting the spread will collapse.

The company reiterated that it registered an unrealized gain of about $14 billion in the second quarter. After factoring in deferred taxes, the Bitcoin treasury company had net income of $10 billion, or $32.60 a share, the firm said in a statement. The eye-catching benefit, first disclosed at the start of the month, was due to a rebound in Bitcoin’s price and a recent accounting change.

Demand for offerings can fluctuate depending on Bitcoin prices. The firm had to sweeten one of its earlier preferred stock offerings this year with a steep discount to win over price‑sensitive buyers.

Just last week the company launched a new kind of preferred stock, dubbed Stretch, that was upsized from $500 million to more than $2 billion. It was yet another move that showed how deftly Saylor can turn financial engineering into crypto firepower. For now at least.

“Strategy’s upsize is a huge reflection on the market demand for its Stretch Preferred Stock offering,” said Tyler Evans, co-founder and chief investment officer of UTXO Management. “They have had similar upsizes from previous preferred stock offerings, but this one is an eye-popping number.”

Source: Bloomberg

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James Whitman

Economic

U.S. President Donald Trump signed an executive order on Thursday increasing tariffs on Canadian goods to 35% from 25%, the White House said.

The new rates goes into effect on August 1.

"In response to Canada's continued inaction and retaliation, President Trump has found it necessary to increase the tariff on Canada from 25% to 35% to effectively address the existing emergency," the White House said.

Source: Yahoo Finance

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China–U.S. Trade War

Economic

US President Donald Trump said Canada has to “pay a fair rate” in order to reach a trade agreement, as US talks with Canadian Prime Minister Mark Carney go down to the wire.

“We haven’t spoken to Canada today,” the president said during an afternoon news conference at the White House. Referring to Carney, Trump said: “He’s called. And we’ll see.”

Trump again criticized Carney’s announcement that Canada plans to recognize a Palestinian state, but told reporters it’s “not a deal-breaker” in the trade talks.

The president has threatened to raise the import tax on Canadian goods to 35% by Friday, up from the current 25%, unless there’s a deal between the two nations.

Trump spoke with Mexican President Claudia Sheinbaum on Thursday morning and shortly afterward the president extended tariff rates on Mexico for 90 days to allow more time for negotiations. He had previously said he might raise them to 30% on Friday, up from 25%.

However, there’s currently a tariff exemption in place for both Canada and Mexico on goods shipped under the rules of the United States-Mexico-Canada Agreement, the accord that Trump signed in his first term. That means the majority of imports from both countries are currently tariff-free — though steel, aluminum and some other products have duties on them.

Asked what’s holding up a deal for Canada, Trump reiterated previous complaints about Canadian protectionism of its dairy industry and its history of low military spending.

“They have to pay a fair rate, that’s all. It’s very simple,” Trump said.

The US and Canada have a bilateral trade relationship worth more than $900 billion annually. The US imported $477 billion of goods and services from Canada last year and exported $441 billion, according to US Commerce Department data.

Shortly before Trump’s news conference, Commerce Secretary Howard Lutnick said on television that he doesn’t see Trump “stepping off the gas” with Canada. Lutnick said that if Carney “starts turning on the charm, and if he takes down his retaliation,” Trump could “let it down a bit.”

Carney, for his part, has said a number of times that he won’t agree to a deal that is bad for Canada.

Source: Bloomberg

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Cryptocurrency

Stocks

Coinbase’s stock slid 8.4% after hours on July 31 as second-quarter results fell short of Wall Street expectations, before paring some losses into late trading.

COIN closed at $377.76 and fell to $346.01 immediately after the release, and later recovered to about $354.77 as of press time.

The exchange reported total revenue of $1.5 billion for the second quarter, versus a $1.59 billion consensus. Furthermore, trading volume came in at $237 billion against $252.76 billion expected in the same period.

Transaction revenue was $764.3 million versus $810 million forecast, while subscription and services revenue reached $655.8 million, below the $715.2 million estimate.

Stacking sats

A notable balance sheet shift accompanied the print. Coinbase ended the quarter with $9.3 billion in dollar resources denominated in cash, cash equivalents, and net USDC. This number is $590 million smaller than the results from the first quarter, a 6% quarter-over-quarter.

The decline can be partly attributed to purchases for its crypto asset investment portfolio. In the second quarter, Coinbase increased its Bitcoin holdings by $222 million through weekly purchases.

As of June 30, the fair value of digital assets held for investment stood at $1.8 billion, with an additional $951 million held as collateral. Including these, the total available resources amounted to $12.1 billion, according to the shareholder letter.

Furthermore, Bitwise’s head of research Ryan Rasmussen highlighted that the exchange incurred $307 million of costs resulting from the May 2025 data theft incident.

The quarter also reflected mixed underlying trends across the business. Assets under custody reached a record, supported by exchange-traded fund (ETF) flows and corporate uptake, but softer market activity weighed on fee realization.

Management also flagged the impact of one-time costs tied to a previously disclosed data incident, offset in part by gains on the company’s crypto investment portfolio.

Separately, Coinbase said on July 31 via X that it plans to offer tokenized equities on its platform, without providing further specifics on timing, scope, or structure. The company did not include additional details on this effort in the shareholder letter.

Source: Cryptoslate

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Economic

Stocks

U.S. stocks closed lower on Thursday as early gains faded, following the latest round of corporate earnings and economic data, as investors awaited results from megacaps Amazon and Apple due after the closing bell.

Microsoft (MSFT.O) shares rose 3.5% after it posted a strong earnings report and briefly surpassed the $4 trillion market cap threshold, becoming only the second publicly traded company to ever touch the milestone after Nvidia (NVDA.O).

Meta Platforms (META.O) surged 11.3% to close at a record high of $773.44 as AI-driven growth in its core ad business powered a bullish revenue forecast.

Still, other AI-related names were weaker on the session. Names such as chipmakers Broadcom (AVGO.O), which lost 2.9%, and Nvidia, off 0.8%, weighed on the PHLX semiconductor index <.SOX>. The chip index dropped 3.1% for its biggest daily percentage decline since April 16.

"Looking at the market action today, you have haves and have-nots, and so you have a couple tech companies, like a lot of the semiconductor-related and semi-cap equipment-related stocks are doing pretty poorly," said Ellen Hazen, chief market strategist at F.L. Putnam Investment Management in Lynnfield, Massachusetts.

"But then, of course, Microsoft is doing pretty well, and the same thing with Amazon and Meta, which are doing really well."

Of the 297 companies in the S&P 500 that have reported earnings through Thursday morning, 80.8% have topped analyst expectations, according to LSEG data, compared with the 76% beat rate over the past four quarters.

After the closing bell, Amazon shed 2.6% in extended trade after reporting quarterly results.

The Dow Jones Industrial Average (.DJI) fell 330.30 points, or 0.74%, to 44,130.98, the S&P 500 (.SPX) lost 23.51 points, or 0.37%, to 6,339.39 and the Nasdaq Composite (.IXIC) lost 7.23 points, or 0.03%, to 21,122.45.

The S&P 500 had risen as much as 1% and the Nasdaq as much as 1.5% earlier in the session. The Nasdaq has not logged a move of at least 1% in either direction since July 3 while the S&P last recorded a daily 1% move on June 24.

Earlier economic data from the Commerce Department report showed inflation picked up in June, with new tariffs pushing prices higher and stoking expectations that price pressures could intensify in the coming months, while weekly initial jobless claims signaled the labor market remained on stable footing.

Investors will now eye Friday's non-farm payrolls report and a looming tariff deadline, as U.S. President Donald Trump was expected to issue higher final duty rates for countries that have not reached an agreement, although Mexico was granted a 90-day reprieve.

U.S. stocks have rallied after a sharp selloff that began in early April after Trump announced a bevy of sharp tariffs, only to rebound as deals have been struck with many trading partners on duty levels.

For the month, the S&P 500 gained 2.17%, the Nasdaq rose 3.7%, and the Dow climbed 0.08%. The Dow, S&P 500 and Nasdaq recorded their third straight monthly gain.

Drug stocks were also weaker after the White House said Trump sent letters to the CEOs of 17 major pharmaceutical companies, urging immediate action to lower the cost of prescription drugs for Americans. The NYSE Arca pharmaceutical index (.DRG) slumped 2.9%, its biggest drop since May 14 and fourth straight session of declines.

Declining issues outnumbered advancers by a 1.55-to-1 ratio on the NYSE, and by a 1.98-to-1 ratio on the Nasdaq.

The S&P 500 posted 35 new 52-week highs and 28 new lows while the Nasdaq Composite recorded 70 new highs and 141 new lows.

Volume on U.S. exchanges was 19.65 billion shares, compared with the 18.01 billion average for the full session over the last 20 trading days.