Summary – A top-down review of interesting calls and comments made last week in Treasuries, monetary policy, economics, stocks, bonds & commodities. TAC is our acronym for Tweets, Articles, & Clips – our basic inputs for this article.
Editor’s Note: In this series of articles, we include important or interesting Tweets, Articles, Video Clips with our comments. This is an article that expresses our personal opinions about comments made on Television, Tweeter, and in Print. It is NOT intended to provide any investment advice of any type whatsoever. No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Macro Viewpoints & its affiliates expressly disclaim all liability in respect to actions taken based on any or all of the information in this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerance.
1. Happy 250th to Our Country, USA the Great – Yesterday, Today & Forever!
- America@america – Happy 250th Birthday, America
- The above is courtesy of a repost by @TraderZ.
2. Markets Last Week
2.1 US Indices:
- VIX down 12.3% to 16.15; Dow up 2%; SPX up 1.8%; RSP up 2.2%; NDX up 72 bps; RUT down 47 bps; MDY down 23 bps; XLU down 1%; SMH down 3.2%;
Wow! What a call last Friday by John Flood, Head of Americas Equities Execution Services at Goldman Sachs! As we wrote last Friday, Mr. Flood
- “warned about Pension Rebalancing coming next week (June 29-June 30) with $30 billion worth US Stocks for sale for rebalancing. That is why he said he won’t be surprised to see some market weakness next week. He did add that such weakness would be a solid buying opportunity. …. I think Semis, Semi-Equipment, pockets of Korea & Taiwan continue to work … S&P 500 has a real chance to break above 8,000 in the near term …. whole lot of technicals are a tail-wind right now .. most importantly, earnings have been fantastic & they continue to be … “
But July is a different month for momentum as Warren Pies said on CNBC Closing Overtime show. But you won’t find his comments on CNBC.com. Not to worry. Look what he posted on X.com on July 1:
- Warren Pies@WarrenPies – Jul 1 – Everyone knows that July is seasonally bullish. But, over the past five years, it is the most negative month for the momentum factor (top 10%/bottom 10%). Heading into July, momentum has been on a historic tear...makes sense to see the broadening/rotation (excerpt h2 outlook).
He gave a specific example the next day:
- Warren Pies@WarrenPies – Jul 2 – Rare to see MTUM down 3% on a day when RSP is up. Today was the 6th occurrence (yesterday was the 5th). Epic momentum run…Epic unwind.
As we recall, Warren Pies did say on CNBC Closing Bell Overtime on Friday that Semis are the spear of …. that drives the market higher. As we have noticed & written often, Warren Pies has been much more correct on his macro calls than most guests who received more effusive welcomes from CNBC. Just look what CNBC.com featured OVER Warren Pies for Friday’s Closing Bell overtime guests highlights – Apollo’s Slok on AI earnings over next several quarters; AI is important to future American competitiveness; & CFR’s Hillman. All sensible topics but not entirely appropriate to a vicious market selloff that drove many indices down the cliff.
This is classic CNBC “intellectual” crap where the network keeps ignoring what its viewers might be going thru only to enable their inane Melissa Lee types to affect an “intellectual” manner. Or was it simply a case of the “senior” Melissa riding rough shod over the “junior” Mike Santoli by ignoring Santoli’s favorite guest Warren Pies. Guess Melissa, sorry the “intellectual” Ms. Lee, doesn’t know the saying among investors that “When it’s Macro, its all Warren Pies“. Or as a Portfolio Manager & a Macro thinker wrote:
- Gubb@gubbmintcheese – Jul 1 – Warren continues to crush the macro calls. @3F_Research is slowly and consistently taking top spot amongst all strategists. So bloody impressed with the job they do. Wish I had found them a few years earlier
We share that feeling. In fact, if we can recall the advertisers on that show, we would write to their media management or their Board of Directors to point out their image is being damaged by the behavior of CNBC hosts like Melissa Lee, who in our opinion, think advertisers pay for their “airs” & not for the goodwill advertisers get from delivering smart advice to investors. And we would sincerely suggest to Melissa Lee that she study how Becky Quick speaks & treats guests on her shows.
Another way of describing the sell-off was:
- The Market Ear@themarketear – Too Much Big Tech Fear? QQQ 5% downside protection now trades at a much richer premium than comparable IWM puts. Is big tech really riskier than small caps?
So?
2.2 MAG 7:
- AAPL up 8.8%; AMZN up 4.3%; GOOGL up 6.7%; META up 5.9%; MSFT up 4.7%; NFLX up 5.2%; NVDA up 1.2%; MU down 13.8%; SOXL down 15.8%
Bottom-line:
- Warren Pies@WarrenPies – Jun 27 – It’s early days for “tokenomics.” But, the general trend from all of our work suggests rising token prices and extremely strong compute demand.
For a much more detailed discussion, we suggest you listen/read the 55 minute clip from Excess Returns titled The $400 Billion Gap | Warren Pies on Token Panic, a Trapped Fed and What Murders Bull Markets. Look what Warren Pies says at minute 36:54 of that clip:
- “It’s going to be the longest cycle we’ve ever seen. …. I’m not buying into the sci-fi world where semis are just no longer cyclical, but I’m also not buying the idea this is close to a cycle top and that we should be like expecting margin growth to slow down anytime soon. And so to me there is no finite answer to that right now. It’s a little bit of both. Um, it’s just a matter of being aware and baking that into your overall market forecast. Um, and valuations are a horrible timing tool. So, I’m not going to time anything off of it;”
Moving on, what about earnings of Mag 7?
- The Market Ear@themarketear – Still magnificent; Mag7 crushing S&P493 again this year in terms of earnings growth.
2.3 Key Financials:
- BAC up 1.5%; C down 1.3%; GS up 14 bps; JPM up 1.7%; KRE down 20 bps; EUFN up 4.2%; SCHW up 7%; APO up 27 bps; BX up 6.4%; KKR up 4.1%; XHB down 2.7%; ITB down 1.9%; NAIL down 7.9%; IGV up 6.1%; CRM up 4.9%; PANW up 14.4%; NOW up 8.1%
2.4 – Dollar & Metals
Dollar was down 42 bps on UUP & down 46 bps on DXY:
- Gold up 1.2%; GDX up 1.9%; Silver up 3.9%; Copper up 83 bps; CLF down 90 bps; FCX down 2.4%; MOS down 5.6%; Oil down 1.4%; Brent down 68 bps; OIH down 4.3%; XLE down 1.2%;
2.5 – International Stocks:
- EEM down 2.2%; FXI up 1%; KWEB up 4.4%; BABA up 1.5%; EWZ down 69 bps; EWY down 8.7%; EWG up 4.1%; INDA flat; INDY down 11 bps; EPI up 2 bps; SMIN up 96 bps; IBN down 20 bps; HDB up 12 bps;
2.6 Treasuries & Interest Rates
- 30-year Treasury yield up 3.3 bps on the week; 20-yr yield up 12.1 bps; 10-yr up 11.3 bps; 7-yr up 11.3 bps; 5-yr up 10 bps; 3-yr up 7.4 bps; 2-yr up 4.9 bps; 1-yr up 1.4 bps;
- TLT down 2.1%; EDV down 3.9%; ZROZ down 4%; HYG down 15 bps; JNK down 24 bps; EMB down 26 bps
June jobs, not up to par!
- Warren Pies@WarrenPies – Jul 2 – JUNE JOBS – Not great; Res con payrolls fell for the 3rd straight month and have now declined by 2.4% from peak. Private white collar jobs still lackluster as well (finance + insurance in a 1.25% drawdown/Computer system & design 4.4% drawdown). LFPR back to pandemic levels.
The household survey was worse. As the Clip titled Payroll Data Just Confirmed The Worst-Case Scenario from Euro Dollar University said:
- “the real disaster, and I mean disaster, that’s the household survey. According to this series, employment plunged by 507,000 in June. Half a million. ….. This is a labor market that’s breaking. And it gets worse. Employment in the household survey is now down a massive 833,000 since January. … The labor force collapsed. Yes. Collapsed by 720,000 in June alone. and it is down over a million since January“
Yet, you see a procession of highly-paid economists parading thru Finance TV still talking about raising rates this year!
3. Global Geo-stuff
It is so fashionable today, as we celebrate America’s 250-year anniversary, to bemoan where America stands today globally. We actually think just the opposite. Except for one sector or two, we think the US is positioned very very well but with one caveat. It is imperative for the USA to not get physically involved in every foreign sphere just because it can and because it wants to prove it is still the world’s greatest power, financial, socially & militarily.
Prof. Mearsheimer said recently:
- “A foreign policy establishment committed to maintaining global primacy across every region simultaneously rather than concentrating resources against the one power capable of overturning the balance. ”
Mearsheimer means USA when he refers to “a foreign policy establishment“. Then he mistakenly applies the below to America.
- “I don’t think the fall of Washington is inevitable, but I do think it is likely under current trajectories. And I think it will not look like a single dramatic event. It will look like a slow erosion of relative power compounded by strategic overreach until one day the world wakes up and realizes the unipolar moment quietly ended years earlier“.
Frankly, the above applies to China already. It is China that is facing the specter of “slow erosion of relative power” and it is accelerating the erosion by “strategic overreach” supported mostly by “jingoist statements“. Where is China’s largest strategic investment today? We would say Iran and Iran is emphatically dependent on China as a buyer of its oil. But that is Iran’s weakness & NOT China’s power. Now ask what can China do to ensure Iran’s steady delivery of Oil to China? Can China prevent America from bombing that flow possibly by destroying the trains that carry the oil to China or by destroying Iran’s ability to pump oil? No. Yes China has sent 28 warships to the Persian Gulf to respond to 35 US warships sent there. A mutual destruction in the Gulf does NOT damage US supplies of Oil either from USA, Venezuela & other regions. But China cannot demand oil deliveries from any other sources, not even Russia.
Let us move away from Iran & the Gulf to China’s own neighborhood. Look at America’s own neighborhood & notice the absolute supremacy of US military power in America’s neighborhood. How dominant is China in its own neighborhood? Not even close. It is ringed on all sides by countries that are engaged in building up their missile forces & navies to defend against China. Below China are Vietnam, Philippines, Indonesia that have or are getting anti-ship & anti-airforce supersonic missiles. To the north is Japan that, even at today’s levels, is no easy target. And, as seems to be a widespread belief, it will take Japan hardly any time to merge its nuclear capabilities with its non-nuclear naval & air forces. Go south from Philippines & you get the Malacca straits & the Indian Navy, Indian Air Force & Indian missiles.
And what about Taiwan? China’s predominantly wishful target! China, in theory, can take Taiwan. But China has had a horrible track record of using naval power to attack neighbors via the Sea. Just look up the history of Kublai Khan, the first ruler to conquer all of China. Then he took Korea before he moved on Japan. Seriously look it up. His futile efforts resulted in destruction of his navy and his rule ended.
No one knows it better than the US Navy, the only Navy that managed to use the Atlantic Ocean to land an army on Germany. It took all of America’s resources & the smarts of Eisenhower to ensure that the bulk of German forces under Rommel’s command were parked at Calais while the US massive landing was at Normandy. And let’s not forget that about 35-40% of German army was focused against Russian army on the other side of Europe. If in doubt, watch & listen to the clip below:
Further China’s takeover of Taiwan would lock out Japanese Navy & Japanese shipping out of the South China sea and from there the Malacca Straits. Remember one dictum. Japan could NOT challenge America in 1939-1941 without first taking over China. Today, the same dictum applies in reverse. China cannot challenge America in the Pacific without first taking over Japan. And recall that PM Takaichi of Japan said last year that takeover of Taiwan by China would constitute “existential danger” to Japan.
That takes us to this past week’s potentially huge visit of Japanese Prime Minister Takaichi to see Prime Minister Modi in Delhi. Just the highlights will illustrate China’s intense anger at the India-Japan deal & resultant sanctions applied to Japan by China this week.
3. 1 India-Japan or Elder Brother & Younger Sister
Very few people have heard of & even fewer people outside India remember how Japan helped create, train & equip the Indian National Army in 1943 to march across China with the Japanese Army to attack British-occupied India. The plan conceived by Indian Independence leaders in India was brilliant. They asked Netaji Bose, a leader held in house captivity in Kolkata, to escape & go to Germany & then to Japan. This worked amazingly well thanks to Hitler who loved the idea & sent Netaji Bose in a German submarine to Tokyo. They liked the idea too.
The British were recruiting thousands of Indians to join the British Army. These untrained guys were put at the front of British army. Fortunately they surrendered & the Japanese transferred them to the INA organization which trained them. This unit led the Japanese army across China & entered India. By that time, the British resistance was fierce & the small INA was defeated at Imphal in the eastern border state of India. But the fact that INA actually organized & fought the British stunned the colonial Brits. Then a unit of the Indian Navy rose against the Brits. That was it. Britain called it quits and began negotiating with Gandhi-Nehru to leave in peace
To this day, Indian people remember the help of Japanese to the INA with gratitude & respect. So inviting PM Takaichi & beginning joint ventures with Japan is so easy & simple for PM Modi.
To PM Modi’s credit, he called PM Takaichi his younger sister and that went over very well. She in turn reciprocated this brother-sister gesture as you can see below:
According to a clip from ANI, “more than 129 MoUs have been signed between Japan and India” and Japan has met the 10 trillion yen investment promised to PM Modi last year.
Then Japan made an amazing offer to India:
- ” Japan has proposed co-producing its advanced Mogami-class stealth frigate in India under the Make in India program, offering to share warship design and support construction in Indian shipyards. The Mogami-class is among the newest and most capable multi-role frigates in service, featuring stealth design, automation with a crew of just 90, and speeds exceeding 30 knots. The offer represents a historic shift in Japan’s traditionally strict defense export policy and could become one of the largest India-Japan defence collaborations ever. Associate Editor Radhika Dhawad breaks down the full significance of this proposal, what the Mogami-class offers India’s navy, and what it means for Indo-Pacific security”.
This seems to have come as a bolt from the blue to China and China quickly expanded Export Restrictions on Japan
But what about the shortage of workers in Japan? The visit focused on that as well and Japan is now targeting the hiring of 50,000 highly skilled Indian workers by 2030.
Doesn’t this fit the Mearsheimer logic to the problems China now faces? Now Japan & India, two friends of USA & two strong nations with modern armed forces located on two sides, north & south, of Chinese coastline working together as friends & potentially defense partners. Their working together fits the goals & needs of US Naval Forces in the Asean without having to devote additional resources & funds from USA.
3.2 India, Na-Pakistan & now China – like 1971? India-China confrontation likely?
Those who were around in 1971 would recall the massacre of 5 million Bengalis by Gen. Yahya Khan, the dictator of Na-Pakistan then. He was helping President Nixon to visit Chairman Mao in Beijing. So the massacre of 5 million Bengalis located in today’s Bangla Desh didn’t mean much to him. That forced Indian Government to help first by sending food & medicines to the starving people of Bengal. In anger, Gen. Yahya Khan declared war on India with the passive help of China. That failed & the Indian Army entered & freed Bengalis into a BanglaDesh in 1971.
What was unaddressed then was the status of the part of Kashmir that stayed inside today’s Pakistan. Not so any more. In the last week or so, the people of POK (pakistan-occupied-Kashmir) have come into the streets declaring they want out of Pakistan. Just look at a couple of clips below –
Once again, this is a racial issue. In 1971, it was Panjabis of West Pakistan riding rough shod & shooting the Bengali population of East Pakistan. Today it is the Panjabi leadership & the predominantly Panjabi army riding rough shod over the rights of Kashmiris who don’t want to live under Panjabi occupation.
In 1971 China tried to enter the war but stopped just at the tip of a conflict. Today, China seems to have entered the POK at least with observers & analysts. They now face India’s Border Security Force. At least so far, the Armies of India & China are not facing each other in Pak-occupied Kashmir.
How far away is that? Look at the map above. The Black portion above the POK area is Tibet, occupied by China – the ally of Napakistan. So the potential for a China-India confrontation is high. We find it hard to believe that PM Modi can step back & allow the Napak Army to attack & kill the protestors for their freedom & food, especially now that China has stepped in.
The Indian Government stand is that the the problem is between India & Napakistan & goes back to 1947 with the error of colonial Britain. So there is no room for China or any one else to butt in. The clip below is the last one we found with any kind of detail or pictures:
Once again, the US is in a difficult position, especially as America celebrates 250-year of great history, history of Government of the people, by the people, and for the people. Is this the right time to assist a terrorist regime to forcibly squash the freedom struggle of a helpless Kashmiri people by a Panjabi army?
On the other hand, the army head Munir & his foreign minister Shahbaz have good relations with the Trump Administration because of their help in the Iran negotiations just as the Nixon Administration was dependent on Gen. Yahya Khan, dictator of Pakistan, for helping arrange the visit of President Nixon to meet Chairman Mao. But the the US Navy just completed a joint naval exercise with Philippines (despite China’s angry objections) near the disputed Scarborough Shoal. And the US Navy has 35 warships near the Persian Gulf while while China has deployed 28 warships.
Our guess is that, since the fight is within the Indian Subcontinent, the Indian military may have substantial advantage over the Chinese in this area and that may be why the conflict, if begun, will spread to other areas of the Line of Control between India & China & perhaps into the naval arena as well. What makes it more complicated is that Turkey is resolutely backing Napakistan & Israel is committed to fighting Turkey & Napak military.
Below is a clip of a veteran ex-diplomat from Singapore speaking to some NaPakistanis about their role in the US-Iran conflict & what impact that might have. This clip was posted two days ago on July 3, 2026 and has, apparently gone viral already:
Finally, below is an explicit visual clip that is the most recent (2 hours ago) that we could find. It also says that Amnesty International has criticized the Na-Paki Government from banning the Joint Awami party from fighting the upcoming elections.
May God help keep the protestors safe & alive!
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