In 30 seconds: SpaceX's post-IPO share price swung wildly from $135 to $220 before retracing, while broader markets showed unusual divergences including semiconductors surging over 90% in a quarter and the Nasdaq 100 decoupling from the Nasdaq Composite. Brad Setser argues China's current account surplus is understated by at least $300 billion due to investment income distortions and customs data gaps, calling on the IMF to correct its external sector analysis ahead of its 2026 report. Former Federal Reserve Chairman Alan Greenspan died at age 100, prompting tributes and reflection on his 18.5-year tenure guiding the US economy, as well as debate over his legacy in light of the 2008 financial crisis. The US Treasury issued a sweeping 60-day general license waiving key Iran oil sanctions including dollar payments, while Hormuz oil transit volumes hit crisis highs and China remained on a buying strike amid ongoing SPR releases.
That is a lot of price discovery for a company with a $2.4 trillion market cap and a free float of just 5%. For context, SpaceX carries the same 0.15% weight in $ITOT as Newmont, even though Newmont has a market cap of only $110 billion. Float-adjusted indexing is doing a lot of heavy lifting here. The Mag 7 $MAGS fell 2.1%. The broader tape is pulling apart too — NDX adding SpaceX while SPX doesn't could mark a more permanent divergence between the two indexes. The Philadelphia Semiconductor Index surged over 90% this QUARTER, led by Western Digital $WDC, up 333%, and Micron $MU, up 297%. Netflix fell 6% on the session, hitting fresh multi-year lows and returning to late 2024 levels, with its market cap back near $300 billion. Alphabet $GOOGL fell 6.2%, its largest single-day decline since 5/7/25. Small caps and mega caps have both gained just over 20% year to date, yet the paths underneath look nothing alike. The market is agreeing on the destination while taking every possible route to get there.
Correct for it and the implied undervaluation of the renminbi shifts by about 10 pp. The core distortion has evolved. The distortion is no longer the discontinuity introduced by SAFE's 2022 shift in how it calculates the BoP goods surplus. It is the 'wrong' investment income balance (a deficit when there should be a surplus). Meanwhile, Ireland's inflation of Europe's surplus adds 0.3 pp of GDP to Europe's headline number, further muddying the comparison. export demand share of Chinese manufacturing value added up from 24 to 27% between 2020 and 2025. China's exports wildly outperform global trade while imports lag. The surge in imports looks to have faded in Q2. China's net export contribution to growth runs at 1.5pp, with a similar drag imposed on its trade partners. Tordoir and Setser suggested that the EU create a 301-style instrument and initiate a currency-based 301 complaint against China. Renminbi appreciation against the euro: 25%. The IMF's last external sector report used 2024 data — the peak of China's customs distortion — and concluded that Europe's surplus as a share of GDP was well above China's.
Alan Greenspan, the Fed chairman who guided a then-record US economic expansion, has died at 100. He served from 1987 to 2006, a tenure spanning 18.5 years. Greenspan's success building an economic consulting firm derailed his studies for an economics Ph.D. at Columbia under Arthur Burns. He bought a duplex on Long Island shared with his mother, as well as a 1959 Buick convertible with red leather seats and tail fins. When Ronald Reagan tapped Alan Greenspan to succeed Paul Volcker as Fed chairman in 1987, one voice inside the administration quipped: If you think that Volcker was the master of obfuscation, wait until you hear Alan. S&P 500 gain under Greenspan: 290%. Then 2008 recast Greenspan's legacy. The policies that had helped produce the long expansion had arguably fueled the 2008 financial crisis.
Treasury just did something nobody had on their bingo card. The department issued a sweeping general license waiving key Iran oil sanctions until August 21, 2026 — wide-ranging in scope, covering exports, shipping and ancillary services, and including crude, refined products and petrochemicals. The practical question is who actually buys. The license is wide; the appetite is not. Meanwhile the physical market is already awash. Oil is leaving the Strait of Hormuz in volume, both dark and visible, with bypass pipelines operating at full capacity. The 10-day rolling exit volume has hit roughly 8.5 million barrels per day — a Hormuz crisis high pace — driven partly by more VLCCs in the mix. Last week's US drawdown alone was ~9.1 million barrels at a rate of ~1.3 million b/d, the second largest weekly release ever. The average release rate over the last eight weeks has exceeded 1 million barrels per day. The one buyer you might expect to feast on discounted Iranian barrels is sitting this out. China remains on an oil buying strike. There is little chance (probably zero) of a US refiner buying Iranian oil over the next 60 days.
Here is what your weekly spend looks like right now.
Gas (per gallon): $4.05, down 2.27% on the week
Groceries (CPI food at home): 345.71, up 0.15% on the month
Eating out (CPI food away from home): 348.89, up 0.16% on the month
Average hourly earnings: $37.53, up 0.32% on the month