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ONE BIG THING
Trump orders reduction of military exercises with South Korea ‘based on my very good relationship with Kim Jong Un’
President Trump ordered Secretary of War Pete Hegseth “to substantially reduce the Joint Military Exercises” with South Korea the day before they were set to begin, “based on my very good relationship with Kim Jong Un, of North Korea,” he said in a post on Truth Social. Trump also cited the cost of the exercises and the fact that they “send a signal that is totally inappropriate and hostile” to North Korea. He also cited South Korea’s reluctance to assist the U.S. in its war with Iran.
The U.S.S. George Washington is moving from the Pacific to the Middle East to replace the U.S.S. Abraham Lincoln, Axios reported. That leaves the Pacific with no U.S. aircraft carriers. The Lincoln has been at sea for eight straight months, and morale aboard the ship is suffering, CNBC reported.
THE MARKETS
Stock markets are broadly up worldwide
- S&P 500 futures were up 0.15% this morning. The index closed down 0.17% on Friday.
- In Europe, the Stoxx 600 was up 0.10% in early trading and the U.K.’s FTSE 100 was up 0.08% before lunch.
- Asia: South Korea’s KOSPI was up 2.42%. Japan’s Nikkei 225 was up 0.74%. India’s Nifty 50 was down 0.11%. China’s CSI 300 was up 1.61%.
- Brent crude was $89 per barrel this morning.
- Bitcoin was at $63.3K.
Chart: TradingEconomics.com
U.S. stocks get a big boost from foreign money
In the week through last Wednesday, the most recent period reported by Ohsung Kwon and his team at Wells Fargo, foreign money flowed into U.S. stocks by a net $4 billion, down a little from $5 billion in the prior week.
Fact of the day: “Just 27% of actively managed U.S. large-cap equity funds beat their benchmark passive-fund alternatives in the 12 months ended June 30.”—The Wall Street Journal
MORE FROM FORTUNE
Billionaire founder agrees with Elon Musk, Sam Altman and Jeff Bezos: We will live and work in space—and could be commuting to the moon by 2030 – Orianna Rosa Royle
Dario Amodei admits AI suffers from a crisis of trust, saying people worry companies or governments are ‘cooking up some new way to screw them over’ – Jason Ma
Owning the Lakers would provide billionaire investor Joshua Kushner with an iconic sports franchise — and a ‘powerful tax shield’ – Jason Ma
Iran’s oil is trapped while rivals’ exports from the Persian Gulf are poised to surge, but Tehran could do whatever it takes to break the chokehold – Jason Ma
Gen Z is eyeing up ‘secure’ healthcare jobs to AI-proof their careers, but be warned: Chiropractors, doctors and paramedics are the unhappiest workers – Orianna Rosa Royle
‘Godfather of AI’ says billionaires like Elon Musk are right about the future of work—but he predicts mass unemployment is on its way – Preston Fore
WOW
Amazon’s Prime Day is now so big it affects America’s macro retail numbers
On Friday last week, the U.S. Commerce Department published the latest retail sales results for July, and the number dropped 0.6%, the first decline in nine months. Economists generated sad-looking charts, like this one (below) from Pantheon Macroeconomics, showing what appears to be depressed consumer activity. Non-store sales (i.e., online) alone declined 2.2%:
But Pantheon’s Oliver Allen has a second chart showing why sales dropped off a cliff. If you exclude autos, gas, construction, and food services to isolate online sales, you can see how Amazon’s Prime Day boosts sales in a single day. This year, Prime Day fell in June, not July, so the Amazon boost had already come and gone. Retail sales aren’t that bad, in other words. Nonetheless, it is still amazing that Amazon alone is now so massive it can shift the macro numbers with a single day’s sales.
MORE FROM FORTUNE
CHART OF THE DAY
Global chokepoints, ranked by risk
This chart from Harry Murphy Cruise at Oxford Economics dramatically illustrates something you already know: that since the war with Iran started, sea cargo through the Strait of Hormuz has slowed to a trickle. Currently, only a handful of ships traverse the seaway each day. Rerouting is costly, Cruise said in a research note: “Red Sea diversions have more than tripled container freight rates.”
There are around 30 major chokepoints like the Strait worldwide, and in this next chart Cruise grouped them into three buckets: those where short detours are available, those with long detours, and those with no alternative at all. “The last group is small but consequential: the Strait of Hormuz, the Bosphorus and the Kerch Strait in the Black Sea, the Bohai Strait, and the Øresund Strait at the mouth of the Baltic Sea. When these close, the trade behind them stops,” he said in the note.
NUMBER OF THE DAY
156,975
The number of tech layoffs globally this year so far, according to a count by Trading Platforms (a comparison shopping website for investment platforms). The job losses occurred at 152 companies. The biggest cut was at Oracle, which axed 25,254 roles. The industry is on pace to have more layoffs this year than in 2025.
THE FRONT PAGES TODAY
Private credit under strain as troubled loans swell – FT
Strait of Hormuz shipping grinds to a halt ahead of U.S.-Iran ceasefire expiry – CNBC
Hamas leaders tell Kushner they will demilitarize Gaza, sources say – Axios
China’s Economic Woes Mount With Disappointing Start to Half – Bloomberg
China Wants to Shape What the World’s A.I. Knows – NYT
Hayden Panettiere, star of ‘Heroes’ and ‘Nashville,’ dead at 36 – NY Post
ONE MORE THING
Selena Gomez has a new role: alleged Silicon Valley villain
Photo: Chad Salvador–Variety/Getty Images
Pop star Selena Gomez is being accused of fraud by investors who claim she failed to deliver on promises to leverage her global celebrity to promote her mental-health startup, which collapsed last year, the AP reports. The startup, Wondermind Global Inc., claimed a valuation of $95 million when it sought money from investors in 2022 to develop products, including a mobile app, according to a lawsuit filed in Delaware federal court. Gomez, one of the founders, served as “chief impact officer” and head of marketing, the suit said.
But Wondermind lied about its prospects and never developed the products or revenue it had promised, according to the suit filed by five investors. Gomez ignored her contractual obligations to the company in part because of her “long-running personal struggles with her mother,” Mandy Teefey, who was a co-founder and co-chief executive officer, the investors claim. Neither Gomez nor Teefey commented to The AP.
The chaos that engulfed Wondermind was described in a must-read article in The Cut last year. It claimed Teefey slept in her office, often for days at a time, without showering or changing her clothes.
“Through the glass walls of her office, employees saw her watching Schitt’s Creek on a flat-screen TV for hours at a time in the middle of the workday, surrounded by takeout boxes and packages from luxury brands,” the story alleged.
