₿ Justin Tew - Objective Finance 📈

✈️ Nvidia is bringing Wall Street deeper into AI infrastructure financing 💰 Nvidia announced that a coalition of major financial institutions, including BlackRock, Goldman Sachs, Apollo, Blackstone, Brookfield, and KKR, will independently deploy more than $500 billion to help fund AI infrastructure. The issue investors were watching: “circular financing”. If Nvidia lends money to customers like OpenAI so they can buy Nvidia chips, and those customers fail, Nvidia could be left with the losses while already having booked the revenue. In less than three weeks, the cost of protecting Nvidia’s debt against default had nearly doubled via credit default swaps (CDS) Tuesday’s announcement helped calm credit markets because Nvidia’s own exposure will be limited to guaranteeing up to 25% of some projects through a “residual value mechanism”, with the rest of the risk absorbed by outside investors. The concern has not disappeared. It has been redistributed. If projects fail, losses could flow to bondholders, life insurers, and pension holders instead of Nvidia shareholders....

💵 What Earnings Calls are saying about the Economy 😎 Bloomberg Economics’ transcript-based indexes show two things rising in S&P 500 earnings calls: - Growth optimism - Inflation concern The growth optimism index tracks how broadly industries are expressing expansion signals in earnings calls, such as guidance raises, record orders, or margin improvements. The inflation concern index tracks the breadth of inflation-related discussion, including wage pressure, pricing power, consumer demand, and supply costs. Both measures have moved higher into Q1 2026, suggesting companies are sounding more optimistic on growth while still talking more about inflation pressure.

BREAKING: 🇺🇸 US inflation falls to 3.4%.

💼 U.S. job openings eased, but the labor market is still stable 📈 June job openings dipped to 7.36M, down from 7.54M in May. The pullback came mainly from: - Healthcare - Leisure and hospitality - Business services But the broader picture still looks balanced rather than deteriorating. Hiring picked up slightly, driven by healthcare and construction. Layoffs remained limited, and the quits rate held steady at 2%. Bloomberg Economics noted that softer labor demand should keep easing wage-driven price pressures. The next key read is Friday’s July jobs report, where economists expect about 80,000 payrolls added.

✈️The AI boom is becoming more debt-financed 😎 The largest AI spenders are leaning harder on bond markets. - Alphabet, Amazon, Meta, Microsoft, Oracle and SpaceX are projected to issue $285B in bonds this year. - That is up from $109B last year. - The money is being used to fund a nearly $4T four-year capex program. - Soaring chip prices are also feeding into consumer goods inflation. - The article notes the iPhone 18 Pro will cost more because of memory chip shortages. The U.S. economy has rarely been this dependent on one technology cycle continuing to deliver.

🇺🇸 The U.S. economy is now running on AI ⌨️ AI has become one of the main engines of recent U.S. growth. - Oxford Economics estimates AI investment alone accounts for nearly 25% of recent GDP growth. - Business spending on AI-related categories is running at roughly $1.5T annualized, up from $1T two years ago. - Data center construction spending hit $68.3B annualized in June, up $21.5B YoY. - At the same time, all other private construction fell by $101.6B. - The AI stock rally has added trillions to household net worth, with U.S. household net worth reaching $174T in Q1. Put together, AI-related factors may be responsible for roughly one-third of recent U.S. economic growth.

🚨 PSA: Timbre+ Credits Refund 🚨 Quick reminder for anyone who still has credits inside the Timbre+ app. Timbre+ Hawkers will stop operating One Punggol Hawker Centre, with NEA calling for a new operator and Timbre+ ending its tenancy on 14 Aug 2026. If you still have unused Timbre+ credits, don’t leave them sitting there. You can check the app and request for a refund directly from there. For refunds less than $50, technically need to head down to the location to get cash refund .. but the hack is to top up to > $50 and request refund via Paynow LOL (see screenshot) Small money still money 🤤, especially when app credits are easy to forget. What to do: - Open your Timbre+ app - Check if you still have stored credits - Use them up or request a refund - Remind your family members too, especially if they frequent One Punggol or Yishun Park Hawker Centre Source: https://www.straitstimes.com/singapore/one-punggol-hawker-centre-to-get-new-operator-open-tender-to-be-called-in-jan-2026

Markets are also pricing in a probable 25bps rate 🚨HIKE🚨 (63% target rate probability) for the next FOMC meeting in September... Lots of volatility ahead , will keep u guys updated okie 🫡

🧑‍💻 Even with all that , Big Tech’s AI capex is still rising tho 🥺 Btw, capex stands for capital expenditures, which means the big money tech companies spend to buy physical things and long-term tools like data centers, computer chips, and power plants to build and run artificial intelligence The chart of the week shows combined capital expenditure and free cash flow for Alphabet, Amazon, Meta, Microsoft and Oracle. Capex has been rising sharply since 2023 and is expected to keep climbing through 2029. The chart estimates combined capex moving toward around US$1.1 trillion+ by 2029. Free cash flow is expected to recover later, but the near-term picture shows how expensive the AI infrastructure race has become. This is the KEY market question around AI: Can Big Tech turn huge AI spending into enough future revenue and free cash flow? If yes, the spending supports long-term growth. If not, investors may start questioning whether AI capex is becoming too heavy relative to returns.

🇺🇸 And the results: Rates left unchanged at 3.5%-3.75% 🚫 Stock Market Highlights 🇺🇸 The Dow Jones Industrial Average dropped 1,152.46 points to close at 51,594.86. The S&P 500 lost 1.5% to finish at 7,316.37, heavily pressured by industrial and tech sector pullbacks. The Nasdaq 100 fell 2% to 27,192.31 amid ongoing concerns over heavy capital spending on AI infrastructure. 📈 Bond Market and Yields The 30-year Treasury yield surged 12 basis points to 5.21%, reaching its highest level since 2007. The 10-year Treasury yield jumped 7 basis points. This reaction reveals that investors are resetting their expectations for the economy, inflation, and interest rates.

🏦 Markets are Unusually Uncertain about the Fed 🇺🇸 Markets are heading into the latest Federal Reserve decision with unusually high uncertainty. Traders are pricing in roughly a one-in-three chance of a surprise rate hike at Kevin Warsh’s second meeting as Fed Chairman. That level of uncertainty is rare in recent Fed history. Open interest in August federal funds futures also hit a record 967,000 contracts, as traders rushed to hedge against a surprise outcome. Warsh has rejected the forward guidance framework that made Fed decisions more predictable for the past two decades. If the Fed holds rates steady, markets will question whether Warsh is data-dependent or backing away from inflation pressure. If the Fed hikes, it would mark a sharp break from central bank norms and reset expectations for the tightening cycle. Either way, the first market reaction may be sharper than usual.

🔥 Value stocks are Beating Growth this year 📈 One of the more surprising market storylines of 2026: The Russell 1000 Value Index is up roughly 20%, while the Russell 1000 Growth Index is down around 1.6%. That is a reversal from the past few years, where growth stocks dominated. But the reason is not traditional “cheap value” stocks like banks, utilities or energy. A June index reconstitution moved Apple, Amazon and Microsoft into the value index, while chip stocks like Micron, AMD and Western Digital were moved into growth near their peak. So value benefited from picking up megacap tech names near their lows, while growth got more exposed to semiconductors before they sold down. The Russell Value Index still trades cheaper than growth, at about 18x forward P/E versus 26x for growth.

JUST IN: 🇰🇷 South Korea's KOSPI stock market crashes another 7% today. 📉🚨

🇰🇷KOSPI Trading Halted After 8% Plunge as SK Hynix ADR Falls Below $140 🔻 South Korea halted trading in KOSPI-listed shares for 20 minutes on July 28 after the benchmark index fell more than 8%, marking its eighth circuit-breaker activation of 2026. It’s now trading below 6000 … SK Hynix’s U.S.-listed ADR, traded under the ticker SKHY, fell below USD 140 and was last quoted at USD 139.45, down 11.89% over the past 24 hours. SK Hynix is one of the world’s largest memory-chip manufacturers and a leading supplier of high-bandwidth memory used in AI processors.

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HSBC sells Singapore insurance business to Germany’s Allianz in US$2.09 billion deal Allianz’s purchase of HSBC Life Singapore arrives roughly two years after its previous attempt to significantly expand its local footprint ended in controversy. https://bt.sg/uwGh

✈️ Investors are questioning Big Tech’s AI spending 👛 The AI euphoria that pushed markets to all-time highs just a month ago is fading. Tech was the worst-performing S&P 500 sector last week. The Nasdaq 100 fell 4.1%, while the Philadelphia Semiconductor Index dropped 10%, its worst week since April 2025. SpaceX also fell below its IPO price after losing 25% over two weeks and wiping out US$1 trillion from its peak market cap. Investors are becoming more uncomfortable with the scale of AI capital expenditure. Alphabet alone is projected to spend US$187 billion this year. The four biggest hyperscalers combined are forecasting up to US$725 billion in capex. The next two weeks of Big Tech earnings will be the key test, with Alphabet, Tesla, Microsoft, Meta, Apple and Amazon reporting in quick succession. Analysts will be watching cloud margins, AI revenue per dollar of compute, and whether capex growth is slowing or accelerating.

🛢 Oil prices are back in focus 🔄 The U.S. has reimposed its blockade on Iranian ports and scrapped the oil export sanctions waiver. That reverses the economic concessions that briefly helped bring oil prices down. The U.S. has also sent additional F-16s and F-35s to the region, suggesting preparation for further escalation. Brent crude surged back toward US$88 per barrel on Friday, marking its biggest weekly advance since April. Tanker traffic through Hormuz has also dropped again, while attacks on energy infrastructure raised fears of sustained supply disruption. The June CPI report had offered a short period of inflation relief from lower gasoline prices. But if hostilities continue, that relief could reverse....

🇮🇷 🇺🇸 Iran ceasefire has collapsed 🚨🔥 The fragile U.S.-Iran interim peace deal has effectively broken down. Both sides have abandoned the memorandum of understanding signed last month and returned to an escalating cycle of military strikes. Iran killed two American service members in Jordan, leading to U.S. retaliatory strikes on Qeshm Island and multiple southern Iranian cities. Iran then targeted Kuwait’s power and desalination infrastructure, launched drones at U.S. bases in Kuwait and Bahrain, and fired missiles that were intercepted over Jordan. The IRGC Navy also halted four tankers attempting to pass through the Strait of Hormuz. This raises fresh concerns over energy markets because Hormuz is one of the world’s most important oil transit routes.