After a late-day selloff yesterday, equities are stabilizing in the early going today. Crude oil is lower, while gold and silver are mixed. Bitcoin is back above $110,000 after breaching that level overnight. The dollar is down.
President Trump dramatically escalated his Federal Reserve fight overnight, saying he would move to fire Federal Reserve Governor Lisa Cook for alleged mortgage fraud. Trump’s move follows allegations from Bill Pulte, head of the Federal Housing Finance Agency, that Cook took out two mortgages on two separate properties in 2021 and named both homes as her primary residence.
Gold, Dollar Futures (Overnight % Change)
Cook said she will fight the move, which comes after several other moves by Trump to pressure the Fed into cutting interest rates sooner and more dramatically. In the 112-year history of the Fed, no president has ever tried to remove a Fed governor in this manner, and it’s unclear if the attempt would survive legal challenges. But markets are reacting nonetheless. The dollar is selling off, gold is rising, and the Treasury yield curve is steepening (though SO FAR the moves are modest).
It’s earnings week for one of the biggest stocks on the planet – Nvidia Corp. (NVDA). The semiconductor company and tech sector bellwether will report Q2 results after the close Wednesday. Heading into the number, options markets are pricing in a potential post-earnings move of 6% – which would amount to about $260 billion in added or lost market cap. That’s actually a bit LOWER than 7.7% average over the last 12 quarterly reports.
Finally, US rare earth element producer MP Materials Corp. (MP) appears to be pushing back against China. While China dominates the rare earth industry, MP still helped fuel just under 10% of that country’s oxide production by shipping it neodymium and praseodymium. Now, it isn’t shipping those raw materials – driving the Chinese price of so-called NdPr oxide to the highest since March 2023. The Pentagon recently agreed to pay $400 million for a 15% stake in MP. Is shares are up 363% year-to-date.
