WS #9072

The dominant signal in this window is the continued selloff in risk assets driven by a confluence of macro and geopolitical headwinds. The US jobs report came in stronger than expected, reinforcing bets that the Fed's next move will be a rate hike rather than a cut, which is pressuring growth stocks and cryptocurrencies. Bitcoin has fallen below $60,000 for the first time since October 2024, down nearly 20% this week, as its largest buyer (Strategy) turned seller and ETF outflows accelerated. The Nasdaq is down over 2% on Friday, with NVDA and other AI-related names extending their selloff. Geopolitical tensions remain elevated: the US, Mexico, and Canada will miss the July USMCA deadline, ramping up trade tensions; the US is holding its first-ever Arctic Refuge drilling rights auction; and the Strait of Hormuz disruption continues to keep oil prices elevated, though Fitch views it as a temporary logistics shock. On the counter-signal side, Energy Secretary Wright announced the US will add 40 million barrels to the Strategic Petroleum Reserve once the Iran conflict concludes, which could dampen some oil price upside. Additionally, Morgan Stanley sees AI-related funding expanding to 15% of all credit deals, and a Bloomberg analyst stated 'there is no AI bubble,' providing some support to the tech narrative. The SpaceX IPO is generating significant attention, with the XOVR ETF implementing a shareholder protection plan ahead of the event, and Polymarket contracts heavily traded on the IPO market cap. Overall, the narrative is one of risk-off sentiment with rate hike fears, geopolitical uncertainty, and crypto contagion, partially offset by long-term AI investment flows and potential SPR refill.