Good morning,

Israel’s security cabinet has approved Netanyahu’s plan to take full control. It’s the clearest sign yet that the 22-month war may soon reach a decisive (and potentially destabilizing) climax.

Back home, Trump’s crypto-friendly executive order lit a fire under digital assets, pushing Bitcoin past $116,500. 

And his latest Fed pick, economist Stephen Miran, has everyone guessing whether Christopher Waller will ultimately replace Powell.

Meanwhile, UBS is warning of an economic slowdown as continuing jobless claims climb to their highest level in nearly four years.

And Americans are coming to terms with the idea that inflation is here to stay, with the NY Fed’s latest survey showing five-year expectations at their highest since March.

Yet the Nasdaq just hit another record, powered by Trump’s hints at semiconductor tariff exemptions and Apple’s new $100 billion domestic investment.

It’s a strange time to witness for any investor: war abroad, economic red flags, political uncertainty, and plenty of green on the screens.

Let’s dig in.

Quote of the day 

Six things to know before opening bell

🇮🇱 Gaza battle enters final phase

Israel’s security cabinet has greenlit Netanyahu’s plan to seize full control of Gaza City, signaling what could be the endgame in the 22-month war with Hamas. Minutes after the announcement, artillery could be heard every 60 seconds from over 50 kilometers away.

❓ Gold's tariff confusion

Gold futures in New York surged against London spot prices after reports surfaced that one-kilogram bullion bars are now subject to U.S. tariffs. What’s unclear is whether the rule targets just Swiss imports — with no trade deal in place — or all kilo-bar shipments. 

🐉 China’s gold binge keeps prices high

China’s central bank just extended its gold-buying streak to a ninth straight month, adding another 60,000 troy ounces to its 74 million ounce hoard in July. That relentless demand has helped keep gold hovering near record highs, including a brief spike above $3,500 yesterday.

💻 Big Tech shrugs off tariffs

The Nasdaq notched another record close, up 0.4% despite fresh tariffs taking effect. Two main drivers: Apple's $100 billion manufacturing investment and Nvidia's  two-day rally after Trump hinted at tariff exemptions for semiconductors. 

🏛️ Trump’s Fed succession plan takes shape

Trump officially tapped economist Stephen Miran to fill the Fed seat vacated by Adriana Kugler. But insiders say the real frontrunner to replace Jerome Powell next year is current Fed Gov. Christopher Waller. The White House is playing coy for now, calling speculation “premature,” but markets are already gaming out the next chair.

📉 UBS warns on slowing U.S. economy

UBS analysts warned this week that the U.S. economy is clearly cooling. Slowing GDP and softening labor data, they say, clash with Powell’s claim that population growth is the problem. Their read is that the labor market is slackening, and the Fed’s narrative may be increasingly out of sync with the data.

🛍️ Inflation hopelessness sets in

Americans seem to have made peace with the fact that inflation is here to stay.

Price hikes have been cropping up across multiple indicators for weeks now, and the latest New York Fed survey shows that shoppers are taking notice. 

Not only do they expect prices to keep rising, but they’re also starting to believe those increases will last well into the next decade.

🧠 NY Fed feels the shift

In its newest consumer expectations survey, the New York Fed found a noticeable uptick in inflation expectations:

• 2030 inflation expectations rose 0.3 points to 2.9%, the highest since early spring

• Five-year expectations hit their highest mark since March

• One- and three-year views held steady at 3.1% and 3.0%, respectively

What spooked analysts wasn’t the short-term view, which has held relatively stable, but the not-so-modest jump in longer-term expectations. 

That view clashes with Powell’s calm tone from just last week, when he said that “beyond the next year or so … most measures of longer-term expectations remain consistent with our 2% inflation goal.”

🔍 Is this just a flare-up?

Some analysts argue this might be a short-lived blip, a painful but relatively brief sticker shock that tariffs will eventually work their way through. 

But even if that’s the case, it doesn’t mean consumers are off the hook.

New projections from Yale’s Budget Lab show households could spend $2,400 more this year due to tariff-fueled inflation alone.

Apparel is where price hikes will hit hardest. With much of the U.S. clothing supply chain reliant on Asia, expect to pay upward of 40% more for shoes and clothes, especially if tariffs stick.

💼 Bad jobs data just won’t quit

The labor market keeps delivering bad news.

Nearly 2 million Americans filed for continuing unemployment during the week ending July 26, the highest level in nearly four years.

What makes it especially concerning is that it lands right after last week’s dismal July jobs report and those aggresive downward revisions to May and June’s job growth.

🧾 What the numbers say

In its latest update, the Labor Department reported:

• 1.974 million continuing jobless claims, up 38,000 from the week prior

• A modest rise in initial claims to 226,000 from 221,000

• The ongoing claims figure is now at its highest since the early days of the pandemic recovery

Oxford Economics’ Nancy Vanden Houten said the initial claims are “consistent with a low pace of layoffs,” but for the growing number of people who are unemployed, it’s getting harder to find new work.

🔍 The bigger picture

The rise in continued claims follows two troubling trends:

1. July’s disappointing jobs report, which pushed unemployment to 4.2%

2. Downward revisions to May and June’s job growth numbers

Vanden Houten said the latest spike “makes even more sense” in that context. It’s not just that layoffs are happening but that fewer people are getting rehired.

And Wall Street is taking notice. Just a week ago, the CME FedWatch tool showed only a 38% chance of a rate cut in September. Now it's over 90%.

📈 Trump’s 401(k) order sends crypto flying

Crypto just scored another policy win.

Trump signed an executive order yesterday allowing 401(k) retirement plans to include crypto holdings, marking another win for his administration’s pro-digital asset agenda.

After championing the GENIUS Act during Capitol Hill’s recent “Crypto Week,” the White House followed up with a sweeping statement of support.

“President Trump wants to give American workers more investment options in order to attain stronger and more financially secure retirement outcomes,” the administration said. 

⚖️ Not everyone is cheering

Supporters hailed the move as a milestone in mainstream crypto adoption.

Bulls estimate that if crypto makes up even 1% of 401(k) allocations, that’s $90 billion in new institutional capital. At 5%, the inflow could hit $450 billion, more than 15x Bitcoin’s current market cap.

But not everyone is on board. Critics say the move could open the floodgates to unnecessary risk for everyday investors.

“As a general rule, crypto doesn’t belong in a 401(k), period, end of sentence,” said Knut Rostad, president of the Institute for the Fiduciary Standard. 

He called the reversal of the Biden-era crypto ban “a big mistake.”

Some of the biggest names in asset management disagree. BlackRock CEO Larry Fink has repeatedly backed the inclusion of private assets — including crypto — in retirement plans.

“We need to make it clear,” he wrote in the firm’s latest investor letter. “Private assets are legal in retirement accounts. They’re beneficial. And they’re becoming increasingly transparent.”

🚀 The bottom line

Love it or hate it, crypto isn’t likely going anywhere... not with so much Wall Street capital pouring in. Barring a black swan event, the asset class is fast cementing its place as a must-have in every modern portfolio.