Daily Brief Macro: Poised for a Volatility Spike and more

• We remain long-term bullish on equities. In the short run, realized volatility declined since the “Liberation Day” panic, but conditions are setting up for a near-term volatility spike.
• Uncertainty over Fed policy and government credibility are possible catalysts for a disorderly increase in volatility and market correction.
• As well, the signs of narrow leadership, weak breadth and stretched risk sentiment elevates the risks of a pullback.

• We believe global equity investors should adopt a barbell strategy of overweighting U.S. large cap growth and non-U.S. value stocks in their global equity portfolios
• The trend is your friend: Both are undergoing multi-year uptrends in relative performance.
• The key question is the length and sustainability of U.S. AI leadership. 

• By restricting the announcement of a 50% tariff on copper pipes/wiring and leaving out ores, concentrates, and cathodes, the Trump administration destroyed the COMEX-LME spread in one fell swoop. 
• COMEX prices have plunged, and the spread now is 150 USD/ton from the highs of almost 3000 USD/ton, with high inventories on the COMEX probably needing to be dumped. 
• Short term copper prices may face pressure, but we see an excellent outlook for the longer term, given the elevated China copper imports, which rose 18% YoY in July. 

• Following our bullish call on iron ore, Iron Ore: Small Bounce to 100 USD/Ton On Oversold Levels, we are now less excited on iron ore and see it drift lower. 
• We expected iron ore to test the lower-end of the long-term band of 95-110 USD/ton (vs current spot of 102 USD/ton).
• While iron ore inventories/stocks at ports drift lower, mill margins have capped out and are not rising any further, leading us to call for a short-term decline in ore prices.

• Discussion between Jonathan, CEO of Tradesmen Collective, and Ed, Director of Investor Relations, on tech startups and market trends
• TTC USA’s integrated platform addresses industry inefficiencies with cutting edge software, escrow services, and legal support
• Insight on leading assets like gold, Bitcoin, and Nvidia; mentions of success stories like MicroStrategy integrating Bitcoin and Nvidia integrating software for business growth

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