Double Disinflation Proof, Chip Volatility, and the Liquidity Wall in Global Markets
Thursday, July 16, 2026 | Daily briefing on double disinflation proof, KOSPI’s chip rout, Iran’s existential war threats, and Bitcoin’s dual selling pressure.
Market Summary of the Day
Disinflation received its second proof: June PPI unexpectedly declined, marking the largest contraction in 14 months. A July rate hike is effectively priced out (currently at a 10-11% probability, down from 45% at the beginning of the week), but the game is far from over: a 25bp+ hike for September is priced at 50%, while a December hike stands at 73%. A hawkish note from Cook: “I am ready to act” if inflation does not slow down soon. The Dollar is at a one-month low.
The chip roller-coaster enters its third act: The KOSPI plummeted -6% today (following Wednesday’s +6.4% surge), sliding to -27% from its June peak; SK Hynix fell -11%, Samsung -7%, and Nikkei -3%; Micron dropped -8% in the US. XFUNDs remarked: “Semiconductors alone make up ~20% of the S&P 500, which is incredibly difficult to sustain.” Right in the midst of this chaos, TSMC posted record-breaking results: Q2 net profit surged +77.4% (vs. expectations of ~60%), marking its fifth consecutive record quarter.
BTC pulled back to $64,926 – $65,500 after a failed attempt to test $66,000. A critical signal from Glassnode reveals that two distinct cohorts are selling into the rally: long-term holders (LTHs) who bought near the top are using this “relief rally as an exit” to minimize losses, while short-term holders (STHs) who bought near the bottom are taking profits at a pace last seen during the May peak.
ETH divergence is deepening: up +10.4% weekly to $1,926 (compared to BTC’s +2.7%). ETFs saw inflows of $96 million in three days (surpassing the entirety of last week), though nearly all of it went into BlackRock’s ETHA. Additionally, Robinhood Chain’s L2—which uses ETH for gas payments—has introduced a new demand source that didn’t exist three weeks ago, driving over $800 million in daily DEX volume.
Iran has declared an “existential war,” threatening further shutdowns of regional energy exports and the closure of the Bab el-Mandeb strait via the Houthis, putting a second critical artery at risk. Only 7 vessels transited the Strait of Hormuz on Wednesday (down from 13 the previous day). Goldman Sachs notes: if the recovery of Gulf exports remains blocked, Brent could exceed $110+ in Q4; if tensions ease, it could drop to the $60s by year-end. Trump offered a mixed signal: “They are bad people, but they want to make a deal.”
SpaceX slipped below its $135 IPO price, down -33% from its peak, erasing over $1 trillion in value; a massive lockup expiration of 911.5 million shares ($123 billion) looms in early August. PayPal surged +17%following news of a $60.50 buyout offer from Stripe and Advent. Buffett remarked: “It’s hard to find value when everyone prefers gambling.”
Main Agenda
PPI Also Drops: Disinflation Double-Confirmed, but December at 73%
Following the CPI surprise, June PPI unexpectedly came in negative, marking the sharpest drop in 14 months. This dual dataset serves as concrete proof that inflation was cooling before the Middle East escalations, effectively taking a July rate hike off the table: the probability of a hike plummeted to 10-11% from 45% at the start of the week. However, the futures curve continues to price in tight monetary policy: 50% for at least a 25 basis point hike in September, and 73% for December. The reasoning lies in the Fed’s own commentary: Cook stated on Wednesday that she is “ready to act if inflation doesn’t start slowing down soon,” while Warsh, in his second day of testimony, maintained policy silence but reiterated a message of resolve.
Wu from the Bank of East Asia commented: “The market had aggressively priced in a July hike, but the tightening path remains intact; a single month of cool data does not spell a permanent slowdown, and the Middle East will limit the downside of the dollar.” Today’s retail sales (expected at +0.2%, control group +0.5%) and jobless claims will test the demand side of the equation. Kantrowitz from Piper Sandler added: “For the market to broaden, yields must go sideways or downward. Today’s best-case backdrop is a labor market stagnant enough to prevent further rate hikes.”
The Chip Pendulum: KOSPI -6%, TSMC +77.4% on the Same Day
The volatility of the Asian chip rally has become a daily occurrence: the KOSPI tumbled -6% today (completely wiping out Wednesday’s +6.4% gain), falling to -27% below its June peak. SK Hynix plunged -11% (double-digit daily swings have become standard since its Nasdaq listing) and Samsung dropped -7%, compounding losses for leveraged domestic funds. In Japan, Advantest fell -6%, SoftBank -7%, and Tokyo Electron -5%, while overnight in the US, Micron slid -8% and Intel -4%.
Kondratev of XFUNDs highlights the structural issue: “After a prolonged AI rally, semiconductor positioning is extremely crowded; semis alone represent roughly 20% of the S&P 500, which is incredibly difficult to sustain.”Reuters asks: “Will this massive AI capex actually translate into profits?” Right in the middle of this skepticism, TSMC delivered its own answer: Q2 net profit surged +77.4% year-on-year to NT$706.6 billion (beating expectations of NT$632.6 billion, which already anticipated a +60% jump). Revenue grew +36% to NT$1.27 trillion, with advanced 7nm and below wafer revenue accounting for 77% of the total, marking its fifth consecutive record quarter. The stock showed a muted reaction in Taipei, rising only +1.2%, confirming Reuters’ morning warning: “Without a flawless report and a rosy outlook, there is no escaping punishment.” At this threshold, the market treats even a beat with caution. ASML’s fate yesterday serves as a precedent: despite beating expectations, Europe’s most valuable tech company could only muster a +2.2% gain.
Iran: “Existential War”
On Wednesday, the US launched two waves of strikes against Iranian coastal defenses and missile sites. In response, Iran announced it targeted US radar and defense systems in Kuwait and Bahrain, declaring an “existential war” with America and threatening further disruptions to regional energy exports. Analysts are closely watching the risk of a new front: Iran’s signals to use its Houthi allies in Yemen to shut down the Bab el-Mandeb strait would put the world’s second most vital energy artery on the table after Hormuz. Messages from US officials stating that “strikes could pave the way for more complex operations” indicate that the escalation ladder is far from exhausted.
Physical data is tightening: only 7 vessels transited the Strait of Hormuz yesterday (down from 13 the day before). Despite this, Trump stated: “Iran wants to talk and make a deal; they are bad people, but they want to make a deal.” Goldman Sachs warns: if Gulf export recoveries continue to stall, Brent could surpass $110 in Q4; if tensions resolve and production returns quickly, it could slide back to the $60s by year-end. ING’s vulnerability note is critical: US commercial inventories are at their lowest since 2022 (seasonally the lowest since 2018), stating, “New supply disruptions are layering on top of Q2’s massive inventory drawdown, leaving the market highly vulnerable.”
SpaceX Below IPO Price: Lockup Wall Arrives in August
The largest IPO in history has broken a critical psychological threshold: SpaceX fell to as low as $132.15 on Wednesday, closing at $135.27—just hovering above its $135 IPO price. This represents a -33% drop from its post-IPO record close, wiping out over $1 trillion in market value ($2.1T → ~$1.8T). A Reuters analysis of 50 major post-2010 IPOs offers a warning: the median return for 21 stocks that fell below their IPO price in the first two months was +61%, compared to +112% for those that didn’t—suggesting an early break is a signal of persistent underperformance.
The real hurdle arrives in early August: on the second trading day following the first earnings report, employees and early investors will be eligible to sell 911.5 million shares ($123 billion, which is larger than the current $86 billion free float). If the price holds above $175.50, an additional 455.8 million shares will unlock, potentially expanding the public float to 40% of the company by December. Valuation remains stretched at 49x revenue (compared to Tesla’s 15x) alongside a net loss of ~$5 billion last year, yet 27 out of 32 analysts maintain a “Buy” rating. Infrastructure Capital noted: “Trading at this level is relatively safe, but we wouldn’t overweight due to the lockup.” With Starship’s 13th test flight scheduled for today, it is a binary risk day for the stock.
PayPal +17%: Stripe-Advent Buyout Proposal
The forgotten giant of Wall Street stepped back into the spotlight: PayPal skyrocketed +17.2% to $55.52 on reports of a $60.50 per share buyout offer from Stripe and Advent International, making it the stock of the day and driving the Communication Services sector’s +2.8% lead. The context, however, is brutal: the stock is still -82% from its record high five years ago, and its core branded checkout business has been in decline despite successive CEOs.
Deutsche Bank believes the offer is too low, viewing management’s silence as a “lowball” reading and suggesting a sum-of-the-parts liquidation could yield higher value. On the other hand, BTIG calls it a “lifeline worth taking,” noting that Stripe’s technology is superior to PayPal’s legacy infrastructure, and an 11.5x P/E is fair for a business expecting negative earnings growth this year. They suggest going private would make a multi-year turnaround easier for a stock currently sitting in “no man’s land.”
Macro Framework
BOK (Bank of Korea) Initiates the Cycle: 2.75%, First Hike Since January 2023
As expected, the Bank of Korea raised its benchmark interest rate by 25 basis points to 2.75%, marking its first hike since January 2023 and officially joining the Asia-Pacific tightening wave (alongside Australia, New Zealand, Indonesia, and the Philippines). The reasoning is familiar: headline inflation hit 3.2% in June, its highest level since 2023. The BOK’s warning last month is particularly noteworthy: high performance bonuses in major IT companies could spill over into broader wage growth, generating persistent inflationary pressure. The timing of the decision was unfortunate, coming on a day when the KOSPI tumbled -6% due to the chip rout.
In foreign exchange markets, we see interesting divergences: Sterling hit a two-month high at $1.3529 on expectations that Burnham will appoint the fiscally conservative Mahmood to the Treasury, reassuring the market. The Euro hit its strongest level in a month at $1.1467, while the Yen hovered slightly positive against the dollar for a third day at 162.16. Korean equities saw a counter-trend: shipbuilders rallied (HD Korea +3%) following Trump’s comment that “we will probably look to Korean firms” for US naval shipbuilding, with $150 billion of the $350 billion Korea-US investment package dedicated to shipbuilding.
Beige Book, Buffett, and Apple’s China AI Push
The Fed’s Beige Book showed expanding economic activity and easing inflation. A colorful detail in the report noted that the World Cup provided a boost to bars and restaurants (the UK was eliminated yesterday after losing 2-1 to Argentina; the final will be played this Sunday between Spain and Argentina at MetLife Stadium).
The quote of the week came from Warren Buffett’s CNBC interview: “It’s hard to find value when everyone prefers gambling.” Meanwhile, Apple clarified its China AI strategy: Alibaba’s Qwen model will be integrated into iOS/iPadOS/macOS in China (Alibaba HK +5%), and Baidu is also working on iPhone Apple Intelligence features (+1.4%). Consequently, AAPL rose +4% yesterday to $327.50, closing in on its record high of $328.73.
Crypto
BTC $64,926: Two Groups Selling into the Rally and the “June Snapshot” Warning
BTC retraced from its $66,000 test ($65,500 down to $64,926), and on-chain data explains the anatomy of this pullback. Glassnode identifies two distinct seller cohorts. The first consists of long-term holders (LTHs) who bought near last year’s peaks: “As the price rallies toward $66K, the volume of LTH realized losses spikes; cycle-top buyers are using this relief rally as an exit opportunity to close out with smaller losses. Selling into strength rather than waiting for a full recovery highlights exhausted conviction among underwater long-term holders.”
The second group is short-term holders (STHs) who bought near the bottom: they are taking profits at a rate exceeding $4 million per day, a velocity not seen since around the May peak. The result is a double-sided supply wall hitting the market just as it attempts an upward breakout.
Lee from Bitget warns: “The 3.5% CPI was driven by a 10% drop in gasoline in June, a move that reversed even before the report was published. The market is rallying on a June snapshot, but July is playing out differently, and the July data will be the first to carry the war premium.” De Maere from Wintermute added: “The inflation data is constructive, but US strikes are in their fourth day and the Fear & Greed index only crept from 22 to 25—still in Extreme Fear. A single soft CPI against active military escalation does not represent a permanent regime change in risk appetite.”
The short-term liquidation map is two-sided: highly leveraged short liquidations accumulating above $65,000 provide fuel for a retest of that zone (optimism is also supported by Clarity, as White House officials meet with senators over the final ethical hurdle). Open interest data from the last 12 hours shows strong buying interest, with a thick layer of leveraged buyers extending down to $62,000.
However, the larger on-chain picture remains cool: there is a sharp divergence between whales and retail. Addresses holding 100-1,000 BTC are in distribution mode, while the smallest tier holding under 1 BTC is buying. Whales who rotated into stablecoins early in the week have stayed there despite the price rise, strengthening the view that smart money is using this weekly pump as an exit.
ETH is telling a different story: up +10.4% weekly to $1,926 (RSI at 67, knocking on the EMA100). ETFs pulled in $96 million in three days, eclipsing the $84 million seen in the entirety of last week. Structural innovation is also supportive: Robinhood Chain (launched July 1) pays gas fees in ETH, settles on Ethereum, and is generating over $800 million in daily DEX volume—mostly driven by memecoins, but representing a demand source that did not exist three weeks ago. Meanwhile, BTC ETFs remain indecisive: -$424 million on July 13, followed by +$181 million the next day. Offsetting positives include funding rates near zero (clearing out the highly leveraged longs that fueled June’s liquidation cascades) and BTC dominance holding at 58.3%.
Commodity Environment
Oil Takes a Breather: Profit-Taking as the $110 Scenario Remains Ready
Following a four-day winning streak, oil turned negative today: Brent crude slid to $84.57-$84.95 (down around -0.3%) and WTI fell to $79.38-$79.45, though both remain near one-month highs following an +18% cumulative move over two weeks. Sachdeva from Phillip Nova commented: “Geopolitical risk is keeping oil firmly supported, but after a powerful rally, traders have entered wait-and-see mode, shifting focus from the threats themselves to whether we see actual physical supply disruptions and how both sides respond in the coming days.”
Kikukawa from Nissan Securities noted that while mediation continues, full-scale war is not the baseline scenario, though headlines could push WTI up to $85-$87. The structural picture remains in a tense equilibrium, underscored by Goldman’s projections ($110+ vs $60s range) and ING’s commercial inventory warnings.
In metals, gold got stuck at $4,035 (-0.2%). IndusInd summarized: “June inflation does not reflect the recent escalation; a temporary peace is effectively priced in,” but the high interest rate environment is dampening gold’s appeal as an inflation hedge. Silver weakened -1.2% to $57.46. Wheat capped off a quiet rally: trading at $676.50, up +10.7% weekly, pushing the RSI into overbought territory at 72.6, and sitting less than 1% away from its 52-week high as war-related grain supply fears are fully priced in, raising the risk of a short-term correction.
Equity Front
Quiet Indexes, Turbulence Beneath the Surface: Momentum -7.1%
Wednesday’s headline numbers seemed calm (S&P +0.38% to 7,572, Dow +0.29%, Nasdaq +0.62%, VIX easing to 15.67), but it was painful for momentum investors: the Invesco Momentum ETF, which returned an annualized 42% over three years, fell -2.4% on Wednesday and is down -7.1% in July.
The winners of this sector rotation were megacaps: AAPL rose +4% ($327.50, record close), META gained +3.1% ($681, +13% weekly), AMZN added +3% ($255), and MSFT climbed +2.8%. The losers were crowded AI and hardware trades. Moving into this morning’s Asian session, Nasdaq futures are flat. While global echoes of yesterday’s chip sell-off (Micron -8%) persist, the S&P is holding within 0.6% of its 7,620 peak.
Today’s docket is packed: UnitedHealth reports pre-market, Netflix post-market, alongside GE Aerospace, retail sales, and jobless claims. In extended trading yesterday, United Airlines fell -2% on a fuel cost warning (noting $6 billion in additional costs), while J.B. Hunt gained +7% on rising intermodal demand. Kantrowitz’s regime playbook serves as the week’s compass: flat-to-down rates + stagnant employment = a broadening bull market; the opposite scenario would deepen the megacap squeeze.
Weekly Calendar
| Date | Day | Event / Development |
| July 16 | Thursday (Today) | US June Retail Sales (expected +0.2%; control group +0.5%) and Weekly Jobless Claims |
| July 16 | Thursday (Today) | Earnings: UnitedHealth (Pre-market), Netflix (Post-market), GE Aerospace, State Street, US Bancorp |
| July 16 | Thursday (Today) | Fed Speakers: Logan (Dallas) and Vice Chair Jefferson; Starship 13th Test Flight |
| July 17 | Friday | House Digital Assets Subcommittee hearing on the Clarity Act in New York; Burnham assumes Labour leadership |
| July 19 | Sunday | World Cup Final: Spain vs. Argentina (MetLife); White House-Senator ethical negotiations may extend into the weekend |
| July 20 | Monday | Burnham’s official appointment as UK Prime Minister; Mahmood expected as Chancellor of the Exchequer |
| Week of July 20/27 | — | Rumored Senate vote on the Clarity Act; expiration date of Trump’s “power plants and bridges” threat |
| July 28-29 | Tuesday-Wednesday | FOMC Meeting — July hike effectively priced out (10-11%); September is a coin toss; December stands at 73% |