by diastole-admin | Aug 3, 2026 | Uncategorized
On Wednesday, the Federal Reserve Open Market Committee (FOMC) announced that it was keeping rates unchanged. That surprised no one. Then came Fed Chairman Kevin Warsh’s press conference. He wouldn’t talk about the three dissenting opinions on the Committee (they had wanted to raise rates). He said that because interest rates and bond yields in the market were already higher, the market was doing the Fed’s job for it. He refused to give any forward guidance on what the Fed was considering for its next meeting or the rest of the year. Warsh said that the Fed was focused on inflation and would act to keep it under control – at the same time that it didn’t act.
So, what the Fed did was keep rates steady below 4% for the big banks which borrow directly from the Fed, at the same time giving tacit approval to market forces pushing rates higher. That makes a bigger spread and a bigger profit potential for those banks who can borrow at the same rate as before, but loan at a higher level. The people who run banks aren’t stupid. They raised mortgage rates immediately.
And stocks fell because Warsh’s tough talk on inflation was just talk – so far. And oil prices were rising on Middle East tensions (this week we’re back to diplomacy and oil prices have fallen again), and in the middle of earnings season some companies reported underwhelming results.
But on Thursday and Friday markets were higher as investors decided that chipmakers’ stocks were a great idea – again. Bond yields remained elevated. And on Thursday, Microsoft added almost half a trillion dollars to its market capitalization after reporting that its Azure cloud unit revenue surged more than 40% during its fiscal fourth quarter. What’s surprising about all of this is that with companies’ shares higher but bond yields the same, where is the money coming from to go into stocks? Maybe from cash and money market funds.
Last week we reported about OpenAI’s artificial intelligence models going rogue and creating their own internet access and then hacking the company with the answers to their test questions. This week it is Anthropic whose models snuck out of their “sandbox” and hacked other companies. On the one hand, it’s good that we know about these breeches, and on the other hand, OMG. And then comes this quote from Gregory Allen, former director of strategy and policy at the Department of Defense Joint Artificial Intelligence Center: “Anthropic found these hacks because they started looking for them. We actually have no idea how widespread autonomous AI hacking is at this moment.” I am just one hack away from returning to pencil and paper.
As of June, overall prices increased 3.5% for the trailing 12 months. About two-fifths of this increase is attributable to housing. Let me mention again that mortgage rates and house prices usually move in opposition so that buyers can afford their payments. But this has not been a normal housing market since the pandemic, and we continue to see high home prices and high-ish mortgage rates at the same time. All of the baby boomers sitting warm and cozy in their big houses continue to be a drag on the market, but they don’t want to trade a really good mortgage rate for a much higher one.
U.S. Gross Domestic Product (GDP) growth slowed to a 1.5% annualized rate in the second quarter, as the war with Iran took a toll. Economists were expecting 2%.
Shell Oil just confessed to the quiet part out loud, saying that it ran its refineries at 102% of capacity during the second quarter to take advantage of soaring prices.
For the week ending on July 31st, the Standard & Poor’s 500 finished at 7,489, the Nasdaq Composite at 25,373, and the Dow Jones industrial Average at 52,485. The yield on the ten-year Treasury Note closed at 4.745. West Texas Intermediate crude oil cost $79.08 per barrel, while N.Y. gold cost $4,059.55 per ounce, and one Euro was worth $1.15.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, Yahoo Finance, CNBC, Sevens Report, Bloomberg, The Wall Street Journal, Axios, Fortune, USAFacts, The Washington Post, HousingWire, CNN, Reuters, and AP. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading!
Smoking toad is not as bad as it sounds, or maybe it is. It involves squeezing the glands of Sonoran Desert toads and smoking the dry secretion (5-MeO-DMT) that results. Smokers experience a psychedelic effect which lasts about 30 minutes. It is illegal in the U.S., but allowed in Mexico, which somehow makes me want to go to Mexico even less than I used to. (Full disclosure, I am not a travel buff.)
by diastole-admin | Jul 27, 2026 | Uncategorized
It’s Fed Week! Yay! 40% of traders believe that the Fed will raise rates, while the rest of them think the Fed will neither raise nor lower rates. I’m with the latter group. But we have to remember that the Federal Reserve Open Market Committee, which makes the decision, is not a monolith. Each member gets one vote on rates, including new chairman Kevin Warsh.
Meanwhile, the yields on Treasurys are rising, pushed by lowering prices for the bonds. So even if the Fed doesn’t raise rates, the marketplace is already doing so, anticipating that a hike is bound to come sooner or later. There’s just too much inflation for it not to happen, investors think. So, they bid lower for the Treasurys, and prices fall, pushing the yields higher.
Mortgage rates also rose, to a level not seen in a year. The average 30-year mortgage last week had a 6.58% rate, according to Freddie Mac, and 6.85% according to Mortgage News Daily.
Most stocks were barely lower last week (the Dow Jones Industrials and the Standard & Poor’s 500) except for the tech heavy Nasdaq, which fell more than 2%. You can correctly extrapolate from this that tech stocks had a tough week. And, in fact, Alphabet posted blockbuster earnings, but the stock still fell because investors don’t like the emphasis by big tech on building out AI capabilities. The same reasoning hurt Intel and American Express.
Even still, ownership of stocks has surpassed ownership of real estate as the main driver of U.S. wealth. This is the first time it has happened since World War II. The fact that home ownership remains out of reach for many first-time buyers is one factor. Stocks near their all-time highs is another factor. And of course, the 401(k) retirement plan has opened up stock ownership for a whole new swath of Americans.
Cars, which always need something, rarely contribute to one’s net worth. But these days used electric vehicles are GAINING in value as Americans look to cut costs and avoid buying gasoline. The average price of a gallon of gas is supposed to be slightly over $4.00, but I find that I am always paying at least $5.00, as are my neighbors. An electric vehicle does start to sound like a smart idea. And if you charge it at home, your cost for “filling the tank” is around twelve dollars. But if you charge it on the road, the cost could be almost as much as a tank of regular gas. Wow. If most people are anything like me, they’re waiting for their current car to finally die, and then they’ll move to an EV or a hybrid.
And speaking of moving, billionaires are leaving California due to its proposed “billionaires’ tax” and leaving New York City in part because of its “pied-a-terre tax” and are finding themselves in Florida, which has no personal income tax. Thus, the real-estate market in Florida – specifically Miami- has now surpassed sales in New York City and the San Francisco Bay Area. In the first six months of this year, 24 residences sold for over $30 million in Miami-Dade County.
It is unclear today whether the war with Iran is on or off. But what is clear is that when the United States bombs Iran, it retaliates by hitting our bases in the region, and our allies. According to the Wall Street Journal, both Bahrain and Kuwait secretly sent jets to attack sites inside of Iran in return. The uncertainty is weighing on markets as well, as the war is expected to push inflation higher, to say nothing of the absolute cost of our engagement. Last week, U.S. crude oil topped $90 per barrel, while international crude passed $100 per barrel. With the lack of bombing over the weekend, both prices have fallen.
Gambling is now America’s favorite pastime, surpassing movies, arts, books, museums, and music, combined. In 2025, Americans placed approximately $166 billion in wagers on sporting events. I’ll bet you thought I would make a joke here.
For the week ending on July 24th, the S&P 500 finished at 7,411, the Dow at 51,947, and the Nasdaq Composite Index at 24,975. The yield on the ten-year Treasury closed at 4.679%. U.S. crude cost $84.33 per barrel, N.Y. gold cost $4,090.10 per ounce, and one Euro was worth $1.14.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Barron’s, Yahoo Finance, The Wall Street Journal, CNBC, Axios, Fortune, The Washington Post, Bloomberg, CNN, Reuters, AP, and Pew Research. If you have questions, please call the Diastole office at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading.
One reason why investors may be turning against AI spending is that AI is not behaving. Open AI just announced that its AI broke out of a “secure” test environment and hacked another, separate company in order to cheat on an evaluation (thank you to Fortune magazine). The solutions to the tests that the AI models were undergoing were maintained by a company named Hugging Face. And guess which company the AI broke into? Yes, Hugging Face. About one hundred years past taking the teacher’s carbon paper out of the trash, and yet somehow similar. It was not thought that the AI which went rogue even had access to the internet. OpenAI is now working with Hugging Face to solve the problem, which makes me feel oh so better.
by diastole-admin | Jul 20, 2026 | Uncategorized
Stock markets were down last week, but the Dow was down less than the S&P and the Nasdaq. That’s because we had another mini rotation out of growth (tech) and into value (not tech). As investors become more concerned that artificial intelligence is going to suck up all the oxygen in the room (i.e. money, water, electricity, land, and jobs), they have been buying less and even selling AI-company shares. AI hyperscalers, as they are known, include Alphabet (parent of Google), Meta (parent of Facebook), Microsoft, and Oracle. They are putting so much money into AI projects that it is hurting their free cash flows.
One big example of that is IBM, which suffered a one-day loss of 25% on Tuesday after it issued an earnings warning due to big companies deferring or cancelling their purchases of mainframe computers. Earlier this year we saw subscription-software firms fall as investors began to think that we would all be writing our own software in the future with AI. (I’m perfectly fine to check AI’s “facts” when I’m doing a search, but no way I’m going to use AI to write my own software to balance my checkbook – thank you Quicken. But, hey, that’s just me, and if I had a personal tech department I might feel very differently.)
In other stock news, SpaceX, which debuted at $135 per share, is now trading around $124. The company lost $4.9 billion last year and yet is trading at almost 97 times sales. It can’t trade on a multiple of earnings because it has no net earnings.
But at the same time, banks are doing really well. Some of that is probably due to the recent SpaceX IPO, since 23 major banks had a hand in the issuance of the stock. So, despite Americans’ worries about groceries and health care and war, etc., banks’ profits are surging. It’s almost always nice to be the middleman, especially with credit cards charging 23% in many cases. We used to have legislation that prohibited usury (the charging of excessive interest), but it was revoked by Congress. If you want to give your representatives a piece of your mind, check out the website 80trillionspeaks.com. All you have to do is enter your zip code and then you can compose a message to go to all of your elected reps.
And what about bonds, you ask. Well, yields are down slightly as prices moved an itty-bit higher, due to a Consumer Price Index report released last week that showed inflation had slowed to 3.5% in June, year-over-year. You may remember that gas prices fell in June while we were in a cease-fire with Iran. Those prices are now rising again, and we may see a very different CPI for July when we get it. Brent crude (the international oil standard) rose in price by about 16% last week to more than $90 per barrel.
The United Arab Emirates (UAE) has boosted its crude oil output by 80% since quitting OPEC on May 1st. That’s good news for everyone who uses oil and gas. And other mid-East countries are busy building pipelines so that they are not subject to the vicissitudes of shipping through the Strait of Hormuz.
Remember those tariffs that were invalidated in the courts? Companies are now receiving their tariff repayments, which they are going to refund to customers ASAP. Just kidding. Most companies say that they are going to use the tariff money to offset ongoing inflation. Hopefully that will lead to companies NOT raising prices in the near future. Stay tuned.
I’m guessing you were not the lucky person who discovered a nearly complete T- rex skeleton in his backyard. The almost 38-foot-long skeleton recently sold for more than $51.1 million. Wow. I just have rocks in my backyard. Some plants. Squirrels.
For the week ending on July 17th, the Standard & Poor’s 500 finished at 7,457, the Nasdaq Composite at 25,520, and the Dow Jones Industrials at 52,146. The yield on the ten-year Treasury Note closed at 4.541%. U.S.) WTI) crude cost $82.50 per barrel, N.Y. gold cost $4,023.20 per ounce, and one Euro was worth $1.14.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here were gathered from sources believed, but not guaranteed, to be reliable, including (but not limited to) Yahoo Finance, Barron’s, the Wall Street Journal, Bloomberg, USA Today, CNBC, Axios, Fortune, CNN, The Bureau of Labor Statistics, AP, ABC, NPR, Fast Company, and the New York Times. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook, at ecook@dwinvest.com. Thank you for reading. Pop quiz: Could I possibly have used more parentheses in this Comment?
Somehow missed the invitation to Taylor Swift’s wedding in your SPAM folder? Not to worry. Artist Justin Gignac picked up the trash from the street outside the Madison Square Garden wedding venue, packed it into little plastic cubes, and is now selling it to the public. Or WAS selling it to the public. His issue of 50 cubes for $25 dollars each sold out in 24 hours. He is now producing 39 more cubes from the same event. I’m guessing that cleaning out all of the stretch limos might have resulted in a better quality of trash, but apparently that wasn’t an option.
by diastole-admin | Jul 13, 2026 | Uncategorized
Markets last week moved up and down with news from the war in Iran and wavering opinions on AI. In other words, deja vu. By the end of the week, the president had said that the cease-fire with Iran was over, and widening opposition to data centers was causing chip stocks to fall.
Because of the chips-stock slide, the momentum trade is having a bad start to the second half of the year. The momentum trade is simpler than it sounds and means only that stocks which are rising are more likely to continue rising than ones that are not. And for much of the first half, chip stocks were rising. Investors jumped on the momentum trade and were rewarded, until they weren’t.
And with the war hot again, oil is only traveling through the Strait of Hormuz on the Omani (south) side, in tankers that are running without their transponders on. The price of oil has jumped back up, but maybe not as far as you would expect, with West Texas Intermediate crude oil trading around $71 per barrel, while Brent (international) crude is trading around $77 per barrel. It’s a good thing that prices are not higher, but why aren’t they? Insiders are hopeful that, as suddenly as the war was back on, it could be off again just as quickly.
But the oil story and the data center story are adding to the inflation story. And it no longer seems that the Federal Reserve will be able to continue cutting rates. But do not fear! A change in the methodology behind the Personal Consumption Expenditures Index (the Fed’s favorite inflation measure) is likely to make the inflation numbers going forward slightly more attractive. The change will take effect as of the September revisions.
Amazon just dropped $25 billion in new debt to help it build up its AI infrastructure. But it was only oversubscribed by 1.6 times, versus 4.7 times for an Amazon deal back in February. Amazon has issued more than $90 billion in new bonds this year, adding to its already $194 billion pile of debt. My buying of weird vitamins and best sellers is no longer able to support Amazon by itself.
More work from home and fewer homes to buy has led to an office-to-apartment conversion boom. On the one hand it makes sense, and on the other hand it’s really difficult to accomplish, because office buildings generally have a core of utilities, and apartment owners don’t really want to share their bathrooms with the neighbors. And one other problem was seen last week when an ongoing conversion of the former Pfizer headquarters in midtown Manhattan started to collapse. The construction included adding several floors on top of the tower, until two of the columns holding up the building suddenly buckled. It has since been stabilized, but the whole project is under review. And I thought climbing the stairs in a blackout was the worst of tower living.
Existing home sales fell 2.4% from May to June but rose 2.8% for the year ending in June. The median home price is now $440,600 – the highest level since records began in 1999. Meanwhile mortgage rates have also risen, adding to the home-ownership dilemma we’ve been facing since the Covid era.
Remember when eggs were expensive and we all blamed inflation and tariffs and avian flu and price gouging? Well, it turns out that price-gouging was a main culprit after all. Three egg suppliers, working together, tried to dominate the market, and came close. Cal-Maine, Versova, and Hickman’s set prices in the period 2022 – 2025 to increase profits, and used techniques like “spoofing”. Spoofing includes entering buy or sell orders in order to move the price and then cancelling those orders while taking advantage of the new price level. The egg companies have denied wrongdoing but agreed to settle civil claims against them.
For the week ending on July 10th, the Standard & Poor’s 500 finished at 7,575, the Nasdaq Composite Index at 26,281, and the Dow Jones Industrial Average at 52,637. The yield on the ten-year Treasury Note closed at 4.569%. U.S. crude oil cost $71.40 per barrel, N.Y. gold cost $4,075.00 per ounce, and one Euro was worth $1.14.
Elizabeth E. Cook
Partner, Diastole Wealth Management
News and information presented here was gathered from sources believed, but not guaranteed to be reliable, including (but not limited to) Morning Brew, Barron’s, Yahoo Finance, CNBC, Axios, Business Insider, Bloomberg, The Wall Street Journal, CNN, The New York Times, The Washington Post, Fortune, USA Today, AP, and The Week. If you have questions, please call Diastole at 203.458.5220, or email me, Liz Cook at ecook@dwinvest.com. Thank you for reading!
Want to enjoy an afternoon by the pool, but don’t have a pool? Swimply is for you! Described as the Airbnb of pools, it lets people rent out their pools by the hour or longer. That SOUNDS good, but what about insurance? And is there a lifeguard? What about the people who own the pool – are they staring out the kitchen window yelling, “NO RUNNING?”
