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In today’s GAR Capital Market Intelligence Report, we examine the three major forces pressuring markets: Brent crude breaking above $100, Alphabet exposing the financial burden of artificial intelligence spending, and the return of aggressive Federal Reserve tightening expectations.
We break down how Houthi attacks on Saudi tankers created a two chokepoint problem across the Strait of Hormuz and the Bab el Mandeb Strait, why Dated Brent moved into extreme backwardation, and how Murban crude surged toward $108 as global inventories remain depleted.
The episode also explains why the probability of a Federal Reserve rate increase at next week’s meeting moved toward 38 percent, how the two year Treasury yield and thirty year real yield surged, and why the Japanese yen fell to its weakest level since 1986.
Within equities, we examine Alphabet’s capital expenditure outlook approaching $205 billion, negative free cash flow, declining operating cash flow, disappearing buybacks, and rising hyperscaler credit risk.
We also cover Tesla’s sharp decline after disappointing margins and earnings, the Magnificent Seven’s worst session since April 2025, the divergence between semiconductor companies receiving AI spending and hyperscalers funding it, and the growing risk that one of the major platforms eventually reduces investment.
Beyond technology, we discuss the S&P 500 falling below its risk pivot, the possibility of negative dealer gamma, CTA deleveraging, and why August seasonality could produce greater volatility across stocks, bonds, currencies, and commodities.
Finally, we examine relative strength in healthcare, defense, industrials, and railroads, along with gold’s decline under higher real yields and Bitcoin’s fall below $65,000 despite strong ETF inflows.
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