July Newsletter

Last month, we ended with a cliffhanger. Trump and Iran’s president signed a peace deal at the Palace of Versailles. Markets celebrated. Oil crashed to $72. Eighteen ships sailed through the Strait of Hormuz. For about 72 hours, it felt like the war was actually over.

Then July happened.

On July 6-7, Iran attacked three commercial ships that didn’t follow Tehran’s pre-approved route through Hormuz. The ceasefire was dead. The US hit back with fresh airstrikes. Oil, which had been sitting quietly at $72 at the start of the month, started climbing again — $76… $81… $88… $97 by July 24.

Then another twist. On July 27, the US suddenly paused all strikes, saying it wanted to “give peace talks space.” Iran denied any talks were happening. The foreign ministry said Tehran “will never allow the United States to determine the timing of war and peace.”

By month-end, fewer than 10 ships per day were going through Hormuz. Normal is about 100. Oil settled at $90/barrel — right in the middle of nowhere. Not $72 “peace price.” Not $119 “war price.” Just… uncertainty price.

Remember June? “$1.4 trillion wiped from AI stocks!” “Is AI one big bubble?” “Nvidia down 18%!” The obituaries were written. The narrative was set: AI was the new dot-com.

Then earnings season arrived. And the numbers told a completely different story.

Alphabet (Google) reported on July 22. Revenue: $119.8 billion, up 24% from last year. But here’s the jaw-dropper — Google Cloud surged 82% to $24.8 billion. That’s not hype. That’s real money from real companies paying for AI. Their AI backlog hit $514 billion. Nearly 90% of Fortune 100 companies are now using Google’s Gemini AI.

Microsoft dropped its earnings and the stock jumped 16% in a single day. Revenue: $90 billion. Azure cloud grew 43%. For the first time ever, Azure revenue crossed $100 billion for the year. Microsoft 365 Copilot (their AI assistant for Office apps) hit 30 million paying users. CEO Satya Nadella said they’re focused on turning “tokens into business results” — in other words, making AI actually useful, not just flashy.

The S&P 500 ended July at 7,438 — down just 0.9% for the month overall, but the final week was strong. The Nasdaq gained 2.8% on the last day alone.

On July 29, the Federal Reserve held its second meeting under new chairman Kevin Warsh. The decision? Hold rates at 3.50-3.75%. Same as June. Same as the last five meetings.

But this time, it wasn’t unanimous. Three members voted to HIKE — Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas). Their argument? Inflation has been above the Fed’s 2% target for more than five years. Enough is enough.

Warsh called it a “good family fight.” The kind where everyone disagrees at dinner but still goes home together.

The dollar eased slightly — DXY pulled back from 101.3 to about 101.0. Still strong, but no longer surging. Morgan Stanley and Natixis both expect DXY to drift toward 98 by year-end, which would be good news for the ringgit.

After five straight months of falling, gold finally had a green month. It ended July at ~$4,086 — up about 2%. Not a moonshot, but a sign the bleeding has stopped. With the Iran war reheating, safe-haven demand came back. And JPMorgan raised their year-end gold target to $6,300. Deutsche Bank said $5,000 is coming. Central banks are still buying hand over fist.

The full gold story this year has been wild: $3,200 in January -> record $5,589 in late January -> crash to $4,100 in March -> $4,540 in May -> $4,000 in June -> $4,086 now. It’s been a 28% pullback from the top, but still up 28% from the start of the year. Context matters.

Bitcoin had a quieter month for once. It bounced off June’s scary $59,860 low and recovered to ~$64,500 by month-end. Not exciting, not terrifying — just sideways. The crypto market seems to be waiting for the next catalyst. The CLARITY Act is still stuck in Congress.

While the Middle East grabbed headlines, a quieter drama played out in North America. On July 1, the USMCA trade deal came up for its mandatory six-year review. Trump refused to renew it. He said he’d rather the US leave the agreement than renegotiate.

Then on July 20, he announced 50% tariffs on a wide range of Canadian products — wine, cement, hockey sticks, you name it — starting August 19. The tariffs bypass USMCA entirely, using a different legal authority (Section 338).

Meanwhile, the US started bilateral trade talks with Mexico — excluding Canada entirely. The message was clear: Trump is trying to break the trilateral deal into two separate agreements. Canada, whose economy depends on $1.3 trillion in cross-border trade with the US, is watching nervously.

In a world of wars, tariffs, and AI crashes, Malaysia quietly had its best economic quarter in a year.

GDP came in at 5.8% for Q2 — beating the 5.3% forecast and accelerating from Q1’s 5.4%. Almost every sector grew, led by services and electronics exports. The KLCI responded, climbing from 1,667 in June to 1,731 by mid-July — a solid 3.8% gain. Foreign money flowed in. Analysts started revising their year-end targets upward.

BUDI Diesel launched on July 1 — and it actually worked. 700,000 diesel vehicle owners can now buy diesel at RM2.10/litre, verified by MyKad at the pump. Compare that to the market price of RM4.07-4.42 (which rose again in late July as oil spiked back to $90+). That’s a 48-52% discount for eligible Malaysians. The 200L monthly quota is shared with RON95 under BUDI95, so you need to plan your usage — but the savings are real.

Here’s the full fuel journey this year, so you can see how far we’ve come:

The ringgit held steady at around RM4.08/USD — barely changed from June’s RM4.10. The dollar easing off its highs helped, and strong GDP numbers attracted foreign capital. Palm oil climbed to ~RM4,683/ton (from RM4,588 in June), with exports rising 8-16% versus the prior month. India’s appetite remains strong.

Every chapter this month ended with the same word: uncertainty. The Iran war is paused but not over. AI proved itself but stocks are still finding their level. The Fed is frozen. Gold is stabilising. The dollar is strong but maybe peaking. Malaysia’s economy is thriving but oil prices are climbing again.

Here’s what could break the pattern in August:

1. Nvidia earnings (August 26) — The AI king reports. If Nvidia delivers $91B+ revenue as guided, the “bubble” narrative dies completely. If they miss, watch out below.

2. Iran peace — or escalation — The US paused strikes. Will Iran come to the table? Or is this just the calm before the next storm? Oil at $90 means the market has no conviction either way.

3. Canada tariffs kick in (August 19) — 50% tariffs on Canadian goods. Will Canada retaliate? If this escalates into a full US-Canada trade war, it ripples through global supply chains.

4. Malaysia’s subsidy pressure — Oil at $90 means the subsidy bill is climbing again. BUDI is shielding citizens, but unsubsidised diesel already rose from RM4.07 to RM4.42 in July. If oil hits $100 again, the whole subsidy debate comes roaring back.

The story continues next month. Stay tuned.