Good morning. Andrew here. The joint intervention by Washington and Tokyo to prop up the falling yen — foreshadowed by a picture of a notepad scrawled with “Buy Japanese Yen (JPY) $5-10 bil,” seemingly by Treasury Secretary Scott Bessent — signals a significant pivot in foreign exchange policy. While framed as assistance for a key ally against disorderly market swings, Wall Street knows the real story: This was a pre-emptive strike to protect the U.S. Treasury market, and therefore the American economy. Was this a one-off or will we have to do this again? History shows that these kinds of moves only buy time. (Was this newsletter forwarded to you? Sign up here.)
Bulls are backMarkets are feeling some déjà vu this morning after President Trump suggested that he wanted another go at peace talks with Iran. Trump said negotiations would resume today, though he didn’t say who would participate. He added that the “perimeters of a deal” had been reached to reopen the virtually closed Strait of Hormuz. (Iran hasn’t confirmed any pact about the strait. Furthermore, an Iranian government spokesman said that there were no direct talks at the moment between Iran and the U.S. Talks were being held today between Iran and Oman, Iranian officials said.) Veteran market watchers are divided on the significance of Trump’s statements from yesterday. But bulls so far are winning out. The latest:
Will Trump do whatever it takes to make a deal? Bond markets have been in turmoil over rising oil prices and inflation, adding pressure on the White House to end the monthslong war. (Trump’s poll numbers have hit a new low.) “I think Trump wants a deal, and that’s why he’s gone back to negotiations,” Derek Halpenny, the head of global markets research at the Japanese bank MUFG, told Bloomberg Television this morning. Others fear a quagmire. “We see the uneasy truce scenario dragging on for a while with violations from Iran and sporadic attacks on ships,” Mohit Kumar, an economist at Jefferies, wrote to investors this morning. The upshot, he added, would be more volatile market swings. There’s another reason for concern. On Friday, Exxon Mobil and Chevron warned that fuel prices were likely to remain high for some time if the standoff continued to deplete oil reserves. (That said, Javier Blas of Bloomberg Opinion doesn’t see stockpiles at “crisis” levels.) Samantha Dart, a commodities analyst at Goldman Sachs, fears a wider fallout on the global supply of diesel, from Ukrainian attacks on Russia’s oil infrastructure. That could drive up costs for agriculture and logistics sectors.
AstraZeneca’s stock tumbles amid reports of a potential megadeal. London-listed shares in the drug maker were down over 5 percent today after The Financial Times reported that it had held talks about combining with Bristol Myers Squibb, in what would be one of the biggest-ever pharmaceutical transactions. A deal would bolster AstraZeneca’s U.S. footprint, but it is likely to raise concerns from antitrust regulators. Todd Blanche bows to pressure from Republican senators. Blanche, the acting attorney general, confirmed in writing last night that the Justice Department was formally abandoning a nearly $1.8 billion fund for President Trump’s allies and clarified the terms of a proposed I.R.S. settlement with Trump. The move may clear the path for Blanche to be confirmed as attorney general. California’s Democratic Party endorses a billionaire tax proposal. The party voted to back the plan, which would impose a one-time 5 percent tax on the state’s roughly 200 billionaires voters approve it in November. The vote exposes fissures within California Democrats: Both Gov. Gavin Newsom and Xavier Becerra, the Democratic candidate trying to succeed him, have opposed the measure. “Spider-Man: Brand New Day” helps set a box office record. The latest Spidey movie is expected to have grossed $927 million in global ticket sales in its opening weekend, blowing past expectations by analysts (and even by Sony, the studio that released the film). Together with a still-strong showing from “The Odyssey,” the Spider-Man movie will help make 2026 a banner year for movies at the box office. Jobs and earnings will be in focus this week. July jobs data is expected to be released on Friday; a hot number could rekindle fears that the Fed will raise interest rates at its next meeting, in September. SpaceX, Apollo and AMD report quarterly results tomorrow; Eli Lilly, Novo Nordisk and the memory chip giants SanDisk and Western Digital announce theirs on Wednesday. SoftBank reports on Thursday.
“Let’s get this done!!!!”The legal world was astonished last year when Paul Weiss, the Wall Street firm long known as a bastion of pro bono work in service of progressive causes, bent the knee to President Trump. An investigation by Michael Schmidt and Jessica Silver-Greenberg of The Times delves into what led to the decision. This included the transformation of Paul Weiss from an elite shop of litigators, led by Brad Karp, to a powerhouse corporate deal practice led by Scott Barshay that was more sensitive to anything that could alienate clients. But Schmidt and Silver-Greenberg also explain how Paul Weiss arranged a deal with the Trump administration, which involved Karp; Robert Kraft, the owner of the New England Patriots and a contact of Karp’s; and more. From The Times: It took two days of Mr. Karp leaving messages before Mr. Trump called back. He told Mr. Karp that in addition to Mr. Kraft, Marc Rowan, the head of Apollo, had vouched for him. They agreed to meet the next morning at 8 a.m. in the Oval Office. Mr. Karp arrived alone. In the Oval Office was the president’s personal lawyer Boris Epshteyn. Another one of Mr. Trump’s personal lawyers, Robert Giuffra, was dialed in. For Mr. Karp, Mr. Giuffra’s presence was likely to be unnerving. Mr. Giuffra is a fierce rival of Paul Weiss as co-chairman of Sullivan & Cromwell, and he was handling Mr. Trump’s appeal of his criminal conviction in the Manhattan district attorney’s case involving Stormy Daniels. Now, Mr. Giuffra appeared to be helping the president bring Paul Weiss to heel. The meeting lasted several hours. Mr. Trump complained that Paul Weiss had wronged him. He raised the fact that E. Jean Carroll, the woman who won a civil judgment against him for sexual abuse, was represented by Ms. Kaplan, a former Paul Weiss partner, at a trial overseen by a judge who was also a former Paul Weiss partner. Mr. Karp refused one demand from the White House: that Mr. Karp commit to help re-litigate the 2020 election and that Paul Weiss say it had been part of weaponizing the justice system against Mr. Trump. Still, even partners who were stalwart Democrats were eager to strike a deal: “Let’s get this done!!!!” Karen Dunn, who oversaw debate prep for Kamala Harris, wrote an email reviewed by The Times. Yet in announcing the deal, Trump declared on social media that Paul Weiss had agreed not to “adopt, use, or pursue any DEI policies,” something that Karp told his partners he hadn’t agreed to. “My god,” he wrote, according to The Times. PICTURE OF THE DAY
The yen is rebounding today after Tokyo and Washington confirmed a joint intervention in the foreign exchange markets. Speculation about the move had gripped currency trading desks after a Reuters photographer on Friday, during a Trump administration cabinet meeting, snapped a picture of a notepad on which the words “To Do” and then “Buy Japanese Yen (JPY) $5-10 bil” were scrawled. The notepad was spotted where Treasury Secretary Scott Bessent, who made a hugely profitable bet against the Japanese yen at Soros Fund Management more than a decade ago, was sitting.
A prominent crypto lawyer joins a buzzy A.I. start-upThe artificial intelligence industry’s lobbying muscle is growing. The latest example? Paul Grewal, the former chief legal officer at Coinbase, is joining the A.I. start-up Cognition AI as its first chief legal and global affairs officer, Niko Gallogly is first to report. The move reflects the A.I. industry’s growing focus on Washington lobbying efforts. Grewal brings deep experience representing Silicon Valley’s interests in the capital. Cognition AI is behind Devin, a coding agent. The company, valued at $26 billion, counts Goldman Sachs and Mercedes-Benz as customers, and reached $492 million in annual recurring revenue in May. Grewal’s new focus in Washington: He told DealBook that ensuring continued access to open-source models was a major priority for Cognition AI. Cognition AI is one of roughly 230 companies and organizations — including Google, Meta and Microsoft — that signed a recent letter spearheaded by Nvidia in support of open-source A.I. It is important that the government is “not unnecessarily handcuffing itself in the global competition with China and other countries,” Grewal told DealBook. Grewal’s résumé is notable:
Grewal said he planned to spend equal time on Capitol Hill and Pennsylvania Avenue. “As lawmakers in Congress learned more about how crypto worked, they became much more comfortable and confident,” he said, adding he expected the same would be true for A.I. The A.I. lobbying bonanza is likely to continue. OpenAI and Anthropic spent a combined $3.17 million on federal lobbying last quarter, up 23 percent from the previous one. Expect more start-ups like Cognition AI to join them. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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