Hasset: Current data makes it difficult to advance interest rate hikes.

According to Fox News, US President Donald Trump stated that the Iran war is "progressing smoothly", the US is dealing heavy blows to Iran, and "we have been winning". (Jinshi)

According to South Korean media reports, South Korea’s Doosan Group has signed an agreement with SK Group to acquire semiconductor wafer manufacturer SK Siltron. With the completion of the transaction, Doosan is expected to further enhance its competitiveness in the semiconductor industry, building on its core businesses such as energy and machinery. Doosan, the holding company of Doosan Group, disclosed on the 31st that it has signed a share purchase agreement with SK Group to acquire a 70.6% stake in SK Siltron held by SK, with a transaction value of 2.3 trillion won. However, the 29.4% stake held personally by SK Group Chairman Choi Tae-won is not included in the acquisition. SK Siltron is South Korea’s only semiconductor silicon wafer manufacturer, ranking third in global market share for 12-inch wafers. Last year, the firm’s corporate valuation exceeded 5 trillion won.

According to the Financial Times, Leopold Aschenbrenner, founder of AI hedge fund Situational Awareness, said in an investor letter that the fund’s assets shrank 67% in July. He took “full responsibility” for the loss and pledged to ensure the team learns from these “extremely costly scars”. Founded in 2024, Situational Awareness once grew to over $20 billion in assets thanks to aggressive bets on the AI boom. This week’s AI stock sell-off hit the fund’s major holdings, including Bloom Energy and SanDisk, hard. Aschenbrenner compared the fund’s situation to a “bank run”, noting that the market engaged in unfavorable trading of stocks linked to the fund. On Wednesday, the fund reached an emergency exit deal with Citadel, selling most of its public stock holdings at a discount; specific terms were not disclosed. Aschenbrenner said the fund will continue operating and will not exit public stock markets, but will no longer borrow from banks to leverage its bets. Despite the major July loss, the fund remains up 80% year-to-date. Aschenbrenner stated: “Our fund must always maintain a structure that can withstand a loss and keep fighting.” The investor letter did not disclose the fund’s latest assets under management; many early investors are subject to lock-up agreements and cannot redeem funds until at least September.

Ray Dalio, founder of Bridgewater Associates, stated that AI has revolutionary value capable of transforming production methods, but the current market has already shown some characteristics aligning with historical bubble patterns. Investors may overlook the gap between technological value and market prices. When asset valuations far exceed actual profitability and the funding environment tightens, bubble risks could quickly emerge. Dalio noted that bubble bursts are typically amplified through debt chains: falling asset prices reduce collateral values, forcing highly leveraged investors to sell assets to repay debts, which in turn drives prices down further. If inflation rebounds and prompts central banks to raise interest rates, higher financing costs could also exacerbate market repricing. He believes the global economy is in a long-term "big cycle" shaped by debt accumulation, widening wealth gaps, political division, and shifts in the international power structure. Investors should avoid concentrating wealth in a single asset and reduce risks via diversified allocations including stocks, cash, gold, bonds, and real estate. As a hard asset that is not easily created, gold can play a role in diversifying risks during periods of currency devaluation and rising financial stress. Regarding the job market, Dalio holds that AI will replace some repetitive intellectual tasks, and those who can collaborate with AI and continuously adapt to changes will gain an edge in the future. He emphasized that technological progress will not halt even if the economy enters a recession.

Fed’s Kashkari said that to address the risk of entrenched inflation, he favors gradual policy tightening. If inflation remains persistently high, a series of small policy adjustments would be more effective than maintaining a wait-and-see stance while still concluding that bolder action is needed.

Bloomberg senior ETF analyst Eric Balchunas noted in a post that semiconductor ETFs had pulled in roughly $12 billion in inflows ahead of the sector’s sharp rebound yesterday. While semiconductor ETFs make up only around 1% of total ETF assets under management (AUM), their inflows this week accounted for 25% of all ETF net inflows. Balchunas added that speculative traders heavily bought the dip during the Monday-to-Wednesday decline, and profited again after the semiconductor sector rallied 7% yesterday. Compared to the historical inflow patterns of these ETFs, recent data is at an unusually high level, with related trading activity surging notably.