📊 Today's Numbers
Meta Platforms ▲ +8.80% to above $600: market rewards the AI infrastructure pivot
Micron Technology ▼ -9.70%: AI-scarcity premium rapidly repriced
SK Hynix ▼ -9%+: Asia caught the overnight shockwave hard
UK Energy Price Cap ▲ +13%: steepest quarterly rise since 2022 crisis
US ADP Private Payrolls ▼ 98,000 (June): well below May's 122,000
ISM Prices Index ▼ 73.00: sharpest monthly drop since July 2022
📈 EQUITIES
Photo: Tima Miroshnichenko
Meta Cloud Pivot Wipes Billions from Global Chip Stocks
For two years, the whole semiconductor rally rested on one idea: AI compute is scarce, and it's only getting scarcer. Meta just blew a hole in that. The company announced it's launching "Meta Compute," a cloud business leasing its excess AI data-centre capacity to outside clients. Overnight, the scarcity premium evaporated.
Micron -9.70%, SanDisk -10.82%, Intel -9.00%, Corning -13%+, AMD -6.90% on July 1: the selloff was broad and fast
Meta +8.80%, briefly crossing $600: investors love the pivot from pure AI buyer to infrastructure vendor
Samsung -7%+, SK Hynix -9%+ in early July 2 Asia trade: two companies that together make up roughly half the KOSPI, both getting hammered on spillover
If you hold a semiconductor ETF or a tech-heavy pension fund, yesterday stung. On the flip side, businesses that rent AI computing power could eventually benefit from more competition and lower cloud prices. But that's months away. The pain is today.
💬 Meta spent years buying AI chips. Now it has so many it's essentially become a cloud provider, and that single fact wiped more than 10% off several chipmakers in a day.
🏦 MACROECONOMIC
Photo: Alaur Rahman
UK Energy Bills Jump 13% as Ofgem's New Cap Kicks In
This one landed directly on 29 million households on Tuesday morning. No lag, no gradual adjustment. Ofgem's new price cap took effect July 1, lifting the ceiling on gas and electricity bills by 13%. The steepest quarterly increase since the peak of the 2022 energy crisis.
Typical household faces roughly £200-£250 more per year, starting now
Wholesale gas prices remain elevated due to Middle East conflict disrupting LNG supply chains, a structural supply shock that domestic policy can't easily fix
UK government May borrowing was the highest in that month since the pandemic: the fiscal room for meaningful support schemes simply isn't there
And here's the political wrinkle. The government that has to manage the fallout is currently leaderless, with Prime Minister Starmer having resigned under mounting cost-of-living pressure. The Bank of England is watching July's CPI print closely. An inflation jump would complicate any rate-cut plans further.
💬 Thirteen percent higher energy bills landed on July 1, and the government dealing with the fallout doesn't have a prime minister right now.
🏦 MACROECONOMIC
Photo: Mike van Schoonderwalt
US June Jobs Miss Sets a Fragile Backdrop for Thursday's BLS Report
Private employers added just 98,000 jobs in June, per ADP and the Stanford Digital Economy Lab. That's down from 122,000 in May, and below what most forecasters expected. The official non-farm payrolls number drops today, and the ADP miss means the stakes are higher.
98,000 vs. 122,000 prior: nearly a 20% month-on-month slowdown in private hiring
Annual pay growth holds at 4.40% year-over-year: wages still rising fast enough to keep the Fed cautious about cuts
Leisure and hospitality weak for a sixth consecutive month: the blue-collar job market isn't recovering, even as financial services add headcount
Slower hiring means job-seekers are waiting longer. Still-elevated wages mean the Fed stays on hold. Both things are true simultaneously, which is exactly the kind of stagflation-adjacent picture that makes rate policy genuinely hard. Warsh has an uncomfortable backdrop heading into the rest of the summer.
💬 The US added fewer private jobs last month than at almost any point since early 2025. Yet wages are still rising fast enough to keep the Fed parked.
📰 Also Today
ISM Manufacturing PMI dips to 53.3 in June, misses forecast: still expanding (sixth consecutive month above the 47.5 breakeven), but momentum is slowing, and the prices index fell 9.1 points to 73.0, the sharpest drop since July 2022, hinting at some eventual relief on goods inflation.
KOSPI hit again as Meta chip shock spreads to Asia: Samsung and SK Hynix together represent roughly half the KOSPI's market cap, and both fell sharply in early July 2 trade. Reports that Apple is evaluating Chinese memory chip suppliers added a second layer of pressure on Korean producers.
Fed Chair Warsh flags easing inflation expectations, holds rate line: Warsh said on July 1 that inflation expectations had eased over the past month, but offered no rate-cut signal. Nine of 18 FOMC officials still pencil in at least one rate hike in 2026, meaning elevated mortgage and borrowing costs aren't going anywhere soon.
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Not investment advice. For informational purposes only.