Deal or no deal?... More Iran uncertainty... One sure thing about two major wars... Better news: a stable labor market... Eyes on inflation... Hawkish in Alaska... Mailbag: AI and the signal from bad lettuce...
Still waiting...
Yesterday, we said we were taking the latest headlines about a U.S. "deal" with Iran to reopen the Strait of Hormuz with a heavy dose of salt, given everything we've seen over the past several months.
Today, showed why...
Optimistic reports from U.S. media say that under a new agreement, the strait will temporarily open with "no fees or tolls."
But, as of this writing, we've read other reports from Iranian state media about a new 60-day framework – suggesting that Iran and neighboring country Oman will monitor traffic and collect fees from ship operators for passage.
Not only that, but U.S., Israeli, and other "hostile" ships would be blocked from transit and face up to 20% "penalties." The current proposal is untenable for shippers, according to Reuters, because many shippers' insurance policies would be terminated if they pay fees or tolls.
So the waiting game continues.
Today, the major U.S. stock indexes were down slightly across the board. Oil futures were up nearly 4%.
Meanwhile, on another major war front, Ukraine has used drones to launch two attacks on Russian oil refineries hundreds of miles from the Ukraine border.
With smoke plumes in the air, ordinary Russians are getting more worried... and more oil supply is being taken out of the market – for better or worse. China and India are the biggest buyers of Russian crude overall.
One thing that's clear about these wars...
We can't have any confidence that oil and other commodities that normally travel through the Middle East or Russia will be available globally without interruption anytime soon.
Broadly, these natural resources have become increasingly caught up in geopolitical turmoil. That's why our friend Rick Rule says the White House has launched a new "Fort Knox" for critical minerals, before China cuts off a key supply to the U.S.
As Rick explains in a free presentation, the Trump administration just launched an effort to stockpile $12 billion in resources, and it's turning to private businesses to do it. The White House's plan to shore up supply chains already helped 28 stocks more than double last year.
Now, Phase II of the plan is here... and over the next 100 days, Rick says a small group of companies could run up five, 10, or even 50 times higher. He explains the details – and gives away one recommendation – in his free presentation here.
So far, so good for the labor market...
As we mentioned on Monday, it's a data-heavy week for jobs.
On Tuesday, the government shared the results of its latest monthly Job Openings and Labor Turnover Survey ("JOLTS")...
In June, there were about 7.4 million job openings across the economy. That was down from 7.5 million in May and 7.6 million in April – the highest number since May 2024. So job openings have now fallen for two straight months.
But hires rose for the second straight month, to 5.3 million. That's the highest level since March. Separations – which include layoffs and quits – also rose to 5.4 million. So the labor market may be getting out of the "frozen" state where people have mostly stayed in their jobs for fear of not finding a new one.
Meanwhile, yesterday, payroll processor ADP released its monthly job gains report, showing that the private sector added 44,000 jobs in July. That was well below Wall Street's estimate of 75,000 jobs and marked the lowest job growth since January. But seven of the 10 sectors that ADP tracks reported job gains in July. So while the reported number was below expectations, the data wasn't a disaster by any means.
Tomorrow morning, the Bureau of Labor Statistics will release its monthly nonfarm payrolls report showing official job gains and the unemployment rate for July. Wall Street expects 83,000 hires and a steady unemployment rate at 4.2%.
As long as the data isn't a huge surprise – like job losses instead of gains – the labor market will appear to be on steady footing.
That's going to keep the Federal Reserve – and the market – focused on inflation...
Over the past year or so, we've highlighted that the Fed has been in a tough spot between a softening labor market and rising inflation. Each of those problems requires a different response – hikes to tame inflation or cuts to boost the jobs market.
But with the labor market now stable (if not improving), the Fed has one goal...
Since Kevin Warsh's first meeting as Fed chair, he has stressed that the central bank is focused on bringing down inflation.
While the Fed ended up leaving the federal-funds rate unchanged last week, it's clear that it's leaning toward higher rates, not lower ones.
At the most recent policy meeting in July, three members voted to raise interest rates. More could do the same at the central bank's next meeting in September.
We got confirmation of that this week... Minneapolis Fed President Neel Kashkari, who has typically been in favor of lowering rates but voted to raise rates in July, said during a speech that "now is the time to start slowly moving" rates higher.
In an interview with CNBC, Kashkari specifically highlighted the stable jobs market we mentioned above, saying the labor market is "hanging in there."
Hawkish in Alaska...
Meanwhile, in a speech in Alaska (of all places), still-employed Fed Governor Lisa Cook said that the risks from inflation outweigh the risks from the labor market. And she's "prepared to act" if she doesn't see inflation come down soon, although Cook voted in line with Warsh to keep rates stable last month.
One of Warsh's main goals as chair so far has been to try to remove "forward guidance" from the Fed. But between the dissenters voting to raise rates in July – and ongoing commentary from Fed presidents and governors that inflation is the main issue – we can gauge that the next move for rates appears to be higher.
At least, that's what the market believes. While investors are still trying to sort through what to expect from a Warsh-led Fed, CME FedWatch shows traders are pricing in a 55% chance of a rate hike in September, with a 45% chance of leaving rates unchanged again.
When you look out to the October meeting, the expectations of a hike get even higher – at around 70%. And by the end of the year, traders are pricing in a more than 80% chance that the Fed hikes rates at least once.
That's not what President Donald Trump wants to see, and it could take some momentum out of stocks. As we noted in the June 4 Digest, higher interest rates ripple their way through the economy to fight inflation. But they also make it harder for unprofitable companies to borrow to fuel their growth. That would be particularly challenging for one specific part of the market – and it's one that retail investors love. From that Digest...
Over the past 12 months, Goldman Sachs' Non-Profitable Technology Index has roughly tripled. And it's approaching its 2021 high... from just before the last time the Fed raised interest rates.
Amid the rate hikes that began in 2022, the Non-Profitable Technology Index crashed more than 60%. We'd expect no different during the next hiking cycle.
Today, that index would include SpaceX (SPCX) and AI startup OpenAI if or when it starts trading shares on the market. Higher rates would also hurt companies with huge debt loads – since they'd have to pay more to service their debt. The same could be said for the national debt, with interest payments crossing above $1 trillion.
The point is, as long as the labor market remains stable and inflation is the Fed's focus, the next move for rates is likely higher, not lower.
As Warren Buffett famously said, "Interest rates are to asset prices like gravity is to the apple. They power everything in the economic universe." Low interest rates mean low gravity on stock prices. Higher rates mean more gravity, pulling prices down.
New 52-week highs (as of 8/5/26): Amgen (AMGN), Arista Networks (ANET), Alpha Architect 1-3 Month Box Fund (BOXX), Brady (BRC), Berkshire Hathaway (BRK-B), Chemed (CHE), iShares MSCI Spain Fund (EWP), iShares U.S. Aerospace & Defense Fund (ITA), Keyence (KYCCF), VanEck Morningstar Wide Moat Fund (MOAT), Nucor (NUE), Invesco High Yield Equity Dividend Achievers Fund (PEY), Packaging Corporation of America (PKG), Translational Development Acquisition (TDAC), Twist Bioscience (TWST), Vanguard FTSE Europe Fund (VGK), and Zebra Technologies (ZBRA).
In today's mail, more on a horse named Sovereignty (mentioned in yesterday's mail), learning AI, and the signal from bad lettuce we've written about this week... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Hey Corey, Subscriber Sherwin R. is onto something when he mentioned Sovereignty is running this Saturday at Saratoga. Brings me back to this year's Father's Day and getting some valuable time with our techie son, a senior UX researcher deeply embedded in the Seattle tech scene. They usually take dad to Emerald Downs, here in Seattle and let dad play the ponies. I enjoy handicapping races, reading the racing forum, looking at past race results, times, distances, class, lineage, etc.
"My son and I talk stocks and he enlightens me on all the new tech stuff and lately it's been all about AI. So he has ChatGPT on his phone and he scans my racing forum and asked for the winners. We held our own for the first four races. Then it gave us the favorite and a better odds horse in the fifth, a 5 to 1. He played it to win and I, being a little more conservative, played it to place. Long story short, it won, putting us both ahead for the day. Sixth race it picked a 3 to 1 and we both played that and it put us even further ahead. Mom put the brakes on the fun and said let's get outta here while we're ahead. LOL!
"The only way I could relate to the ease of use of this AI was to ask my son, so, in my Customer Service Center Manager days (retired now), I could have let AI load the call center analytics, created my reports and do my narrative to send up to the higher ups? Yes, dad, that's what all this AI business is about. Get more for less time, staff, etc. WOW, it finally made sense to me how inventive and creative the curve is with AI and we're just in the early stages.
"What I do worry about though, is the loss of all this labor that is/will occur. Think about it Corey, [it] could even put all your editors out of work someday... Just sayin'." – Subscriber Steve R.
Corey McLaughlin comment: Thanks for the note, Steve. Great story. And yes, that is what this AI business is all about.
As far as the tech replacing me, I'd be lying if I said I haven't thought about it. But I continue to think that learning to work with AI – instead of trying to pretend it doesn't exist – will go a long way toward job preservation and production in every industry.
That doesn't mean existing jobs won't be lost. The tech can make a lot of current work more efficient – and, in some cases, make the workers replaceable. But new jobs will also eventually be created, like they always have been.
Just consider... 200 years ago, farming was by far the most common job in the U.S. – making up around 80% of the workforce. In the 1920s, the share of farming jobs was down to 25%, and jobs on assembly lines and railroads, along with office stenographers, were popular.
The most common jobs in the U.S. today are home-health and personal-care aides and retail and fast-food workers. Now, the economy is more service-based, for better or worse. AI has and can consolidate retail jobs, but it's not going to replace home-health aides. In fact, it might just increase demand for them as AI advances in healthcare help people live longer.
I don't think writing and editing are going anywhere, either. For whatever reason, I've seen more job postings in recent years for various content roles than I ever have before. AI can help with production, but it can't replace original human thought and judgment – at least not yet!
"Hi Corey, I just wanted to echo another subscriber. Thank you for all the great information! And to ALL the Stansberry editors and researchers. Thanks for doing a great job!
"I also wanted to share my own thought on the ongoing lettuce contamination issue. It sure is a pattern, isn't it? If it isn't one product, it's another. Why can't the government do its job and keep us safe from unsafe food, pandemics, hackers, financial fraud, and so on?
"I am no fan of 'big government' – especially since it has been tossing billions and now a trillion or so, every year, to the Department of War. For decades. Both parties say they wanna 'make America safer' but neither actually do. Do you feel safer?...
"Could it be that cutting large numbers of 'gummint bureaucrats' could have left us unable to do the job? Ya think? Site visits and inspections, verification of safety and sanitation procedures, laboratory testing and identification of pathogens, recalls, prosecutions of violations, removal of dangerous stuff all take time and well-prepared manpower. Expertise takes time to incubate in education, work training and experience, continuing education, licensing of professionals, proper supervision of staff, and adequate planning for contingencies. Cutting anywhere in these pipelines can damage the entire system.
"Efficiency is great. So is intelligent creation and careful application of rules based on science and fairness, not political ideology and money influence..." – Stansberry Alliance member Art G.
McLaughlin comment: I can't tell you what caused the lettuce parasite outbreak, but here's a related public service announcement: Beware of jalapeños now.
The U.S. Centers for Disease Control and Prevention and the Food and Drug Administration are investigating a salmonella outbreak linked to Mexican jalapeño peppers that has sickened more than 300 people in 27 states. People started getting sick in June.
Supplier Coast Citrus Distributors has recalled peppers sent to restaurants, including Chipotle Mexican Grill and Qdoba. Chipotle says it switched suppliers on July 20, and Qdoba stopped using jalapeños on July 28.
All the best,
Corey McLaughlin and Nick Koziol
Baltimore, Maryland
August 6, 2026
