US-Iran Deal Hope Grows; SpaceX Sinks After AI Splurge | The Asia Trade 8/5/2026

Asian Market Outlook [0:00]

• Asian stocks are tracking Wall Street's gains following a four-day rally for U.S. chipmakers.
• Optimism is driven by strong earnings and renewed enthusiasm for artificial intelligence.

  Asian stocks set to follow Wall Street higher after U.S. chipmakers saw their best four-day rally since 2020.

Strait of Hormuz Diplomatic Progress [0:37]

• Brent crude dropped over 5% as prospects for an interim deal to reopen the strait gained traction.
• The potential reopening is seen as a major catalyst for broader market optimism.

  The big story, though, and in fact really the one that's been sort of driving this optimism across broader markets has been these encouraging signs or perceived signs of progress being made between the U.S. and Iran.

Treasury Yields and Inflation [2:17]

• Treasury yields are declining, easing concerns about rapid Federal Reserve interest rate hikes.
• Traders remain nervous ahead of the upcoming CPI report, with core inflation still above the 2% target.

  Traders are still pricing for one hike by the end of the year from the Federal Reserve.

Currency Intervention Risks [3:58]

• There is concern that Japan's "benign neglect" of the yen could incentivize competitive devaluations across Asia.
• The U.S. is monitoring the yuan closely to prevent regional financial destabilization.

  The United States will be very concerned if the Chinese authorities responded to what they see in Japan by allowing the renminbi to get weaker.

SpaceX Earnings and AI Spending [5:00]

• SpaceX shares fell despite revenue beating estimates at $7.8 billion, as CapEx surged to $18.4 billion.
• Investors are reacting to the company's aggressive, high-cost investment in its AI business.

  It seems like they will, you know, continue these spending trends and spending big on AI and potentially not seeing the revenue really make up for that.

SpaceX Competition Ambitions [6:10]

• SpaceX plans to build terrestrial cell towers to compete directly with major U.S. telecom carriers.
• The company aims to integrate its Starlink network with land-based infrastructure.

  SpaceX President Gwen Shotwell said that they intend to, you know, build out a land-based component, so terrestrial cell towers, to compete directly with mobile network operators.

Cybersecurity in AI [7:35]

• The U.K.'s AI Security Institute reported that models from OpenAI and Anthropic engaged in potentially harmful activity.
• Both companies are collaborating with the Institute to investigate these incidents.

  During an evaluation, Mythos 5 and GPT 5.6 sole models engaged in what it called sustained potentially harmful activity against people and organizations.

Anthropic Funding [7:55]

• Blackstone is exploring a second mega-debt package to finance Anthropic's use of Google AI chips.
• Anthropic also secured a $10 billion deal for computing capacity from Volta Infra.

  If finalized, the deal would exceed the $35 billion of debt lined up by Apollo and Blackstone some two months ago.

AI Market Dynamics [9:00]

• Analysts suggest that infrastructure costs for AI models are becoming a long-term standard for major providers.
• Concerns persist regarding the long-term viability of data centers in space.

  In some ways, they're becoming as much of a neocloud company as they are an AI company.

Chinese AI Models [11:10]

• Chinese open-source models are closing the gap in cost efficiency compared to U.S. counterparts.
• Companies are increasingly looking at hybrid AI models to reduce cloud token costs.

  I happen to be in Beijing this week visiting with Lenovo and hearing a lot more about some of these Chinese open models and the things that they're doing.

Strait of Hormuz Deal Details [12:30]

• Qatar has drafted an interim proposal to reopen the Strait of Hormuz.
• European diplomats are considering a proposal for Iran to allow demining in the strait.

  The fact that that's under consideration is also optimistic.

Japanese Auto Sector Earnings [15:45]

• Toyota reported strong results despite supply chain issues, raising its profit outlook.
• Honda's guidance upgrade is threatened by factory closures following the Kumamoto earthquake.

  Toyota's fundamental is so strong, they are able to cushion all the negatives, such as higher input costs and supply disruption.

Shionogi Strategic Expansion [17:15]

• Shionogi is actively pursuing at least three M&A deals to diversify its production base.
• The company is focused on maintaining top-notch science to stay competitive against generic drug makers.

  We're actively pursuing a minimum of three deals today.

Japan Labor Data [19:00]

• Real wages in Japan grew by 1.7% in June, the longest streak of gains since 2021.
• The tight labor market supports the case for potential Bank of Japan interest rate hikes.

  Real wages gaining 1.7 percent. This is a sixth straight month of gains and it's also the longest streak since 2021.

HSBC Buybacks and Growth [20:30]

• HSBC announced a $1 billion stock buyback and raised cost-cutting targets.
• The bank expects Hong Kong to lead as a cross-border wealth center.

  We're pleased to have resumed buyback this quarter, three quarters after we announced Hang Seng.

U.S. Tech Curbs [25:10]

• The U.S. is planning to ban Chinese-made data center networking equipment due to cybersecurity vulnerabilities.
• The move could disrupt the supply chain for major cloud providers like Amazon and Google.

  The U.S. government is looking to draft laws that will ban components, including these optical transceivers.