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

Market Outlook [0:00]

• Asian stocks are poised to follow Wall Street higher following a strong four-day rally for U.S. chipmakers.
• Oil prices dropped below $80 a barrel as prospects for an interim deal regarding the Strait of Hormuz gained traction.

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

AI Enthusiasm and Volatility [1:00]

• Hyperscalers continue to spend aggressively on AI build-outs, benefiting Asian chipmakers.
• Investors are looking for fresh exposure to markets after a difficult July.

  That's obviously going to help chipmakers in Asia as well. So we've got a self-fulfilling cycle at the moment, which seems to be very positive across the board.

Inflation and Treasury Yields [2:00]

• Treasury yields are being monitored closely ahead of a major CPI report.
• Traders are pricing in one Federal Reserve hike by the end of the year.

  We still have to get past that. Core inflation in America is still running above the two percent target for the Federal Reserve.

Currency Stability and Regional Risks [3:00]

• Concerns exist regarding competitive devaluations if the renminbi weakens in response to the yen.
• U.S. officials are framing cooperation with Japan as a regional stability effort.

  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 Debut [4:00]

• SpaceX shares fell in late trade despite revenue of $7.8 billion exceeding analyst estimates.
• Capital expenditure jumped to $18.4 billion, primarily driven by AI investments.

  I don't think this should be very surprising to investors. But as you mentioned, you're seeing this broader AI sell-off, and that seems like it's impacting how investors are looking at SpaceX as well.

SpaceX Strategic Ambitions [5:00]

• SpaceX aims to compete directly with terrestrial mobile network operators like Verizon and T-Mobile.
• The company plans to build out land-based cell towers to complement its Starlink network.

  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.

AI Security and Infrastructure [6:00]

• Cybersecurity incidents involving AI models from OpenAI and Anthropic are under investigation by the U.K.
• Blackstone is exploring a $36 billion debt package to finance Anthropic's use of Google AI chips.

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

The Future of AI Compute [7:00]

• Analysts note that SpaceX is functioning as much as a cloud company as an AI company.
• There are long-term questions regarding the sustainability of current AI spending trends.

  In some ways, they're becoming as much of a neocloud company as they are an AI company because their revenues from the pure AI side of selling their own models of Grok haven't been as big.

Chinese AI Models [8:00]

• Chinese open-source models are closing the gap in cost efficiency and performance.
• Companies are increasingly looking to run models locally to reduce cloud costs.

  I believe that open source models, these open weight models, pardon me, are really going to have a dramatic impact.

Strait of Hormuz Negotiations [9:00]

• Qatar has drafted a proposal to reopen the Strait of Hormuz, with U.S. and Iranian officials signaling optimism.
• European diplomats are considering a role in demining the strait.

  The fact that behind the scenes there are talks about demining the Strait, that's some progress there. That's, in some ways, a climb down from some of the stance that Iran had before.

Toyota and Auto Sector Earnings [10:00]

• Toyota announced a $6.3 billion buyback and raised its profit outlook despite supply chain costs.
• Honda's outlook faces potential pressure from earthquake-related factory closures.

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

Shionogi's Global Strategy [11:00]

• Shionogi is pursuing at least three M&A deals to diversify its production base.
• The company is focused on top-notch science to differentiate itself from Chinese competition.

  We are looking for a lot of opportunities. Actually, we're actively pursuing minimum three deals today.

Japan Labor Data [12:00]

• Japan's real wages gained 1.7% in June, marking the sixth straight month of growth.
• The tight labor market supports the case for potential Bank of Japan interest rate hikes.

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

Corporate Buybacks and Growth [13:00]

• HSBC announced a $1 billion stock buyback and raised its cost-cutting target.
• Paramount reported a surge in profits and remains confident in its merger with Warner Brothers Discovery.

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

U.S. Tech Curbs on China [14:00]

• The U.S. is planning to ban Chinese-made data center networking components like optical transceivers.
• The move is linked to security vulnerabilities identified in U.S. telecom networks.

  U.S. government is looking to draft laws that will ban components, including these optical transceivers. Now, these are the things that allow data to be transferred at the speed of light.

India Economic Resilience [15:00]

• Apple sales in India topped $10 billion for the first time.
• The Reserve Bank of India is expected to keep rates on hold while monitoring food and energy inflation.

  The economy is moving quite resilient. And as we saw for Apple as well, the iPhone market is quite strong. India is one of its biggest markets.