Good morning. The US continues to play hardball with China over trade. Gold’s wild rally continues unabated. And a stablecoin issuer accidentally mints $300 trillion. Listen to the day’s top stories.
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Different impressions. China spoke of “mutual respect” and “peaceful coexistence,” but Scott Bessent described a very different encounter when a top Chinese trade official arrived in Washington recently. The US Treasury chief said the negotiator turned up uninvited and acted “unhinged.” Still, Bessent left the door open to a longer-term truce, even as the hardball continues.
The US is taking steps to block one of Hong Kong’s largest phone companies from accessing American telecom networks. And Bessent signaled an emerging united front among Group of Seven nations and others with regard to China’s new rare-earth export curbs. Meanwhile, Chinese hackers are being blamed for a potentially “catastrophic” breach of a major US-based cybersecurity provider.
But stock markets are shaking off trade jitters as tech optimism and a strong earnings keep momentum going. TSMC posted an almost 40% jump in quarterly profit, another sign of robust AI spending. At the same time, gold’s wild ride continues unabated on assessments that today’s eye-watering levels will look like a bargain in a few months’ time.
TSMC’s bulging profits aside, Wall Street is warning—again—of over-exuberance in the AI industry. And so far, generative AI isn’t helping hedge funds produce market-beating returns or meaningfully impacting the industry, according to billionaire Ken Griffin. Still, the AI jobs carousel continues. The head of Apple’s effort to make Siri more ChatGPT-like is jumping ship to Meta, just weeks after being appointed head of the team.
HistoSonics Non-Invasive Edison Histotripsy System Photo: HistoSonics
Sound bet? Jeff Bezos is among investors backing health-care company HistoSonics at a $3 billion valuation in the belief its technology can help fight tumors using sound waves. It’ll use the funds to target other types of cancer beyond its current focus on the liver. Bay Area startup Rondo Energy is also beginning to scale; it just turned on the world’s largest industrial heat battery.
Deep Dive: Back-to-Nature Bonds
Fire-fighting teams dampen smoldering vegetation on the foothills of Table Mountain in Cape Town in 2021. The city is plagued by regular wildfires, much it spread by alien vegetation. Photographer: Rodger Bosch/AFP via Getty Images
As the world looks for ways to curb biodiversity loss, new financial tools are being developed to fund the preservation and restoration of ecosystems.
The latest example is in South Africa, where some of the world’s leading conservation nonprofits—including US-based The Nature Conservancy—are exploring a bond tied to the rate of clearing invasive vegetation and a sustainable fund to protect more of the country’s wild areas.
Another tool known as a “debt-for-nature” swap—designed to refinance government debt and put savings toward sustainable projects—is finding increasing favor on Wall Street, which is getting more involved in efforts to monetize an area the United Nations wants to channel more private finance into.
The Big Take
A freight train carrying iron ore travels toward Port Hedland, Australia. Photographer: Bloomberg/Bloomberg
It ships enough iron ore every day to build the Empire State Building twice over and has grown almost tenfold in the past decade. And yet, even within the commodities industry, few have heard of Radiant World. But its rapid growth—and its bold and bullish bets—has rattled the market, and the Chinese government as well.
Opinion
The S&P 500 pop is back from the dead, a trend that’s become visible in the index debuts of Coinbase and Robinhood, Jonathan Levin writes. But it’s not stemming from gauge-hugging investors; it’s being driven by a new class of active retail traders, and we’re all being taken along for the ride.
Planet-sized fat finger. Stablecoin issuer Paxos accidentally minted a massive $300 trillion of PayPal’s PYUSD stablecoin on Wednesday before burning the tokens minutes later—a stark reminder that trust in crypto assets rests not only on reserves, but on operational discipline and error-proof code. Especially when that code can, however briefly,
