Yesterday, July 9: Pastors Can Now Preach Politics
IRS backs church's getting positively political, TikTok to stay in the US via M2, and Wiener wants AI safety
July 9 QFR:
The IRS stated communications in good faith by a church during religious services do not violate the Johnson Amendment
TikTok is launching a standalone U.S.-only app called “M2” on September 5
California State Senator Scott Wiener has introduced new amendments to SB 53, a bill requiring major AI companies to publish safety protocols and report critical incidents
Notes for July 10:
0300PST: Sec. Rubio meets with Russian FM Lavrov (Kuala Lumpur, Malaysia)
0530PST: Initial Jobless Claims
1000PST: 30-Year Bond Auction
***Trump’s personal calendar only had a singular event listed for tomorrow.
Earnings Calls to Watch July 10:
Key Events to Watch July 10:
US Market:
A rally in big tech stocks led the market higher Wednesday, boosting the Nasdaq to an all-time high as Wall Street recovered earlier losses. Nvidia briefly surpassed $4 trillion in value. This occurred amid President Trump's renewed tariff threats, now extended to an August 1 deadline. New tariffs target pharmaceutical drugs at 200% and copper imports at 50%. Separately, Merck announced a $10 billion acquisition of Verona Pharma. Additionally, Nvidia briefly became the world’s first $4T dollar company.
[The tech-driven market rally signals investor confidence in growth sectors, despite renewed tariff uncertainties. Trump's aggressive trade policies, especially new high-rate tariffs, pose risks to global supply chains and economic growth. Upcoming earnings reports will be key to understanding companies' ability to adapt to these policy shifts.]
🧥 - BMNR 0.00%↑, WPP 0.00%↑; 🌲 - NVDA 0.00%↑, RYTM 0.00%↑
The IRS has made a surprise move, stating in court documents that communications in good faith by a church to its congregation during religious services do not violate the Johnson Amendment, which prohibits tax-exempt nonprofits from intervening in political campaigns. This interpretation, praised by conservatives and some progressive religious groups, allows pastors to endorse candidates from the pulpit without risking tax-exempt status. However, it raises concerns among other faith leaders and legal experts about potential campaign finance corruption and church-state entanglement.
[The IRS's reinterpretation of the Johnson Amendment marks a significant shift, potentially enabling greater political activity by religious organizations. While hailed as a win for religious freedom by some, it could blur the lines between church and state, raising concerns about campaign finance ethics and the politicization of religious institutions. This decision will likely ignite further debate on the role of faith in elections.]
President Donald Trump has ordered the re-opening of protected Pacific waters to U.S. fishing fleets, a move championed by commercial seafood interests in American Samoa and Hawaiʻi who claim it's vital for economic survival. This reverses a 2014 expansion of the Pacific Islands Heritage Marine National Monument, which was established to protect a fragile ocean ecosystem. However, U.S. Pacific Marine Fisheries Service data indicates that U.S. tuna fleets spent minimal time in these waters prior to their closure.
[Trump's decision to reopen protected Pacific waters prioritizes short-term economic arguments from fishing interests over long-term environmental conservation, despite data suggesting limited past fishing activity in those areas. This move risks undermining marine ecosystems and established conservation efforts. It also highlights the contentious balance between economic development and environmental protection, potentially influencing future debates over marine sanctuaries.]
🧥 - TSN 0.00%↑, CAG 0.00%↑; 🌲 - RWR 0.00%↑, XLY 0.00%↑
US Politics:
Democrats are capitalizing on MAGA infighting after the Trump administration released heavily redacted Epstein files, which confirmed no “client list” or blackmail evidence and reaffirmed Epstein’s suicide. The DOJ and FBI’s findings, based on enhanced prison footage, directly contradict years of MAGA-driven conspiracy theories and promises of transparency from Trump allies. MAGA influencers, including previously vocal figures like Kash Patel and Dan Bongino, now support the official narrative, fueling frustration and distrust among Trump’s base. Democrats are leveraging the lack of disclosure and Trump’s past Epstein ties to question his credibility, as Senate Finance Committee Democrats renew demands for unredacted financial documents and highlight links between Epstein, Trump donors, and administration appointees.
[The Epstein file release undermines the MAGA brand’s core promise of transparency, risking alienation of grassroots donors and weakening Trump’s lucrative branding machine. Corporate donors and partners may distance themselves to avoid reputational risk, shrinking the resources available for Trump’s ventures—including Trump Media & Technology (DJT), a flagship “Trump stock.”]
🧥: DJT 0.00%↑, RUM 0.00%↑; 🌲: $MSNBC, VOX 0.00%↑
The U.S. Senate confirmed Bryan Bedford as Federal Aviation Administration (FAA) administrator in a 53-43 vote. Republicans praised Trump's pick, citing Bedford's experience as Republic Airways CEO since 1999. Democrats and safety advocates opposed, citing his lack of commitment to the 1,500-hour pilot training rule, implemented after a 2009 crash. Critics, including "Sully" Sullenberger and victim families, expressed concern about rolling back safety reforms.
[Bedford's confirmation, despite concerns about his stance on the 1,500-hour pilot training rule, signals a potential shift in aviation safety policy. This partisan vote highlights differing views on balancing industry needs with established safety regulations. The FAA now faces the challenge of maintaining public trust amidst recent accidents, while navigating debates on pilot experience requirements.]
🌲 - DAL 0.00%↑, UAL 0.00%↑, AAL 0.00%↑, LUV 0.00%↑
California State Senator Scott Wiener has introduced new amendments to SB 53, a bill requiring major AI companies like OpenAI and Google to publish safety protocols and report critical incidents. This updated bill, influenced by Governor Newsom’s AI policy group, aims to balance safety transparency with industry growth. Unlike its predecessor, SB 1047, the revised SB 53 does not impose liability on AI developers for model harms and includes whistleblower protections, along with creating "CalCompute," a public cloud computing cluster.
[California's renewed push for AI safety legislation, focusing on transparency and incident reporting rather than liability, indicates a strategic shift in regulatory approach. This softer stance, influenced by industry feedback, aims to foster innovation while establishing crucial guardrails. The bill's success could set a precedent for other states and influence federal AI policy amidst ongoing debates.]
🧥 - GOOG 0.00%↑, MSFT 0.00%↑, META 0.00%↑; 🌲 - AI 0.00%↑
Global Politics:
China is experiencing a resurgence in foreign tourism after expanding its visa-free policy to citizens from 74 countries, allowing stays up to 30 days. Over 20 million visa-free foreign visitors entered in 2024, more than double the previous year. This initiative aims to boost tourism, the economy, and soft power. Tour guides and travel companies are seeing increased demand, with European travelers showing a significant increase.
[China's unprecedented loosening of visa policies reflects a strategic effort to re-engage with the global economy and enhance its international image post-pandemic. While boosting tourism and related sectors, the selective nature of visa-free access, excluding major African countries and having stricter transit rules for nations like the U.S. and U.K., hints at underlying geopolitical considerations. The success of this policy will be crucial for China's economic recovery.]
A British court convicted three men of arson in a March 2024 fire at a London warehouse storing equipment for Ukraine. Prosecutors assert Russia's intelligence services masterminded the plot, part of a growing European disruption campaign. Dylan Earl, who organized the arson, received an "Excellent" message from his alleged Russian handler. This incident adds to over 70 Russian-linked disruptions documented by the Associated Press since 2022.
[The conviction for arson highlights Russia's escalating covert campaign across Europe, increasingly relying on amateur recruits. This "flexible, deniable system" poses growing risks of injury as sabotage incidents intensify. Western intelligence faces a challenge in countering these operations, which aim to undermine support for Ukraine and destabilize European societies.]
🧥 - EWG 0.00%↑; 🌲 - PLTR 0.00%↑, LHX 0.00%↑, LDOS 0.00%↑
Russia launched another massive missile and drone attack on Kyiv overnight, injuring at least 10 and causing fires across the city. This follows the heaviest aerial assault of the three-year war just a day prior, with Russia employing increasing numbers of decoy drones to overwhelm Ukrainian air defenses. U.S. President Trump expressed frustration with Putin's stance, and the U.S. has resumed critical weapons deliveries to Ukraine.
[Russia's intensified and complex aerial assaults aim to overwhelm Ukraine's defenses, indicating a strategy to exploit Ukrainian vulnerabilities and logistical challenges. The U.S. resuming weapon deliveries is critical, but the ongoing need highlights the war's severe material demands. The conflict's escalation also underscores the diplomatic deadlock between the U.S. and Russia.]
🌲 - LMT 0.00%↑, RTX 0.00%↑, GD 0.00%↑, NOC 0.00%↑
U.S. Secretary of State Marco Rubio will meet Russian Foreign Minister Sergey Lavrov in Malaysia amidst rising tensions over Ukraine and U.S. weapon deliveries. This meeting occurs during the ASEAN Regional Forum, where Rubio also faces leaders from countries affected by impending U.S. tariffs, including eight ASEAN members. These tariffs threaten to overshadow Washington's efforts to strengthen Indo-Pacific ties and counter China's regional influence.
[Rubio's challenging diplomatic mission underscores the complexities of balancing immediate geopolitical crises with long-term strategic competition. The high tariffs risk alienating crucial Asian allies needed to counter China, potentially weakening U.S. influence. This reflects a tension between Trump's "America First" trade policies and traditional diplomatic alliances, potentially complicating regional security efforts.]
🧥 - ITA 0.00%↑, LMT 0.00%↑; 🌲 - VWO 0.00%↑, EWJ 0.00%↑
Technology:
Oppenheimer upgraded Microsoft to “Outperform” with a $600 price target, citing rapid AI revenue growth and strong Azure cloud momentum. Microsoft’s AI business, especially Azure, is seen as undervalued by the market. The firm highlights Microsoft’s rare “Rule of 60” profile—high growth and profitability at scale. Risks include slow Copilot AI adoption and uncertain enterprise demand.
[Oppenheimer’s bullish call underscores Wall Street’s conviction that Microsoft’s AI and Azure momentum will drive further valuation gains, likely attracting institutional flows and reinforcing tech’s dominance in major indices. This upgrade could prompt sector rotation into mega-cap tech, pressuring software and legacy IT peers. Policymakers may scrutinize Microsoft’s swelling market cap, yet investors are unlikely to mind as long as growth persists. Financial markets may see increased ETF rebalancing, and competitors could face higher capital costs as investors chase Microsoft’s “Rule of 60” magic—a club so exclusive, even Apple and Google might want a guest pass.]
🧥: GOOGL 0.00%↑, ORCL 0.00%↑; 🌲: MSFT 0.00%↑, NVDA 0.00%↑
TikTok is launching a standalone U.S.-only app called “M2” on September 5, 2025, to comply with federal legislation requiring ByteDance to divest its U.S. operations or face a ban. The new app will run on a separate algorithm and use only U.S. user data, isolating it from TikTok’s global platform. Users must download the new app to maintain access after March 2026, when the current version will be disabled. This move aims to address U.S. national security concerns and facilitate a potential sale to a consortium including Oracle, Blackstone, and Andreessen Horowitz, though no deal is finalized. The split may affect content recommendations and creator monetization, as the U.S. app will prioritize domestic content and operate independently from ByteDance’s global engineering.
[TikTok’s U.S. app separation marks a pivotal moment in global tech regulation, fragmenting one of the world’s largest social platforms and raising operational costs. The shift could weaken TikTok’s famed recommendation engine, giving rivals like Meta and YouTube a chance to capture users and ad dollars. The uncertain sale and regulatory hurdles add volatility to social media stocks, emphasizing the growing importance of data sovereignty and regulatory compliance as competitive advantages. Investors should watch how this technical and ownership split impacts user engagement and ad revenue in the coming quarters.]
🧥: BIDU 0.00%↑, SNAP 0.00%↑; 🌲: META 0.00%↑, ORCL 0.00%↑
OpenAI is reportedly set to release its own AI-powered web browser in the coming weeks, aiming to challenge Google Chrome. This follows Perplexity's recent launch of "Comet," an AI browser integrating its search engine and an AI assistant for tasks like summarizing content and managing emails. Both companies seek direct user access and novel AI-driven Browse experiences, with OpenAI potentially integrating its "Operator" AI agent.
[The emergence of AI-powered browsers from OpenAI and Perplexity signifies a pivotal shift in how users will interact with the web. These platforms aim to centralize information and tasks through AI, potentially disrupting Google's dominance in search and Browse. However, the success hinges on overcoming AI's current limitations, like hallucinations, and addressing user concerns regarding extensive data access.]
🧥 - GOOG 0.00%↑, AAPL 0.00%↑; 🌲 - AI 0.00%↑, SMCI 0.00%↑
 | A guest post by
|