1. Europe is increasingly benefiting from a sharp decline in the US market’s free cash flow yield.

Citigroup strategists say Europe stands out as the only major region experiencing a “meaningful improvement in risk appetite, supported by fresh long accumulation and favorable earnings delivery.” The team writes that positioning “remains constructive rather than euphoric.”
The earnings season in the region has been strong, with companies on track to post second-quarter EPS growth of more than 14% year-over-year, beating an estimated 11.5%. Out of the companies that have reported, 56% have beaten expectations while 25% of them have missed.

2. Markets get a fresh read on the U.S. economy on Friday when closely watched non-farm payrolls data are released.

Economists polled by Reuters expect the July report to show payrolls increased by 91,000 jobs and the unemployment rate held at 4.3%. A stronger-than-expected reading could raise bets that the Fed may need to resume raising rates to contain persistently above-target inflation at its next meeting in September.
The central bank held rates steady on Wednesday, but three policymakers voted for a hike and Chair Kevin Warsh reiterated the Fed's commitment to returning inflation to its 2% target.

3. Alibaba shares higher on unveiling AI model Qwen3.8-Max.

The launch underscores the growing momentum behind open-weight AI models, which are increasingly narrowing the gap with frontier systems developed by U.S. rivals.
In a note, Morgan Stanley (MS) said growing adoption of open-weight models such as Kimi K3, Qwen and Llama should accelerate, rather than undermine, AI usage by making the technology cheaper and more accessible to enterprises.
The brokerage argued that lower costs are likely to fuel broader deployment of AI across companies, echoing the "Jevons Paradox" theory that higher efficiency ultimately drives greater consumption.
MS noted that many companies already use a mix of open and closed models, with open-weight systems typically deployed for coding, document parsing and other specialized tasks that require speed, customization or lower operating costs. About 63% of enterprises surveyed by McKinsey use open-source models alongside proprietary alternatives, it said.
The average price target for Baba is $187.

4. Enterprise closed weight users incur both licensing and token costs while open-weight users pay for their usage in three ways.

The difference between open-weight models and closed weight models has nothing to do with the number of active parameters, overall cost, or efficiency. The distinction between the two relates to how users pay and/or interact with the models.

5. The road to cheap orbit.

The space sector has surged since 2020, thanks to the boom in satellite technologies, with the amount of payload launched into orbit growing by 31% a year, compared with average annual growth of 4% between 2000 and 2019.
About 4,900 tonnes were launched into orbit in 2025, and the space economy was worth over $600 billion in 2024, equivalent to Sweden’s GDP.

SpaceX shares fell after hours as investors focused on heavy spending.
SpaceX compute agreements added $1.6B of second-quarter revenue, while total capex reached $18.4B.

Musk said no worries, his firm will make $1T in revenue by 2030… somehow.

Sources: Goldman Sachs, Univeristy of Cambridge

Not a subscriber yet?