USMCA clock starts, gold soars, birthright preserved

Central banks bought a net 244 tonnes of gold in Q1 2026, up 17% from the previous quarter. The surge, led by Poland and Uzbekistan, reflects heightened geopolitical risk and a weakening U.S. dollar, signaling a broader shift away from dollar‑denominated reserves. Expect continued pressure on the dollar and supportive gold prices.

Goldman Sachs says leveraged bets now total $1.4 trillion, about 1.8 % of U.S. equities, and are tightly packed in AI names. A correction could force margin calls that ripple through broader markets, raising systemic risk. Investors should watch AI weighting to gauge fallout.

The Russell 2000 surged nearly 22% in H1 2026, its strongest half-year performance since 1991, as AI infrastructure spending rippled down into the small-cap space. Chip‑equipment firms like Aehr Test Systems and MaxLinear rallied over 400%, driving consensus earnings growth forecasts for the index to 38% and suggesting the momentum could persist if rates stay low.

Legendary investor Michael Burry announced a short position in Caterpillar, saying the equipment giant’s price‑to‑sales ratio is at a three‑decade high after an 86% rally driven by AI hype. He added this to bearish bets on Nvidia, Tesla and semiconductors, warning the AI‑linked rally could be overextended.

The Trump administration will formally announce it will not extend the USMCA, activating a ten‑year sunset clause that could dismantle the North American free‑trade zone. Negotiators from the three countries will meet to discuss changes, with stakes high for auto‑content rules and supply‑chain stability.

The Supreme Court’s 6‑3 decision to uphold birthright citizenship preserves an estimated $7.7 trillion lifetime contribution to the U.S. economy, according to a Center for Migration Studies analysis. The report also projects 3.1 million additional workers and $1 trillion from future generations, underscoring the policy’s long‑term economic stakes.

Cleveland Fed President Beth Hammack warned that the "insatiable" demand for AI infrastructure is adding to inflationary pressure. If price growth stays elevated, she said the Fed may need to raise benchmark rates to bring inflation back to target.

Exponential View estimates global AI sales hit $25 billion in Q1 2026, surpassing the $21 billion quarterly depreciation on data‑center and chip build‑outs. The revenue excess marks the first time AI demand covers infrastructure cost, suggesting the massive capex spree is beginning to pay off. This trend could shift investor calculus on AI‑related hardware stocks.

Zhipu AI unveiled its open‑weight GLM‑5.2 model and researchers say it matches Anthropic’s Mythos on bug‑finding and vulnerability‑detection benchmarks. Because the model can be run on off‑the‑shelf hardware, the U.S. worries it gives adversaries a powerful, low‑cost cyber‑weapon.

Cook County sheriff investigators recovered $1.3 million of stolen copper wire and data‑center gear from two trailers outside Chicago, exposing a shift by organized crime toward AI‑fuelled data‑center supply chains. The haul highlights a new, lucrative target as the industry races to build out massive AI infrastructure.