Report: Elon Musk Reconsiders America Party Plans

Welcome back!

Here’s your must-read news this morning:

• Blue states’ fiscal troubles 

• Musk reconsiders America Party plans

• Whistle blown on anti-conservative banks

I’ve got all the details for you, so let’s dive in.

— Josh

MARKETS

💰 Democrat-led States’ Fiscal Woes Drive Tax Hikes on Wealthy, Risk Exodus

The Scoop: Democrat-led states are resorting to tax hikes on wealthy residents to address budget shortfalls, a strategy critics link to fiscal mismanagement, Fox Business reports. Rhode Island’s “Taylor Swift tax” on high-value vacation homes stands out as a prominent example.

The Details:

• Rhode Island over the summer imposed a new tax on vacation homes worth over $1 million, adding about $136,000 to Taylor Swift’s $17 million Westerly property.

• Maryland raised income taxes for residents earning over $500,000 to patch budget holes.

• Connecticut proposed higher income taxes for individuals earning $250,000 or more ($500,000 for couples).

• Washington lifted its capital gains tax from 7% to 9%, excluding real estate, driving wealthy residents like Jeff Bezos to low-tax Florida.

What’s Next: These tax hikes are likely to intensify criticism of blue states’ fiscal policies, potentially accelerating the exodus of wealthy residents and businesses to low-tax states like Florida.

Markets Roundup

🏦 Economy & Policy

• ⭐ Editor’s Pick: UK inflation rose to 3.8% in July, the highest since January 2024, driven by a 30.2% surge in air fares and rising fuel and food prices. (YF)

• The Commerce Department expanded its steel and aluminum tariffs to include 407 new product categories, such as wind turbines, cranes, and railcars, imposing a 50% duty, effective immediately. (INV)

• U.S. single-family homebuilding and permits rose in July 2025, signaling a modest recovery in housing activity despite high mortgage rates. (RTS)

• Treasury Secretary Scott Bessent said tariff revenue, projected to exceed $300 billion in 2025, may be directed toward reducing the U.S. national debt. (FBN)

📈 Stock Market

• ⭐ Editor’s Pick: Home Depot reported fiscal Q2 adjusted earnings per share of $4.68, missing Wall Street’s expectation of $4.71, and revenue of $45.28 billion, falling short of the anticipated $45.36 billion. (HR)

• Lowe’s surpassed Wall Street’s Q2 earnings expectations with $4.33 per share and $29.36 billion in revenue, boosted by rising home project demand. (YF)

• Target exceeded Wall Street’s Q2 earnings and sales forecasts, reporting $2.05 per share and $25.21 billion in revenue, while reaffirming its full-year outlook. (CNBC)

• Newsmax’s Q2 2025 revenue rose 18.4% to $46.4 million, led by a 28.5% jump in broadcasting revenue to $38 million, despite a -$0.59 adjusted loss per share. (INV)

🏢 Industry

• ⭐ Editor’s Pick: Commerce Secretary Howard Lutnick said Intel must provide the U.S. government with a non-voting equity stake in exchange for CHIPS Act funds. (CNBC)

• McDonald’s will lower prices of its combo meals, after consumers were left sticker-shocked by Big Mac meals that surged to $18 in some locations. (WSJ)

• The FDA is investigating a shipment of Walmart's Great Value raw frozen shrimp that tested positive for a radioactive isotope, prompting a recall recommendation. (CBS)

• Fisher Island’s 33109 ZIP code in Miami Beach, Florida, topped the list as the most expensive in the U.S. with a median home listing price of $11.9 million. (MG)

💵 Energy & Commodities

• ⭐ Editor’s Pick: Trump's "Drill, Baby, Drill" policy has driven U.S. oil and gas production to record highs, boosting energy independence and lowering domestic prices despite falling global oil prices. (AMAC)

• Los Alamos National Laboratory Scientists developed a method to transform nuclear waste into a potentially safer form of nuclear fuel. (ABC)

• U.S. oil and gas mergers and acquisitions surged in 2024, tripling from the previous year. (RTS)

• Trump criticized a court decision to temporarily block a land transfer essential for a copper project in Arizona, calling it a "radical left" move that jeopardizes jobs and U.S. copper production. (MIN)

🌕 Crypto

• ⭐ Editor’s Pick: Wyoming became the first U.S. state to launch its own stablecoin, debuting on Ethereum, Solana, Avalanche, Polygon, Arbitrum, Optimism, and Base. (DC)

• SEC Chair Paul Atkins said that "very few" crypto tokens qualify as securities, signaling a more industry-friendly regulatory approach than the Biden administration. (TB)

• Sen. Tim Scott (R) vowed to advance a bill to streamline digital asset regulations before a September deadline, but warned that Sen. Elizabeth Warren (D-MA) is “standing in the way.” (YF)

• Robinhood will launch sports betting prediction markets for NFL and NCAA football through a partnership with Kalshi. (CD)
  

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TECH

💻 Report: Elon Musk Reconsiders America Party Plans, Could Support Vance in 2028

The Scoop: Elon Musk is stepping back from plans to launch a new political party, dubbed the America Party, as he prioritizes his business ventures and maintaining ties with key Republican figures like Vice President JD Vance, according to the Wall Street Journal.

The Details:

• Musk has told associates he’s reluctant to start a third party that could split GOP votes.

• Last month, Musk announced intentions to form the America Party to represent voters disillusioned with the two major parties, but he has since canceled meetings with third-party campaign organizers.

• Musk has maintained contact with Vance, seen as a potential MAGA successor, and is considering financial support for Vance’s possible 2028 presidential run.

• In 2024, Musk spent nearly $300 million supporting Trump and Republicans through his America PAC.

• Musk and Trump have recently eased tensions over fallout from the “Big, Beautiful Bill,” with Trump praising Musk’s businesses and a review confirming the importance of SpaceX’s federal contracts.

What’s Next: While Musk hasn’t entirely ruled out forming a new party, his current focus on business and GOP relationships suggests a pause in political ambitions. His decision could bolster Republicans in the 2026 midterms by avoiding vote fragmentation.

Tech Roundup

🧠 AI

• ⭐ Editor’s Pick: Meta is restructuring its AI division, downsizing its thousands-strong team, with some executives departing and exploring third-party AI models to power its products. (NYT)

• OpenAI’s Sam Altman said GPT-6, now in development, will launch faster than the GPT-4 to GPT-5 gap, with improved memory and personalized chatbot creation to match user preferences. (CNBC)

• China’s DeepSeek unveiled V3.1, an improved AI model with better memory and conversation skills. (VB)

• An AI model developed by MIT and biotech startup Recursion can screen millions of molecules at supercomputer speed, poised to revolutionize drug discovery. (IE)

🤖 Hardware & Robotics

• ⭐ Editor’s Pick: Unitree Robotics dominated the inaugural World Humanoid Robot Games in Beijing, securing 11 medals, with its H1 and G1 robots excelling in field and combat events. (IE)

• Evri, the UK’s largest parcel delivery company, launched a trial of its AI-powered robotic delivery dog named Milo. (TEL)

• Researchers developed knitted textile metasurfaces that enable soft robots to morph and camouflage on demand. (TEX)

• A former NASA engineer is now leading RollPros, training robots to automate the production of pre-roll cannabis joints. (FOR)

🚀 Defense & Space

• ⭐ Editor’s Pick: Under Secretary of Defense Emil Michael offered a rare behind-the-scenes look at how the U.S. is intensifying efforts to achieve drone dominance through AI-powered unmanned systems. (NN)

• China’s military parade rehearsal in Beijing revealed a range of previously unseen missiles and a stealthy cruise missile, showcasing its advancing strike capabilities. (TWZ)

• The U.S. Space Force will launch the secretive X-37B spaceplane on its eighth mission on Thursday, August 21, to conduct classified experiments. (ABC)

• DARPA aims to merge quantum technology with existing networks for enhanced security for government use by 2030. (NGV)

💰 Venture Capital & Deals

• ⭐ Editor’s Pick: EliseAI, a provider of AI tools for healthcare and housing, secured $250 million in a Series E funding round led by Andreessen Horowitz, doubling its valuation to $2.2 billion. (RTS)

• Medallion raised $43 million, led by Acrew Capital, to advance its AI-driven provider network and launch CredAlliance, the first national credentialing clearinghouse. (MHN)

• Functionize, an AI-driven software testing platform, secured $41 million in Series B funding led by Mumford Investments. (SA)

• Firecrawl, a startup providing an open-source web crawler for developers and AI agents, secured $14.5 million in a Series A funding round led by Nexus Venture Partners. (TC)

FREEDOM

🏦 Bankers Reveal Obama, Biden Administration Pressure to Debank Conservatives

The Scoop: In the wake of President Donald Trump signing an executive order outlawing debanking based on political or religious beliefs, unnamed senior bank executives told Fox News that the Obama and Biden administrations pressured them to deny services to conservative and religious groups.

The Details:

• Debanking involves banks closing accounts or denying services, often without explanation, initially tied to anti-money laundering laws but recently accused of targeting conservatives and religious groups.

• A senior banking executive said, “Those pressures were very, very real. When your regulator gives you a suggestion, it’s not a suggestion, it’s an order. The political stuff is very real, those pressures are real.”

• Another banker stated, “When there’s ambiguity in the law, beauty is in the eye of the beholder, and for a long time the beholder was the Obama and Biden administration.”

• Trump, Melania Trump, and former Sen. Sam Brownback (R-KY) were previously debanked. A House Oversight Committee report confirmed Operation Choke Point targeted legal businesses like firearms sales.

What’s Next: The executive order bans using “reputational risk” as a pretext for debanking, aiming to curb politically motivated practices. Experts like Tim Schwarzenberger call it a “breakthrough moment,” but the order’s enforcement and impact on banking practices will depend on regulatory follow-through and bank cooperation.

Freedom Roundup

🏛️ Policy, Free Speech & Woke Overreach

• ⭐ Editor’s Pick: The UK is grappling with a free speech crisis, with over 30 daily arrests for online posts deemed offensive. (NYP)

• Trump ordered a review of Smithsonian museums, criticizing their "woke" exhibits, aiming to align content with American exceptionalism ahead of the 2026 250th anniversary. (FOX)

• An investigation into China’s censorship system reveals the opaque and shifting processes that determine what content gets published or banned. (FP)

• The Trump administration’s CFPB closed a Biden-era investigation into Credova, a Public Square subsidiary offering firearms financing, citing political bias. (BN)

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DISCLAIMER: The CAPITAL newsletter is for informational purposes only and does not constitute financial, investment, or professional advice. Readers should conduct their own research and consult a qualified financial advisor before making investment decisions. The CAPITAL newsletter and its owner and operator, Josh Caplan, are not liable for any loss or damage resulting from reliance on this information. The CAPITAL newsletter is solely owned and independently operated by Josh Caplan, separate from any employer affiliations.