Good morning, investors. Scott Bessent just made it known that, despite moving from Wall Street to the US Treasury he’s as tapped into bond markets as ever.

He took action Wednesday to ramp up government bond purchases in the face of a sharp rise in long-term interest rates.

More on that below.

The bigger story is in biotech.

Wall Street just assigned $44 billion in value to a new cancer drug the FDA has not approved.

Moderna stock surged 177% on Wednesday after it announced with Merck that their personalized mRNA cancer vaccine reached a key milestone in a Phase 3 melanoma trial. 

Moderna’s valuation rose from about $25 billion to nearly $69 billion within a matter of hours.

Indeed, the early science is promising. The trial followed 1,137 patients whose melanoma had been surgically removed, and those who got the vaccine alongside Merck’s Keytruda went longer without the cancer returning versus those who got Keytruda alone. 

That said, the trial has not yet shown that patients live longer.

Moderna has not asked the FDA to approve anything, and it still has to start discussions with regulators. 

As far as the parabolic market reaction, part of that was mechanical. Short sellers had bet against roughly 13% of Moderna’s tradeable stock and took a $4.8 billion hit in paper losses, according to ORTEX data.

Moderna generated $2.23 billion in revenue over the last year while losing $3.15 billion.

Wall Street’s average price target for the stock hovers at $79 a share, below the current price of $179. 

Wednesday’s rally for Moderna led a broad rally in biotech, with the State Street SPDR S&P Biotech ETF (XBI) rising nearly 6% in the session. 

If this sharp of a move was in response to a single Phase 3 trial, imagine if Moderna gains traction with regulatory approval, production and insurers down the line. 

🏦 Scott Bessent is the most interventionist Treasury chief in decades. He has doubled long-dated bond buybacks, spent yen for the first time in 30 years, and dragged the dollar to a three-month low all in service of pulling the 10-year yield down. (Bloomberg)

💰 Samsung is set to return $72 billion to shareholders. Early reports suggest the memory giant will approve a special dividend and buyback at a late-August board meeting worth roughly 100 trillion won as AI supercycle profits pile up. (Reuters)

🎯 Deutsche Bank called Bessent's move a return of Operation Twist. The 30-year yield fell 10 basis points to 5.18% after the Treasury’s latest move, which mirrors a tactic last deployed by the Fed in 2011 to pull down borrowing costs without touching short rates. (Bloomberg)

Jack Farley is a macro strategist and the co-founder of the Monetary Matters Network.

We sat down to discuss his highest-conviction stock ideas across semiconductors and energy, his outlook for the AI trade, the case for silver, and the positions he wants to short in the current market.

Tune in on Spotify, Apple Podcasts, or YouTube.

🗓 August 21, 1998: Long Term Capital Management lost $553 million in a single day as Russian markets went haywire. Six weeks later the hedge fund required a Fed-led rescue by a cadre of Wall Street banks.

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