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Once in orbit, AST SpaceMobile claims that the satellites will provide "U.S. nationwide non-continuous service with over 5,600 cells in premium low-band spectrum," with plans to increase processing bandwidth tenfold over time. Initially starting small, the company aims to build a global constellation of 168 satellites to provide direct cellphone-to-cellphone service worldwide, eliminating the need for cell towers. AST's ultimate goal, as outlined before its 2021 IPO, is to offer this service to up to 5 billion mobile subscribers, capturing a significant share of the "$1 trillion global mobile wireless services market."

However, not all news is positive. Constructing a 168-satellite constellation is expensive, and AST currently has only $210 million on its balance sheet. AST will need to ramp up its operations and revenue quickly to sustain its business. Investors should mark their calendars for August 14, when AST will hold a conference call to update on its cash reserves. Given that the stock has already surged over 200% this year, there is also a risk of profit-taking.

Another factor is the election; policy risks generally have less impact on small-cap stocks, most of which are domestic U.S. companies. Except for those reliant on imports, other impacts are relatively minor.

However, the risk for small-cap stocks lies in potential profit pressures that may emerge during this earnings season. Market expectations are extremely high, and macroeconomic pressures are more severe than they appear. While the Russell 2000 has high short-term elasticity in a rate-cut environment, the limited scope of rate cuts necessitates caution. Poor earnings performance without fundamental support cannot sustain long-term gains.

The FOMC meeting on July 31 is a key focus this week, as is the non-farm payroll report on Friday. The main question remains when rate cuts will begin. The July meeting will likely affirm recent inflation progress and pave the way for a potential rate cut at the next Fed meeting, possibly on September 20. If rate cut signals are released, it would generally be positive news for the market.

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100 points: any participating user with at least 1 post during the event period.

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AUD50 cash coupon: for the top writer of unique, on-topic, and in-depth trading analyses (including P/L records) throughout the competition.