General Market News

U.S. farm and biofuel groups are urging President Trump to reject a proposed expansion of small refinery exemptions (SREs) from biofuel blending requirements, warning it would devastate rural economies and biofuel demand. The White House is reportedly considering nearly doubling exemptions to 1.8 billion credits to lower gasoline prices amid a war with Iran ahead of November midterm elections.

• The administration is considering roughly doubling SREs from 950 million to 1.8 billion credits, with a decision expected by end of August
• Groups warn excess exemptions would 'decimate demand' for biofuels, causing market collapse and reducing demand for corn and soybean oil
• Iowa Republican Senator Joni Ernst called the plan a 'handout to Big Oil,' arguing SREs would hurt farmers without lowering gas prices while padding refiners' profits

Cleveland Federal Reserve President Beth Hammack called for raising interest rates, stating that 'now is the time to act' based on recent inflation data. She emphasized that the central bank remains too far from its inflation goal, reiterating her hawkish stance on monetary policy.

• Hammack is advocating for higher interest rates contrary to the Fed's recent easing trend
• Her position is based on recent inflation data showing the Fed has not achieved its target
• The statement represents a dissenting view within the Federal Reserve on the appropriate direction for monetary policy

RiverFront Investment Group analyzes different yield metrics used to evaluate stocks and bonds as rising interest rates force equities to compete harder for investor allocations. The article explains that nearly 40% of U.S. stocks' long-term total returns historically come from compounded dividends, highlighting the importance of understanding various yield measures when making asset allocation decisions.

• For stocks, earnings yield (E/P ratio inverse) is compared to 10-year Treasury rates for valuation, while dividend yield and SEC yield (which nets dividends against fund fees) are used to assess income potential
• Bond evaluation differs by strategy: ETF portfolios use SEC yield to forecast income generation, while individual bond portfolios analyze yield-to-maturity, yield-to-call, and yield-to-worst based on bond characteristics
• Municipal bonds require taxable-equivalent yield calculations to compare properly with taxable bonds; a 3.25% municipal yield equals 5.16% for investors in the 37% tax bracket, making it superior to a 4.70% Treasury despite lower stated yield

Family offices increased their stock holdings to 37% of portfolios in Q2 2026, up from 34% in Q1, while reducing exposure to private markets and real estate. The shift, tracked by CNBC and Addepar across hundreds of family offices managing $1.4 trillion in assets, reflects continued bullishness on AI-driven equities and markdowns in private credit valuations.

• The 3 percentage point increase in equities marks the largest quarterly shift in 3-4 years, driven by a 15% S&P 500 rally and concentration in tech stocks like Microsoft (held by 77% of family offices), Amazon, Alphabet, Apple, and Nvidia
• Private market allocations fell from 49% to 46%, primarily due to private credit funds marking down asset values, with 18% of recent vintage funds (2020+) posting net asset value declines versus a 9% historical average
• The portfolio shift largely resulted from market fluctuations rather than active trading, as rising stock valuations and declining private market marks changed relative allocations while cash positions decreased slightly

The Nasdaq 100 and S&P 500 rose in early trading on Thursday following strong earnings from Nvidia, while the Dow Jones 30 lagged behind. The Nasdaq 100 approached 30,000 with support at 28,500, while the Dow retreated toward 53,000 amid geopolitical concerns including trade tensions and the Strait of Hormuz closure.

• Nasdaq 100 gained 1.10% and S&P 500 rose 0.41%, driven by Nvidia's positive earnings call, while Dow Jones declined 0.38%
• Key technical levels identified: Nasdaq 100 targeting 30,000, S&P 500 eyeing 7,800 resistance with 7,600 as support, and Dow testing 53,000 with 50-day EMA support
• Market faces multiple headwinds including upcoming speech by Kevin Warsh, interest rate concerns, US-Canada trade tensions, and geopolitical risks affecting blue-chip multinationals

Kansas City Federal Reserve President Jeffrey Schmid described inflation as 'stubborn' and 'sticky' and stated that the current policy rate of 3.5%-3.75% may not be restrictive on the economy. While he stopped short of calling for a rate hike, his comments highlight ongoing concerns about inflation running above the Fed's 2% target.

• Core inflation rose 3.3% year-over-year in July, significantly above the Fed's 2% target, while the economy grew at 1.5% in Q2 with unemployment at 4.1%
• Schmid questioned whether current rates are restrictive, saying 'I don't know what we're restricting currently with the rate policy that we're at today'
• Schmid expressed support for Fed Chairman Kevin Warsh's proposal to reduce the number of FOMC meetings from eight to six per year

Nasdaq 100 futures surged about 1% on Thursday after Nvidia projected roughly 70% revenue growth for fiscal 2028, significantly exceeding Wall Street expectations. The rally broadened to software stocks as Salesforce and CrowdStrike also delivered strong outlooks, easing concerns about AI disruption to traditional software businesses. Investors await Fed Chair Kevin Warsh's Jackson Hole speech on Friday as the next major macro test.

• Nvidia jumped over 7% premarket after reporting data-centre sales up 117% to $89 billion and guiding Q3 revenue to $108 billion, though gross margin is expected to decline from 75% to about 74% due to rising memory costs
• Salesforce rose 7% after raising fiscal 2027 revenue guidance to $46.1-$46.4 billion, with Agentforce and Data 360 annual recurring revenue reaching $3.9 billion (up 210% year-over-year); CrowdStrike climbed 9% on 26% revenue growth to $1.47 billion
• July inflation remains elevated with headline at 3.7% and core at 3.3%, both above the Fed's 2% target, keeping rate increase prospects alive ahead of Warsh's Friday keynote at Jackson Hole

Fed Chairman Kevin Warsh faces mounting pressure to address persistent inflation as he delivers a key speech at Jackson Hole. Inflation has exceeded the Fed's 2% target for 65 consecutive months, with July's 3.7% rate nearly double the target. Warsh must balance communication carefully amid concerns about Fed independence and potential coordination with Treasury Secretary Bessent's market interventions.

• July inflation hit 3.7% with auto prices rising at 5% annualized pace and housing costs up 3.5%; three policymakers dissented in favor of rate hikes at the last meeting
• Markets are increasing bets on a Fed rate hike as soon as the September 15-16 meeting following sticky inflation data
• Treasury Secretary Bessent's surprise expansion of debt buyback program to cap rising yields has complicated Warsh's stated preference for letting bond markets operate freely

Wall Street's largest banks are feuding over a Federal Reserve proposal to revise capital surcharge rules for systemically important banks (GSIBs). JPMorgan and Bank of America oppose a funding provision that would benefit Goldman Sachs and Morgan Stanley, with JPMorgan estimating it would miss out on $13 billion in capital relief while its rivals gain $1-2 billion each. The dispute threatens to complicate the Fed's effort to finalize capital rule reforms before Democrats potentially take control of the House.

• JPMorgan estimates the proposed short-term wholesale funding tweak would cost it $13 billion in capital relief and BofA $9 billion, while Goldman and Morgan Stanley would each gain $1-2 billion in additional relief
• The dispute centers on how the Fed measures short-term wholesale funding in its GSIB surcharge calculation, with Morgan Stanley and Goldman more reliant on such funding (37% and 30% of liabilities) compared to JPMorgan and BofA (21% and 24%)
• JPMorgan and BofA are lobbying the Fed to reverse the change, arguing it would incentivize trading over lending, while Goldman and Morgan Stanley push for quick finalization, claiming it improves risk sensitivity

Federal Reserve Chair Kevin Warsh will deliver his first keynote speech as Fed chair at the Jackson Hole Economic Policy Symposium on Friday, facing scrutiny over his approach to monetary policy amid persistently high inflation. Markets are seeking clarity on the Fed's rate path as inflation remains well above the 2% target and bond yields hover near recent highs. Warsh has avoided traditional forward guidance since taking office in May, creating uncertainty about future policy direction.

• PCE inflation remains elevated at 3.7% headline and 3.3% core in July, both significantly above the Fed's 2% target, with markets pricing in a 45% chance of a rate hike by December following a 9-3 vote to hold rates at 3.5%-3.75% in July
• Warsh has eliminated forward guidance and forward-looking comments from Fed statements, creating what economists call a 'tremendous degree of uncertainty' and contributing to higher Treasury yields due to perceived lack of policy transparency
• Economists expect Warsh to avoid committing to specific rate moves in his speech, maintaining his 'watchful thinking' approach while markets desire clearer framework guidance on how the Fed will conduct monetary policy under his leadership

Qantas Airways will retire its 10 Airbus A380 superjumbos by mid-2028, four years earlier than planned, due to rising maintenance costs and supply-chain constraints for the out-of-production aircraft. The decision reflects the broader decline of the world's largest passenger airliner, which has faced retirement by multiple carriers due to high operating costs and competition from more efficient twin-engine aircraft.

• Early retirement will unlock approximately A$300 million ($215 million) in net cashflow benefits from 2028-2031, primarily by avoiding maintenance costs
• Of the 251 A380s delivered before production ended in 2021, only 196 remain in service as of July, with airlines including Air France, China Southern, and Malaysia Airlines having already retired their fleets
• Emirates remains the dominant operator with 116 aircraft (nearly half of all A380s delivered) and plans to fly them into the 2040s, while most other operators expect to phase out the model by the early 2030s

Treasury yields declined slightly on Thursday as investors awaited key employment data and the Federal Reserve's Jackson Hole economic symposium. The benchmark Treasury yield fell 2 basis points to 4.645%, while markets priced in a 36% probability of a Fed rate hike in September. New Fed Chair Kevin Warsh's Friday speech at Jackson Hole is the week's most anticipated event.

• Initial jobless claims data scheduled for 1:30 p.m. ET will provide another economic snapshot after the Fed's preferred inflation measure was released Wednesday
• Markets are pricing approximately 36% odds of a September Fed rate hike according to CME Group data
• Investors seek clarity on Chair Warsh's views on the economy, inflation, and monetary policy, with any dovish or hawkish signals likely to trigger market volatility

Six months into the Iran war, OPEC+ has lost its traditional ability to influence oil markets as the conflict has blocked the Strait of Hormuz and damaged infrastructure across multiple member countries. The group's share of global oil output has fallen from 48% to 40% since late February. China has emerged as the new 'swing consumer,' with its import cuts helping balance markets more effectively than OPEC+ production decisions.

• OPEC+'s core group of seven producers (including Saudi Arabia and Russia) now accounts for only a quarter of world oil output in July, down significantly from pre-war levels
• China has purchased roughly 400 million fewer barrels of oil since the war began compared to the same period last year, driven by a fuel export ban, lower refining output, and increased electric vehicle adoption
• OPEC+ has announced six oil output increases since March, but most remain 'largely on paper' due to the Hormuz blockade, with these decisions having minimal impact on oil prices except during a brief July ceasefire

French telecom operator Iliad reported a 2.2% increase in first-half 2026 core profit to €2 billion ($2.3 billion), driven by strong performance in Italy. Consolidated revenue rose 3% to €5.24 billion, reflecting the company's evolution from a French market disruptor to a broader European telecoms group with growing contributions from Italy and Poland.

• Italy revenue surged 10.2% to €665 million, significantly outpacing France's 1.5% growth to €3.32 billion and Poland's 3.5% increase to €1.26 billion
• The company added 300,000 new customers during the period, with growth driven primarily by mobile subscribers while fixed-line customer base declined
• Results demonstrate Iliad's successful geographic diversification, with Italy and Poland now representing an increasing share of total revenue beyond its traditional French base

Six months after U.S. and Israeli bombing of Iran triggered a Middle East conflict, global markets have experienced disrupted energy supplies with Brent crude averaging $90 in 2026 versus $70 in 2025, though global stocks hit record highs driven by AI sector investment. The conflict has particularly impacted Gulf economies, fertilizer shipments, and food prices, while traditional safe-haven assets have failed to perform their typical defensive roles.

• Brent crude briefly topped $120 in April and now averages around $90 in 2026, up from roughly $70 last year, with diesel prices rising sharply due to Gulf export disruptions and Russian refinery outages
• Global stocks gained $7 trillion (9%) since the war began, reaching a $105 trillion record high, as AI sector investment cushioned geopolitical concerns, though Gulf markets underperformed with Qatar and UAE stocks down 14%
• Gulf economies face severe damage: Saudi exports shrank 10% quarter-over-quarter, Dubai property sales plummeted 70%-80%, and Qatar's economy is expected to shrink nearly 30% this year due to damage at its Ras Laffan gas facility

Treasury Secretary Scott Bessent and Federal Reserve Chairman Kevin Warsh are displaying conflicting approaches to managing U.S. financial markets, with Bessent favoring interventionist tools like bond buybacks to control long-term rates while Warsh advocates letting markets set prices more freely. The disagreement comes as the Trump administration attempts to contain borrowing costs amid rising yields, with 30-year rates hitting a 19-year high. The clash will be highlighted at the Fed's Jackson Hole event where Warsh is scheduled to speak.

• Bessent announced Treasury would pause buybacks of longer-dated debt after 30-year yields reached a 19-year high, signaling Washington won't let 10-year yields approach 5% without intervention
• Warsh has criticized large-scale Fed asset purchases and wants to retreat from extensive communication policies, preferring markets play a bigger role in setting rates rather than central bank intervention
• Many investors and billionaire Stanley Druckenmiller argue Bessent is fighting the wrong battle, as rising yields reflect fundamentals like strong growth, sticky inflation, and fiscal deficits rather than market dysfunction

An oil tanker was struck by an unidentified projectile in the Strait of Hormuz on Tuesday, the latest attack testing President Trump's assertion that the waterway is 'functioning' after mine clearance. Traffic through the vital energy corridor remains drastically reduced at just five confirmed crossings Tuesday compared to over 130 daily before the conflict, while U.S. allies reportedly doubt Iran's mines have been fully cleared.

• Only five ships crossed the strait Tuesday, down from 130+ vessels daily pre-war, with all using Iran's designated unilateral route despite U.S. escort operations along the Omani side
• U.S. allies are skeptical of Trump's claims that Iranian mines have been fully cleared from the waterway, contradicting his Wednesday statement calling Hormuz 'a functioning strait'
• Iran's Foreign Minister called on the UN to condemn U.S. 'economic terrorism' and warned the strait won't fully reopen until the U.S. fulfills commitments under a lapsed June interim peace deal

Online fast-fashion retailer Shein is set to raise $1.7 billion through its Hong Kong initial public offering, selling 280 million shares. The Singapore-headquartered company, originally founded in China, is pricing its long-awaited IPO on Monday at HK$48.56 per share. This represents a significant capital raise for one of the world's largest fast-fashion retailers.

• The offering will sell 280 million shares at HK$48.56 per share, raising approximately $1.7 billion
• Shein is headquartered in Singapore but was originally founded in China, and is choosing Hong Kong for its public listing
• The IPO pricing is scheduled for Monday, marking the completion of the company's long-awaited public market debut

South Korea's central bank raised interest rates by 25 basis points to 3% on Thursday, marking its second consecutive hike as it battles elevated inflation. Core inflation reached its highest level since December 2023, while headline inflation has risen monthly since February due to war-related cost pressures, prompting the Bank of Korea to signal further rate increases ahead.

• The rate hike to 3% marks the highest level since January 2025, with the BOK indicating a policy stance 'consistent with further rate hikes' as inflation remains above the 2% target
• Housing prices in Seoul surged 2.5% month-over-month in June, the highest increase in five years, contributing to accelerating cost pressures in the capital region
• Strong semiconductor sector growth is expected to drive robust export and domestic demand, which the central bank warns will keep inflation elevated for a considerable period

Former JPMorgan Chase executive Jes Staley testified to U.S. lawmakers that he repeatedly shared confidential bank information with convicted sex offender Jeffrey Epstein, including details about Federal Reserve communications, deal information, and his own compensation. The admissions came during a House Committee investigation into Epstein's ties with political and business elites, with transcripts released in August 2026.

• Staley disclosed sensitive JPMorgan information to Epstein including the bank's Federal Reserve communications during the 2008 financial crisis, a $44 billion private bank inflow figure, compensation details, and pending deals
• Staley informed Epstein that JPMorgan had designated him a high-risk client and raised concerns about his large cash withdrawals
• Staley signed documents for Epstein's trust in 2014 and 2015 but later declined to serve in the role, stating he did not want to be associated with the estate