Weekly Market Commentary

Markets ended the week mixed as investors assessed the implications of the US economic isolation of Iran, the fallout of increased tariffs on Canada, Nvidia Q2 earnings results, and the Fed Chairman’s speech at the Kansas City Federal Reserve’s Economic Symposium in Jackson Hole. Oh yeah, we were also treated to a slightly hotter print of the Fed’s preferred inflation measure, the PCE. On Monday, Treasury Secretary Bessent laid out a plan to isolate economic activity with Iran.  The plan, dubbed Economic D-day, promised economic punishment to any country doing business with Iran and suggested that, in the coming days, there will be announcements and actions taken against several entities that have worked alongside Iran to evade economic sanctions.  The US and Iran both said they would not return to the MOU signed in June, as negotiations have stalled.  Oil traded lower this week on reports that 10 million barrels

US equity markets took a step back last week in what turned out to be a very busy week.  Increased yields on the long end of the curve prompted Treasury Secretary Scott Bessent to double buybacks of 10- to 30-year US Treasuries in an effort to temper the rise in rates.  The move was met with a rally in both bonds and stocks; however, it was short-lived, with much of the gains being given back within a day of the announcement.  A global debasement narrative has emerged as the US deficit topped $40 trillion.  The US Dollar sold off to levels not seen since May, while precious metals and Bitcoin prices soared.  Interestingly, the correlation between Gold and Bitcoin is the highest since Covid, following massive liquidity injections by global governments.  It’s notable that several other developed markets are facing similar pressure on their sovereign debt, including Japan, the UK,

The S&P 500 forged a new all-time high as investors recalibrated interest-rate-hike expectations after an in-line print of the Consumer Price Index and a cooler-than-expected print of the Producer Price Index.  The probability of a rate hike in September fell to 32% from 55% a week ago. Interestingly, the short end of the US curve advanced while longer-dated Treasuries declined over the week amid concerns about the widening US deficit.  Treasury auctions this week were met with tepid demand and saw the 10-year and 30-year priced at yields not seen since 2007 and 2001, respectively. Oil prices rose as the US-Iran war continues while negotiations appear to be at an impasse.   The US signaled it would continue its blockade of Iranian ports to inflict economic pressure while Iran and the Houthis continued to attack cargo ships in the Strait of Hormuz and the Red Sea.  Second-quarter earnings continued to roll

Giddy up!  US equity markets ripped higher in the first week of August as 2nd quarter earnings continued to impress.  According to FactSet, 88% of the S&P 500 have reported earnings, of which 86% have beaten Earnings Per Share estimates, while Earnings Per Share have grown by an impressive 50.4%.   76% of companies that have reported have beaten on revenues, with revenues growing by 15% in the 2nd quarter.  Standout companies this week included: Palantir, Caterpillar, MP Materials, Cloudflare, SpaceX, AMD, and Twilio. Tensions in the Middle East persisted as negotiations to partially open up the Strait of Hormuz between Iran and Oman continued.  Oil prices fell for the third consecutive week as rhetoric suggested a deal was close.  That deal has been elusive, to say the least, and concerns about the particulars remain.  Is the US even engaged in negotiations, will the passage of the Strait require a toll, will all