The FOMC minutes noted that inflation could require further tightening, as detailed by Bloomberg.
Global bond yields hit their highest levels since 2008, due to reasonably solid economic data that is pivoting investors from their fading dovish views and allocations. Per NOSO, Japan’s 20-yr bond yield popped after a debt auction drew weak demand. So, Bloomberg is calling for bonds to outperform.
$WMT is up (or at least started the day up) after increasing its annual profit guidance for the 2nd q in a row due to strength from higher income customers.
$CSCO reported an earnings beat. Per Reuters, the topline forecast was soft, though, so mgmt. focused on market share gains and positive AI stories. Orders for AI products have exceeded $500mm.
The SF Fed reported that US households are on track to deplete excess savings in the current quarter, as discussed by Bloomberg.
Some investors said police in China visited their homes to warn them against public protests, given a decision by China’s shadow bank to restructure its debt and sell assets to pay off investors. Local real estate agents are cautioning that the real estate market may be worse than the government is letting on—saying that prices are down -15% in prime spots in Shanghai and Shenzhen. Xi is calling for patience as his Communist Party tries to reverse China’s terrible economic slump, per SCMP. That’s the thing about dictatorship and economic hardship. Folks run out of patience and only have 1 person to blame.
We’re now at a 9-day pattern with the yen falling below levels that triggered gov interventions last year, so investors aren’t so crazy about buying Japanese stocks right now. The Nikkei 225 fell as much as 1.4%. The currency hit a 9-mo low of 146.56 per USA, and last year they stepped in at 145.90. More on Japan? Yep, exports shrank for 1st time in more than 2 yrs due to lower shipments of autos and chips, per Bloomberg.
Well, we doubt we’ll experience a full Depeche Mode ending to August… but this Friday begins the traditional 2-wk break for much of Wall Street. Folks come back just after Labor Day on Sep 5. Don’t expect folks to add a ton of risk, even though we’ll still have a number of key events occurring (Jackson Hole conference 8/24-8/26, NVDA earnings on 8/23, anything China-related).