Corporate news and fundamental reviews, new Fed actions and geopolitics
Latest stock market news
• Markets are quiet this morning, with U.S. stock index futures up 0.2%, the VIX falling below 20 and Bitcoin back near $115,000. There was still some buying to be done on Monday, with U.S. and European stock futures rising along with the dollar. The Nikkei was slow to react to Friday's Wall Street crash and the yen's surge, but the rest of Asia fared better.
Fed funds futures started out by pricing in a 65 basis point rate cut by December, but that figure is now back to 60 basis points. That's still a far cry from the 33 basis points seen before Friday's weak U.S. jobs report, and there's still an 83% chance of a cut in September. In fact, the 25 basis point drop in two-year yields on Friday was essentially the market cutting the Fed's rate on them, given that U.S. borrowing costs are tied to yields, not the funds rate.
Ten-year yields also fell sharply by 14 basis points but found resistance around 4.20%, a level they have repeatedly tried to break below since October last year.
• Over the long term, the downward revision of wages has seriously undermined the US claim to economic supremacy and the dollar's reputation for exceptionalism. That reputation has also been tarnished by President Trump's firing of the head of the Bureau of Labor Statistics, an institution with an invaluable reputation for impeccable integrity that has won the trust of investors around the world.
Or at least that’s how it used to be. Now Trump says he will pick a new head of the Bureau of Labor Statistics in the next few days. Will it be an independent statistician committed to providing reliable data, or a Trump loyalist eager to please his master? U.S. assets enjoy a trust premium that will be very difficult to maintain as Trump bends every level of government to his will.
• Trump also just floated the idea of using some of the excess tariff profits to pay “dividends” to a select group of lucky people — no doubt with special checks emblazoned with the “TRUMP” logo. So you tax everyone who buys imported goods, whether they have a choice or not, and then use some of the proceeds to pay out money to whoever you please, in your own name rather than the government that actually does the work.
Speaking of tariffs, a U.S. appeals court heard arguments late last week on the legality of Trump’s “reciprocal” tariffs and was inclined to uphold the original ruling that the tariffs were illegal. That ruling would likely still be upheld by the Supreme Court, which typically upholds unchecked presidential power. However, if the tariffs are found to be illegal, not only would all existing or pending trade agreements be invalidated, but the Treasury Department would have to return all the money it collected. Wouldn’t that be fun…
• The recent 30% rally from April lows has fueled optimism, but historical patterns suggest caution is needed.
August and September are typically weak months for the stock market, and this August fits a rare but telling scenario: the year after an election during a second presidential term. There have been six such cases since 1950 — all of them negative in August, with an average decline of 3.4%.
• China has officially banned cryptocurrency trading, mining and related services, citing financial risks, concerns about capital outflow and negative impact on the environment.
• Buffett's Berkshire Hathaway (BRK) wrote off $3.76 billion of the value of its stake in Kraft Heinz - Reuters.
The agency noted that this move is an admission that a decade-long investment has not paid off.
Operating profit in the second quarter fell by 4%, to $11.16 billion from $11.6 billion a year earlier. Net profit for April-June fell from $30.35 to $12.37 billion. The volume of cash amounted to a near-record $344.1 billion.
Berkshire Hathaway's operating profit fell by 4% y/y in Q2 2025.
The company again issued a stern warning about Trump's tariffs and their potential impact on various areas of the company's business.
The amount of cash on the company's balance sheet remains at a record level: Buffett still believes that now is not the best time to buy.
In Q2 2025, Berkshire was again a net seller of shares and did not repurchase its shares.
• OPEC+ agrees to increase oil production by 547,000 bpd in September.
Saudi Arabia and its partners have agreed to increase production by 547,000 bpd next month.
The move allows OPEC+ to complete its plan to return 2.2 million barrels per day to the market a year ahead of schedule, - Bloomberg.
• S&P 500 earnings per share (EPS) growth for Q2 is +9% y/y, significantly higher than the consensus forecast of +4% at the start of the earnings season, according to Goldman Sachs. EPS growth forecast for August-26 to August-25 is +16% y/y.
• US spot Ethereum ETPs attracted a record $5.4 billion in net inflows in July.
Overall, ETPs now hold ~6 million ETH (~5% of circulating supply) worth $21.5 billion. Of that, only an estimated $1-2 billion is hedge fund arbitrage, with the rest being long-term capital - Grayscale
Inflows into spot BTC ETFs continue to slow, with aggregate inflows still hovering near record levels - Farside
• Total U.S. liquid petroleum product production in May set a new record of 20.96 million barrels per day, revised upward from the previous estimate of 20.60 million b/d, EIA said.
• In Spain, a survey was conducted among teenagers aged 12 to 16 years - it showed that many of them perceive OnlyFans as a real opportunity to earn money.
The reason is said to be advertising of models and agencies on social networks - it gets into the feeds of absolutely all users, including minors.
• Shares in Europe's largest banks have risen to their highest since 2008,
with HSBC hitting an all-time high and Barclays and Santander at their highest since the crisis.
After years of stagnation, banks are once again attracting investors amid an improving macroeconomic environment.
• Capital expenditure on AI is becoming the new “wartime economy.”
The rate of investment in this technology may even surpass the railroad in the 19th century.
• Earnings volatility: After about two-thirds of the S&P 500 companies reported earnings, the index rose 10.3%, compared with the 5% expected on June 27, according to FactSet.
• Goldman Sachs advised clients to buy copper the day before the sharp drop in prices - BBG.
• As the Fed began raising rates in early 2022, foreign private investors began buying more U.S. Treasuries despite rising hedging costs.
They are responding to higher bond yields, while demand from central banks and sovereign wealth funds is not sensitive to yield levels, - Apollo.
• Musk suggested that with the development of general AI (AGI), the world will turn into a simulation, and humans will become secondary characters.
• Berkshire Hathaway (BRK.B) reduced its cash reserves by $3.6 billion in the second quarter,
from $347.7 billion to $344.1 billion.
Of this, $243.6 billion was invested in short-term U.S. government bonds.
Key events that could impact markets on Monday:
- Swiss CPI for July.
Current Fundamental Reviews
• Democrats don't want to see Kamala Harris run for president in 2028 - Politico.
There are doubts within the party about her chances of winning both the primaries and the general election.
• Trump plans to build a grand ballroom in the White House that will cost $200 million.
The project has been criticized in the US - The Hill.
• Poland is becoming the most armed state in Europe. Today, Warsaw announced the purchase of another 180 South Korean K2 tanks — Euronews.
The contract is valued at $6.7 billion. At the same time, 61 combat vehicles will be manufactured locally. Surprising given the obvious tendency for heavy equipment to be ineffective in modern warfare.
• Prices for tobacco products in the EU will increase by 139%. The EU plans to increase the minimum excise tax: this applies to electronic cigarettes, heated tobacco, nicotine pouches and other products. In Ukraine, the corresponding price increase is expected gradually in the period from 2026 to 2028.
• India has not instructed its state-owned refineries to stop buying oil from Russia, Bloomberg reports.
However, the agency's sources say the refineries have been instructed to develop plans to buy non-Russian oil.
India Pays a High Price for Friendship with Russia: Trump Starts Getting Closer to Pakistan
Relations between the US and India have deteriorated sharply due to Trump’s introduction of 25% tariffs and threats of sanctions for purchasing Russian oil.
Analysts predict that New Delhi will take a tougher stance in its dialogue with Washington and will seek greater strategic autonomy.
• Congresswoman Marjorie Taylor Greene spoke out against Washington's continued funding of the conflicts in Ukraine and Gaza,
saying that further U.S. involvement in the conflicts could lead to a loss of voters for the Republican Party.
• NATO is considering the deployment of a corps of troops near the borders of the Russian Federation. If the decision is positive, the forces will be based in the Estonian city of Pärnu.
• A multi-thousand-strong rally for the release of hostages at any cost took place in Tel Aviv.
According to various estimates, between 10,000 and 60,000 people gathered at the so-called “hostage square” near the Tel Aviv Museum of Fine Arts.
• Elon Musk reportedly spent $21 billion of the US budget on cutting costs.
His DOGE (Department of Government Efficiency) was supposed to optimize government spending, but instead 20,000 officials were sent on an 8-month leave, and some were even paid not to work.
This is a well-known practice in the US when laying off contract workers early - one-time payments can exceed the short-term effect of savings on salaries.
• In Germany they joke that the temperature in the country is +40, but after all taxes and deductions it is +15.
• FBI hid Trump's name in Epstein case documents - Bloomberg.
The US Federal Bureau of Investigation has redacted some documents in the child sex trafficking case involving financier Jeffrey Epstein.
• India won't give up Russian oil despite Trump's threats.
Indian officials said the country will continue to buy cheap Russian oil despite Trump's talk of possible sanctions.
• New UN report says almost no one reads UN reports - Reuters
• Musk called on Ireland and other EU countries to leave the bloc.
"All countries should do it, in my opinion. It's destroying democracy in Europe."
• AI transparency requirements have come into force in the European Union.
Under the new rules, AI developers in the EU are required to disclose how their models work and the data used to train them. Models that are considered potential sources of risk must document security measures. The innovations are aimed at protecting intellectual property and the rights of authors and content owners.
• German companies are dissatisfied with their new staff: some cannot read or write.
According to a survey by the Federal Association of Chambers of Commerce and Industry (DIHK), more than a quarter of companies (26%) plan to reduce the number of vocational training programs in 2025 - the economic crisis in Germany has also affected this area. But it is not just the economic situation. Almost half of those surveyed said that they were unable to find suitable candidates for vacancies in their companies last year.
• Fed Governor Lisbeth Kugler has announced she is leaving her post at the central bank.
Trump: 'Kugler resigned over disagreement with Powell.'
Trump says jobs data was 'rigged' to make him look bad
'The jobs numbers are now being compiled by a Biden appointee. I have instructed my team to fire her.'
• The labor market is not as bad as the NFP shows, - WSJ analyst.
The index of total weekly wages, a good indicator of nominal income growth, rose by 5.3% y/y in July (compared to 4.5% in June).
This was due to an increase in the number of hours worked with a stable increase in hourly wages. During the year, this indicator fluctuated in a fairly narrow range - between 4.5% and 5.3%, which is in line with the norms typical of the pre-pandemic period.
And the three-month annual dynamics, which was quite volatile, recovered to 4.6% in July - after declining to 2.8% in June, the lowest level for the entire post-pandemic period.
• Is the U.S. on the Verge of a Debt Spiral? — Fidelity.
Government spending has risen from $500 billion to $1.2 trillion since COVID. The only way to avoid a budget squeeze is to continue to run deficits. But that's the path to a debt spiral.
• Japan has addressed a similar situation with zero rates and yield curve control (YCC), limiting debt servicing costs to 4% of GDP. The US could see a similar scenario in 2026 with new Fed leadership.
• The probability of human extinction due to artificial intelligence is at least 95%.
This was stated by the head of the non-profit organization Machine Intelligence Research Institute, Nate Soares, who previously worked at Microsoft and Google.