See the ‘Market Data’ post.
Reminder: USMD will pause updates for the next two weeks, during this usually quieter period, remaining subject to market developments, and will resume on Sep 2 following Labour Day.
Good evening,
All eyes are on the Alaska Summit between Trump and Putin, which began at 15:30 New York time and could last around six hours. Trump stated he would leave the meeting if talks were not progressing and that the goal of the summit was to announce a ceasefire, emphasising that he is not negotiating on behalf of Ukraine.
Risk assets had a relatively weak Friday with the S&P 500 and Nasdaq Composite down almost 0.5% but managed to post a mild gain of ~1% week-to-date, with the small-cap Russell 2000 index as the clear outperformer. The main driver today was mixed economic data with a poor reading for the Michigan Consumer Sentiment indicator, as well as anxiety ahead of the historic event taking place in Alaska. It was an active day for Fed funds futures as the implied probability of the Fed keeping rates unchanged next month rose to 15% while traders are pricing in an 85% chance for a 25bp cut.
European and Asian stocks also ended a week of positive returns, with France’s CAC 40 advancing 2.3% and Japan’s Nikkei 225 rallying nearly 4% WTD.
Benchmark US bond yields rose again today to finish the week little changed, with 6-month Treasury Bills down 5bp to 4.07% and 10-year Note yield up 4bp to 4.33%.
Regarding tariffs updates, Trump said he would announce levies on semiconductors as soon as next week, anticipating they would begin at lower levels but increase over time.
Data: US industrial production contracted 0.1% MoM in July and showed a 1.4% annual expansion, with capacity utilisation in manufacturing declining to around 77%, still below long-term averages. Retail Sales grew by 0.5% MoM, in line with estimates and 3.9% YoY, evidence of sustained consumer resilience despite tariffs and inflation pressures. However, the Michigan Consumer Sentiment Index (Prelim) fell to 58.6 in August, down from 61.7 in July, missing estimates and reflecting a softening in sentiment. Consumers’ view of current buying conditions for durable goods plunged 14%, marking the lowest in a year.
Japan posted its fifth consecutive quarter of growth with GDP expanding by 1% annualised in Q2, well above expectations, driven mostly by strong exports ahead of Trump’s tariffs and capital expenditure (+1.3%), which also surprised analysts. The data gives the Bank of Japan more room to consider interest rate hikes later this year, especially with durables export and investment growth.
Switzerland’s economic growth slowed sharply to 0.1% QoQ in Q2, down from 0.8% in Q1 and marking its weakest pace since Q1’24, as earlier gains from frontloading ahead of U.S. tariffs unwound.
Deals: In private markets, Bill Chisholm, co-founder of STG Partners, has received NBA approval to buy a controlling stake (51%) in the Boston Celtics in a deal valuing the team at $6.1bn, with full ownership planned by 2028 at a $7.3bn valuation.
In the UK REIT sector, Unite Group Plc (mcap £3.5bn) will acquire Empiric Student Property (mcap £620mn) in an $635mn deal, with Empiric investors set to hold 10% of the merged company, valuing the combined portfolio at £10.5bn.
IPOs: Kyivstar Group, Ukraine’s largest mobile operator, saw its shares drop 17% from the deal price on its Nasdaq debut. It raised $178mn through a SPAC merger with Cohen Circle, having targeted up to $200mn, and now has a market cap of ~$2.6bn.
Week Ahead:
Earnings: BHP, Palo Alto Networks, Home Depot, Salesforce, TJX, Target, Analog Devices, Walmart and Intuit.
Data: inflation updates in Canada, Japan and the UK; Aug Prelim PMIs in G7; retail sales in the UK.
Central Banks: China’s Loan Prime Rates, Sweden’s Riskbank, and New Zealand’s RBNZ hold policy meetings on Wednesday.
Enjoy your weekend, see you soon.
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