Category: Newsletter

Bond yields climbed to multi-decade highs as oil stayed above $100 amid Gulf attacks and hurricane-related supply risks, stoking inflation concerns. US stocks ended higher for the week, but a wobble in AI-linked shares exposed narrow market leadership. Meanwhile, renewed Saudi-Houthi fighting raised fresh risks to regional security and oil flows.

Markets turned a soft September jobs print into relief, as just 29,000 jobs added and a 4.2% unemployment rate slashed October Fed hike odds to 14%. Yet Treasury yields held near 24‑year highs and oil hovered around $100, keeping inflation and December‑hike risks firmly in focus for investors.

Markets digest a hawkish Fed echo as 10‑year yields breach 5%, while oil’s wild ride driven by Hormuz tensions and ceasefire hopes keeps inflation and rate expectations on edge. A Trump–Xi truce and AI‑led tech rally support risk assets, but this week’s PCE and jobs data will test conviction.

A Middle East escalation reshapes rate paths as the Fed, BoE, and BoJ all tighten amid oil-supply fears. Frontier AI’s “pace the frontier” accord triggers legal pushback and a semiconductor shakeout, supporting short-duration bonds, tactical gilts, and gold.

Markets confront a synchronized hawkish turn: the Fed, ECB and BOJ are all tightening together for the first time since before the 2026 easing cycle, with a ~90% probability now priced for a Fed hike on 16 September. Front-end Treasuries selloff and gold posts a third straight weekly decline as rising real yields outweigh geopolitical risk. Oil prices remain supported, pending resolution of the conflicts in the region. Concerns raised by CEOs of the major AI frontier companies regarding risks of AI will also be watched closely.

Markets shifted focus from earnings to macro as a blow‑out August jobs report (162k payrolls; 4.1% unemployment) lifted odds of a September Fed hike. US indices were flat to slightly lower, while oil surged on US‑Iran tensions and Treasuries sold off; gold lagged as real yields climbed.

U.S. markets closed the week higher as exceptional Q2 earnings S&P 500 profits up 52%, the strongest since 2021—offset a hawkish Jackson Hole speech from Fed Chair Kevin Warsh that lifted rate‑hike bets and Treasury yields. Geopolitical risks in Iran and U.S. debt concerns kept volatility elevated, with investors now focused on incoming inflation and labor data.

Markets confront a Treasury–Fed tug-of-war as Scott Bessent’s aggressive yield-capping fades and Chair Warsh’s independent stance dominates ahead of Jackson Hole. Divergent signals from resilient PMIs to Walmart’s soft guidance, plus Iran-driven oil and gold strength, set a cautious tone into Nvidia’s Q2 results and Warsh’s Friday keynote.

Markets digest cooling inflation and softer spending as the Fed’s September hike odds recede, while Nvidia’s $500bn AI financing pact with Wall Street giants reinforces tech leadership. Gold and oil gain on geopolitical premiums, even as Treasury yields decline and equities log another weekly advance.

Softer July payrolls and downward revisions eased expectations for a September Fed hike, while moderating wages and lower oil prices supported duration, gold, and rate-sensitive equities. Strong earnings and AI-led semiconductor gains propelled U.S. stocks to records, reinforcing a constructive risk backdrop ahead of CPI; sticky inflation remains a threat.