Ten Stories Moving the Market

Ten Stories Moving the Market:

U.S. President Donald Trump said his representatives remain in contact with Iranian officials over peace negotiations; Trump said Iran still wants a deal but factions keep breaking it – Fox News. (Why you should care – Trump said the attacks will continue until Iran returns to the negotiating table)

U.S. President Dondald Trump told Israeli Prime Minister Benjamin Netanyahu that Israel should start redeploying its forces out of Syria and urged him to do the same in Lebanon, according to U.S. and Israeli officials – AXIOS. (Why you should care – the removal of Israeli forces from Lebanon has been a repeated request from Iran)

The U.S. is advancing talks for a pipeline that would carry oil from Iraq to Syria, a route that avoids the Strait of Hormuz and would reduce Iran’s future leverage over global energy supplies – Bloomberg. (Why you should care – reduced dependence on the Strait would mean a steadier global oil supply)

U.S. President Donald Trump reimposed a naval blockade of all Iranian ​ports and threatened to hit power plants and bridges next week unless Tehran resumes negotiations; the U.S. also began a fresh round of strikes "to continue ‌degrading Iranian capabilities used to attack commercial shipping in the Strait of Hormuz," the U.S. military – Reuters. (Why you should care – the U.S. said the strait is open to all shipping traffic except Iran)

With the U.S. and Iran slugging it out over the Strait of Hormuz again, each nation is running out of time to achieve its goals; President Donald Trump would prefer a resolution before the November midterm elections and before oil prices surge back to painful levels for Americans – WSJ. (Why you should care – Iran is hoping it can outlast another crippling attack in addition to a naval blockade that threatens to devastate its economy)

China’s economy slowed more than expected last quarter to the weakest in more than three years; gross domestic product growth of 4.3% was below the bottom of this year’s official target range of 4.5% to 5% – Bloomberg. (Why you should care – the weaker-than-expected data is likely to encourage stimulus measures from Beijing)

Federal Reserve Bank of Chicago President Austan Goolsbee, suggested the case for a near-term interest rate hike may have weakened but is by no means dead; Goolsbee called the report "surprisingly benign" and "encouraging," but said he would be “feeling a lot better" if there were several months more of such reports – Reuters. (Why you should care – the comment suggests Goolsbee wouldn’t favor interest rate changes at the upcoming policy meeting)

Federal Reserve Chairman Kevin Warsh pledged to lawmakers that the Federal Reserve will bring inflation down, saying members of its rate-setting committee “have no tolerance for persistently elevated inflation” – Bloomberg. (Why you should care – Warsh gave few hints on what changes he might make to battle inflation, saying policymakers need to be more circumspect in communications)

U.S. consumer inflation slowed more than expected in June as energy prices retreated; the Consumer Price Index rose by 3.5% in June compared to the 4.2% jump in May – Reuters. (Why you should care – while oil prices have rebounded on increased Iran tensions, they’re still well below the May peak)

Recent productivity growth has been especially strong in the three most AI-exposed sectors: information, finance and insurance, and professional and technical services; U.S. labor productivity has grown at an annualized rate of 2.4 percent since the beginning of 2024, compares to average productivity growth of 1.6 percent in the five years before the pandemic – Dallas Fed. (Why you should care – these three sectors account for just 16% of U.S. hours worked, yet have driven 40% of total productivity gains since 2024, a preview of what broader AI adoption could mean for the rest of the economy)

Economic Calendar:

Earnings – ASML, BLK, BK, BNY, FTB, JNJ, MS, MTB, PGR, PNC, UAL

Sweden – CPI for June (2 a.m.)

Euro Area – Industrial Production for May (5 a.m.)

U.K. – BoE’s Pill (Chief Economist) Speaks (6:30 a.m.)

U.S. - MBA Mortgage Applications (7 a.m.)

U.S. – PPI for June (8:30 a.m.)

U.S. – NY Empire State Manufacturing Index for July (8:30 a.m.)

Fed’s Williams (New York, Voter) Speaks (8:45 a.m.)

Bank of Canada – Monetary Policy Announcement (9:45 a.m.)

U.S. - Energy Information Administration Crude Oil Inventory Data (10:30 a.m.)

BoC’s Macklem (Governor) Speaks (10:30 a.m.)

ECB’s Nagel (Germany) Speaks (12 p.m.)

Fed’s Cook (Board Member, Voter) Speaks (1 p.m.)

Treasury Auctions $70 Billion in 5-Year Notes (1 p.m.)

Fed’s Beige Book (2 p.m.)

Bank of Korea Monetary Policy Announcement (9 p.m.)