Transcript

In Tatters. · ANGLES.

0:01
SPEAKER_00: In Tatters.
0:03
SPEAKER_00: My Weekly Market Review, July 19, 2026.
0:06
SPEAKER_00: The U.S.-Iran Ceasefire Memorandum is obviously in tatters.
0:13
SPEAKER_00: Iran closed the Strait of Hormuz,
0:15
SPEAKER_00: prompting a reinstatement of the blockade by Trump,
0:18
SPEAKER_00: who also briefly proposed an idea to create his own toll system to pocket 20%
0:25
SPEAKER_00: from all shipping traffic.
0:27
SPEAKER_00: Within 24 hours, he was forced to clumsily backtrack on this bonkers plan.
0:33
SPEAKER_00: The US carried out more airstrikes,
0:35
SPEAKER_00: prompting a resumption of Iranian attacks on multiple military targets throughout
0:39
SPEAKER_00: the region.
0:41
SPEAKER_00: Financial markets have not so far priced in any outcome other than
0:46
SPEAKER_00: the conflict being comfortably in the rearview mirror very soon.
0:51
SPEAKER_00: If the certainty behind this conviction were to begin to crumble,
0:55
SPEAKER_00: there could be an urgent need to reprice risk assets lower.
1:00
SPEAKER_00: And this significant escalation over the weekend drove up energy prices
1:05
SPEAKER_00: and interest rates and sent overseas stocks reeling on Monday,
1:09
SPEAKER_00: particularly in the highly volatile South Korean market.
1:15
SPEAKER_00: Wall Street took stock prices lower in a more orderly fashion over the course of
1:19
SPEAKER_00: the session,
1:20
SPEAKER_00: the decline led by tech and AI names,
1:23
SPEAKER_00: but without the whiff of panic that was sensed in parts of Asia.
1:28
SPEAKER_00: Sky-high expectations means
1:31
SPEAKER_00: that simply beating Q2 earnings estimates is not necessarily good enough anymore,
1:37
SPEAKER_00: and misses are being severely punished.
1:41
SPEAKER_00: As an example, Citibank and GE's stock prices fell back despite some very solid reports.
1:49
SPEAKER_00: On the other hand,
1:50
SPEAKER_00: IBM was slaughtered on Tuesday after disappointing,
1:55
SPEAKER_00: losing a quarter of its total value
1:57
SPEAKER_00: after enduring its worst one-day percentage price dive since Hey Jude,
2:04
SPEAKER_00: which just enjoyed a revival among us recently devastated English soccer fans,
2:09
SPEAKER_00: Topped the charts in 1968.
2:13
SPEAKER_00: IBM's customers are turning away from the 115-year-old juggernaut to younger,
2:20
SPEAKER_00: more nimble AI companies.
2:23
SPEAKER_00: However,
2:23
SPEAKER_00: the likes of Goldman Sachs,
2:25
SPEAKER_00: JP Morgan,
2:25
SPEAKER_00: and Wells Fargo all smashed through estimates by enough to move higher,
2:30
SPEAKER_00: in some cases, to new all-time record highs.
2:35
SPEAKER_00: CPI retail inflation for June dropped to 3.5% annualized,
2:41
SPEAKER_00: reflecting last month's fall in oil prices.
2:45
SPEAKER_00: This eased some of the fears about a Fed Funds rate hike on July 29th,
2:49
SPEAKER_00: which drove interest rates back down across the board,
2:53
SPEAKER_00: and stocks reacted positively, closing nicely higher.
2:58
SPEAKER_00: PPI wholesale inflation data released on Wednesday reinforced the CPI numbers
3:05
SPEAKER_00: by pulling back from recent highs.
3:07
SPEAKER_00: Morgan Stanley,
3:08
SPEAKER_00: BlackRock,
3:09
SPEAKER_00: and Bank of New York joined a ballooning list
3:12
SPEAKER_00: of financial firms issuing spectacular earnings,
3:16
SPEAKER_00: helping to somewhat offset market concerns about
3:20
SPEAKER_00: the chaotically deteriorating geopolitical situation in the Middle East Fueled
3:26
SPEAKER_00: by increasingly intense threats of violence from Trump.
3:30
SPEAKER_00: The indexes hugged the flatline or session and clothes little changed.
3:36
SPEAKER_00: Americans still can't stop spending,
3:39
SPEAKER_00: as shown by the retail sales release on Thursday morning,
3:42
SPEAKER_00: which was the cherry on top of a very strong week of data.
3:47
SPEAKER_00: However,
3:48
SPEAKER_00: the indexes drifted lower again over the course of the day,
3:52
SPEAKER_00: On intensifying chip and AI stock weakness,
3:55
SPEAKER_00: and a growing sense that
3:57
SPEAKER_00: an increasingly erratic trunk may be losing whatever control he felt he had left
4:02
SPEAKER_00: over the Iran war,
4:04
SPEAKER_00: and that the market's previous assumptions about a swift,
4:08
SPEAKER_00: clean end to the conflict may now need to be recalibrated.
4:15
SPEAKER_00: In a weird,
4:16
SPEAKER_00: rambling address to the nation on Thursday night,
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SPEAKER_00: Trump made wild and unsubstantiated claims about electoral fraud,
4:23
SPEAKER_00: including directly accusing China of hacking data theft and interference just
4:29
SPEAKER_00: a few weeks before his scheduled meeting with Chinese Premier Xi in Washington DC.
4:36
SPEAKER_00: He also found time to include a highly misleading plug
4:40
SPEAKER_00: for his largely unimpressive Trump child accounts.
4:45
SPEAKER_00: China remained in focus on Friday,
4:48
SPEAKER_00: With the unveiling of KimiK3,
4:51
SPEAKER_00: a potentially serious competitor to the likes of NVIDIA,
4:55
SPEAKER_00: Broadcom, OpenAI, Anthropic, and the rest.
4:59
SPEAKER_00: Asian markets dumped,
5:01
SPEAKER_00: and what had been a sell-off in chip and AI names on Wall Street quickly turned into
5:06
SPEAKER_00: a rout,
5:07
SPEAKER_00: as traders rushed to exit the exact same positions that had driven
5:12
SPEAKER_00: the major Q2 rally.
5:15
SPEAKER_00: This was enough to tip the Chipmaker stock index into official bear market as
5:20
SPEAKER_00: the Nasdaq got battered,
5:22
SPEAKER_00: not helped by a disappointing Netflix earnings report
5:26
SPEAKER_00: and subsequent share price plunge for the major index component.
5:31
SPEAKER_00: The S&P 500 got off a little more lightly,
5:34
SPEAKER_00: but still dropped to close near its lows of the day to finish up a losing week.