Outlook

Stocks were mixed last week as markets continued to navigate geopolitical concerns and new signals about short-term interest rates.

A hawkish Warsh speech lifts Fed hike odds, Canada records broad second-quarter gains, and Australia’s July inflation data strengthens expectations for another rate hike as September comes into view.

The most important thing heading into this week is not only the economic data and its potential impact on the Fed’s September rate decision and Treasury rates, but also Broadcom’s results

Last week, yields on bonds issued by sovereign governments around the world rose to multi-year highs, including in Japan and throughout Europe.

The number-one story in the financial markets of late has been the run-up in longer-dated Treasury (UST) yields - which have climbed back to levels not seen since before the 2007 Financial Crisis.

Recently, our national debt passed the $40 trillion mark, which is $90,000 per head. The more important question is whether the economy grows faster than the cost of servicing that debt.

US inflation data supports a Fed pause through year-end, while UK growth loses momentum and the RBA maintains a hawkish hold amid housing concerns.

Crude prices are rising on renewed geopolitical tensions triggered by President Trump threatening Oman with military strikes and communicating that he is in no rush to end the Iran war.

The most exciting thing this week is likely to be the Fed minutes. But what are the different market indicators telling us what the next few days are likely to look like?

Stocks bolted ahead last week as investors cheered the last big week of Q2 corporate reports and a Friday jobs update that put the spotlight on the Fed's next move with short-term rates.

With inflation still sticky and labor markets resilient, the bond market may force Chair Warsh toward a September rate hike unless upcoming jobs and CPI data show clearer signs of cooling.