General Market News

The U.S.-Canada trade dispute escalated sharply as President Trump warned Canadian leaders to 'fall in line' or face worse consequences, while Canadian Prime Minister Mark Carney accused the U.S. of trying to subordinate Canada. Canada is set to announce retaliatory tariffs on Tuesday in response to U.S. tariffs on approximately $20 billion worth of Canadian goods including wine, furniture, and dairy products.

• The U.S. imposed tariffs on Canadian goods and threatened to raise tariffs on Canadian cars, trucks, auto parts and steel to 50% beginning January 1, 2027
• Canada plans 'dollar for dollar' retaliatory tariffs on U.S. steel, electronics and other products, expected to take effect September 8
• Relations deteriorated after trade negotiations collapsed late Friday, with both sides blaming each other and Carney stating Canada will not accept being treated as a 'subsidiary of the United States'

Leonardo Maria Del Vecchio, son of Luxottica's late founder, is stepping down from his management positions at EssilorLuxottica effective August 31. He will leave his roles as Ray-Ban brand chairman and chief strategy officer, reportedly criticizing CEO Francesco Milleri's management style as 'distant' and 'impersonal'. The move affects one of the world's largest eyewear companies, where the Del Vecchio family holding Delfin remains the leading shareholder.

• Del Vecchio will quit as chairman of Ray-Ban and chief strategy officer, effective August 31, 2024
• He criticized CEO Francesco Milleri's leadership, describing the company as being run in a 'distant' and 'impersonal' manner
• The Del Vecchio family's holding company Delfin remains the leading shareholder in the Franco-Italian eyewear group

Online fast-fashion retailer Shein's Hong Kong IPO has been fully covered by investor demand, according to sources. The offering aims to raise up to $1.8 billion and values the company at up to $27 billion. The IPO was launched on Monday with orders coming from a number of existing investors.

• The IPO book was fully covered, indicating strong investor interest in the fast-fashion retailer's Hong Kong listing
• Shein is valued at up to $27 billion in the offering, which could raise as much as $1.8 billion
• Investor orders have come from a number of existing backers, demonstrating continued confidence in the company

The Trump administration announced plans to isolate Iran from the global economy by threatening penalties against any entity that continues trading with Tehran, potentially cutting them off from the U.S. dollar system. This move targets Iran's economic lifelines that have sustained its economy through six months of war. The policy puts the U.S. on a potential collision course with Iran's major trading partners including China, UAE, Turkey, Iraq, and India.

• China is Iran's largest trading partner, buying about 90% of Iranian oil exports (roughly $31.2 billion in unreported crude in 2025), often rebranded as Malaysian or Indonesian crude to avoid sanctions.
• The UAE had bilateral trade of around $28 billion with Iran in 2024, serving as a major financial hub, though it suspended trade last week after Iran fired ballistic missiles toward Emirati territory.
• Iraq depends heavily on Iranian energy, with a five-year contract for up to 660 billion cubic feet of natural gas annually and Iranian electricity accounting for over 30% of Iraq's generation in 2023.

Six months after U.S. and Israeli attacks on Iran triggered a major oil crisis, countries affected by various conflicts now produce over 43% of global oil supply (about 45 million barrels per day). The disruptions, combined with the Russia-Ukraine war, conflicts in Libya, and U.S. restrictions on Venezuela, have caused more than 10% of global refining capacity to go offline, driving fuel prices higher and contributing to inflation and rising government debt.

• Current Gulf oil disruption stands at 5-7 million barrels per day, with Saudi Arabia re-routing oil to the Red Sea and Gulf exporters finding alternatives to the Strait of Hormuz
• Global refining capacity has been cut by about 10%, with Ukraine targeting Russian refineries as far as 2,700 km from Ukrainian territory, forcing Russia to ban gasoline and diesel exports
• The IEA has released record volumes from emergency stockpiles to cushion the supply shock, but those releases are now largely complete even as global inventories continue to decline

Oil prices steadied around $93.50 (Brent) and $85 (WTI) after a 2% decline, as expanded U.S. sanctions on Iran create geopolitical premium despite Washington favoring economic pressure over military action. Technical analysis suggests WTI could target $100-$105 if it breaks above $90, while Brent may reach $120 if it clears $100, though risks from Strait of Hormuz shipping disruptions and depleted U.S. strategic reserves remain elevated.

• U.S. strategic oil reserves have fallen to their lowest level since 1982, intensifying supply concerns amid Iran sanctions and Middle East shipping risks
• WTI consolidating below descending trend line from April 2026 highs, with $90 breakout level seen as gateway to $100-$105 target range
• Brent showing constructive price action above $85 support, with 50 SMA crossing above 200 SMA on weekly chart signaling positive trend toward potential $120 target if $100 resistance breaks

Bitcoin rose 3.1% to $79,739 on Tuesday, approaching the $80,000 milestone as renewed institutional demand and improved risk appetite extended a rally that began last week. The surge follows a sharp 20% three-day gain driven by a short squeeze that liquidated over $4 billion in bearish positions, while spot bitcoin ETFs attracted $1.92 billion in weekly inflows, the largest since October.

• U.S. spot bitcoin ETFs saw $1.92 billion in net inflows last week, their strongest performance since October when bitcoin reached its previous cycle peak
• The rally was partly triggered by the U.S. Treasury's decision to double purchases of longer-dated government bonds, which temporarily lowered yields and boosted demand for risk assets
• Options market activity suggests growing investor confidence in the rally's durability, with traders now paying for longer-term exposure rather than just short-term gains

Chinese robot maker Unitree experienced a roughly 45% post-listing slump after its blockbuster debut, with valuation swings of $30 billion sparking concerns about AI and robotics bubble. The sharp reversal has raised questions about China's IPO listing mechanism, which analysts say distorts prices, and serves as a cautionary tale for other Chinese tech companies. Despite the hype, Unitree's first-half profit fell 53% to 40 million yuan, highlighting a disconnect between market enthusiasm and fundamentals.

• Unitree's stock surged 460% on debut (vs 226% average for Chinese IPOs over three years) before plunging, with retail investors bearing losses while early stakeholders profited
• China's IPO system allows regulatory guidance on pricing and restricts short-selling, enabling 'pump-and-dump' schemes where stocks 'worth 10 yuan can open at 100 yuan'
• The company has limited commercial success beyond attention-grabbing demonstrations, with adjusted net profit falling 53% to 40 million yuan ($5.95 million) in Q1 2026

Treasury Secretary Scott Bessent confirmed that regularly scheduled Treasury auctions will continue as planned despite the Treasury Department's announcement to expand its buyback program for longer-dated securities. The Treasury increased its maximum buyback authority from $2 billion to at least $4 billion per operation, effective September 9 through November 4, to provide greater liquidity support in the longer-dated bond market.

• The expanded buyback program doubles the floor for operations from $2 billion to at least $4 billion, allowing Treasury to respond flexibly to market conditions in thinly traded longer-dated sectors
• The timing coincides with the U.S. gross national debt surpassing $40 trillion for the first time, as higher Treasury yields increase the government's debt servicing costs
• The Treasury General Account, currently holding approximately $940 billion, may serve as the funding source for buybacks, though this would reduce the nation's cash reserves

Scotland-based power supply firm Aggreko has filed for a U.S. initial public offering, planning to list its ordinary shares on American markets. The move reflects a broader trend of power companies accessing U.S. equity markets as investors anticipate rising electricity demand and infrastructure needs.

• The IPO filing underscores increased investor interest in the power sector, with nuclear companies X-Energy and Standard Nuclear also going public through traditional IPOs this year
• Goldman Sachs, J.P. Morgan, and BofA Securities are serving as joint lead bookrunning managers, with Barclays and Morgan Stanley as additional bookrunning managers
• The offering capitalizes on market optimism around growing electricity demand and the need for new energy infrastructure investments

California's Orange County District Attorney announced a $100 million claims program for over 50,000 residents evacuated in May 2026 due to a chemical incident at a GKN Aerospace factory in Garden Grove. The incident involved a failing tank of methyl methacrylate, a flammable liquid used in aerospace manufacturing. The criminal probe has been closed, with the factory targeting a September 28 restart under a new safety plan.

• More than 50,000 residents were evacuated from the Garden Grove area following the May 2026 chemical incident involving methyl methacrylate at the aircraft window manufacturing facility
• The District Attorney's Office ended its criminal investigation and is negotiating a safety plan with independent monitoring for the GKN Aerospace plant
• The facility is targeting September 28, 2026 for full manufacturing resumption as part of the settlement agreement

US stocks closed mixed on Monday, with the Dow rising 0.26% while tech-heavy indexes fell ahead of Nvidia's earnings report. The S&P 500 dropped 0.28% and the Nasdaq fell 0.76%, dragged down by semiconductor stocks including Micron (-5%), AMD (-3%), and Broadcom (-2%). Markets are focused on Nvidia's Wednesday earnings as a key test for AI stock valuations and broader market sentiment.

• Treasury yields declined, with the 10-year falling to 4.69% and 30-year to 5.216%, as markets await Fed Chair Warsh's Jackson Hole speech Friday and July PCE inflation data Wednesday
• Semiconductor sector sold off sharply ahead of Nvidia earnings, with concerns about AI demand and political opposition to data centers after Texas Governor Abbott paused new data center approvals over grid concerns
• Geopolitical risks added pressure as Trump announced tariffs on Canadian auto imports starting January 2027 and the administration threatened expanded secondary sanctions on countries trading with Iran

Economist Steve Keen, who predicted the 2008 financial crisis, warns that the AI investment bubble will burst within a year due to unsustainable spending on data centers and infrastructure. He estimates AI companies are spending five times what they earn from sustainable users, which will lead to massive losses and bankruptcies similar to 19th-century railway bubbles. Unlike 2008, Keen does not predict a banking-led collapse but rather widespread corporate failures driven by disrupted supply chains and unprofitable AI investments.

• Companies have borrowed over $410 billion this year for AI and data center investments, with some investment-grade bonds yielding 7.23%, higher than some junk-rated debt and well above the 4.7% U.S. 10-year rate.
• Keen estimates revenue from serious AI users runs at only one-fifth of what firms are spending, and warns that GPU-based data centers become uncompetitive after 3-4 years, forcing costly reinvestment cycles that may not be justified.
• On gold, Keen warns it could fall during a crisis as investors sell to cover losses in other positions, cautioning that 'rather than hedging your bets, you amplify your risk' if leveraged investors need liquidity.

Oil prices retreated on August 24, 2026, after U.S. Treasury Secretary Scott Bessent announced plans for additional economic pressure on Iran, including threats of secondary sanctions against countries doing business with Iran. WTI crude fell below $85 while Brent declined toward $92, as traders sold the news despite ongoing geopolitical tensions. Natural gas remained range-bound near $2.80 amid strong production and high storage levels.

• Bessent confirmed the U.S. will impose sanctions on countries doing business with Iran and announced a 7.5% tariff on Chinese goods, potentially escalating trade tensions with China, a key buyer of Iranian oil
• WTI oil is attempting to settle below $85 with support at $81.50-$82.00, while Brent oil pulled back to test $92 with next support at $91-$91.50
• Natural gas continues struggling below the $2.80 resistance level despite high demand forecasts, pressured by strong production and elevated storage levels

The Trump administration announced a comprehensive global sanctions plan targeting Iran, which U.S. Treasury Secretary Scott Bessent described as 'an economic D-Day.' The administration signaled that China will not be exempt from these sanctions, indicating a broad enforcement approach that could affect major global economies engaged in trade with Iran.

• Treasury Secretary Scott Bessent characterized the sanctions as 'an economic D-Day,' suggesting an aggressive and comprehensive approach to economic pressure on Iran
• China has been explicitly put on notice that it will not receive exemptions from the Iran sanctions regime, potentially escalating U.S.-China economic tensions
• The global scope of the sanctions plan indicates the administration intends to enforce secondary sanctions on any country or entity conducting business with Iran

Treasury Secretary Scott Bessent is attempting to lower rising bond yields through various interventions, but prediction market traders remain skeptical of their effectiveness. Traders on Kalshi and Polymarket platforms are betting that 10-year Treasury yields will remain elevated or continue rising through 2026, despite temporary dips following Treasury Department announcements.

• Kalshi traders place 56% odds that the 10-year Treasury yield will end 2026 at or above 4.75%, compared to current levels around 4.70%, with only 27% probability it exceeds 5%
• Polymarket speculators give two-in-three odds that yields will breach 4.8% at some point in 2026, a level not yet reached despite recent bond sell-offs
• Treasury's announced bond buyback program and potential use of its Treasury General Account initially pushed yields lower, but traders expect the decline to be temporary with yields resuming their upward trajectory

ASE Technology Holding (ASX) is experiencing strong margin expansion in its ATM (assembly, test and materials) business, driven by record revenues and improved operating leverage. ATM revenues reached a record TWD 126.1 billion in Q2 2026, up 36% year-over-year, with gross margin rising to 27.3%. The company expects ATM gross margin to exceed 30% in Q4 2026, surpassing its previous structural ceiling.

• ATM revenues grew 36% year-over-year to TWD 126.1 billion in Q2 2026, with full-year 2026 growth expected at 35%, driven by LEAP advanced packaging and testing services
• ATM gross margin improved 5.4 percentage points to 27.3% in Q2 2026, with operating margin reaching 15.7% (up 6.2 points), and Q4 2026 margin expected to exceed 30%
• ATM now represents 66% of consolidated revenues and 94% of operating profit, up from 61% and 87% respectively in the prior year, reflecting shift toward higher-margin advanced packaging

Monetary historian Barry Eichengreen warns that US Treasury market fragility could trigger a sudden loss of confidence in the dollar, marking a shift from his previously cautious stance. Following trade policy moves in April 2025, he now sees risk of abrupt change before alternatives can emerge, despite the dollar maintaining about 60% of global reserves. Recent Treasury interventions and Fed support operations signal official concern about market stability.

• Central banks shifting away from dollars are buying Australian, Canadian, Singapore, Korean and Nordic currencies rather than euros or yuan, which together account for 75% of the dollar's lost reserve share this century
• Eichengreen now recommends investors trim Treasury holdings in traditional 60/40 portfolios and consider alternative assets like gold, as US debt appears on an 'unsustainable fiscal trajectory' with bonds no longer serving as a safe bedrock
• Recent US actions including using euros instead of dollars to support the yen and doubling Treasury buybacks signal fragility rather than confidence, with history showing 'nothing good' follows when central banks must artificially suppress rates to support government debt

JPMorgan warns that the U.S. stock rally may be entering a downturn, primarily driven by weakening conviction in AI stocks that have powered much of the market's recent gains. The firm's technical strategist sees deteriorating market internals beneath calm index levels, coinciding with historically unfavorable late-summer seasonal patterns, creating conditions resembling a topping process.

• The current rotation differs from Q4 2025: capital is moving from AI/tech into defensive sectors due to risk reduction, not economic confidence, as investors question AI infrastructure spending payoffs
• JPMorgan draws parallels to the 2000 tech bubble, noting similar patterns of excessive valuations in leading stocks and doubts about payback timelines on late-stage buildouts (then telecom equipment, now AI infrastructure)
• Market internals show weakness despite headline strength: hardware and hyperscale computing stocks struggle to reclaim resistance levels, while the S&P 500 has already pulled back 1.5% from recent highs

The US is resuming imports of Mexican cattle after a year-long ban imposed to prevent screwworm spread, with a phased reopening starting in Arizona before expanding to New Mexico. The move has drawn criticism from US cattle groups and officials as Mexico's border states continue reporting new screwworm cases, with 67 confirmed in Chihuahua since July and 2 in Sonora. Mexico is intensifying containment efforts using sterile fly dispersal in affected northern states.

• Chihuahua state has reported 67 confirmed screwworm cases since first detection in July, while neighboring Sonora reported 2 cases after its first detection last week
• Mexico recently opened a sterile-fly production facility in Chiapas, while the US is building its own plant in Texas expected to be completed by spring 2027
• The phased reopening remains contingent on Mexico's compliance with screwworm-control measures, despite concerns from US cattle groups that resuming imports could increase parasite risks