Market Pulse
A quiet day before a loud one. The S&P 500 slipped 0.12%, the Dow 0.08% and the Nasdaq 0.16%. Tuesday’s close left the S&P at 7,677.24 and the Nasdaq at 26,151.30, so Wednesday changed almost nothing. The only lively corner was the Russell 2000, up 0.50%. The market sat on its hands because Nvidia reported after the bell and Jackson Hole starts Friday.
July PCE showed that prices are sticky. Core personal consumption expenditures inflation, the gauge the Fed watches first, is holding at 3.3% year over year, while the headline rate drifts from 3.7% to 3.6%. An improvement? No, that is standing still for the third year running.
Gold near $4,610 an ounce, down 0.6%. The drop broke a run of three rising sessions. It traded above $4,700 in the morning and gave that back by the afternoon. When the metal falls ninety dollars in a day and nobody treats it as news, that tells you everything about the price level.
Oil is cheapening even with the Strait of Hormuz shut. WTI slid to $80.41 and settled around $80.45 a barrel. Both OPEC and the International Energy Agency cut their demand forecasts for this year, with the agency projecting a decline of 1.6 million barrels per day. Supply is squeezed and the price still falls, because demand is breaking faster than supply.
Bitcoin around $78,500. On Tuesday it crossed $80,000 for the first time since May 15 and touched $81,235, a rebound of roughly 38% from the June low below $58,000. Two engines drove it: $1.9 billion of weekly inflows into US exchange-traded funds and about $4 billion of liquidated short positions. The dollar index sits near 99, at three-month lows, in its third weekly decline out of four.
The consumer has stopped buying the story. The Conference Board confidence index fell to 89.4, the lowest since January and the second monthly drop in a row. The expectations component fell hardest, and households now see 5.8% inflation next year against 5.6% a month earlier. Petrol is holding above four dollars a gallon.
Lithuania & Baltics
About 69,000 ESO customers still have no power after the August 22 storm. At the peak more than 268,000 customers were cut off, and ESO chief Renaldas Radvila says the storm was more than a third stronger than the one two years ago. The Utena, Kaunas, Vilnius and Panevėžys regions were hit hardest, and the last customers may not be reconnected until August 29. The government declared a state-level emergency, crews from Poland’s distribution network operator join the effort on Thursday, and Litgrid, the armed forces and the riflemen’s union are also in the field.
ESO will compensate direct losses where supply was not restored within 72 hours. Under a simplified procedure each private customer can receive up to 220 euros: a fixed portion of about 45 euros plus 1.05 euros for every hour of delay. Applications open on September 1 through self-service, email or ordinary post. Gitanas Nausėda summed the storm up briefly: we saw our weak points.
Armed forces chief Raimundas Vaikšnoras says the United States is keeping its word and troops are on the way. More than a thousand American soldiers served in the summer rotation, some of them stayed, and the advance parties of the next rotation have already arrived. He named no exact numbers or dates. At the same time a fifth group of Lithuanian border guards left to help secure Latvia’s frontier with Belarus, while the State Border Guard Service itself is left without a head.
Vilnius will spend 1 million euros improving shelters, and the city council approved a 36 million euro Nordic Investment Bank loan guarantee for the utility company Grinda. Mindaugas Matukonis was appointed deputy commander of the Riflemen’s Union, and the government, trying to contain rising biofuel prices, promises to increase supply.
Europe
European Council President António Costa spoke about hybrid threats in Vilnius. After meeting Gitanas Nausėda he said the Union must be ready for a joint response by 2030 and that every member state is working toward it together with the Commission. The plan exists and the deadline exists, while the balloons and the drones are flying today.
On August 24, Ukraine’s independence day, the coalition of the willing met, some thirty-four countries strong. France, Germany and the United Kingdom chaired it, and the agenda covered military aid, air defence and long-term security guarantees. The Union approved 6.1 billion euros for Ukraine at the same time.
Germany faces five state elections in a year and the polls make uncomfortable reading. In the Politico polling average the AfD leads nationally on 28%, the Christian Democrats have 22%, the Greens 14% and the Social Democrats 12%. That is the backdrop to every decision on the defence budget.
Ukraine
Volodymyr Zelenskyy warns that Russia could mobilise at least another 300,000 troops this year in an effort to finish taking the Donetsk region. By his figures Russia has lost 267,000 soldiers since the start of the year, about 155,000 of them killed.
More than 600 Ukrainian drones flew toward the Moscow region, 180 of which were shot down, according to Moscow mayor Sergei Sobyanin. Russia meanwhile is stepping up ballistic strikes on Kyiv and exploiting the chronic Ukrainian shortage of American Patriot interceptors.
Moscow says it is ready to hear new ideas. Deputy foreign minister Sergei Ryabkov added the condition that any proposal must match the situation on the ground and Putin’s position. New ideas are welcome, then, as long as they are old ones.
Geopolitics
CIA director John Ratcliffe flew to Moscow unannounced on Tuesday. Kremlin spokesman Dmitry Peskov confirmed that talks took place at the level of intelligence chiefs, that there was no meeting with Putin, and declined to discuss what was said. It is the first visit by a US intelligence chief to the Russian capital since William Burns in November 2021 and the most senior Trump administration trip there since January. Donald Trump himself called the mission semi-routine, and Nausėda said Vilnius knew about it.
Trump believes Iran’s supreme leader Mojtaba Khamenei is alive. In a radio interview he said Khamenei was very seriously wounded, with damage to the left side of his body, the arm and the leg. His father Ali Khamenei was killed in a strike in February, the son was named successor in March, and he has not appeared in public once since. While he is absent the decisions are made by Revolutionary Guard veterans, and those are the people Washington would have to negotiate with over Hormuz.
Seven people died in a fire at a chemical plant in Russia, and floods in Nepal have killed 95, with hundreds still unreachable.
Central Banks
The Fed has held rates at 3.50–3.75% for a fifth consecutive meeting, and in July three committee members dissented in favour of a twenty-five basis point hike. Traders no longer expect deep cuts this year and some are already weighing an increase. The Jackson Hole symposium runs August 27–29, and on Friday Kevin Warsh speaks there as chair for the first time, having led the Fed since May 22. The official theme is payments innovation. The questions will be about inflation.
The US Treasury is doubling its bond buybacks at the same time, and that is what pushed yields down last week and lifted riskier assets along with them. The European Central Bank has already finished its cycle, and swap pricing suggests its next move is more likely up than down.
IPO Radar
Anthropic leads the race to the public market. The company raised 65 billion dollars at a 965 billion dollar valuation, filed confidentially on June 1, and its debut is expected around October 26. Its annualised revenue at the end of July reached 65 billion dollars, and adjusted operating income turned positive. OpenAI filed a week later, on June 8, but its debut is not expected until around the middle of 2027. Goldman Sachs and Morgan Stanley are leading both deals.
What to Watch Tomorrow
Nvidia’s results and third-quarter guidance. Around 92 billion dollars of revenue and 2.09 dollars of earnings per share are expected, almost double a year ago. The guidance matters more than the quarter just gone, because it is calculated without sales to China.
The opening of Jackson Hole and Warsh’s speech on Friday. Three committee members already voted for a hike in July, so every sentence about tolerance for inflation will be read as a signal for September.
The pace of ESO’s restoration work. Either those 69,000 customers fall to zero by August 29, or the compensation list grows longer.
The follow-up to Ratcliffe’s visit. Either the intelligence channel produces a public diplomatic step, or the whole thing stays a semi-routine trip.
Oil and Hormuz. WTI near 80 dollars with the strait closed is a strange price, and it points either to recession or to a deal coming.
The Bear’s Take
The Fed has stood still for a fifth meeting, three of its members now want to hike, and the Treasury is doubling bond buybacks and pressing yields down. Independence? No, this is a handover of duties, and liquidity is now dosed by the borrower. Gold is holding near 4,600, bitcoin has bounced a third off its June low, and consumer expectations have fallen back to January levels. All three numbers say the same thing in different voices.
Sources
Reuters, Bloomberg, CNBC, The Washington Post, CBS News, CNN, Axios, Al Jazeera, US News, Arab News, RFE/RL, the Conference Board, Trading Economics, Fortune, Yahoo Finance, TheStreet, the Kansas City Fed, the International Energy Agency, OPEC, LRT, BNS, 15min, Alkas, ESO, Politico Europe.
These are my notes on what moved today. You make your own decisions about your own money, and the responsibility stays there too.