Notable market news this past week (19-Jul-26)
Here is the Skeptivest roundup of the latest market headlines for the week
🌍 Geopolitical tensions return to the forefront, Kevin Warsh launches taskforces
Geopolitical tensions escalated sharply last week after the US-Iran ceasefire collapsed, with renewed Iranian missile and drone attacks prompting US strikes on Iranian military assets. President Trump subsequently reinstated a naval blockade around Iran, revoked remaining oil sanctions waivers and formally notified Congress of renewed military operations, heightening concerns overpotential disruptions to shipping through the Strait of Hormuz. The renewed conflict triggered a broad risk-off move across global markets, sending oil prices above US$105/bbl, lifting gold above US$4,000/oz, strengthening the US dollar and weighing on global equities, particularly energy-intensive sectors.
Separately, Federal Reserve Chair Kevin Warsh announced five expert-led task forces to review the Fed's communication strategy, balance sheet, inflation framework and broader policy toolkit. The inclusion of external critics advocating reduced forward guidance has prompted the Fed to streamline its policy statements and scale back long-term rate projections, fuelling uncertainty over the future path of US monetary policy. As a result, investors reassessed expectations for interest rates and quantitative tightening, contributing to heightened volatility across both bond and equity markets.
☕️ Quick fire happenings to note
🌏 Global macro
- US inflation cooled more than expected in June, with headline CPI declining 0.4% m/m and annual inflation easing to 3.5% from 4.2% in May. Producer prices also fell 0.3% m/m, marking their steepest monthly decline since 2020, as lower energy prices temporarily eased broader price pressures before renewed US-Iran hostilities drove oil prices higher in the past weeks. The first monthly decline in headline CPI in six years reinforced the disinflation narrative, prompting investors to pare back expectations of a Federal Reserve rate hike at the July FOMC meeting.
- US retail sales remained resilient in June, with headline sales rising 0.2% m/m, while sales excluding gasoline increased 0.7% m/m, reflecting firm underlying consumer demand despite lower fuel prices in the previous month. Core retail sales, which feed into GDP, rose 0.5% m/m, underscoring the resilience of US consumer spending amid elevated interest rates and supporting expectations of continued economic growth.
- China's economy grew 4.3% y/y in the second quarter, slowing to its weakest pace in more than three years and falling below the government's 4.5%–5.0% target range. The weaker-than-expected growth has increased pressure on Chinese policymakers to accelerate fiscal spending and introduce additional stimulus measures to support the economy and achieve this year's growth target.
🏦 Individual stocks/companies
- Netflix Inc (-7.13% past 5D) shares fell sharply following its Q2 earnings release, despite reporting better than expected earnings supported by resilient subscriber growth and expanding advertising revenue. Investors instead focused on the company’s softer than expected third quarter revenue guidance and signs of moderating growth, outweighing an otherwise solid quarter. The company narrowed its full-year revenue outlook and forecast Q3 revenue of US$12.86bn and EPS of US$0.82, both below markets’ expectations of US$13bn and US$0.84 respectively. The decision to reduce the frequency of viewing-hours disclosures further fuelled concerns that subscriber engagement and revenue growth may be entering a more mature phase, overshadowing continued strength in advertising and subscriber growth.
- Taiwan Semiconductor Manufacturing Co Ltd (-8.20% past 5D) shares declined over the week following its Q2 earnings release, despite reporting record quarterly results that exceeded expectations, driven by 77% surge in net profit on robust AI chip demand. The company also raised its third-quarter revenue guidance and lifted its full-year revenue growth forecast, underscoring continued strength in AI-related capital expenditure. The sell-off seems to be a classic event of “buy the rumour, sell the news,” as TSMC’s strong Q2 results failed to satisfy investors amid elevated expectations for AI-linked stocks, anxiety over massive capital expenditures increase, profit-taking and concerns over lofty valuations.
- Citigroup Inc (-8.32% past 5D) shares fell more than 4% in a single session following its Q2 earnings release, despite reporting better than expected results driven by record trading and investment banking revenues. Revenue jumped 133% y/y to a record US$641.6 million, significantly exceeding market expectations, driven by robust demand for its defence and autonomous systems. Second quarter net income surged 45% to US$5.8 billion, marking the bank's highest quarterly revenue in a decade, as market volatility and a rebound in dealmaking boosted performance. However, investors focused on management's cautious second-half outlook and higher than expected expense guidance, with Citi indicating restructuring costs would exceed previous estimates.
🇸🇬 Singapore related
- Singapore's economy expanded 5.7% y/y in Q2 2026, supported by robust AI-driven electronics demand, although growth moderated from 6.3% y/y in Q1. The expansion was led by a 12.2% surge in the manufacturing sector, fuelled by strong global demand for AI-related semiconductors and electronics, while June electronics non-oil domestic exports (NODX) soared 105.1% y/y, underscoring the strength of the sector.
