Macro

Fed cuts 50bp; first real relief for frozen market

GLP-1 leaders (Lilly hitting record value) kept me euphoric early, but managed care melted down under Medicare Advantage rate cuts and rising medical costs, the Change Healthcare cyberattack disrupted the system, and Medicare's first negotiated drug prices bit;

Constellation Energy plans to restart the Three Mile Island nuclear plant by 2028, selling power to Microsoft under a 20-year agreement to support AI data centers, marking a major step in nuclear's resurgence. The $1.6 billion restart and renaming of the plant underscores growing tech-sector demand for carbon-free energy, with significant implications for grid planning and nuclear policy. The deal boosted Constellation's stock 22%, reflecting investor confidence in nuclear energy's role in meeting rising electricity demand.

The energy sector turned modestly bullish this month, driven primarily by renewed interest in nuclear power as a stable, large-scale energy source for high-demand technologies. The Constellation announcement to restart Three Mile Island to power a Microsoft AI data center signaled a strategic pivot toward monetizing clean, baseload power for energy-intensive computing, reinforcing sector confidence. This development underscored nuclear’s evolving role in meeting future electricity demand, particularly within the growing AI infrastructure ecosystem.

The July Consumer Price Index showed core inflation moderating to an annual rate of 2.5%, down from June's 2.65% and approaching the Federal Reserve's 2% target. Despite this easing, mortgage rates have risen to near 6.75% from 6.16% at the start of 2026, partly due to inflation concerns from Mideast conflict-driven oil prices. The Fed remains in a wait-and-see mode but is expected to raise short-term rates, as traders anticipate a hike by year-end to curb persistent consumer costs. The impact on mortgage rates remains uncertain, with Fannie Mae forecasting rates in the low- to mid-6% range through 2027.

Fed rate cuts aid consumer affordability

Fed begins cutting rates

The July Consumer Price Index showed core inflation moderating to an annual rate of 2.5%, down from June's 2.65% and approaching the Federal Reserve's 2% target. Despite this easing, mortgage rates have risen to near 6.75% from 6.16% at the start of 2026, partly due to inflation concerns from Mideast conflict-driven oil prices. The Fed remains in a wait-and-see mode but is expected to raise short-term rates, as traders anticipate a hike by year-end to curb persistent consumer costs. The impact on mortgage rates remains uncertain, with Fannie Mae forecasting rates in the low- to mid-6% range through 2027.

Fed cuts 50bp, easing cycle begins

A euphoric AI-capex supercycle: Nvidia's blowout earnings added record value and it passed Microsoft as the world's most valuable company ($3.3T); a July megacap rotation, the CrowdStrike outage and the Aug 5 carry-trade selloff were brief wobbles.

US election political-ad record floods TV and digital

Fed cuts 50bp and Constellation-Microsoft Three Mile Island restart deal

Fed rate-cut cycle begins; gold at records

Early-year uncertainty from the Congressional Ukraine-aid stall gave way to April's $61B supplemental, and Iran-Israel strikes, the Israel-Hezbollah war and China's Taiwan drills sustained record global demand;