Signals

• Kevin Warsh signaled in a closely watched speech that the Federal Reserve may need to raise borrowing costs as early as September. • Warsh praised the overall performance and resilience of the economy, noting its ability to withstand shocks despite potential rate hikes. • The move could create tension with President Donald Trump, who previously targeted Jerome Powell for resisting rate cuts, though Trump may grant Warsh more leeway.

• PL Wealth released a report highlighting encouraging economic signals for India as it enters the second half of 2026. • Key growth drivers include the return of foreign portfolio investors (FPIs) as net buyers, recovering monsoon conditions, and a steady start to the Q1 FY27 earnings season. • CEO Inderbir Jolly stated that long-term conviction in the economy remains strong due to domestic investment, favorable demographics, and structural growth opportunities.

• Investors are facing mixed signals as private market managers' stock prices have performed poorly in 2026 despite solid returns from the underlying assets and funds. • Morningstar’s listed private equity index has shown some recovery after early-year losses, while firms like Blackstone continue to report solid earnings. • This disconnect highlights a gap between the valuation of asset management companies and the actual performance of the alternative investments they oversee.

• The US has signaled an increase in economic pressure on Iran and imposed new sanctions against Hezbollah amid stalled wartime diplomacy. • President Donald Trump has threatened "crushing economic warfare," though analysts note Iran has developed a "survival economy" to withstand long-term sanctions. • To increase effectiveness, the US Treasury suggests cracking down on clandestine trade and banking networks operating primarily through Singapore, Hong Kong, and the UAE.

• A recent surge in US long-term Treasury yields has triggered a bond market selloff, causing concern among equity investors regarding the stability of the stock market. • Technical analyst Mark and other experts identify five resilience signals, including a VIX-to-VVIX ratio of 0.17 and the continued strength of financial stocks during yield curve steepening. • Deutsche Bank strategist Maximilian Uleer warns that Brent crude exceeding $100 per barrel, combined with high long-term rates and falling inflation, would be a more critical danger signal.

• Nvidia and six major investment firms have announced a plan to channel over $500 billion (€433bn) into AI infrastructure. • The initiative establishes "compute financing platforms" using private credit, insurance funds, and institutional capital to fund the construction of data centers. • This arrangement is significant because it allows tech companies to scale their AI capabilities without loading massive infrastructure costs onto their own balance sheets.

• US stock futures remained flat or slightly weaker on Wednesday, August 12, 2026, as investors awaited new inflation data. • Market attention is centered on the US 10-year Treasury yield, which is currently near 4.7%, amid a 46% to 51% probability of a Federal Reserve rate hike in September. • High borrowing costs are creating uncertainty for interest-rate sensitive sectors, specifically utilities, real estate, and financials.