Good morning investors! US-Iran situation remains undecided as investors await economic data.
Today we cover:
What to expect this week
US-Iran situation update
AI earnings bust
📊 Economy and News
What to Expect this Week
Here’s what to keep an eye on this week:
Monday, August 10
Watch earnings from space-related names including AST SpaceMobile (ASTS), Rocket Lab (RKLB), Firefly Aerospace (FLY), and Virgin Galactic (SPCE).
Tuesday, August 11
Existing home sales for July (around 10 a.m. ET). NFIB Small Business Optimism Index also due.
Major earnings: On Holding (ONON), Cava Group (CAVA), Super Micro Computer (SMCI), CoreWeave (CRWV), Lumentum (LITE), Sea Limited (SE), plus restaurant operators such as Jack in the Box and Brinker International.
Wednesday, August 12
July Consumer Price Index (CPI) at 8:30 a.m. ET — the week’s key release. June showed a 0.4% monthly decline; markets expect a modest rebound near +0.1% month-over-month and around 3.4% year-over-year (core ~2.5%).
Earnings: Cerebras Systems (CBRS), Coherent (COHR), Cisco (CSCO), and Nebius Group (NBIS).
Thursday, August 13
July Producer Price Index (PPI) at 8:30 a.m. ET, plus weekly initial jobless claims. PPI is expected to rise modestly after June’s dip.
Earnings highlight: Applied Materials (AMAT). Other names include Birkenstock (BIRK) and related industrial/tech reports.
Friday, August 14
July retail sales at 8:30 a.m. ET (expected roughly flat to +0.2% month-over-month) and University of Michigan preliminary August consumer sentiment at 10 a.m. ET. Sentiment remains subdued after earlier lows, with consumers watching the labor market, savings rates, AI-related concerns, and tariffs. Business inventories data also due.
Global hits:
Taiwan’s 2027 defence spending to rise 16%.
China factory-gate inflation slows more than expected in July.
Spain checks 200 Italy arrivals in border controls after migration row.
Reminder: Warsh wants a Fed that plays a smaller role in markets.
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📈 Stocks
S&P 500 7,757.64 (+0.62%)
DJIA 54,036.93 (+0.28%)
NASDAQ 26,690.62 (+1.31%)
BRENT CRUDE 83.54 (+1.03%)
* Prices as of Aug 10th, 12:20 AM UTC
Trump: US “Low-Keying” Iran Pressure as Economy Crumbles
President Trump said Sunday the US is deliberately taking a restrained approach to Iran, letting economic pressure do the work instead of launching new military strikes.
“We are low-keying it,” Trump told Axios. “We are only semi-negotiating with them. We are just watching Iran with its huge inflation and the fact they have no money.”
He described Iran as being “in very bad shape,” unable to pay its troops, and said the US naval blockade has worsened the regime’s financial crisis. With oil around $75 a barrel, he noted American consumers are feeling less pain from the conflict.
“It will work out. It always works out. It’s like a chess game,” Trump added.
The comments come as Iran demands compensation, an end to sanctions and the blockade, release of frozen assets, and US troop withdrawal before reopening the Strait of Hormuz. Foreign Minister Abbas Araghchi said a temporary maritime deal with Oman is “very close,” but any final agreement needs Supreme Leader approval and will not automatically restore full commercial traffic.
Washington has indicated it would lift the port blockade once shipping resumes without obstruction. Vice President JD Vance noted progress but questioned whether Iran’s terms would be acceptable.
Interesting: New Mexico judge orders Meta to pay $567 million into a child mental health fun.
💵 Personal Finance
What Face Biggest Hit From an AI Earnings Bust?
An AI earnings bust would not automatically trigger a broad economic downturn, according to Capital Economics. The impact depends on the cause, with some scenarios mainly redistributing income rather than shrinking overall growth.
Chief global economist Jennifer McKeown outlined three possible triggers:
1. Falling AI prices from competition
Cheaper models would squeeze providers’ margins but boost adoption in sectors like financial services and healthcare. In the U.S., this would largely shift income within the economy. Effects on chip makers in Taiwan and Korea are mixed—lower model prices could still support semiconductor demand.
2. Higher input costs (electricity, commodities)
Energy exporters (Gulf states, Norway) and metals producers (Chile, Australia) would gain, while the U.S.—home to most AI investment—could see reduced data-center spending. Global activity impact would likely stay modest.
3. Weaker-than-expected demand
This poses the greatest risk. A pullback in AI investment would hit semiconductors, cloud computing, data centers, electrical equipment, and power generation. Most exposed economies: Taiwan, Korea, Mexico, China, and the U.S. Europe has limited near-term exposure.
In a severe case of permanent demand weakness due to doubts about AI’s potential, lower productivity growth would reduce output across advanced economies. The U.S., U.K., and Switzerland would face the largest long-run losses, as they stood to gain most from AI adoption.
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