US stocks climbed to new highs this week with the small cap Russell 2000 index leading the gains on expectations for a rate cut at the September meeting of Federal Reserve policymakers.
Futures markets priced in more than a 90% chance of a quarter of a percentage point cut to official rates after Treasury Secretary Scott Bessent told Bloomberg Surveillance that rates are too restrictive and should probably be 1.5% to 1.75% lower.
Consumer price inflation released on Tuesday (12 Aug) showed a 0.2% month-on-month increase, matching forecasts while the yearly rate held steady at 2.7% against 2.8% expected, giving stocks and bonds a boost.
Hotter than expected producer prices on Thursday (14 Aug) reminded investors that a rate cut was not necessarily a formality. The producer price index for July came in at 0.9%, much higher than the 0.2% forecast by economists.
All eyes now turn to today’s retail sales report which will drop before US markets open with the consensus looking for a 0.5% month-on-month gain, against a 0.6% rise in June.
BULLISH (BLSH)
In a sign of the times, the latest hot IPO (initial public offering) on the New York stock exchange is a cryptocurrency exchange by the name of Bullish (BLSH:NYSE).
On the first day of trading (Wednesday), shares in Bullish closed up 84% at $68 having at one point traded at around $118 or more than three times the $37 IPO price.
Investor demand for the Peter Thiel-backed vehicle was more than 20 times the amount of stock offered in the $1.1 billion financing, which happened to coincide with both Bitcoin and Ether trading close to their all-time highs.
According to the SeekingAlpha website, Ether appears to have gained the upper hand over Bitcoin of late as ‘surging’ spot ETF inflows and corporate treasury buying drive a sharp shift in demand.
Big winners from the Bullish IPO, apart from the short-term traders who were lucky enough to be allocated stock, are co-founder and board member Brendan Blumer, who has the largest individual stake of 30.1% worth $3.4 billion at current prices, and fellow board member Kokuei Yuan who owns a 26.7% stake worth $3.1 billion, according to a Bloomberg report.
PARAMOUNT SKYDANCE
Shares in media giant Paramount Skydance (PSKY:NASDAQ) jumped 37% to $15 on Wednesday (13 August) after the newly-merged entity signed a seven-year deal for the broadcast rights to mixed-martial arts promotion company UFC (Ultimate Fighting Championship).
The deal, worth $7.7 billion, will start in early 2026 and will give Paramount+ and CBS exclusive US rights to all UFC events.
Michael Morris, analyst at investment bank Guggenheim, said the deal was a ‘catalyst for growth’ signaling perhaps more deals in the pipeline for Paramount Skydance.
The UFC media rights are expected to generate around $300 million in annual advertising revenue on top of Paramount+ subscription proceeds.
Group president Jeff Shell revealed other future plans for the $8.4 billion company including developing its stalwart entertainment brands, Nickelodeon, MTV and BET while sharply increasing feature film production.
Shell told international news agency Reuters: ‘We’re thinking about the cable networks, not as declining linear assets that we need to spin off somehow. We’re thinking of those brands we have to redefine.’
TAPESTRY
A bleak outlook from US fashion firm Tapestry (TPR:NYSE) sent its shares into a spin on Thursday (14 August), falling as much as 15% to $96.
New York-based Tapestry, which is the parent company of three major brands – Coach New York, Kate Spade New York, and Stuart Weitzman – said US trade tariffs would harm its gross margins and cost it around $160 million in fiscal 2026.
The company said it now expected revenue to grow by low single digits to around $7.2 billion, while EPS (earnings per share) are seen to be in the range of $5.30 to $5.45 against a consensus of $5.49 due to a negative impact of more than $0.60 from tariffs and duties.
Tapestry primarily makes its Coach and Kate Spade handbags in countries such as Vietnam, Cambodia, the Philippines and India, which are heavily exposed to tariffs.
The Kate Spade brand is likely to be the worst affected as most of its business is in the US, said chief financial officer Scott Roe.
The aspirational luxury firm’s warning follows other upmarket retailers such as Gucci-owner Kering (KER:EPA) and French luxury group LVMH (MC:EPA) which are also exposed to the financial impact of US tariffs.
