August 19, 2026
The stay of execution on Trump’s 50% tariffs is a definite plus for Canada but it sure did not help equities in Asia overnight where (ex-Hang Seng) there were some significant losses across the board. We have become used to volatility in Korea’s Kospi and last night was no exception with the index falling just shy of 6%. Samsung and SK Hynix were under pressure (which is basically the Kospi) with sentiment hurt by the combo of rising bond yields and concern around AI spend. There is also some likely lingering concern about South Korea’s relationship with the U.S. after the recent pullback in military drills. The Nikkei finished more than 3% lower despite a healthy rebound in Japanese machine orders while the Shanghai index fell more than 2% despite China’s robot maker Unitree Robotics IPO closing over 460% higher in its stock market debut. European bourses were mixed today with very little overall movement. Given the current backdrop that is probably a good result. I guess markets should be thankful most of Europe is out for summer holiday this month. UK PPI data was softer than expected, CPI was a touch hotter but that was almost entirely driven by household services as gas prices saw the largest increase since late 2022 with the UK energy price cap rise taking effect on 1st July (meaning the market is brushing off the slightly higher inflation number). EU Core CPI came in at 2.5% as expected as well. As government bond yields across the globe continued to test multi-year highs the U.S. Treasury Department swooped in this morning announcing it will double liquidity support buyback operations for long dated coupon securities (to $4B from $2B). Treasury yields immediately dropped, particularly at the targeted long end. The “mini-QE” program also perked up equity futures, and the Dollar Index dropped more than half a percentage point. The minutes of the July FOMC meeting confirmed most members assessed higher rates would likely be necessary if inflation did not fall, and that dissenters thought quicker action now could forestall the need for further hikes later. Bitcoin had a banner day, up over 5% and at its highest level since early June, as the White House convened a summit on cryptocurrencies with various fintech CEOs. The U.S.-Iran stalemate wore on, leaving crude futures drifting a bit higher. Moderna shares were a standout winner as the company reported compelling Phase 3 results for its melanoma vaccine developed with Merck. Big box retailer Target reported strong Q2 results, enhanced by tariff refunds, and Lowe’s beat expectations as well, though it trimmed its FY outlook due to concerns that DIY demand will remain under pressure amid household budget constraints.
* Nikkei -3.16%
* Shanghai -2.40%
* Hang Seng +0.09%
* DAX -0.14%
* FTSE +0.14%
* CAC -0.09%
* DJIA +0.22%
* S&P 500 +0.21%
* Nasdaq +0.16%
* Russell 2000 +0.50%
* BSD Global Tech Hedge Fund -0.70%