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Good morning. Following yesterday’s remarks from Fed Chair Kevin Warsh and disappointing data pointing to slowing economic growth in China, markets enter Thursday with a somewhat quieter calendar at the start of the day. The absence of major macroeconomic releases this morning shifts investor attention toward corporate news, where potentially massive mergers and tech industry reshuffling are looming on the horizon. This afternoon, however, the spotlight returns to the American consumer, as key retail sales data will reveal whether the highest interest rates in years are finally curbing demand.
Top Stories Today
- M&A speculation fuels investor imagination. Strong, though still unofficial, reports of two major deals are circulating in market circles. On one side, a consortium of Stripe and Advent International is reportedly considering a bid to acquire payments giant PayPal. On the other, signals suggest Uber Technologies is exploring a potential acquisition of European delivery player Delivery Hero. While official confirmation from either company’s board and final valuations remain absent, these reports show that large capital is still hunting for consolidation opportunities, aiming to capitalize on lower valuations in the fintech and food-delivery sectors. (Sources: financial press; market reports.)
- Apple seeks a path for AI in China. Signals from the Asian market suggest Chinese regulators may soon open the door for the rollout of “Apple Intelligence” domestically. To comply with China’s strict privacy and AI regulations, Apple will likely integrate its operating systems with local language models, including technology from Baidu and Alibaba’s Qwen model. This is a strategic move: China is one of the most important markets for iPhone sales, and the lack of advanced AI features could significantly weaken the American company’s position against dynamic local competitors. (Sources: trade press and Asian media.)
- Turbulence at IBM and shifting IT spending priorities. According to recent reports, IBM is facing pressure following signs of weaker preliminary quarterly results. From a broader market perspective, the most interesting aspect is the reason behind this: a sudden shift in enterprise customer behavior. Companies are reportedly redirecting budgets en masse away from traditional software and IT services toward rapid purchases of physical AI hardware, such as servers and memory, amid fears of shortages. This is an important signal for investors: the AI boom has its “casualties,” with capital being dynamically drained from certain tech segments in favor of hard infrastructure. (Sources: analyst reports; market reports.)
In the Background
- Moves in the European debt market. We’re seeing a narrowing of the so-called spread (the difference in yields) between 10-year German government bonds and their U.S. counterparts. Markets are increasingly pricing in the likelihood of an interest rate hike by the European Central Bank (ECB) at its September meeting, gradually pushing up bond yields across the continent.
- Bank of Korea responds to inflation. As anticipated yesterday, investor attention in Asia has centered on the Bank of Korea’s (BoK) decision. Market signals confirm a return to hikes in the key policy rate. This is a direct response to persistently high consumer inflation and elevated household debt levels in South Korea. The situation is a reminder that the global fight against inflation is far from over, with some central banks still forced to maintain a hawkish (restrictive) stance.
Worth Watching
- July 16, 2:30 PM CET – U.S. Retail Sales. Today’s key data point, as flagged yesterday. The figures will reveal the strength of consumer demand. A weaker reading could reinforce the economic-cooling scenario, giving the Fed grounds for rate cuts.
- July 16, 2:30 PM CET – U.S. Initial Jobless Claims. The weekly, fastest-moving barometer of U.S. labor market health.
- July 16, 2:30 PM CET – Philadelphia Fed Index (U.S.). A manufacturing activity indicator offering an early read on the health of U.S. industry in July.
- July 16, evening – Fed speakers (L. Logan, J. Schmid). Investors will be listening closely for clarification of hawkish signals following yesterday’s Senate testimony by the Fed Chair.
- July 17, 11:00 AM CET – Eurozone Final HICP Inflation. Friday’s data will confirm the final pace of disinflation in Europe ahead of the ECB’s upcoming decisions.
- July 20, 3:15 AM CET – People’s Bank of China (PBoC) Decision. An important event heading into next week. Given the weak Chinese GDP data reported yesterday, any cuts to the LPR rates would signal support for the country’s slowing economy.