Finance

Markets had an upbeat week last week, after a chaotic stretch driven by both policy and profits. Big banks including Goldman Sachs, JPMorgan, Morgan Stanley, and Citibank reported blockbuster trading revenues, fueled by a surge in volatility following President Donald Trump’s escalating tariff moves through the spring and summer. Suggested Reading Before that, stocks and bonds briefly hit the skids after Trump once again flirted with firing Fed Chair Jerome Powell. Wall Street’s response to Trump’s Powell threat — a rapid repricing in bond markets — underscored just how fragile confidence in the central bank’s independence has become. Related Content Here’s a look at what’s to come this week: Monday, July 21 The economic week kicks off with the Conference Board’s index of leading economic indicators. In earnings, the big names are bunched later in the week — but Monday brings reports from a sprinkling of significant names, including Verizon, NXP Semiconductors, and Domino’s Pizza. Tuesday, July 22 No major economic data is on the calendar, giving markets a chance to absorb Monday’s numbers and look forward to housing and labor-market reports later in the week. On the other hand, it’s a blockbuster day for earnings, with 90 companies reporting, from Coca-Cola and SAP to Philip Morris, RTX, Texas Instruments, Lockheed Martin, and General Motors. Wednesday, July 23 The housing market takes center stage midweek, with June existing-home sales due at 10 a.m. E.T. Earnings-wise, it’s the busiest day of the week with — count ’em — 147 companies reporting. Tech giants Alphabet and Tesla headline the day, alongside T-Mobile, IBM, and AT&T. Analysts will be laser-focused on AI spending, ad revenue, and insight into search demand as AI creeps increasingly into the space from outside Alphabet’s reach. Also in the mix: Moody’s, Boston Scientific, General Dynamics, and more. Thursday, July 24 A full slate of economic data hits Thursday morning, starting with initial jobless claims at 8:30 a.m. E.T. — offering a read on labor-market strength amid much (and continued) macro uncertainty. At 9:45 a.m., the S&P flash PMIs for services and manufacturing will give an early look at July’s business activity. Then at 10 a.m., the June new-home sales report will shed more light on housing momentum, such as it may be. Earnings come fast and furious, then faster and more furious, with 100+ companies set to report. Highlights include Intel, Blackstone, Honeywell, and Union Pacific, offering a window into semiconductors, private equity, industrials, and shipping. Friday, July 25 The week ends with a look at the industrial economy, as the Commerce Department releases June durable goods orders at 8:30 a.m. E.T. Earnings will slow to a simmer, but not disappear. Notable names reporting include HCA Healthcare, Charter Communications, Aon, and Centene — a cross-section of health, telecom, and insurance that will round out a week heavy with marquee names and tech. 📬 Sign up for the Daily Brief Read More

8 ways quantum computing could change the world Here’s how quantum computing is set to reshape industries from finance to pharma with powerful real-world applications Quantum computing has long lived in the realm of theory, but now it’s entering a new era of practical experimentation and commercial ambition. Tech giants, governments, and startups are investing significant resources in unlocking the commercial potential of quantum computing, and for good reason.  These groups have their sights set on more than just the science — they want to explore opportunities for practical business use. Here’s how this once esoteric technology could redefine key sectors of the global economy, from pharmaceuticals to finance. 2 / 9 1. Accelerating drug development The research and development of new drugs is a slow and expensive process, often taking over a decade and billions of dollars. Quantum computing could change this by simulating how molecules behave at the quantum level, something traditional computers can’t do accurately. This means pharma companies could test thousands of compounds virtually, identifying promising candidates faster and at a lower cost.  Companies like Roche and Pfizer are already exploring quantum tools to speed up research and development pipelines and rapidly respond to emerging health threats. 3 / 9 2. Optimizing financial strategies The financial world runs on probabilities, predicting risk, optimizing portfolios, and detecting fraud. Quantum computers are especially good at solving complex optimization problems, such as dynamically adjusting investment portfolios, making them powerful tools for asset management and risk modeling — assessing potential financial losses based on various factors.  Major banks are investing in quantum research to explore everything from real-time trading strategies to fraud detection systems that spot subtle anomalies faster than current AI models. 4 / 9 3. Enhancing AI performance AI and quantum computing are colliding in big and meaningful ways. Classical computers struggle to train large machine learning models, especially those involving vast data sets and multidimensional variables — those with multiple attributes, dimensions, or features. Quantum machine learning (QML) could significantly accelerate these tasks by processing information in more complex ways. While QML is still in its early stages of development, companies are experimenting with hybrid systems. These classical and quantum systems work in harmony, enhancing pattern recognition, reducing training time, and enabling the creation of smarter AI tools with less data. 5 / 9 4. Transforming supply chain logistics Supply chains can be challenging to manage due to delays, fluctuations in demand, and inefficiencies in routes, which can result in significant costs for businesses. Quantum computing’s ability to process massive datasets simultaneously makes it well-suited for logistical optimization, whether it’s planning delivery routes or managing inventory in real time. Retailers and logistics firms already are testing scenarios where quantum systems might cut fuel use, shorten delivery windows, and improve demand forecasting — the process of predicting how much of a product or service customers will want in the future — across global supply networks. 6 / 9 5. Reinventing materials science At the atomic level, creating better materials involves understanding how electrons interact — specifically, how they move and influence one another within atoms and molecules. This task is so complex that it exceeds the limits of current supercomputers, which are highly powerful computers designed to perform complex calculations and process large amounts of data at high speeds.  Quantum simulations could handle this complexity and simulate these behaviors more effectively, helping researchers design lighter aircraft alloys, stronger industrial materials, or more efficient battery chemistries. For instance, NASA and leading energy companies are investing in quantum computing systems — hardware and software designed to run quantum algorithms — to discover new materials that could reduce emissions or enhance performance in extreme environments. 7 / 9 6. Securing data encryption Ironically, quantum computing poses one of the biggest threats to data security, yet it is also one of its best defenses. Powerful quantum computers could eventually break widely used encryption methods like Rivest-Shamir-Adleman (RSA), which cover everything from email security to cryptocurrency protection.  To prepare for this, experts are developing quantum-safe encryption methods — algorithms designed to stay secure even if quantum attacks are possible. Tech firms and cybersecurity providers are working to test and implement these new standards before large-scale quantum systems are built. 8 / 9 7. Supporting climate and energy modeling Modeling complex climate systems or predicting future energy demands involves a huge number of factors. Quantum systems can simulate these interactions far more efficiently than classical models, enabling scientists and policymakers to understand and potentially address some of the most pressing environmental challenges.  Quantum computing could optimize power grids, model carbon capture strategies, or identify the most effective renewable energy deployments for a given region. 9 / 9 8. Powering national defense and aerospace Quantum radar, secure satellite communications, and complex battlefield simulations are examples of how defense agencies see quantum computing as a way to gain a technological advantage.  Quantum radar, for example, could detect stealth aircraft by using entangled particle pairs — pairs of particles connected in a way that lets them reveal hidden objects traditional radar might miss. Quantum-enabled encryption could also make military communications harder to intercept or break. Agencies ranging from the U.S. Department of Defense to NATO are funding research into these capabilities, recognizing the potential strategic benefits quantum computing could provide. Read More

Federal Reserve Governor Christopher Waller said Thursday that he wants the central bank to cut interest rates at its next meeting, saying the labor market could “deteriorate” if it doesn’t.  Suggested Reading “I believe that the Federal Open Market Committee should reduce our policy rate by 25 basis points at our next meeting,” Waller said in a speech at the Money Marketeers of New York University.  Related Content Waller said that while the labor market “looks fine on the surface,” downside risks are rising. “We should not wait until the labor market deteriorates before we cut the policy rate,” he said.  Pointing to slow growth in the private sector compared to payroll gains in state and local government, Waller said that “private payroll data are being overestimated” and will change after the benchmark revision in early 2026. Taking in account for expected changes to this data, Waller said private sector gains in June were “much closer to zero.”  “This is why I say private-sector payroll gains are near stall speed and flashing red,” he said. “Looking across the soft and hard data, I get a picture of a labor market on the edge.”  Citing other reasons for his recommended rate cut, Waller said that tariffs don’t pose a lasting impact to inflation, only a “one-off increase” causing a “temporary surge.”   He added that the policy should be “close to neutral” and “not restrictive.”  Considering an expected “soft” GDP growth number combined with an unemployment rate at 4.1% coupled with inflation close to the Fed’s target, he said the data implies that “the policy rate should be around neutral, which the median of FOMC participants estimates is 3 percent, and not where we are—1.25 to 1.50 percentage points above 3 percent.”  Waller isn’t typically “a politically motivated character,” making his “strong view” on the Fed rate important “in that context.,” said W. Brad Bechtel, Global Head of Jeffries FX, on Friday. “Pretty strong view from Waller as the Fed gets close to entering their blackout period before the next meeting.” “We continue to expect three consecutive 25bp cuts this year at the September, October, and December FOMC meetings. We expect two additional 25bp cuts in 2026 for a terminal funds rate range of 3-3.25%,” economic researchers at Goldman Sachs said Thursday. “The economy is still growing, but its momentum has slowed significantly, and the risks to the FOMC’s employment mandate have increased,” Waller said.  President Donald Trump this week again floated the idea of firing Federal Reserve Chair Jerome Powell. The reaction was immediate: bond yields jumped, trading volume spiked to levels not seen since April’s “Liberation Day” tariff announcement.  —Catherine Baab contributed to this article. 📬 Sign up for the Daily Brief Read More

A triple play will soon hit the credit scores of millions of Americans — medical debt, college loans, and to a lesser extent buy-now-pay-later plans will all be reflected in credit reports. Credit scores could end up being 20 or more points lower, according to financial experts, making it more difficult to finance mortgages, car loans, and apply for credit cards at a time when the U.S. economy is already showing signs of slowing. “There are 45 million people with student loan debt and 15 million with medical debt. It’s highly likely that there is some overlap there,” said Adam Rust, director of financial services for the Consumer Federation of America. “People are really facing a perfect storm here.” On July 11, U.S. District Court Judge Sean Jordan of Texas — appointed by President Donald Trump — vacated one of President Joe Biden’s last acts, a rule put in place by the Consumer Financial Protection Bureau (CFPB) in January that would have removed medical debt from credit reports. The Consumer Data Industry Association and the Cornerstone Credit Union League challenged its validity, and the court sided with the industry groups, determining that the rule exceeded the CFPB’s authority under the Fair Credit Reporting Act, which protects information collected by consumer reporting agencies. Although the three national credit reporting agencies — Experian, Equifax and TransUnion — announced last year that they would remove medical collections under $500 from consumer credit reports, the CFPB rule would have removed roughly $49 billion in medical bills from the credit reports of an estimated 15 million Americans. The Bureau estimated that, as a result, the credit scores of people burdened by medical debt would have increased by about 20 points, and that in turn would have helped get about 22,000 additional mortgages approved every year, the CFPB said. The medical debt change comes just two months after a decision in May by the Department of Education to restart collection of college loans, suspended during the pandemic. Federal student loan debt now tops $1.6 trillion, spread across more than 43 million borrowers. Borrowers who fail to resume payments could face seized tax refunds and wage garnishment. Of the two types of debt, it is college loans that will likely have the greater impact, and cause real chaos for consumers, said Kevin King, vice president of credit risk for LexisNexis Risk Solutions. Many banks exclude medical debt from their credit worthiness formulas because “to punish a consumer for struggling to meet a financial obligation that they didn’t sign up is pretty difficult to justify,” he said. “College loan delinquencies are harder to dismiss,” even though many borrowers had delayed payments over the last few years because of constantly changing rules on repayment. As of April, 31% of federal student loan borrowers are 90 days or more past due, according to TransUnion. Close to 2 million of those borrowers are expected to hit default status this month, and another 3 million people are on track to default by September. More than two million borrowers have already experienced credit score declines of at least 100 points, a New York Federal Reserve report said. On average, delinquent borrowers have lost about 60 points from their credit scores. Then in June, the major credit reporting firm FICO announced that, starting this September, it will incorporate “buy now, pay later” (BNPL) loan data into its scoring models. Payments for these plans are not typically reported to credit bureaus, so missing one does not impact credit worthiness, and industry experts do not expect the change to have a significant impact on consumer credit scores in the short term. However, their popularity has skyrocketed since the pandemic. A CFPB Market Report found that the number of such loans in the United States grew more than tenfold from 16.8 million to 180 million from 2019 to 2021. In terms of the dollar volume, it went from $2 billion to $24.2 billion. And a Lending Tree report issued this month found that more than four in ten BNPL borrowers have late payments, up from 34% from the previous year, and 25% of consumers who rely on such services use them for everyday goods like groceries, up from 14% one year ago. “Buy Now, Pay Later loans are playing an increasingly important role in consumers’ financial lives,” said Julie May, vice president and general manager of B2B Scores at FICO, in a press release. By including these loans, “we’re enabling lenders to more accurately evaluate credit readiness, especially for consumers whose first credit experience is through BNPL products.” All these changes put lower-income consumers in a difficult position as they struggle with what is known in the credit industry as the “hierarchy of payments—i.e., which bill do I pay first? “But at the end of the day,” says LexisNexis’ King. “There are going to be fewer consumers who meet FICO scores for loans,” and that, he warned, could have a ripple effect on the economy. 📬 Sign up for the Daily Brief Read More

Artificial intelligence is already reshaping industries like finance and customer service, but Silicon Valley is setting its sights on something even bigger: superintelligence. This next evolution of AI, where companies aim to surpass the cognitive abilities of all humans combined, has not been realized. But it’s still attracting billions of dollars in investments — and stoking a growing concern: energy scarcity. Suggested Reading In a new episode of the Moonshots podcast, former Google CEO Eric Schmidt said the real bottleneck to achieving artificial superintelligence isn’t computing power or funding. It’s electricity. Related Content “AI’s natural limit is electricity, not chips,” Schmidt said. “The U.S. is currently expected to need another 92 gigawatts of power to support the AI revolution.” That’s the equivalent of building roughly 92 new nuclear power stations, a tall order in a country that’s only built two in the last three decades. The warning comes as tech giants like OpenAI, Meta, and Microsoft race to build AI experts in fields such as law, medicine, engineering, and research. Schmidt predicts this could happen within five years. The stakes are massive. As Wall Street piles into AI, drawn by its promise to automate tasks, boost productivity, and unlock new discoveries, superintelligence is seen as the ultimate prize. And the competition to reach it is fierce. Companies are now battling over top AI talent and securing massive energy contracts to stay ahead. Microsoft, for example, has already signed a 20-year power purchase agreement with Constellation Energy to restart Three Mile Island, a nuclear plant shuttered in 2019, with a target relaunch in 2028. And its latest environmental report shows another cost of current AI use: a 34% jump in water consumption to cool servers and keep data centers running, totaling 1.7 billion gallons in a single year. By 2027, researchers estimate AI workloads could consume up to 6.6 billion cubic meters of water, enough to supply all of Canada for over a year. Even Sam Altman, CEO of OpenAI, has acknowledged the energy challenge. “An energy breakthrough is essential for AI’s future,” he said last year. Altman has personally invested in Helion, a nuclear fusion startup aiming to build a pilot plant by 2028. Lawmakers are taking notice. In May, Microsoft and AMD urged Congress to fast-track permits for new energy projects to avoid overwhelming the U.S. power grid. Still, the environmental toll is raising alarms among climate groups. Greenpeace has warned that, without serious planning, AI’s growth could derail national and global climate goals — which most nations are already failing to meet. “We don’t know what AI will deliver, and we certainly don’t know what superintelligence will bring,” Schmidt said in a LinkedIn post promoting the podcast, “but we know that it is coming fast. We need to plan ahead to ensure we have the energy needed to meet the many opportunities and challenges that AI puts before us.” In other words: It’s not enough to build the brains. We’ll need to power them, too. 📬 Sign up for the Daily Brief Read More

Life at the top is proving complex for China’s leading automaker, and there are fresh challenges on the horizon. BYD Co.’s monthly sales have stagnated of late and with the summer months being a traditionally slower time for consumer purchases, that trajectory isn’t expected to reverse any time soon.  Discounting is also now being looked sternly upon by Beijing, with China last week pledging to rein in “irrational competition” in the electric vehicle sector, reflecting authorities’ wish to tackle the deflationary price wars that are threatening economic and industrial growth. Some of BYD’s international forays are also proving more challenging than expected, raising the question, is China’s No. 1 automaker on shaky ground? The Shenzhen-based behemoth currently looks like it will undershoot its annual sales target for 2025, in what would be a rare miss after a multi-year bull run. The number of electric and hybrid vehicles BYD needs to sell each month through December has hit 560,000 units, in excess of levels it could hope to achieve typically in a single month. The most vehicles BYD has ever sold in a month was just shy of 515,000, in December last year. Analysts are now doubting whether BYD can hit 5.5 million units in 2025. Consensus estimates continue to be downgraded. Deutsche Bank AG earlier this month said it now expects 5 million in wholesales, or deliveries to dealers, for this year, comprised of 4 million domestic units and 1 million overseas, while Morgan Stanley last month lowered its projection to 5.3 million, pointing to a smaller number of new models. Bloomberg Intelligence’s Joanne Chen says BYD will need to sacrifice some profit and maintain its hefty discounting in the second half if it wants to stay on track. “Regulatory scrutiny will temper direct cuts to vehicle sticker prices but competition isn’t going away and retail promotions are still needed to sustain sales momentum,” she said. “New model roll outs and steady tech upgrade are also crucial.” Bing Yuan, a fund manager at Edmond de Rothschild Asset Management, said many market watchers now realistically expect sales of around 5 million. “My sense is that is the consensus,” she said. Stripping out overseas and commercial sales, BYD’s core car deliveries in China are shrinking. In June, they slipped 8% year-on-year as vehicles from brands like Zhejiang Geely Holding Group Co., Xpeng Inc. and Xiaomi Corp. won over buyers. HSBC Holdings Plc data show that Geely was the largest gainer of market share in the first half, while BYD was among the biggest losers. Overseas sales are faring better and those are looking on target to reach BYD’s forecast of 800,000. Indeed, BYD is already almost 60% of the way there. But while higher margin international sales will help BYD offset aggressive domestic discounting, some foreign markets are presenting new difficulties. BYD has grand plans for Saudi Arabia, for example, hoping to triple its footprint after Tesla Inc. entered the country. But EVs account for just over 1% of total car sales in the kingdom, with high costs, sparse charging infrastructure and extreme temperatures challenging EV adoption. India, a potentially huge market, has meanwhile consistently blocked BYD’s efforts to expand and despite rapid growth from a low base in Europe, there are substantial tariff headwinds and increasing competition from legacy automakers that already have consumers’ trust, not to mention more extensive after-sales networks. At home, regulatory scrutiny has also intensified around BYD as it continues to be at the fore of an EV price war. In late May, it slashed prices by as much as 34%, triggering renewed sector-wide discounts. Its moves were later discouraged in a veiled warning by the Chinese Communist Party’s mouthpiece the People’s Daily, which slammed the “rat-race competition.” Whether Beijing can actually stop price discounting by a privately held company is a point of debate. Tianlei Huang, a China program coordinator at the Peterson Institute for International Economics, said authorities may resort to administrative tools such as price reviews or cost investigations to establish a de facto price floor, or coordinate a concerted capacity reduction among leading EV makers, although he acknowledged those measures won’t be easy. Regardless, BYD must be careful. As the company gears up to release first-half results later next month and July sales data within weeks, analysts will have their spreadsheets at the ready, waiting to see whether those 2025 targets look even further in the distance. Read More

Markets were little changed on Sunday ahead of a busy week for investors, who can expect another flood of corporate earnings, economic data and comments from central bankers. Meanwhile, upper-house parliamentary election results from Japan could ripple through global bond markets and jolt U.S. Treasury yields. U.S. stocks signaled a calmness on Sunday night that belied a busy week ahead that includes a flood of corporate earnings, economic data and comments from central bankers. Futures tied to the Dow Jones Industrial Average ticked up 44 points, or 010%, reversing an earlier dip. S&P 500 futures were up 0.11%, and Nasdaq futures rose 0.17%, also turning higher. The yield on the 10-year Treasury edged down 1.1 basis points to 4.42%. The U.S. dollar was flat against the euro and down 0.22% against the yen, after upper-house parliamentary elections in Japan delivered a disastrous blow to Prime Minister Shigeru Ishiba’s coalition. Earlier forecasts for a poor result for Ishiba had already sent Japanese government bond yields to multi-year highs as investors expected the election to clear the way for more government spending and tax cuts. Japan’s stock and bond markets are closed Monday, meaning U.S. Treasury yields may see a delayed response to the election later in the week. Higher Japanese yields could make U.S. debt less attractive to local investors, who have typically been big Treasury buyers. Gold edged up 0.15% to $3,363.20 per ounce. U.S. oil prices rose 0.19% to $67.47 per barrel, and Brent crude climbed 0.12% to $69.36. After big banks and Netflix reported quarterly earnings last week, more tech giants are due. Results for Tesla and Google parent Alphabet come out on Wednesday, while Intel reports on Thursday. Other big names on deck include Verizon, Coca-Cola, Lockheed Martin, General Motors, RTX, Northrop Grumman, IBM, AT&T, Honeywell, and Union Pacific. Among economic reports that are scheduled are two key housing datasets: existing home sales on Wednesday and new home sales on Thursday. They come amid growing signs of cracks in the housing market. On Tuesday, Federal Reserve Chairman Jerome Powell and Governor Michelle Bowman are due to speak at a banking conference. That’s as President Donald Trump and the White House have continued to wage a pressure campaign against Powell over rates and renovations at the central bank’s headquarters. Introducing the 2025 Fortune 500, the definitive ranking of the biggest companies in America. Explore this year’s list. Read More

The US Dollar stabilizes after intraday selloff, supported by strong US data and tempered Fed interest rate cut expectations. US Treasury yields dip from recent highs, amplifying pressure on the Greenback. The technical setup on DXY indicates fading momentum below the 50-day EMA following a breakout from a falling wedge. The US Dollar is steadying

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Gold price remains rangebound as rate expectations influence yields and bullion demand. Resilient US housing data and rising Michigan Sentiment data fail to lift the Dollar but risk-on sentiment limits gains for Gold. XAU/USD consolidation build between the $3,300 – $3,370 range. Gold (XAU/USD) is trading higher on Friday as investors remain focused on Fed