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Russia has officially withdrawn from the grain agreement, which means the guarantees of safe navigation and the humanitarian maritime corridor in the northwest of the Black Sea have been canceled.
However, there is a glimmer of hope as the Kremlin is open to reconsidering the agreement if their demands are met. The President of Turkey has also expressed optimism about extending the agreement.
In the meantime, the Russian Ministry of Defense will view all vessels heading to Ukrainian ports in the Black Sea as potential carriers of military cargo.
Shifting to monetary policy, the Federal Reserve is cautious about repeating the mistakes of the 1970s when hasty revisions to monetary policy led to stagflation in the economy.
Thus, although inflation in the United States fell to 3% year-on-year in June, compared to 4% in the previous month (as the economic calendar suggests), talk of ending the cycle of rate hikes has yet to begin.
Surveys conducted by BofA, Goldman Sachs, and JP Morgan indicate that asset managers also believe the regulator still needs to be done with its tightening campaign.
The concern is that inflation could rise again due to various risks, such as increasing energy prices, an overheating labor market, rental growth, and the emerging threat of a food crisis.
The only problem is that rising borrowing costs have already led to a sharp increase in bankruptcies among large companies – the second fastest since 2008.
Ultimately, these factors could increase tensions on Wall Street, potentially slowing economic growth and straining credit markets still recovering from significant losses.
Finally, according to Refinitiv, 75% of companies reported actual earnings per share above forecasts, slightly below the 5-year average of 77% but above the 10-year average of 73%.
For Q3, growth of 0.1% is expected, while the Q4 is projected to grow more strongly at 7.5%. As for the whole of 2023, modest earnings growth of 0.1% is forecast.
