Written Commentary
ADM Reports Second Quarter 2026 Results
August 4, 2026
Middle East stalemate prompts renewed sentiment pendulum swing; digesting hawkish RBA rate hold, UK BRC Retail Sales, upward revision to Singapore Q2 GDP and outlook; US NFIB survey, Existing Home Sales and Coreweave earnings.
- USA: time to stand back and take stock of unintended consequences of US policies?
EVENTS PREVIEW
Once again, the pendulum of market sentiment is swinging away from optimism about a resolution to the Persian Gulf conflict, even if in reality the situational stalemate has not materially shifted for some months, and markets are in effect expressing their preference for Pavlovian reaction function to the cacophony of ambiguous and/or contradictory headlines and political soundblasts.
The day’s agenda of regular macro events is modest, with UK BRC Retail Sales, Singapore’s upwardly revised Q2 GDP and 2026 GDP forecast upgrade and a hawkish RBA rate hold to digest, and only the US NFIB survey and Existing Home Sales ahead, neither of which is likely to occupy markets for more than a passing moment. Coreweave is the highlight of the US earnings run, but AI/Tech market chatter will more likely focus on Intel’s upsized $20 Bln secondary offering, and the latest AI compute buildout deal between Nvidia and Wall St finance behemoths, the latter putting some renewed wind in the sales of tech sector equities, even if the modus operandi of such financing were undisclosed.
Perhaps the most underdiscussed topic of the moment is how the current US administration’s frequently unilateral actions at home and above all abroad, which are intended to assert its power, are in fact exposing the often quite acute limitations and other vulnerabilities on its ability to turn political bluster into action that achieves objectives. For historians who would acknowledge that the world is in a very different place to a 100 years ago, there are some echoes of the demise of the British Empire – perhaps most notable is the erosion of what has been a world dominating military industrial and financial complex. China’s emergence of the past 30 years is a contributing factor, but while its ability to dominate global trade has been impressive, the weakness of its domestic economy (in sharp contrast to the US, and previously the UK) is a major Achilles heel.
Be that as it may, even if one has to point to a huge misjudgement in waging a war on Iran to force it to give up on its nuclear ambitions, and a hope that this would also drive regime change, it is clear that its defence complex has not been able to maintain supplies of ordnance to wage wars on multiple fronts, per se undermining the credibility of its rhetoric. It has also created a problem in the Strait of Hormuz, long recognised as a major vulnerability in energy supply chains, but for many a decade classified as a ‘don’t even go there’ issue for most political leaders.
Ironically, it is already rapidly reshaping and strengthening energy distribution channels in the region on a permanent basis, while also prompting many countries to undergo a major rethink on the energy security and supply chains, and the composition of their power supply. Some might say that was long overdue, and too many countries and regions have been very complacent, but in so doing this is also prompting many to reconsider their approach to renewables, per se undermining the administration’s objective of US energy dominance in the longer run (even if there have been obvious short-term gains).
Elsewhere the joint intervention with Japan to prop up the JPY not only broke accepted conventions by not informing the ECB of the decision to sell EUR rather than USD, but in so doing raised many questions about the rationale: e.g. how concerned is the Treasury about foreign sales of Treasuries, and by extension its large budget deficit, are there constraints on its FX reserves and the Exchange Stabilisation Fund?
Leaving aside the many domestic legal challenges to the various trade tariffs, US trade wars have shifted the bilateral trade balances above all with China, but the fact is that despite often sharp tariff hurdles and multitude of supply chain disruptions, global trade has in real terms gone from strength to strength, paced by rapid growth in trade between countries in the global south, with many realizing that focussing on exports to Europe and North America is not nearly as beneficial as boosting exports with other countries, be that within region or intercontinental. North America and Europe still dominate capital flows, but the sands are shifting, even if this has to be viewed as a multi-decade transition.
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This material is provided for information purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instrument. The views expressed reflect market conditions and publicly available information as of the date of writing and may change without notice. No representation or warranty is made as to the accuracy or completeness of the information. Past performance is not indicative of future results. Readers should consider their own circumstances and, where appropriate, seek independent financial advice.
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