According to the speech released this morning, Kevin Warsh will reiterate, during his first appearance before the House of Representatives as Federal Reserve Chair (8am), that the central bank's main priority remains restoring price stability and that the Committee will not allow inflation to remain at persistently elevated levels. He will also highlight that the US economy maintains solid growth, supported by a resilient labor market and the dynamism of business investment, especially in sectors linked to artificial intelligence.

Our Take

Warsh's speech maintains a firm tone on inflation and reinforces the idea that the Fed is in no hurry to modify rates. At the same time, his emphasis on reforming the institution marks a break from the prior era, particularly in terms of communication and inflation analysis.

The truce between the United States and Iran appears close to breaking after US forces reinstated the naval blockade on Iranian vessels and launched a new air strike, while Iran attacked more oil tankers transiting the Strait of Hormuz. President Donald Trump also proposed a 20% charge on all cargo crossing the strait. Brent has accumulated a gain of close to 20% since last week and trades above $86 per barrel, the highest level in a month.

Our Take

Although markets have so far navigated the breakdown of the US-Iran ceasefire without major disruptions, the escalation of hostilities and the oil price rebound do not favor the bullish scenario. Additionally, the 20% toll is an initiative we consider very difficult to implement and which, if applied, would further limit maritime traffic through this strategic waterway.

China's trade surplus widened to $125.62 billion in June, surpassing the market's expectation of $121 billion and reaching its second-highest monthly level on record. Exports grew 27% annually to a historical high, driven by global demand for chips and data center equipment linked to artificial intelligence, while imports increased 36%, their largest advance in five years. In the first half, the cumulative surplus reached $575.98 billion, slightly below the same period of 2025.

Our Take

The report reflects strong dynamism in China's foreign trade, favored by the global AI investment boom. However, the faster growth of imports versus exports also suggests greater demand for foreign inputs and goods. Going forward, the sustainability of this momentum will depend on whether technology demand remains solid and on the evolution of trade tensions with its main partners.

Corporate news

JPMorgan reported quarterly net income of $21.2 billion, or $7.70 per share, the highest figure in the bank's history, after its equity trading revenues rose 86% annually to $6.03 billion. Investment banking revenues totaled $3.28 billion, a 30% annual advance.

Goldman Sachs reported revenues of $7.42 billion in its equity trading business during the second quarter, a 72% annual advance and the third consecutive quarter of record figures for this business line. Investment banking revenues reached $3.4 billion, the highest since 2021, while the bank's total net income reached $20.3 billion, a 39% annual advance.

Bank of America surpassed market estimates with its second-quarter results, obtaining net income of $9.1 billion, representing a 26.39% annual increase. The bank's earnings per share (EPS) reached $1.21, above the $1.13 anticipated by consensus.

The increase in interest income has favored Wells Fargo's earnings, whose income grew more than expected during the second quarter, reaching $6.41 billion ($2.00 per share), compared to $5.49 billion ($1.60 per share) in the same period the prior year. Net interest income increased 5%, driven by lower deposit costs, higher loan balances and investment securities, and the impact of lower interest rates.

Citigroup increased its second-quarter earnings by 45%, driven by the solid performance of its investment banking division. Fee revenues in this business grew 44% to $1.55 billion, while total banking revenues reached $1.92 billion, 34% more than the same period the prior year. With these results, the institution recorded its best banking revenue quarter in the last decade.

International Business Machines (IBM) reported preliminary second-quarter revenues of $17.2 billion, below the consensus estimate of $17.9 billion. The CEO noted that clients redirected capital expenditure toward servers, storage, and memory given supply scarcity in the industry, which affected the company's software sales.

The to-do list

  • Follow Warsh's testimony before the House of Representatives at 8:00am — markets will be watching for any signal about the threshold that would trigger a September hike.

  • It's Tuesday, a good day to advance on the most important pending matters of the week before Wednesday's and Thursday's density arrives.

  • Today at 1:00pm the semifinal France vs. Spain kicks off, one of the most anticipated matches of the World Cup — have everything ready before midday and enjoy the duel.

  • Dedicate 20 minutes to a session of squats and crunches at home, no equipment and no excuses.

Today's quote…

"It's not about having time, it's about making time."

— Anonymous