Industrial Production & Capacity Utilization

• Industrial Product (IP) and manufacturing production each rose 0.2% MoM in July after 0.3% in June; total IP stood at 103.0% of its 2017 average, 1.1% above year-earlier; capacity utilization edged up to 76.3%, 3.1pp below its 1972–2025 average. Consensus was +0.3%, and June was revised up from the originally reported +0.1%. Capacity utilization matched the 76.3% expected; manufacturing output matched at +0.2%.
• Business equipment rose 0.8% and defense and space equipment 1.8%, while consumer goods fell 0.4% (durables −1.4%, nondurables −0.1%); construction supplies rose 0.8%, materials 0.3%. Motor vehicles and parts fell 2.1%, and manufacturing ex-autos rose 0.4%. Mining rose 0.2%, utilities 0.5%.
• Capex-linked industrials (business equipment +6.6% YoY, defense +6.8% YoY, high-tech +11.8% YoY) continue to outrun consumer-facing manufacturing (consumer goods −1.8% YoY), with autos/parts a drag.

FOMC Minutes

• The Committee held the funds rate at 3.50–3.75% on a 9-3 vote, with Cleveland's Hammack, Minneapolis' Kashkari and Dallas' Logan each preferring a 25bp hike; no Board governors dissented.
• FOMC minutes revealed a broadly hawkish policy debate, with many officials indicating further rate hikes could be necessary if inflation does not continue to ease; policymakers also highlighted tighter financial conditions, including higher long-term Treasury yields, while generally viewing the labor market as balanced and discussing, but not adopting, a proposal to reduce annual Fed meetings from eight to six.
• Longer-dated Treasury yields pulled back Wednesday after Treasury announced an enlarged debt buyback operation, confounding attribution to the minutes themselves. September hike odds have collapsed to roughly 30% (CME FedWatch: 69.4% hold as of Aug 17; 68.4% hold as of Aug 20). Goldman's Jan Hatzius called a September hike “very unlikely” and market pricing too hawkish, with traders pushing the next quarter-point hike to January; J.P. Morgan Wealth Management's 25bp September base case was set weeks earlier when futures implied ~65%.

Global Flash Manufacturing & Services PMI

• The flash composite output index rose to 56.0 in August from 54.5 in July, the fastest US business growth since April 2022; the headline manufacturing PMI slipped to 53.2 from 53.9, the weakest since March, while services reached 56.8.
• The flash factory output index fell to 51.9 from 53.9, a 13-month low. S&P Global attributed the factory slowdown to fading safety-stock building that had powered goods production early in the war, and to supply chain delays lengthening again in August to one of the greatest extents in four years, blamed on shipping disruption, tariffs and thin supplier inventories.
• Manufacturers' input buying rose only slightly, the smallest increase this year. Employment grew at the fastest pace since January 2025; selling-price inflation slowed to its lowest since November while energy costs, tariffs and supply constraints kept input costs elevated; business expectations hit a nine-month high.

Jobless Claims

• Initial jobless claims, a measure of how many workers were laid off across the U.S., decreased to 206,000 in the week ended August 14, down 6,000 from the prior week.
• The four-week moving average was 204,000, up 4,250 from the prior week.
• Continuing claims — those filed by workers unemployed for longer than a week — increased at 1.799 million in the week ended August 7. This figure is reported with a one-week lag.

Fed's Balance Sheet

• The Federal Reserve's assets totaled $6.746 trillion in the week ended August 21, down $14.3 billion from the prior week.
• Treasury holdings totaled $4.539 trillion, up $5.2 billion from the prior week.
• Holdings of mortgage-backed securities (MBS) were $1.93 trillion in the week, down $0.1 billion from the prior week.

Total Public Debt

• Total public debt outstanding was $40.03 trillion as of August 21, an increase of 7.5% from the previous year.
• Debt held by the public was $32.28 trillion, and intragovernmental holdings were $7.73 trillion.

GDP

• The latest annualized U.S. GDP stands at $32.48 trillion as of June 30, 2026, an increase of 1.91% from the previous quarter, & an increase of 6.53% from the previous year.
• The total public debt-to-GDP ratio is at 121.52% as of June 30, an increase of 2.73% from the previous year.

Inflation Factors

CPI:

• The consumer-price index rose 3.4% in July year over year.
• On a monthly basis, the CPI increased 0.1% in July on a seasonally adjusted basis, after decreasing (0.4%) in June.
• The index for all items less food and energy (core CPI) rose 0.2% in July, after falling 0.0% in June.
• Core CPI increased 2.5% for the 12 months ending July.

Food & Beverages:

• The food at home index increased 2.6% in July from the same month a year earlier, and decreased (0.1%) in July month over month.
• The food away from home index increased 3.4% in July from the same month a year earlier, and increased 0.3% in July month over month.

Commodities:

• The energy commodities index decreased (2.9%) in July after decreasing (9.5%) in June.
• The energy commodities index rose 24.7% over the last 12 months.
• The energy services index rose 0.1% in July after increasing 1.5% in June.
• The energy services index rose 4.3% over the last 12 months.
• The gasoline index rose 24.6% over the last 12 months.
• The fuel oil index rose 39.1% over the last 12 months.
• The index for electricity rose 4.2% over the last 12 months.
• The index for natural gas rose 4.3% over the last 12 months.

Supply Chain:

• Drewry's composite World Container Index increased to $4,526.19 per 40ft container for the week of August 21.
• Drewry's composite World Container Index has increased by 101.1% over the last 12 months.

Housing Market:

• The shelter index increased 0.1% in July after increasing 0.1% in June.
• The rent index increased 0.1% in July after increasing 0.1% in June.
• The index for lodging away from home decreased (3.4%) in July after decreasing (2.5%) in June.

Federal Funds Rate

• The effective Federal Funds Rate is at 3.63%, down (0.01%) year to date.

Money Market Funds

• Money market fund assets stood at $7.93 trillion as of August 19, 2026, up 0.0% from the previous week, & up 10.3% from the previous year.

Middle East

• Brent settled up at $93.70 and WTI at $87.06 Friday, finishing the week more than 5% higher after Treasury Secretary Bessent said Washington will impose the toughest sanctions in history on Iran; Bessent will hold a Monday press conference on the plan, which Trump framed in a Wednesday post as the most crushing economic operation ever taken against any country.
• The US military told CNBC it has helped tankers move more than 660 million barrels through Hormuz since early May, while Foreign Minister Araghchi said the waterway will not reopen until Washington eases sanctions and pays war reparations. RBC's Helima Croft questioned whether additional sanctions change Iranian behavior given Iran is already among the most sanctioned countries, and noted it is unclear whether the US will target China and Russia.
• ADCB reported the Gulf project pipeline remains substantial into H2 2026 despite higher shipping, insurance and construction costs, with the UAE recording the highest absolute value of awards in H1; expected awards include over $10bn for Dubai's Al Maktoum International Airport expansion and $10bn for phase two of the TA'ZIZ chemicals zone in Abu Dhabi, with the conflict strengthening the case for investment in supply-chain and logistics continuity that reduces reliance on Hormuz.

Europe

• The Eurozone flash composite rose to 52.1 from 52.0, its highest since November and above a Reuters poll of 51.7; the factory PMI jumped to a four-year-plus high of 52.8 from 51.9 against a 51.8 poll estimate, with output growth the strongest in 54 months, after the bloc expanded 0.4% in Q2 despite disruption from the US-Israeli war on Iran.
• Eurozone manufacturing production hit a 54-month high of 53.4 with growth driven primarily by German output boosted by AI-related tech goods and defense equipment demand; services held at 51.7, total new business reached a 40-month high, and new export orders expanded for the first time in 4.5 years as manufacturing ended a 38-month streak of job shedding. Germany's August flash manufacturing PMI printed 54.1 against 52.0 expected.
• European financial firms are on track to return a record €228 billion to shareholders in 2026, up 13% year-over-year, led by strong earnings from banks and insurers. Higher interest rates and AI-driven efficiency gains are supporting profitability, making financials the largest expected contributor to MSCI Europe earnings growth this year and next.
• France's unemployment rate rose to 8.3%, the highest level in nearly six years, as weaker economic growth, higher energy costs linked to Middle East disruptions, and severe heat waves weighed on business activity.

China

• The Shanghai Composite rose 0.24% and the Shenzhen Component gained 0.59% on the LPR hold, with expectations of further stimulus reinforced by weak July data and Premier Li Qiang's call to accelerate the shift toward new growth drivers; investors are awaiting the National People's Congress Standing Committee meeting on August 25–28 for policy signals.
• Sales at the 25 biggest luxury labels in China dropped more than 10% in July per three research firms surveyed by Bloomberg — worse than June and a sharp reversal from earlier this year. The slump coincides with Beijing's campaign to stem capital outflows and reclaim tax revenue, including tighter controls on cross-border stock trading, with wealthy Chinese now holding more equities than property, tying luxury demand to market swings.
• Global private equity firms continue to pull back from China, with major buyout groups making no new publicly disclosed mainland investments in 2026 amid geopolitical tensions, heightened regulatory scrutiny, and concerns over exits. While China's valuations have become more attractive and US-China relations have stabilized somewhat, investors remain focused on lower-risk opportunities in markets such as Japan, India, and Australia.

Americas

• Canada retail sales fell 0.8% in July after a 0.6% June gain — the first decline in seven months, breaking a purchasing surge driven by higher gasoline prices — though strong Q2 purchases point to a rebound in consumption. Consumer-discretionary credits in Canada warrant closer monitoring into Q3.
• U.S.-Canada trade talks collapsed over disagreements on extending tariff relief to Canadian medium- and heavy-duty vehicles, triggering a fresh escalation in trade tensions. The U.S. imposed 50% tariffs on roughly $20 billion of Canadian goods, with the Trump administration invoking Depression-era emergency authority, while Canada announced retaliatory tariffs on U.S. imports effective September 8.
• Mexico is pressing for trade terms similar to Canada's new U.S. agreement, which lowered tariffs on certain steel and aluminum products to 25% and auto tariffs to 15%. The deal provides Mexican negotiators with a clearer benchmark as they seek comparable relief for key export sectors, particularly metals and autos.

Japan

• Support is growing for faster Bank of Japan (BOJ) rate hikes, with the government, former policymakers, and major financial institutions increasingly backing tighter monetary policy. Japan's benchmark rate currently stands at 1.0%, while the yen has surrendered roughly 40% of the gains achieved after recent joint U.S.-Japan currency intervention. Markets are increasingly pricing in a potential BOJ rate hike at its September 17-18 meeting as officials seek to address inflation and currency weakness.

Africa

• The Bundibugyo Ebola strain has infected 3,973 people and killed 1,801 in just 10 weeks — already outpacing the record 2014-2016 West Africa outbreak's early trajectory — with its unusually slow replication rate allowing infected individuals to travel widely before symptoms emerge, as evidenced by a Congolese traveler who completed an eight-day Dubai business trip before testing positive, while active conflict in eastern DRC, community mistrust, and the absence of an approved vaccine continue to hamper containment efforts

Venezuela

• U.S.-backed talks between Venezuela's interim government and parts of the opposition began on August 1, aiming to establish a path toward democratic elections, but exclude prominent opposition leader María Corina Machado and lack a clear election timetable. The talks reflect the Trump administration's efforts to advance a political transition while supporting Venezuela's economic stabilization and reopening the country to U.S. investment.

India

• Indian companies are ramping up overseas acquisitions to diversify markets, access technology, and strengthen supply chains amid geopolitical uncertainty, with outbound investments reaching $14 billion in the first four months of fiscal 2026, compared with $18.7 billion in the prior full year. Major deals include Sun Pharma's $11.7 billion acquisition of US-based Organon and Persistent Systems' €1.3 billion bid for Germany-based Nagarro.

Colombia

• Far-right populist Abelardo de la Espriella — a criminal defense attorney who has represented paramilitary commanders and money launderers — captured 44% of the vote in Colombia's first-round presidential election, setting up a June 21 runoff against leftist Iván Cepeda that presents voters with the starkest ideological choice in the country's modern political history

Cuba

• CIA Director Ratcliffe made a rare visit to Havana to warn Cuban officials they have a limited window to engage with the Trump administration, as the island faces severe fuel shortages, widespread blackouts, and growing street protests

Australia

• Australia is permanently diversifying its oil imports beyond Middle East suppliers and accelerating its renewable energy transition, even as it secures emergency fuel reserves to buffer against the ongoing Strait of Hormuz disruption

Canada

• Canada approved Enbridge's ~$3 billion Westcoast pipeline expansion, adding 300 million cubic feet per day of capacity as part of PM Carney's push to reduce U.S. trade dependence and boost Asian energy exports

Italy

• Trump publicly broke with Italian PM Giorgia Meloni — once his closest European ally — after she refused to send forces to the Strait of Hormuz and called his attacks on Pope Leo "unacceptable," leaving her isolated on both sides of the Atlantic

Oil Prices

• WTI: $87.06 per barrel
• +5.66% WoW; +16.20% YTD; +37.73% YoY
• Brent: $93.70 per barrel
• +5.85% WoW; +19.29% YTD; +38.47% YoY

US Production

• U.S. oil production amounted to 13.8 million bpd for the week ended August 14, up 0.0 million bpd from the prior week.

Rig Count

• The total number of oil rigs amounted to 588, down 5 from last week.

Inventories

Crude Oil

• Total U.S. crude oil inventories now amount to 428.8 million barrels, up 1.9% YoY.
• Refiners operated at a capacity utilization rate of 97.2% for the week, up from 96.2% in the prior week.
• U.S. crude oil imports now amount to 7.339 million barrels per day, down 1.5% YoY.

Gasoline

• Retail average regular gasoline prices amounted to $4.11 per gallon in the week of August 21, up 30.8% YoY.
• Gasoline prices on the East Coast amounted to $3.98, up 28.0% YoY.
• Gasoline prices in the Midwest amounted to $4.03, up 30.8% YoY.
• Gasoline prices on the Gulf Coast amounted to $3.73, up 31.0% YoY.
• Gasoline prices in the Rocky Mountain region amounted to $4.43, up 34.5% YoY.
• Gasoline prices on the West Coast amounted to $5.21, up 24.9% YoY.
• Motor gasoline inventories were up by 0.7 million barrels from the prior week.
• Motor gasoline inventories amounted to 209.4 million barrels, down (6.3%) YoY.
• Production of motor gasoline averaged 9.71 million bpd, up 1.6% YoY.
• Demand for motor gasoline amounted to 8.689 million bpd, down (1.7%) YoY.

Distillates

• Distillate inventories decreased by (1.5) million in the week of August 21.
• Total distillate inventories amounted to 105.6 million barrels, down (9.0%) YoY.
• Distillate production averaged 5.226 million bpd, down (2.0%) YoY.
• Demand for distillates averaged 3.953 million bpd in the week, down (0.4%) YoY.

Natural Gas

• Natural gas inventories increased by 16 billion cubic feet last week.
• Total natural gas inventories now amount to 3,169 billion cubic feet, down (0.9%) YoY.

High-yield:

High yield bond yields increased 9bps to 7.26% and spreads widened 2bps to 296bps. Leveraged loan yields were unchanged at 8.87% and spread tightened 1bp to 480bps. WTD high yield bond returns were negative 13bps and WTD leveraged loan returns were positive 14bps. High-yield bond spreads widened as investors absorbed a surprise longer-dated Treasury buyback announcement and hawkish Fed minutes, while lighter capital-market and secondary-market activity weighed on sentiment. Leveraged-loan price gains were supported by steady inflows and healthy CLO origination, while the lightest capital-market activity in 19 weeks constrained new-issue supply, adding to the supportive technical backdrop.

Week ended 08/21/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (trading in excess of 1,000 bps)²

Total HY Defaults

Leveraged loans:

Week ended 08/21/2026

Yields & Spreads¹

Pricing & Returns¹

Fund Flows²

New Issue²

Distressed Level (loan price below $80)¹

Total Leveraged Loan Defaults

Default activity:

• Most recent defaults include: Hughes Satellite Systems ($1.5bn, 8/2/2026), Unifrax Investment ($3.1bn, 7/26/2026), Dish DBS ($9.8bn, 6/30/2026), QVC Group ($2.2bn, 4/16/2026), Cumulus Media ($641mn, 03/05/2026), Trinseo ($390mn, 02/17/2026), Beasley Broadcasting Group ($189mn, 02/01/2026), Nine Energy Service ($300mn, 02/01/2026), Multi-Color ($4.5bn, 01/29/2026), and Pretium Packaging ($201mn, 01/28/2026).

CLOs:

Week ended 08/21/2026

New U.S. CLO Issuance²

New U.S. CLO YTD Issuance²

Note: High-yield and leveraged loan yields and spreads are swap-adjusted

¹ Source: Credit Suisse High Yield and Leveraged Loan Index

² Source: JP Morgan

Ratings activity:

S&P and Moody's High Yield Ratings

Source: Bloomberg

Appendix:

Diagram A: Leveraged Loan Trading Levels

Source: Credit Suisse Leveraged Loan Index

Diagram B: High Yield and Leveraged Loan LTM Price

Diagram C: Leveraged Loan and High Yield Returns

Diagram J: New Issue - Leveraged Loan and High Yield

Diagram K: Leveraged Loan + HY Defaults by Sector – LTM

Source: JP Morgan Default Monitor

Diagram L: CLO Economics

Diagram M: Developed Country Govt. Bond Yields (%)

Diagram N: S&P 500 Historical Multiples

Source: S&P Capital IQ

Diagram O: U.S. Middle-Market M&A Valuations (EV/EBITDA)

Source: Pitchbook

Diagram P: U.S. Large Cap M&A Valuations (EV/EBITDA)

Source: Pitchbook

Diagram Q: Dry Powder for All Private Equity Buyouts ($B)

Diagram R: Dry Powder for All US Debt ($B)

Diagram S: Structured Credit Spreads

Source: Bloomberg

Diagram T: Structured Credit Yield

Source: Bloomberg

Diagram U: SOFR Curve

Diagram V: CMBS Spreads

Source: Bloomberg