Fin-X Weekly 20th July 2026

Global equities were choppy as a renewed Gulf flare-up lifted oil prices and drove equity rotation. Chip stocks fell sharply, though early second-quarter earnings results were broadly supportive.

US inflation surprised to the downside as headline pressures eased, but the partial closure of the Strait of Hormuz elevates future energy-shock risks.

Chinese growth slowed to its weakest pace since 2022 amid soft domestic demand, while Australian business and consumer sentiment improved as tensions in the Middle East eased.

The week ahead brings the Australian employment report, the ECB meeting, UK and Japanese inflation, Friday's flash PMIs, and earnings from Alphabet and Tesla.

Global markets this week were dominated by a renewed flare-up in the conflict between the United States and Iran, a sharp rebound in oil prices, a downside surprise in US inflation and the first of the second-quarter earnings.

Equity markets saw a rotation away from AI-linked semiconductor names toward financials and defensives such as real estate, even as energy prices rose after the interim peace agreement between the US and Iran collapsed.

The Philadelphia SOX semiconductor index fell -10.0%, and South Korea said it would temporarily halt new listings of single-stock leveraged exchange-traded products to curb volatility, following a surge in the popularity of funds tied to Samsung Electronics and SK Hynix. The Financial Services Commission said on Thursday that the ban would remain in place until market conditions stabilise.

IBM shares plunged -26.3% after the company warned that sales were falling well short of expectations, as demand shifted towards AI-related products across services, storage and memory.

The broader earnings narrative remained positive despite valuation concerns. Early second-quarter guidance has lifted consensus S&P 500 earnings growth above +23% yoy, a second consecutive quarter of annual growth above +20%.

The five largest banks - JPMorgan, Goldman Sachs, Bank of America, Citigroup and Wells Fargo - posted a combined US$49 billion in quarterly earnings, up +39% from a year earlier. The results confirmed the pre-season expectation that trading and investment banking would be the standout drivers, powered by elevated volatility from the geopolitical conflict. Share-price reactions nonetheless diverged sharply, reflecting how much good news was already priced in.

US President Donald Trump proposed a 20% toll on all cargo shipped through the Strait, then later abandoned the idea. The Wall Street Journal reported that the president was leaning towards expanding military operations in the country, including the use of ground forces. In a prime-time address on Thursday, he concentrated instead on long-debunked claims about his 2020 election defeat, apparently preparing to contest an expected disappointing performance in November's mid-term elections.

The war-related partial closure of the Strait of Hormuz has re-inserted an energy-shock channel into the inflation and policy debate, particularly for the European Central Bank, the Bank of England, Norges Bank and energy-importing Asian economies. The ECB is nonetheless expected to keep rates on hold at Thursday's meeting.

The Federal Reserve is also expected to keep rates on hold when it meets at the end of the month. Last week's US inflation and activity data painted a picture of easing headline pressures alongside resilient underlying demand. Headline CPI fell -0.4% mom, its largest monthly decline since April 2020, pulling annual inflation down to +3.5% from +4.2%; core CPI held flat mom and slowed only modestly to +2.6% yoy as energy prices tumbled -5.7%. PPI likewise surprised to the downside, falling -0.3% in June, though pipeline pressures from the Iran-related energy shock remain a risk to core producer costs in the future.

Retail sales rose a modest +0.2% in June, the smallest gain in five months, as a -5.3% drop in petrol-station receipts tied to a drop in average pump prices masked solid underlying demand. Core retail sales, excluding autos, petrol, building materials and food services, rose a strong +0.5%, boosted by Amazon's Prime Day and auto-dealer sales, with sales up +6.7% yoy.

Industrial production ticked up just +0.1% in June, below the +0.2% to +0.3% forecast, as manufacturing output was flat while mining and utilities each grew +0.4%. On a quarterly basis, industrial production still expanded at a solid +4.0% annualised rate in the second quarter.

Chinese activity data was mixed but again showed the divergence between exports and the domestic economy. The second-quarter GDP report showed growth slowing to +4.3% yoy from +5.0% in the first quarter, missing consensus forecasts of around +4.5% and marking the weakest pace since late 2022. GDP rose +0.9% qoq, down from +1.3% in the first quarter, confirming a loss of momentum.

June industrial output actually accelerated to about +5.3% yoy, but retail sales grew just +1.0%, while fixed-asset and property investment contracted sharply over the first half of the year. Full-year growth is now expected at around +4.6%, within Beijing's 4.5% to 5% target but softer than 2025's +5.0%, with analysts anticipating calibrated monetary and fiscal support rather than large-scale stimulus.

In Australia, both the NAB business and Westpac consumer surveys pointed to a fragile but improving sentiment picture, as easing Middle East tensions helped consumers and businesses claw back some of the confidence lost earlier in the conflict. June unemployment is expected to remain at 4.4% when it is released on Thursday, with job gains of around 15,000 — a notable slowdown from May's surprisingly strong 40,300 rise.

Besides the Australian employment data and the ECB meeting, Chinese prime rates are expected to be left on hold later today. The United Kingdom and Japan will publish inflation figures ahead of the latest flash PMI surveys on Friday. This week's high-profile earnings announcements include Alphabet and Tesla.

Source: Bloomberg, NBSC, BLS, NAB, Westpac, 19^th July 2026

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