Market Soars to Record Highs Amidst Earnings Optimism; Regulatory Scrutiny on Private Credit and Geopolitical Tensions Emerge

The S&P 500 surged to a record high above 6,300 on Thursday, reflecting broad market optimism fueled by strong U.S. economic data. This rally was underpinned by a rebound in retail sales, which rose 0.6% in June, and a fifth consecutive weekly decline in initial jobless claims to 221,000, signaling a resilient labor market. Solid earnings reports from major companies such as Netflix (NFLX) and GE (GE), combined with easing concerns over interest rate cuts and stable consumer demand, further bolstered investor confidence.

In a significant move to scrutinize emerging financial risks, Senator Elizabeth Warren (D-Mass.) has formally requested Treasury Secretary Scott Bessent, who chairs the Financial Stability Oversight Council (FSOC), to evaluate the private credit market. Warren's letter highlights concerns over the market's rapid growth, which has reached approximately $1.7 trillion, and its potential implications for financial system stability, including issues of opacity and interconnectedness with traditional banks. She has also called for the FSOC to design and conduct a stress test focused on nonbank financial institutions' private credit exposures.

Comcast (CMCSA) is implementing substantial price hikes for its Peacock streaming service, with the ad-free plan increasing by $3 to $17/month, a jump of up to 38% for some tiers. This strategic pivot aims to reduce the platform's streaming losses, and a new $8 "Select" tier is being introduced to cater to budget-conscious users seeking limited content access. The move positions Peacock's ad-supported plan as one of the costliest compared to rivals, reflecting the ongoing challenges and evolving strategies within the highly competitive streaming landscape.

To counter the aggressive recruitment of top talent by private equity firms, Goldman Sachs (GS) has launched an innovative "intern-to-buy-side" track. This initiative offers interns a full-time banking role with a clear pathway to asset management after two years, aiming to boost long-term retention and secure skilled professionals within the firm. The policy reportedly includes quarterly "loyalty oaths" where analysts affirm they have not accepted offers from rivals, underscoring the intense competition for junior talent in the finance industry.

Former President Donald Trump has escalated his pressure on Federal Reserve Chair Jerome Powell, pushing for an inspection of the Fed's $2.5 billion headquarters renovation project, citing possible fraud. Despite legal complexities surrounding the firing of a Fed Chair, Trump continues to leverage frustrations over interest rates and strategic appointments to challenge the central bank's independence. Powell has reportedly asked the Fed's inspector general to review the project's cost increases.

Separately, U.S. lawmakers are urging the Biden administration to limit intelligence sharing with Spain due to concerns over its Huawei wiretap deal. Citing espionage risks, these concerns center on Huawei’s potential access to sensitive communications, despite Spain’s assurances that the contract meets national security requirements. Senator Tom Cotton and Representative Rick Crawford sent a letter to the Director of National Intelligence, emphasizing that Huawei's ties to the Chinese Communist Party pose a threat to the security of NATO allies.