The Profit Margin: July 20, 2026
Statistic of the Week
The U.S. Strategic Petroleum Reserve (SPR) has fallen to its lowest level since 1983. For the week ending July 10, the reserve held approximately 316.5 million barrels of crude oil. While the SPR remains the world’s largest publicly known emergency petroleum reserve, the Department of Energy has stated that its operational minimum is approximately 70 million barrels. Looking ahead, the Department has announced plans to replenish the reserve, arranging purchases of roughly 200 million barrels over the next year to replace the 172 million barrels previously released.
Global Perspective
China recorded its slowest year-over-year economic growth rate in the second quarter since the early 1990s. A prolonged downturn in the property market has continued to weigh on the broader economy, despite considerable strength in exports. Exports rose 27% in June, led in part by a surge in automobile shipments. Vehicle exports increased 71% and surpassed one million units for the first time.
Market Moving Events
Thursday: Jobless Claims
Friday: New Home Sales
Commentary
Continued geopolitical unrest and concerns about a potential slowdown in artificial intelligence infrastructure spending weighed on equity markets last week. All three major U.S. equity indices finished the week lower. The DJIA, which posted its worst weekly performance since March, declined 0.93%.1 Disappointing earnings from IBM were a significant contributor to the Dow’s relative underperformance. The S&P 500 fell 1.55%, while the technology-heavy Nasdaq dropped 2.90%.2 Fixed income markets were comparatively stable. The yield on the 10-year Treasury was little changed during the week, closing Friday at 4.55%.3
As the United States and Iran continued to exchange strikes and the U.S. blockade was reinstated, oil prices surged during the week. Crude oil rose approximately 15% to above $80 per barrel, including its largest single-day increase since 2020 on Monday.4 Despite the geopolitical backdrop, both the June CPI (chart right) and PPI reports came in below analysts’ expectations. However, the recent spike in energy prices will likely place upward pressure on July’s inflation readings. One encouraging detail within the economic data was the resilience of the U.S. consumer. Core retail sales increased 9.2% year over year,5 underscoring continued consumer strength despite elevated inflation and higher interest rates.
Last week, the major banks easily exceeded analysts’ expectations, providing an encouraging start to the reporting period. This week, investors will continue to monitor corporate results for further insight into the health of the economy, consumer spending, and the outlook for business investment.
Chart of the Week
Consumer prices fell 0.4% in June, bringing the annual inflation rate down to 3.5%, below analysts’ expectations. The monthly decline was the largest since April 2020. Core inflation, which excludes food and energy, also came in below consensus estimates.
Source Materials
Market Moving Events:
MarketWatch.com
Chart of the Week: Clearnomics,
Bureau of Labor Statistics
Statistic of the Week:
MarketWatch.com
Global Perspective:
The Economist
Commentary:
1. Bloomberg, Barron’s
2. Bloomberg
3. MarketWatch.com
4. MarketWatch.com
5. Investor’s Business Daily