On July 8th, Russian President Vladmir Putin and Indian Prime Minister Narendra Modi met for an annual summit after a three-year hiatus. This meeting received heightened attention due to its timing and the ongoing Russian-Ukrainian war.
Catch-Up Quick: On July 8th, Russia hosted India for the annual bilateral visit, the first since 2021 and the Russian invasion of Ukraine. Despite both President Putin and Prime Minister Modi stating the meeting was a bilateral visit, the meeting won mass international attention, particularly in Washington, where American and European world leaders were meeting for the NATO summit.
Consequently, this meeting sparked widespread backlash due to the summit occurring simultaneously with the NATO summit, where European and American governments, alongside Ukrainian President Zelenskyy, planned to demonstrate Russia’s isolation from the world and deepen support for Ukraine. However, the summit threw a wrench in the plans to demonstrate Russia’s global isolation.
Other Key Facts:
India has not outwardly condemned the Russian invasion of Ukraine, instead urging Russia to find a peaceful solution to the conflict
Russian-Indian trade has increased 66% YoY
India and Russia have grown to be tremendous trading partners since the end of the Cold War
India and China are key buyers of Russian oil, with India receiving more than 40% of oil imports from Russia
Persistent geopolitical, economic, and border tensions have existed between Beijing and New Delhi
Russia has recently sought to strengthen relationships with key allies including China, North Korea, and Hungary
Meeting Outcomes: Outside of deepening Russian-Indian ties, the summit accomplished several goals for Moscow
Displayed Russia’s presence on the international stage after recent meetings with China & North Korea
Demonstrated that significant economic powers (China & India) still support Russia
Long-Term Implications: The Russian-Indian summit has demonstrated that Russia continues to be supported by key economic players, despite economic sanctions from the United States and Europe. However, this summit also demonstrates India’s growing geopolitical and economic power as it seeks to dethrone China as Asia’s biggest economy. It has grown exceedingly unlikely that Russian intervention in any potential India-China conflicts due to Russia’s partnership with both nations, a major win for India. Furthermore, this summit likely hints at a prolonged Russian-Ukrainian war as Russia continues to demonstrate its global relationships.
Macro Roundup:
Wholesale Inventories: 0.6% vs 0.6%
Initial Jobless Claims: 222k vs 236k
CPI: -0.1% vs 0.1% MoM & 3% vs 3.1% YoY
Core CPI: 0.1% vs 0.2% MoM & 3.3% vs 3.4% YoY
PPI: 0.2% vs 0.1% MoM & 2.6% YoY
Core PPI: 0.0% vs 0.2% MoM & 3.1% YoY
Other Highlights:
Boeing pleads guilty for two fatal 737 Max crashes and faces a fine of nearly $500M
Streaming bundles consolidation is growing
Airlines struggle despite record demand due to higher costs
Chairman Powell gives a two-day testimony to Congress indicating slowing employment growth and economic risks must be considered in monetary policy decisions
Fears of “upflation” surge across the country
Microsoft and Apple withdraw from OpenAI Board
Used car prices plummet to post-pandemic low to an average of $17,934
Costco increases membership fees
Tesla delays Robotaxi unveil till October
Small-caps rally after inflation report as investors churn money out of technology
Pepsi misses on earnings and indicate an increasingly-stretched consumer
Major investment banks release earnings and fall due to lower net interest income, despite growing investment banking revenue
What’s the Big Picture: Increased rate cut hopes. With a weaker inflation report, all signs point to the Federal Reserve cutting rates in September with a second potential cut in December. Currently, there is an 85% chance of a cut in September and roughly 60% chance of a second cut in December.
Looking Ahead:
As earnings season kicks into high gear, here are the major economic events to monitor this week:
Monday: Chairman Powell speaks; Investment Banks earnings reports continue
Tuesday: U.S. Retail Sales; Homebuilder confidence index; UnitedHealth releases earnings
Wednesday: FED Beige Book released
Thursday: Initial jobless claims
Friday: Earnings from Domino’s and D.R. Horton
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