* Ukraine war at six-month mark, with no end in sight
* Putin reportedly thinks winter will favor Russia in its Ukraine war efforts
* US plans for $3 billion in new aid for Ukraine
* US military strikes target Iran-linked targets in Syria
* More Americans fall into poverty from inflation vs. pandemic or Great Recession
* Streak of falling US gasoline prices offers relief for drivers
* New home sales in US continue to slide in July
* US PMI survey data shows further contraction in business activity in August:

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Markets are still struggling to price in a variety of risk factors, including: How long and how far will interest rates rise? When will inflation peak? How will the war in Ukraine evolve? Is a global recession fate, and if so how deep will it be? No one has a crystal ball and the future’s always uncertain, but trending behavior in markets can offer some useful perspective, particularly when debates about the future are unusually stark.

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* US natural-gas futures reach 14-year high
* Eurozone economic activity fell for second month in August via survey data
* Euro at two-decade low vs. US dollar
* UK economic activity near virtual standstill in August, PMI data shows
* Pimco analyst predicts great moderation for inflation is “fully behind us now”
* Strong US dollar takes a toll on gold and silver prices
* US economic activity rebounded in July via Chicago Fed Nat’l Activity Index:

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A clean sweep of red ink washed over all the major asset classes for the trading week through Friday, Aug. 19, based on a set of ETFs.

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* US delegation including Indiana’s governor in Taiwan for trade talks
* Russia sees no chance for diplomatic solution to end the war in Ukraine
* Daughter of Putin ally killed in car explosion near Moscow
* US, S. Korea start biggest military drills in years amid threats from N. Korea
* China cuts lending rates again, following a cut last week
* Germany likely headed for recession, Bundesbank predicts
* US ‘effectively peak employment,’ says ZipRecruiter CEO Ian Siegal
* Severe droughts snarling supply chains and lifting food prices
* Fed expected to slow rate hikes to 50 basis points in September
* Business community overwhelmingly expects a recession within next 18 months
* US Dollar Index near 20-year high:

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● Danger Zone: The Coming Conflict with China
Michael Beckley and Hal Brands
Excerpt via Foreign Policy
The greatest geopolitical catastrophes occur at the intersection of ambition and desperation. Xi Jinping’s China will soon be driven by plenty of both.
In our new book, Danger Zone: The Coming Conflict with China, which this article is adapted from, we explain the cause of that desperation: a slowing economy and a creeping sense of encirclement and decline. But first, we need to lay out the grandness of those ambitions—what Xi’s China is trying to achieve. It is difficult to grasp just how hard China’s fall will be without understanding the heights to which Beijing aims to climb. The Chinese Communist Party (CCP) is undertaking an epic project to rewrite the rules of global order in Asia and far beyond. China doesn’t want to be a superpower—one pole of many in the international system. It wants to be the superpower—the geopolitical sun around which the system revolves.

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Portfolio design and management tends to fare best when the rules and structure are relatively simple. But there are limits and so deciding on the degree of simplicity can be a gray area, depending on your definition of “simple” and “complicated,” along with expectations and investment goals. The debate on how far to go with simplicity inspires a fresh look at what I call the hierarchy of decisions in the process of building and managing portfolios through time.

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* US Leading Economic Index falls for fifth straight month
* US jobless claims edged lower last week, continue to reflect low level of layoffs
* Philly Fed Manufacturing Index rebounded in August
* Norway and New Zealand’s central banks announce latest rate hikes
* Turkey’s central bank cuts interest rates despite surging inflation
* Extreme heat strikes world’s three largest economies simultaneously
* US existing home sales fell for sixth straight month in July:

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Yesterday’s release of Federal Reserve minutes for the July FOMC meeting reaffirms that the central bank won’t ease off on interest-rate hikes until inflation is tamed. Good thing, too, since the latest inflation data suggests there’s still a long road ahead before policy goals and pricing pressures are aligned. But the Treasury market is always looking ahead and at the moment it seems to be hinting at the possibility that hawkish monetary policy may be close to peaking, based on comparing the 2-year yield with effective Fed funds rate (EFF).

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* US government will hold trade talks with Taiwan to counter China
* Renewed Iran nuclear deal appears “closer than we’ve been before”
* Fed minutes: rate hikes will continue until inflation slows substantially
* Nearly 3/4 of US farmers say drought is damaging their harvests
* Europe’s summer heat is exacerbating energy challenges
* China deploys cloud seeding to ease toll from record heat wave
* Mortgage boycotts spread across China
* US retail sales were flat in July but spending ex-gas and autos is still solid:

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