Margin squeeze hits US stocks after jump in producer prices

Good morning. Here's what happened overnight and what you need to know today.

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1.

Margin squeeze: A blistering run in US stocks hit a wall after producer prices climbed in July by the most in three years, lifting bond yields and the dollar and prompting traders to pare back bets on a Fed rate cut next month. The PPI rose 0.9% from June and 3.3% from a year earlier, driven by a 1.1% jump in services costs and higher goods prices linked to tariffs. Jobless claims edged lower but continuing claims held near 2021 highs. Bitcoin fell more than 4% from a record after the inflation data and Treasury Secretary Scott Bessent said the US will not buy more for its strategic reserve. Farm equipment giant Deere & Co lowered its annual profit outlook and Coach owner Tapestry trimmed its forecast, with both citing tariff pressures. Cisco also gave a cautious forecast and exchange operator MIAX rose over 30% in its debut, adding to the US IPO resurgence driven by pro-crypto policies under President Trump. (Bloomberg)(Reuters)(Capital Brief)

2.

Feel-out meeting: Vladimir Putin and Donald Trump will meet at Joint Base Elmendorf-Richardson in Anchorage, Alaska on Friday local time, in what Trump has called a “feel-out” meeting with a 25% chance of failure. Speaking in televised comments ahead of the summit, Putin said the talks would address the war in Ukraine and possible agreements on control over strategic offensive weapons. Putin’s foreign policy aide Yury Ushakov said they would also discuss the “huge untapped potential” in US–Russia economic ties. Trump later said the meeting is intended to prepare for a second session also including Ukrainian President Volodymyr Zelenskyy and possibly European leaders. Earlier Putin praised Trump’s “energetic and sincere efforts” to stop the hostilities and, according to sources, is expected to push for sanctions relief and US recognition of Donetsk and Luhansk as Russian territory. The Kremlin said no agreements will be signed, but the leaders are scheduled to hold a joint press conference after the talks. (Reuters)(WSJ)(Bloomberg)(White House)

3.

Economic reform: The Business Council of Australia (BCA) launched a push for deregulation ahead of the federal government’s Economic Reform Roundtable, releasing a report warning of the impact of costly red tape and calling for a reduced regulatory burden on companies. The BCA is urging the creation of a Minister for Better Regulation to oversee reforms that would “make it easier to do business in Australia”. It is also seeking a stocktake of existing rules, an “economic star rating” for each new policy based on its contribution to productivity and growth, a Single Front Door for investment and improvements to the Foreign Investment Review Board process, including setting a new target for 75% of cases to be processed within 30 days. The BCA’s report estimates that cutting red tape by 1% would unlock $1 billion a year for the economy and that compliance with 86,000 regulations costs Australians $110 billion annually. (Capital Brief)

4.

Football offensive: Paramount will advance talks over a new deal for the streaming and broadcast rights to the A-Leagues after David Ellison’s Skydance officially took over the US media conglomerate as controlling shareholders last week. The company, which is led by Beverley McGarvey in Australia, is set to ramp up its pursuit of the A-Leagues after opening talks in June, people briefed on the situation told Capital Brief. Paramount’s current deal with the Australian Professional Leagues (APL) is worth an estimated $200 million over five years, and was key to its 2021 launch in the Australian market. The streamer has since secured select international rights and bills itself as the home of Australian football. The A-Leagues is a priority for Paramount in Australia, said one of the people, and the company remains locked in ongoing discussions with the APL — the governing body that operates the A-Leagues — over a fresh broadcast deal. (Capital Brief)

5.

Bid blindside: Elanor Investors Group managing director Tony Fehon says he was blindsided by a hostile takeover bid for one of its funds by the family office of billionaire Paul Lederer and suggested that if the suitor succeeds it will be getting a bargain. Last week, Lederer Group made a 70 cents per share bid, worth around $285 million, for Elanor Commercial Property Fund. The Lederer Group listed a number of grievances against the fund to justify the offer. Elanor has since hit back at what it says were “factually incorrect” assertions. “We were [surprised with the proposed offer] because we talked about stabilising Elanor straight away and with all of our discussions with them it had been all about ‘well if you can stabilise your balance sheet and so on, then that’s good’,” Fehon told Capital Brief. The relationship between Lederer and Elanor had been “positive in nature” prior to the bid. (Capital Brief)

6.

Enterprise AI: Toronto-based AI startup Cohere has raised USD500 million ($770.1 million) and named former executives from Meta and Uber as it positions itself as a more secure alternative to OpenAI and Anthropic. The funding round, led by Radical Ventures and Inovia Capital, lifts its valuation to USD6.8 billion and included backing from AMD Ventures, Nvidia, PSP Investments, Salesforce Ventures and the Healthcare of Ontario Pension Plan. Cohere appointed Joelle Pineau, who spent nearly eight years at Meta as vice-president of AI research, as chief AI officer, and Francois Chadwick, a former Uber and Shield AI executive, as chief financial officer. Unlike most AI companies, Cohere builds enterprise-specific models and often runs them on customers’ infrastructure. Annual recurring revenue has doubled to USD100 million since the start of 2025, with a target of USD200 million by the end of the year, according to the Financial Times. (Capital Brief)(Cohere)(Joelle Pineau)

7.

Pit stop: Ampol agreed to acquire 100% of the shares in EG Group Australia for a headline price of $1.1 billion. The cash and scrip deal will see Ampol pay $800 million in cash, to be funded by existing debt, as well as Ampol shares valued at $250 million, to be issued to EG Australia. Ampol will acquire approximately 500 sites across Australia, with the company stating the deal will enable an estimated $65–$80 million in annual post-integration synergies. After completion, the fuel and convenience and fuel marketing businesses across Australia and New Zealand will represent circa 85% of Ampol Group earnings. The parties aim to complete the deal by mid-2026 and the transaction is subject to clearance from the ACCC. The sale marks EG Group's exit from the Australian market, with proceeds to be used to reduce the Group's debt. (Capital Brief)(Ampol)(EG Group)

8.

Kremlin crackdown: WhatsApp accused Russia of attempting to block its encrypted messaging service after calls on the messaging app were restricted. Russia’s media regulator Roskomnadzor said that it began restricting certain WhatsApp and Telegram calls via state-media TASS on Wednesday, as the services failed to share information with law enforcement in fraud and terrorism cases. "In order to counter criminals…measures are being taken to partially restrict calls in these foreign messengers," the regulator told TASS. Text messages and voice notes are not currently affected by the Russian restrictions. WhatsApp returned fire on Thursday, saying: "WhatsApp is private, end-to-end encrypted, and defies government attempts to violate people's right to secure communication, which is why Russia is trying to block it from over 100 million Russian people. We will keep doing all we can to make end-to-end encrypted communication available to people everywhere, including in Russia." (TASS)(WhatsApp X)(Capital Brief)