Trump Says Talks Are Iran’s ‘Last Chance’, Stocks Near Record Highs | The Opening Trade 8/4/2026

Watch on YouTube ↗  |  August 04, 2026 at 11:50  |  1:35:18  |  Bloomberg Markets
Speakers
Chris Watling — Global Economist and Chief Market Strategist, Longview Economics
Louise Dudley — Portfolio Manager, Federated Hermes
Myles Bradshaw — JPMorgan Asset Management, Head of Global Aggregate Strategies
Anthony Stevens — Bloomberg Market Producer
Adam Vincent — Bloomberg

Summary

European equities opened higher on Tuesday amid a busy earnings day, with BP and HSBC posting beats but Lufthansa and Zalando warning on fuel costs and weak demand. Oil prices remained elevated near $85 as President Trump called Iran talks a 'last chance' and Strait of Hormuz shipping stayed disrupted. The tech narrative continued to diverge, with hyperscalers and software outperforming chips, while Palantir surged after hours on strong earnings. Market participants offered contrasting bond views—one calling for 6% US yields, another seeing positive skew—and highlighted sector ideas including railroads, European financials, and hyperscaler corporate debt.

  • BP reports highest quarterly profit in four years; new CEO highlights balance-sheet repair and North Sea asset sale.
  • HSBC resumes $1 billion buyback, raises cost-cutting target, but stock initially falls on mixed earnings detail.
  • Lufthansa and Zalando drop sharply after disappointing results: Lufthansa warns on jet fuel surge, Zalando on weak sneaker sales.
  • Brent crude hovering around $84–85 as Trump threatens Iran with military action; talks with Oman over Hormuz passage continue.
  • Palantir's blowout quarter drives after-hours rally; contrast grows between hyperscalers/software and chip stocks.
  • Chris Watling (Longview) targets US 10-year at 5.5–6%, likes railroads, and sees dollar weakness ahead.
  • Louise Dudley (Federated Hermes) overweight semiconductor memory, European financials, and UK equities; underweight airlines.
  • Myles Bradshaw (J.P. Morgan AM) sees positive skew for US bonds, underweight JGBs, and is building allocation to hyperscaler debt.
Ideas
Chris Watling Global Economist and Chief Market Strategist, Longview Economics 24:49
US 10-year yield breaking toward 6%
The U.S. economy is broadening with a CapEx boom, a recovering credit cycle, labor market turning up, and a strong industrial cycle (ISM manufacturing). This self-sustaining momentum will push the 10-year Treasury yield out of its three-year range and toward 5.5–6%.
U.S. 10-Year Treasury Note MED
Chris Watling Global Economist and Chief Market Strategist, Longview Economics 27:42
Industrial cycle lifts railroad volumes
Railroads are an attractive sector because the industrial cycle is returning, which will boost volumes and make them a good way to play cyclical strength.
XTN MED
Chris Watling Global Economist and Chief Market Strategist, Longview Economics 28:24
Dollar weakens on cyclical and geopolitical drivers
The dollar should weaken for both cyclical reasons (global economic rally normally pushes the dollar down) and structural reasons (Trump's pressure on allies discourages Treasury holdings, China creating alternative currency regions). Sterling and euro are holding up well, suggesting other currencies want to appreciate.
UUP MED
Louise Dudley Portfolio Manager, Federated Hermes 51:48
Memory hardware has supply-driven pricing power
Hardware memory semiconductors benefit from constrained supply and strong pricing power, while CapEx continues to increase. This part of the AI trade still has momentum, with green shoots in actual build-out and usage cases.
HBM MED
Louise Dudley Portfolio Manager, Federated Hermes 54:26
European financials offer value and rate support
European financials remain an area of strength, supported by higher rates and relative value within European equities, in contrast to out-of-favour sectors like chemicals.
European Financials Sector MED
Louise Dudley Portfolio Manager, Federated Hermes 55:42
Stay negative on airlines on fuel costs
Airlines continue to be unattractive because sustained elevated oil prices and jet fuel costs will compress margins and hurt earnings.
European airlines MED
Louise Dudley Portfolio Manager, Federated Hermes 56:46
UK equities overweight on better macro data
The UK is overweight relative to Europe; recent macro data has been stronger than expected and inflation appears well-behaved, supporting the case for UK equities despite political uncertainty.
EWU MED
Myles Bradshaw JPMorgan Asset Management, Head of Global Aggregate Strategies 79:44
Positive skew favors owning US bonds now
The bond market has priced a high risk premium for uncertainties (geopolitics, Fed reaction, supply). Unless those risks fully materialize, there is positive skew for owning bonds, keeping yields in their existing range and offering upside.
TLT MED
Myles Bradshaw JPMorgan Asset Management, Head of Global Aggregate Strategies 83:09
Short JGBs as BOJ lags on hikes
The Bank of Japan is behind the curve on normalizing rates; the market is pricing only one hike every six months, a low hurdle. Underweighting Japanese bonds is a good way to add alpha in a global bond portfolio.
JGBUX MED
Myles Bradshaw JPMorgan Asset Management, Head of Global Aggregate Strategies 83:25
Hyperscaler debt attractive, build position gradually
Hyperscaler corporate debt offers value with strong operating cash flow, low forecast leverage (about 1x), and yields around 150 bps over in the 30-year sector, similar to some BBB names. The heavy supply pipeline is creating an opportunity to accumulate early.
US Hyperscaler Corporate Bonds MED
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This Bloomberg Markets video, published August 04, 2026, features Chris Watling, Louise Dudley, Myles Bradshaw discussing U.S. 10-Year Treasury Note, XTN, UUP, HBM, European Financials Sector, European airlines, EWU, TLT, JGBUX, US Hyperscaler Corporate Bonds. 10 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Chris Watling, Louise Dudley, Myles Bradshaw  · Tickers: U.S. 10-Year Treasury Note, XTN, UUP, HBM, European Financials Sector, European airlines, EWU, TLT, JGBUX, US Hyperscaler Corporate Bonds