1. Harris Picks Minnesota Gov. Tim Walz as Running Mate — Vice President Kamala Harris on Tuesday picked Minnesota Gov. Tim Walz, an avuncular former high-school teacher with a progressive streak, as her running mate in a move that added a white man to the first-ever ticket led by a woman of color. A two-term governor and current chairman of the Democratic Governors Association, Walz could be especially helpful in the battleground states of Wisconsin and Michigan. He is already well known in western Wisconsin because it shares media markets with Minnesota, while Michigan has some economic and cultural similarities with the state he now governs.
2. Bank of Japan Walks Back Talk of Rate Increases After Roiling Markets — The pledge by Bank of Japan Deputy Gov. Shinichi Uchida led to a sharp recovery in Tokyo stock prices and a fall in the yen. That moved markets closer to where they were before the July 31 news conference by Gov. Kazuo Ueda, in which he suggested he wanted to keep raising rates despite lackluster consumer spending in Japan. The Bank of Japan lifted its policy interest rate to 0.25% on July 31. Combined with Ueda’s hawkish comments and the prospect of Federal Reserve rate cuts soon, the move pushed up the yen sharply.
That in turn pushed down Japanese stocks, and the Nikkei on Monday suffered its biggest single-day percentage loss since 1987. Global stock markets including the U.S. followed suit.
3. US Initial Jobless Claims Decline by Most in Nearly a Year — Initial claims decreased by 17,000 to 233,000 in the week ended Aug. 3, according to Labor Department data released Thursday. That was helped by fewer applications in states that had registered large increases in recent weeks, such as Michigan, Missouri and Texas. The decline in initial applications may help reassure markets that the workforce is simply reverting to its pre-pandemic trend rather than rapidly deteriorating. That was the consensus until last week, when the jobs report showed employers substantially scaled back hiring in July and the unemployment rate rose for a fourth month, triggering a key recession indicator.
4. Stock market may retest Monday lows in 4-step recovery process, history suggests — based on past history from the past VIX volatility shock, history suggests a retest of those Monday lows is likely in order. The good news is that the market is likely to regain its mojo in the coming weeks, as long as a recession remains at bay and the latest episode proves to be nothing more than an economic growth scare based on Ned Davis Research. Chart below displays the result of the research.

The week ahead — Economic data from Econoday.com: