Good Afternoon. On this day in 1978, the Double Eagle II landed near Paris after 137 hours in the air, completing the first successful transatlantic crossing by a crewed balloon. Today’s economy couldn’t quite hold a steady altitude: New York factories strengthened, but oil, yields, and legal stakes all moved higher while stocks drifted lower.

That’s the Monday setup. Growth hasn’t disappeared, yet the price of uncertainty is rising across borrowing, transportation, leadership, and regulation. The businesses with room to maneuver will have an easier time than the ones depending on a single forecast, person, or customer response.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

🔢 Big number: 18 months — that’s how long grocery inflation in Canada has outpaced the country’s headline inflation rate. Food-price growth slowed in July, but households haven’t received the same relief their top-line inflation number suggests.

New York manufacturers opened August with more momentum than expected, giving the industrial economy a useful bright spot. The improvement isn’t a free pass, though, because the same survey showed supply and price pressure moving in the wrong direction.

The news: The New York Fed’s general business conditions index rose five points to 20.6, its highest level in more than four years. New orders and shipments posted solid gains, while employment and hours worked increased modestly. Manufacturers also reported longer delivery times, worsening supply availability, and faster growth in input costs. They’re still optimistic about the next six months, but they aren’t expecting an easy operating environment.

What’s next: One regional survey can’t settle the national manufacturing outlook, yet the mix matters for planning. Stronger orders support production and hiring, while tighter supplies and cost pressure argue for backup vendors and careful pricing. Tuesday’s national industrial-production report will show whether New York’s acceleration is part of a broader turn or mostly a regional burst.

Source: Federal Reserve Bank of New York

Wall Street’s record run met a familiar obstacle Monday: energy became more expensive, Treasury yields moved higher, and stocks gave back ground. The decline wasn’t severe, but it showed how quickly an oil shock can reach beyond the gas pump.

The news: The S&P 500 and Dow each closed down close to 0.5%, while the technology-heavy market finished down close to 0.2%. Brent crude rose 2.4% to $90.62 a barrel as traders weighed the conflict with Iran and risks to Persian Gulf shipping. The 10-year Treasury yield climbed to 4.72% from 4.68% on Friday, helped by the stronger New York factory report. The move isn’t large, but nearly all major U.S. companies have already reported spring results, so attention is shifting toward large retailers later this week.

Big picture: Investors aren’t rejecting corporate growth; they’re recalculating what it’s worth when fuel and financing cost more. Retail earnings will test whether shoppers can absorb another layer of pressure without cutting volume. Businesses don’t need to predict every move in crude, but budgets should include a case where transportation and borrowing stay expensive together.

Source: Associated Press

Meta’s biggest legal test over youth safety begins Tuesday in Oakland, where a coalition of states will argue that Facebook and Instagram used harmful design features and failed to protect younger users. This isn’t only about a potential payment; the operating rules could matter more.

The news: California, Colorado, Kentucky, and New Jersey are leading a consolidated case involving 29 state attorneys general. The claims focus on allegedly addictive design, age verification, consumer protection, and children’s privacy. Meta says the remaining claims aren’t supported and that the requested financial penalties are disproportionate. Its attorneys have warned that theoretical damages could reach $1.4 trillion, while lawyers for the states have described $200 billion as a more likely figure. Opening arguments follow a recent Meta loss in New Mexico that brought financial and product remedies.

Bottom line: A verdict won’t arrive immediately, but the trial can shape how social platforms measure age, recommend content, and document safety decisions. Meta can appeal a financial award; it can’t as easily ignore a court-ordered redesign that affects engagement and advertising. Any company serving minors should review its own defaults and evidence now, because regulators aren’t treating product design as a neutral choice.

Source: CNBC

L3Harris activated its succession plan after the board investigated conduct by its chief executive, replacing him immediately while keeping the company’s financial outlook intact. The swift handoff limits a leadership gap, but it doesn’t erase questions about governance.

The news: Sam Mehta became president and chief executive after Christopher Kubasik stepped down as chief executive, chairman, and director. L3Harris said Kubasik’s conduct wasn’t consistent with company values, though it was unrelated to financial reporting, controls, customer relationships, or operations. The board named Lewis Hay III independent chairman and promoted two segment leaders to fill Mehta’s prior responsibilities. Management also reaffirmed its 2026 revenue, margin, earnings, and free-cash-flow outlook, yet shares still finished down close to 4.6% as investors absorbed the surprise.

What’s next: Guidance can reassure customers and shareholders, but it can’t answer every culture question. The board will need to show that oversight, contract execution, and the leadership bench remain durable after the transition. Watch employee turnover and program milestones alongside the financial targets, because a defense contractor’s credibility depends on execution over years, not one conference call.

Source: L3Harris Technologies

OmniAb turned a specialized research platform into a potentially large pharmaceutical partnership with Eli Lilly. The headline milestone total is eye-catching, but the deal’s structure shows why the work ahead matters more than the maximum number.

The news: The companies agreed to collaborate on a new ion-channel program using OmniAb’s discovery and screening technology. OmniAb will receive an upfront payment and could earn as much as $370 million through research, development, and commercial milestones, plus tiered royalties on global sales. The therapeutic target, drug type, upfront amount, and timing weren’t disclosed, so most of the possible value still depends on scientific and commercial progress.

Big picture: Platform companies don’t need to fund every drug through late-stage trials, but they do need partners to keep programs advancing. Lilly brings development resources, while OmniAb spreads its economics across milestones and royalties. The useful signals won’t be the maximum contract value alone; they’ll be target disclosure, program advancement, and whether this relationship leads to more work.

Source: OmniAb

Canada’s inflation rate moved back to 3.0% in July as gasoline and travel became more expensive. The increase doesn’t mean every price category accelerated, but it gives households and the Bank of Canada less room to celebrate June’s slowdown.

The news: Consumer prices rose 3.0% from a year earlier after a 2.8% gain in June, and they increased 0.5% during July. That doesn’t mean every category accelerated: gasoline prices were 25.7% above a year earlier as conflict in the Middle East and shipping disruptions pushed energy costs higher. Travel tours and airfares also accelerated, partly because of costlier fuel and demand around World Cup destinations. Grocery inflation cooled to 3.1% from 3.9%, though it still exceeded headline inflation for an 18th straight month.

Bottom line: The central bank can’t control an overseas energy shock, but it has to judge whether that shock changes expectations and spills into other prices. Canada’s inflation excluding gasoline held at 2.2%, which offers some comfort without removing the risk. Households should separate one-time travel and fuel jumps from recurring expenses, because their personal inflation rate won’t necessarily match the national average.

Source: Statistics Canada

Japan’s economy expanded again in the second quarter, supported by exports even as household demand showed less energy. The positive headline hasn’t resolved the bigger question: whether growth can continue when consumers remain cautious and global trade faces pressure.

The news: Real gross domestic product rose 0.3% from the first quarter, equal to a 1.1% annualized pace. That was slower than the 2.1% annualized growth recorded in the first quarter. Exports increased 0.5% as overseas demand for Japanese vehicles and semiconductors helped, while private consumption was essentially flat. The result hasn’t ended the expansion, but it left more of the work to external demand.

What’s next: Export strength can’t fully replace a healthy domestic customer, especially when trade and energy costs can change quickly. Wage growth, July inflation, and upcoming machinery orders will show whether companies have enough confidence to invest and households have enough purchasing power to spend. Japan’s next expansion phase will be sturdier if demand broadens beyond shipments abroad.

Source: Cabinet Office of Japan

China’s July data reinforced a difficult split: factories and exporters are still producing, but households and builders aren’t creating enough demand at home. That can sustain output for a while, yet it also increases pressure for more policy support.

The news: Retail sales rose only 0.6% from a year earlier, below the 1.3% growth expected by economists surveyed by Wind and slower than June’s 1.0%. Fixed-asset investment fell 6.7% during the first seven months of the year, a deeper decline than in the first half. Industrial production grew 4.5%, down from 5.3% in June, with export orders providing much of the support. The numbers show that China’s supply side hasn’t stalled, but domestic spending remains the weaker link.

Big picture: More stimulus can lift activity, but policymakers can’t rebalance the economy through factory support alone. Measures that improve household confidence, property stability, and disposable income would address the demand gap more directly. Global companies should prepare for two conditions at once: capable Chinese suppliers and a Chinese customer who’s still careful.

Source: South China Morning Post

Q: Why’d the new CEO bring a compass and a map?

A: They’d heard the company needed direction.

The business exposure created when critical knowledge, relationships, or decision-making depend too heavily on one leader or employee.

In a sentence: L3Harris hasn’t eliminated key-person risk by naming a successor quickly, but its internal handoff shows why a prepared leadership bench can reduce disruption.

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