Tuesday's Final Takeaways: Trade Deficit Widens, Moonshot AI & DeepSeek Funding Latest

Marley Kayden (0:01)

Welcome back to Market Unclosed. I'm Marley Kayden here in Chicago, alongside Sam Vadas at the New York Stock Exchange. We gave you those results from Constellation Brands, and then 10 minutes after they released those results to us, they announced that they are acquiring a ready-to-drink, a spirit-based brand called Spike Aid. So they'll be adding to their offerings. That's also a conversation we had on the Market Matters podcast with Martin Lodaveggs from IWSR about how those ready-to-drink drinks are the future of the beverage industry. So take a listen to that. As far as our takeaways for today, the US trade deficit really standing out to me widening sharply in August, hitting $105.6 billion. That was up 13.7% from July and the largest gap since March of 2025 Imports jumped 4.3% to a record $420.8 billion.

That was outpacing a 1.4% increase in exports to $315.2 billion with higher imports of crude oil, gold and semiconductors helping drive that increase. The data is notable because the widening deficit comes despite the administration's tariffs, which were intended in part to reduce America's reliance on foreign goods. The bigger economic question now is how much the surge in imports reflecting strong domestic demand and business investment will weigh on third quarter GDP.

Also, oil standing out to me. It did pull back earlier in the session. We had Brent hovering around 101 It's now about 100 Now it's about 101 WTI holding right about $89.

As we saw Gulf crude shipments excluding Iran rebounding to more than 80% of pre-war levels. That was helped by Saudi Arabia's increased use of alternative export routes and pipelines that bypass some shipping bottlenecks. But the geopolitical risk premium has not disappeared. Nearly 20 commercial vessels, mostly oil tankers, have been attacked in or around the Strait of Hormuz over the past month. Highlighting just how vulnerable global energy flows remain, even as exports are recovering. The key takeaway here is that oil is being pulled in two directions. Improving exports are easing some fears of an immediate supply shock, while persistent geopolitical tensions are keeping a floor under prices. That matters not just for energy stocks, but also for inflation, for interest rates, the broader market, especially with Brent Crude hovering around that psychologically important $100 level. Oil and yields, always a top of conversation for us. Seems like every day, Sam, but what's stuck out to you on the session?

Sam Vadas (2:23)

Absolutely, and just chuck a bit of AI in there, why don't we? Plenty going on in China's startup space today, as I mentioned a little bit earlier, DeepSeek reportedly now closing to or close to securing at least $12 billion in its latest funding round. That's according to Bloomberg. It says the Chinese battery maker Contemporary Amperix and Tencent are among the biggest backers of the money.

The latest round of funding is said to be bigger than its own target and comes ahead of an expected IPO in early 2027 It underscores the enormous amount of capital needed to bankroll its ambitions as China looks to compete with the US. Meanwhile, its rival Moonshot has reportedly closed its final round of fundraising. At a valuation of roughly $50 billion, it prepares for its public offering in Hong Kong. In the first quarter, Bloomberg's saying the company is looking to gauge investor appetite through early meetings starting this month. It's one of the most hotly anticipated FOMC's in Hong Kong. It's reportedly looking to raise up to $5 billion in the deal. The onshore Chinese markets will reopen after a week-long holiday tomorrow night. I will be keeping an eye on some of those technology stocks, particularly after Huawei also just got that validation from Qualcomm's licensing deal this week. Heading into tomorrow, Marley, what are you going to be looking out for?

Marley Kayden (3:37)

We'll get a look at the minutes from the last FOMC meeting, some more insight into the thought process behind that September hike. Fed watchers looking for any clues about the metrics that the Fed is using when it's making its decisions right now, and also what it's considering when it comes to how many more hikes could be in store. There was some comments about the Fed being more accommodative going forward, but whether or not this current rally is affecting some of that accommodation, I think we'll be looking for some clues there. But how about you, Sam, what are you looking for?

Sam Vadas (4:08)

Yeah, as KG has been also pointing out this week, the 10-year note auction is going to be interesting tomorrow, just obviously given that bonds have been stealing the show. It'll be on the same day as the Fed minutes, so we'll certainly be looking at that. But spiked aid, a vodka-based sports drink, I'm just wondering how many instances you would need both of those things, Marley.