Market Beats | US Personal Spending Climbs Again in August, Inflation Stays Sticky; Trump Administration’s $14B Valuation for TikTok US Shocks Investors; Valentino in Talks With Creditors After Breaching Debt Covenants; Trump Plans 100% Tariffs on Branded Drugs Unless Firms Build in US; Canada Faces Slow Recovery Amid US Tariff Pressures; Trump Signals More Prosecutions After Comey Indictment; US Pulls Back on Fair Housing Enforcement

—— US Personal Spending Climbs Again in August, Inflation Stays Sticky; Trump Administration’s $14B Valuation for TikTok US Shocks Investors; Valentino in Talks With Creditors After Breaching Debt Covenants; Trump Plans 100% Tariffs on Branded Drugs Unless Firms Build in US; Canada Faces Slow Recovery Amid US Tariff Pressures; Trump Signals More Prosecutions After Comey Indictment; US Pulls Back on Fair Housing Enforcement

1. US Personal Spending Climbs Again in August, Inflation Stays Sticky

US personal spending rose 0.4% in August after adjusting for inflation, marking a third consecutive monthly increase, according to Bureau of Economic Analysis data released Friday. The gains highlight consumers’ ongoing role in supporting economic growth.

The core personal consumption expenditures (PCE) price index — which excludes food and energy and is closely watched by the Federal Reserve — rose 0.2% from July and held steady at 2.9% year-over-year, still above the Fed’s 2% target. While strong consumption points to solid momentum in the third quarter, sustaining it depends on the labor market, where hiring has slowed and wage gains have moderated. Inflationary pressures from President Donald Trump’s tariffs may also weigh on margins as companies decide whether to pass higher costs on to consumers.

With inflation remaining elevated, Fed policymakers are cautious about cutting rates further. The September jobs report will be a key input for the next policy meeting, though a possible government shutdown could delay its release. Following the report, stock futures gained while Treasury yields stayed lower.

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2. Trump Administration’s $14B Valuation for TikTok US Shocks Investors

The Trump administration has pegged TikTok’s US business at $14billion, far below the $40billion estimates that many investors had anticipated. Vice President JD Vance revealed the figure Thursday, while noting that the ultimate purchase price will be determined by the buyers.

Prospective acquirers such as Oracle and Silver Lake may see the low valuation as a bargain, but ByteDance and its investors are likely to find it unreasonably low. Ashwin Binwani, founder of Alpha Binwani Capital, called it “perhaps the most undervalued tech acquisition of the decade,” saying the estimate represents roughly a third of TikTok’s fair worth.

At a $14billion price tag, TikTok US would trade at a price-to-sales ratio of about 1.4x — comparable to mature, slow-growth companies like Exxon Mobil and General Mills. By contrast, Meta’s Instagram trades near 10x sales and Alphabet’s YouTube around 8x.

TikTok remains one of the most widely used social media apps in the US, with 170 million active users generating more than $10billion in annual revenue.

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3. Valentino in Talks With Creditors After Breaching Debt Covenants

Valentino SpA is negotiating with creditors after weaker luxury demand eroded its earnings, pushing the Italian fashion house beyond the debt thresholds set in its loan agreements, according to people familiar with the matter.

The brand, owned by Qatar’s Mayhoola for Investments and Kering SA, is seeking covenant relief after its net debt-to-earnings ratio surpassed the agreed limit. Valentino first breached the terms in December, but performance worsened in the first half of 2025 as global luxury markets slowed under economic uncertainty and rising tariffs.

The company’s €530million ($619million) financing package, signed in July 2024 with lenders including Intesa Sanpaolo, Banca Monte dei Paschi di Siena, Banco BPM and BNP Paribas, requires biannual testing of its leverage ratio. Valentino’s revenues fell 2.8% to €1.31billion in 2024, while Ebitda dropped 21% to €248million, hurt by weaker wholesale sales and slower demand in Europe and China.

Kering, which acquired a 30% stake in 2023 and recently extended its option to buy the remainder until 2029, had hoped the deal would reduce its reliance on Gucci. But the sector as a whole is under pressure. A Bain & Co. report in June projected luxury sales will contract by 2% to 5% this year.

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4. Trump Plans 100% Tariffs on Branded Drugs Unless Firms Build in US

President Donald Trump announced Thursday that the US will impose a 100% tariff on imported branded or patented drugs starting October 1, 2025, unless the manufacturer is actively building a plant in the US. Generic pharmaceuticals, which make up the bulk of US imports, will be exempt.

Trump specified that exemption would apply if a facility has already “broken ground” or is “under construction.” The move is aimed at pushing multinational drugmakers to expand manufacturing within the US.

The EU said it was confident its pharmaceutical exports would be shielded under an agreement reached with Trump last month, while the UK government described the announcement as “concerning” for the sector.

Investor reaction was muted. Shares of Denmark’s Novo Nordisk fell 1.5% on Friday, while AstraZeneca and Roche traded broadly flat after an early dip.

Pharmaceuticals were excluded from Trump’s reciprocal tariffs announced in April, though they have since been subject to duties negotiated bilaterally with individual countries and Brussels.

On Friday, the EU reiterated its expectation that the US would honor last month’s deal capping tariffs on European goods at 15%.

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5. Canada Faces Slow Recovery Amid US Tariff Pressures

Canada’s economy is set for a modest recovery in the second half of 2025, with exports gradually rebounding from the impact of US tariffs, according to analysts.

A Bloomberg survey of economists forecasts GDP growth at a 0.5% annualized pace in the third quarter, up from last month’s 0.1% estimate, after a 1.6% contraction in Q2. Exports are projected to rise 3.3%, following a steep 27% annualized drop in the prior quarter.

US President Donald Trump has imposed 35% tariffs on Canadian goods that don’t comply with the US-Mexico-Canada Agreement. While more firms are now shipping under the deal, key sectors such as steel, aluminum, autos and copper remain subject to heavy duties, creating the sharpest drag.

The survey indicates Canada will continue to struggle with weak momentum, with annual growth expected to average just 1.2% in 2025 and 1.1% in 2026.

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6. Trump Signals More Prosecutions After Comey Indictment

Just hours after the Justice Department indicted former FBI Director James Comey, President Donald Trump suggested that more political opponents could soon face prosecution.

Speaking before departing for the Ryder Cup on Long Island, Trump insisted the move was about “justice, not revenge,” reiterating that he had been the target of a political “witch hunt” for four years.

The Justice Department announced Thursday night that a grand jury in Virginia had indicted Comey on charges including lying to Congress and obstructing a congressional proceeding, citing his 2020 Senate testimony. The charges follow pressure from Trump, who has long pushed for legal action against the former FBI director over his role in investigating ties between Trump’s 2016 campaign and Russia.

While Trump declined to identify specific future targets, he has previously named billionaire Democratic donors George Soros and Reid Hoffman as possible subjects of investigation. He has also urged Attorney General Pam Bondi to pursue cases against Democratic Senator Adam Schiff and New York Attorney General Letitia James.

The indictment of Comey marks a sharp escalation in Trump’s campaign against perceived adversaries and has heightened concerns that the White House is undermining the long-standing tradition of DOJ independence from presidential influence — a norm established after Richard Nixon’s Watergate scandal in the 1970s.

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7. US Pulls Back on Fair Housing Enforcement

Intel Corp. has approached Apple Inc. about a possible investment as part of efforts to revive its struggling business, according to people familiar with the matter. The two companies have also held preliminary discussions about closer collaboration, though no deal is assured at this stage.

The talks follow a $5billion investment from Nvidia Corp. last week to jointly develop chips for PCs and data centers, and a $2billion investment from SoftBank Group Corp. in August. Intel is also in contact with other firms about potential partnerships and funding.

An investment from Apple would represent a significant endorsement of Intel’s turnaround bid. Apple, once a major Intel customer, has shifted entirely to its own processors over the past five years, with advanced chips produced by Taiwan Semiconductor Manufacturing Co. As such, a return to Intel chips in Apple devices remains highly unlikely.

Intel CEO Lip-Bu Tan is pursuing a comeback backed by the US government. In August, the Trump administration brokered an unusual deal that gave the federal government about a 10% stake in Intel, framing the company as essential to restoring US semiconductor leadership.

Despite government support, Intel faces steep challenges: it has lost its long-standing technology lead to rivals like Advanced Micro Devices Inc. and failed to capture much of the booming AI chip market dominated by Nvidia. The company has also cut jobs and delayed factory expansion amid financial strain.

Still, sentiment has improved since the government’s investment, with Intel shares climbing more than 50% since early August.

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