Update(10:16ET): Within an hour of the first videos hitting social media and widely circulating, Russia's defense ministry has said the large explosion at its Crimean Saky Airbase was not the result of an airstrike or shelling. The statement said ammunition stored at the airfield detonated, but the cause of what ignited the storage depot is still unknown and being investigated. Russian state media has published the following English-language statements of the defense ministry:

This development is apparently a major surprise to some. So much so that: “No one could have predicted this. If someone tells you they predicted this, they’re a genius or lying through their teeth,” says a CIO obviously deeply involved in the failing trade.

I can’t wait to tell my wife I am a genius. (My mother, so proud of my “ologies”, already knew of course.)

Yes, I am lying through my teeth in saying so – just ask my wife. But you had to be the very opposite of a genius, or lying through your teeth, to not see there was no way a property bubble of the scale of China’s scale could avoid ending this way, or that, given a choice, it would be foreign bond holders who would suffer more than local ones when push came to shove.

A massive explosion erupted Tuesday deep inside Crimea at Russia's Saky Airbase, which lies some 200km from front line fighting in Ukraine, immediately giving rise to speculation that this could have been a Ukrainian long-range missile strike. 

Few details are confirmed thus far, only that a multiple-stories high fireball and smoke was filmed from many angles engulfing the Russian military airbase. 

“I was into pain reduction and mind expansion, but what I’ve ended up with is pain expansion and mind reduction. Everything hurts now, and nothing makes sense.“

Taiwan announced its own live fire drills Tuesday, a day after China's military announced it is extending ongoing exercises surrounding the democratic-run island past the scheduled end date of Sunday. Taiwan's defense ministry said the new defensive drills are intent on simulating repelling an attack of the island in the event of a Chinese invasion. 

However, Taiwanese officials are emphasizing that "Tuesday’s drills, which involved soldiers firing howitzer artillery out to sea, had long been scheduled and were not a reaction to China’s unprecedented war games." It's said to have involved hundreds of troops and about 40 howitzers. The Taiwanese drills reportedly last only an hour, China’s Eastern Theater Command announced its exercises will continue indefinitely. The PLA, along with state media, is now openly describing the games as focused on conducting a "joint blockade". 

Median one- and three-year-ahead inflation expectations both declined sharply in July, from 6.8 percent and 3.6 percent in June to 6.2 percent and 3.2 percent, respectively. Both decreases were broad-based across income groups, but largest among respondents with annual household incomes under $50,000 and respondents with no more than a high school education. Median five-year ahead inflation expectations, which have been elicited in the monthly SCE core survey on an ad-hoc basis since the beginning of this year, also declined to 2.3 percent from 2.8 percent in June. Expectations about year-ahead price increases for gas and food fell sharply. Home price growth expectations and year-ahead spending growth expectations continued to pull back from recent series highs. Households’ income growth expectations improved.

The recent plunge in the price of oil, which has dropped by more than 25% from its post-Ukraine war highs, may be delighting the Biden administration (since presidential approval ratings tend to be inversely correlated to gas prices), but has stumped investors and energy market watchers alike. And not just because the growing chasm between the physical market – which remains extremely tight and allows Aramco to demand Asia pay ever higher prices for its products – and the futures market has been likened to the relationship between Dr Jekyll and Mr Hyde. Market watchers have been further perplexed by the White House eagerness to take credit for the collapse in oil prices even though most attribute the ongoing commodity bear market to the upcoming (or current) recession, for which the Biden administration is responsible. In fact, some have gone so far as to accuse the administration of indirectly (or directly) influencing the EIA to make gasoline demand appear lower than it...

“This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.” 

– Ben Bernanke

After a Monday which started off with a powerful rally only to fizzle and close in the red, overnight market action has seen a continuation of the muted drift lower, and S&P 500 futures have turned lower this morning, falling 0.2% to 4,132, near session lows after trading 0.2% higher earlier. Nasdaq futures dropped 0.5%, indicating that the index will extend its losses for a third session, and semiconductor companies like Nvidia and AMD slipped in premarket trading after Micron forecast adjusted revenue for the fourth quarter at or below the low end of its June 30 guidance. The fading of some meme stock euphoria that defined the past 3 days has not helped bullish sentiment. Treasuries dipped, with the 10-year benchmark yield rising three basis points to 2.79% as traders await Wednesday’s CPI report to gauge the path of Federal Reserve tightening.