The Rundown - Bessent Steps In with Rare Bond Buyback, Walmart Sinks On Weak Sales Growth

Episode Date: August 20, 2026

Market update for August 20, 2026Check out the Public app for incredible investing tools and to support the show (LINK)Follow us on Instagram (@TheRundownDaily) for bonus content and instant reactions.In today’s episode, Zaid covers:Why Treasury Secretary Scott Bessent is stepping in to push long-term Treasury yields lowerWhat the Treasury’s bond buyback strategy means for stocks, mortgages, and borrowing costsWalmart earnings after the retailer posted its slowest U.S. sales growth in more than six yearsWhy Bitcoin, Ethereum, Coinbase, and other crypto names are rallyingAlibaba’s 75% profit plunge as AI spending surgesHow billions of dollars in tariff refunds are boosting corporate earnings

Public.com presents the rundown. Your daily market update in 10 minutes. My name is Zadadmani, and today is Thursday, August 20th. In today's episode, we'll break down what Treasury Secretary Scott Besant is doing to push down long-term bond yields. We'll also recap Walmart earnings and tell you why crypto is rallying again. Then stick around to the end of the show to find out why you might be getting a tariff refund check in the mail. We got a great show for you today. Let's go.

Stocks moved higher on Wednesday, with both the S&P 500 and NASDAG gaining about 0.2%. But once again, the main character of the markets was the bond market as the Treasury Department stepped in to calm some nerves. We've been talking about this all week. Treasury yields have been surging recently. The 30-year yield crossed 5.3% this week, its highest level since 2007. And that has some people wondering if the bond market is flashing a warning sign or if investors are getting nervous about the amount of borrowing happening across the economy, including from the federal government, because the national debt just crossed $40 trillion. And these yields matter way beyond just the bond market because they influence things like mortgage rates and corporate borrowing costs and even stock valuations. So Treasury Secretary Scott Besson decided to intervene to push yields lower.

Scott Besson yesterday announced that the U.S. Treasury will double the amount of long-term government. government bonds it buys back from $2 billion to at least $4 billion starting on September 9th. This gets kind of complicated. We might have to do a full deep dive on this, but here's like a quick simple version on what's going on. Right now, the U.S. government has a ton of 10, 20, and 30-year IOUs floating around in the market. Scott Besson is basically saying the U.S. Treasury will go in and buy back those existing bonds, specifically the 10 to 30-year bonds. And what that does is it creates a buyer for these long-term bonds and to remove some supply from the market, which pushes yields lower. But here's the key part to all of this. The U.S. Treasury will likely

finance those purchases by issuing more short-term treasury bills. So another way to think about this is that the government is essentially refinancing some of their long-term debt with short-term debt. And this move has worked, at least for now. The 30-year treasury yield dropped about a tenth of a percentage point after the announcement yesterday. So this is basically financial engineering by the U.S. Treasury to keep long-term borrowing costs from getting out of control. The problem, though, is if the Treasury keeps replacing long-term debt with short-term bills, the government becomes more exposed to short-term interest rates. And that's why I don't think this bond market drama is going away.

In fact, Treasury yields are rebounding again today. The 30 years back to 5.26%. So we'll continue to keep an eye on the bond market along with everything else happening. So if you're new here, definitely get subscribe to the podcast and tune in every day to Stay in the loop. Let's run through some headlines. Starting with Walmart. Walmart shares are getting hammered this morning, even though the company technically

beat earnings expectations and raised their outlook for the year. Revenue's last quarter grew about $6% to $188 billion that beat expectations, and their adjusted earnings came in at 81 cents per share versus the 74 cents that Wall Street was expecting. The bright spots include e-commerce sales, which were up 24% in the U.S., and advertising revenue, which jumped 38%. Walmart also saw a boost in their membership income, which was up 17%. So people are signing up for Walmart Plus, which I have, by the way, it's a great service.

So on the surface, the numbers were great, but there was one ugly metric. U.S. comparable sales grew just 2.6% for the quarter, which would be Walmart's slowest quarterly growth in more than six years and below expectations. Now, there is one important caveat here. There's a new federal drug pricing rule that caps drug prices, and that hurt Walmart's pharmacy business. So if you strip out the health and wellness business, U.S. comparable sales actually grew 3.4%.

But that was still well below expectation. And that's raising red flags about the health of the American consumer. Walmart is like the bellwether for how consumers are doing because 90% of the U.S. population lives within a 10-mile radius of a Walmart. And Walmart management said that shoppers made the same number of trips, but they spent less per trip, especially lower income shoppers that are feeling stretched thin by high gas prices. On the flip side, Walmart continues to gain market share with higher income households

earning over $100,000 a year who are trading down for value. Now, Walmart plans to double down on value and lower prices. There's an interesting tariff angle here. Walmart said they are receiving $2.9 billion in tariff refunds from the U.S. government, and management says they plan to use that money to lower prices rather than just pocket the benefit. Those price cuts should become more noticeable this quarter, so we'll see if that ends up boosting sales. By the way, we're going to talk more about tariff refunds near the end of the show. But overall, I think Walmart isn't a decent spot here, and I'm not too concerned about the health of the American consumer just yet.

We talked about Target's earnings yesterday, and they're seeing a jump in sales. So I don't think there's a broad slowdown in consumer spending. I think Walmart is becoming a much more interesting company than just, you know, a big store that sells cheap stuff. They're building these high margin businesses around advertising and membership and marketplace sales. and delivery. They're basically trying to become Amazon, but they also have a massive storefront footprint with over, what, 4,000 stores in the U.S. And I think the market sees that potential from Walmart, which is why Walmart trades close to 40 times forward earnings, which is actually a higher multiple than Amazon. But when you trade at such a valuation, expectations become really

high, and Walmart missed the mark this quarter, and that's why the stock is down more than 7% this morning at the time of this recording. Let me know in the comments on what you guys think, do you think this earnings from Walmart is a red flag or just a blip? Let's talk about some stocks making moves today. The entire crypto sector is ripping this morning, which is a sentence that I haven't said in a while. This surge is happening after President Trump met with industry executives at the White House yesterday, and he urged Congress to pass the Clarity Act, which would establish a formal

regulatory framework for the crypto industry. Crypto is also getting a boost from bond yields. dropping, which we covered earlier in the show. So yeah, there's finally a crypto rally going, which I feel like has had no juice all summer. Bitcoin is up more than 4% over the last day, topping $72,000, while Ether has jumped over 20% in the last week to over $2,300, its highest level in more than three months. Crypto stocks are also surging across the board. Coinbase is up 8%. Strategies up 10% and Circle is up 7% at the time of this recording. If you zoom out, though, Bitcoin is still down roughly 18% so far this year.

and it's down over 40% from its all-time highs, which were set back in October of last year. So who knows, maybe Bitcoin will be one of the breakout winners of the second half of the year. Now, on the flip side, Alibaba is dropping this morning after a massive surge in AI spending absolutely wrecked their profits last quarter. Alibaba is China's largest e-commerce company, but they are aggressively trying to reinvent themselves into an AI cloud company. They reported earnings this morning, and growth was solid. Total revenues grew 9% to about $38 billion, while cloud revenues,

was up 45%. Alibaba also said that revenue from AI-related products grew by triple digits for the 12th straight quarter. So the growth is solid, but Alibaba is spending a ton of money for that growth. Their capital expenditure last quarter jumped 75% to roughly $10 billion as they buy up chips and data centers and build out their AI infrastructure. And all that spending has crushed their bottom line. Net profits fell by 75% to $1.6 billion, which is roughly half of what analysts were expecting. The company also burned through more than $6.6 billion in free cash flow during the quarter. Now, Alibaba has basically told investors it cares more about winning the AI race right now than maximizing short-term profits. I mean, that's the same playbook that U.S. tech companies are

playing. But the market doesn't love its shares of Alibaba are down more than 3% this morning at the time of this recording. And if you zoom out, Alibaba stock has dropped more than 12% this year heading into the earnings report. Let's wrap the show with the fun fact. Tariff refunds are juicing corporate earnings. After the Supreme Court struck down President Trump's emergency tariffs earlier this year, businesses started filing claims to get their money back. In fact, as at the end of July, more than $128 billion worth of refund claims have already been accepted and are being processed by the government.

And so far, more than 40 S&P 500 companies have reported about $9.6 billion in total refunds. And some of these checks are pretty massive. Apple, for example, got nearly $2.2 billion in refunds. Nike got almost $1 billion. FedEx got around $800 million, and Target got more than $750 million. In fact, the tariff refunds for Target accounted for 40% of their total earnings for the quarter. We talked more about that on yesterday's show, so go check that out if you missed it. Now, what's interesting here is how different companies are handling the refunds.

FedEx, for example, is passing back the refunds to their customers. They literally added a tracker on their website. So there's customers can track the status of their tariff refund. Meanwhile, you have companies like Costco and others getting hit with class action lawsuits from shoppers demanding that they get their cut of the refund. So yeah, this is going to be a classic situation where the lawyers will walk away with a nice payout, while us consumers, I don't know, we might get a $1.50 settlement check in the mail three years from now. So yeah, if you bought anything from Costco or another retailer, keep an eye on your mailbox for that class action postcard. Well, all right, guys, that's the rundown for today. I hope you guys enjoyed today's episode.

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Guys, back here tomorrow.