Buongiorno, Bull Sheeters. The August rally has been truly impressive. The S&P 500 has gained ground on all but one trading session this month. Alas, this morning investors have hit pause on equities, with U.S. futures slightly down, and Europe and Asia mixed.

Let’s check in on the action.

Markets update

Asia

• The major Asia indexes are mostly higher with Japan’s Nikkei up 1.8% in afternoon trade.
• Facing a potential U.S. ban, Tencent Holdings, operators of the popular WeChat messaging platform, is trying to placate investors that any impact on the business would be a narrow one. Conversely, any ban could inadvertently hit Apple’s $44 billion China business pretty hard.
• Saudi Aramco has vowed to meet its commitment of paying out $75 billion in dividends this year despite a huge drop-off in revenues and a rising debt pile. Unless crude prices rise significantly, that strategy isn’t a viable one, analysts tell the Financial Times.

Europe

• The European bourses sank at the open, with London’s FTSE down 0.9% in the first hour of trade, before falling further.
• The U.S. will hold off—for now—on a threatened tariff hike against the E.U., a dispute that began 16 years ago over state subsidies to Airbus and has now mushroomed into more than 100 items—from clothes to cheese to whiskey.
• Add Russia to the list of those dumping dollars for euros. According to Bloomberg, Russia’s strategy to “de-dollarize” the economy has gone into full swing with the majority of its Russia-China trade, for example, now priced in euros, not dollars.

U.S.

• U.S. futures are trading sideways. That’s after yesterday’s big rally, which saw the S&P 500 briefly hit an all-time high with Big Tech’s thoroughbreds—Apple, Microsoft  and Amazon—leading the way.
• Can the S&P climb any higher above these pandemic-defying prices? Fortune‘s Shawn Tully runs the numbers, and concludes the future return on big cap stocks is pretty lousy.
• Don’t tell that to Tesla bulls. Shares closed Wednesday 13% higher following the company’s announcement of a 5-for-1 stock split. Never mind that the move is the equivalent of breaking a five-dollar-bill—you don’t get any more value when you ask for five singles. Still, investors keep pouring into the stock expecting huge returns. So far, they haven’t been wrong.

Elsewhere

• Gold has had a wild ride this week. It’s down slightly, trading around $1,940/ounce.
• The dollar is down, too.
• Crude is flat, with Brent trading at $45.20/barrel.

***

The shape of recovery

Now is as good a time as any to check in on the health of the world’s biggest economies. The U.K. yesterday reported dismal Q2 figures, meaning all G7 nations (with the exception of Japan) have now detailed how badly their economies contracted in the lockdown-slammed quarter.

Among the mega economies, China (not part of the G7, of course) actually reported Q2 growth. They were the only ones.

Elsewhere, the U.S. saw a historic economic contraction in the April-June quarter, but it wasn’t nearly as bad as the collapse of economic activity in the Euro zone, or in Britain. Today’s chart details the Q2 carnage:

The good news is that Q2 was probably the nadir for the developed world’s pandemic-inflicted economic collapse. From here, most economists agree, we’re in rebound territory.

But we’ve only just begun calculating the cost of recovery. For example, the U.S. is facing a record budget deficit that will almost certainly top $3 trillion by the close of the fiscal year ending on Sept. 30. That’s more than double the previous record. And there’s a chance—an ever-slimming one—that another trillion-dollar-plus fiscal stimulus package is still in the cards, adding to a groaning debt load.

To get out of the economic crisis, every nation in the chart above will see its dreaded debt/GDP ratio soar. We’ve racked up debts so big that we and our kids will be paying them off for years to come.

Slow growth and rising indebtedness used to be the kind of thing that would put a chill on the markets. Deteriorating public finances, the econ text books tell us, should send yields on sovereign debt higher, rightly suggesting a higher premium be paid for every dollar loaned out. That’s not happening, as you can see with Treasury yields plumbing historic lows.

Inflation expectations are still relatively low and investors are as bullish as ever on tech and health care stocks, which are now seen as a flight to safety. As the August equities rally shows, investors just aren’t all that concerned about the debt sustainability of the world’s biggest economies.

You know what could pop this bubble of euphoria? A bad autumn where the pandemic lingers and spikes, lockdowns are re-instituted, vaccine trials get bogged down, and lawmakers and central bankers begin to fess up that they’re running out of bullets.

Such a scenario may sound overly pessimistic, but investors are indeed concerned about the pandemic. It regularly tops investor sentiment polls as “biggest worry” or “biggest headwind” in Q3 and beyond.

Okay, I don’t want to end on a downer note, so [checks notes]… did you hear the news? Tesla is doing a five-for-one stock split.

***

Have a nice day, everyone. I’ll see you here tomorrow… But first, more news below:

Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com

As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.

Today's read

Pizza party. Not all pizza's the same. That truth is being exposed during the pandemic. For starters, if you don't have a decent home-delivery business, your pizza business is toast. Fortune's Brooke Henderson does a deep-dive into America's biggest pizza chains and reveals why some of these stocks—hint: Domino's Pizza—are soaring above the rest of the pack.

Media mogul. The life and career of Sumner Redstone was worthy of a movie. It's a story full of heated boardroom clashes, bold M&A deals, romance and betrayal, and, yes, a daring escape from a hotel fire. Redstone, whose family now has a sizable stake in ViacomCBS passed away on Tuesday at the age of 97. His obituary is one for the ages.

MPW. One more time... Fortune is collecting nominations for our annual Most Powerful Women lists, which publish in our November issue. We’re accepting submissions through this online form. The deadline for applications is Aug. 24

Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.

Market candy

Running mate

Kamala Harris, Joe Biden's newly named running mate, is one of the highest-earning Democrats in Washington. Fortune's Jen Wieczner breaks down Harris' net worth and finds that "by some measures," Harris has been a bigger earner than even Biden himself. "Politically, Harris has proposed some changes to U.S. tax policy, including taxing stock trades at 0.2% and bond trades at 0.1%—a change that could potentially increase the taxes she pays on her own investment accounts, which include both stock and bond funds," Wieczner writes.