Good morning, Bull Sheeters. The markets are sinking this morning ahead of Fed chairman Jerome Powell’s big annual speech on monetary policy and the latest batch of jobless claims. All eyes too are on the Texas-Louisiana Gulf coast as Hurricane Laura makes landfall with devastating effect.

Here’s what’s moving markets, a day after the equities rally pushed stocks above a $90 trillion valuation, a new record.

Markets update

Asia

• The major Asia indexes are mixed in afternoon trading, with Shanghai up 0.6%.
• TikTok’s CEO Kevin Mayer resigned unexpectedly yesterday, just four months into the job. The clock continues to tick on the viral video-sharing platform, owned by China’s ByteDance, as the Trump Administration vows to shut down its U.S. service over security concerns next month unless it finds a suitable buyer.
• The diplomatic tensions don’t end there. Secretary of State Mike Pompeo blasted HSBC for siding with Beijing by allegedly operating bank accounts for individuals on a U.S. sanctions list, and for allegedly blocking pro-democracy Hong Kong newspaper Apple Daily, from accessing their personal bank accounts and HSBC credit cards.

Europe

• The European bourses opened mostly in the green, before falling. Germany’s Dax, which is ever so close to break-even for the year, is down roughly 0.4% two hours into the trading day.
• EU trade chief Phil Hogan has submitted his resignation after sparking a political furor for attending a gala golf dinner last week in violation of Ireland’s social-distancing rules. The EU is now in a scramble to find a replacement. Let the horse-trading begin.
• Geopolitical tensions in the Med are growing as Greece yesterday asserted new maritime claims that essentially extend its borders in the Mediterranean. The latest move comes as Greece and Turkey continue to spar over energy resources to exploit in the eastern Mediterranean.

U.S.

• The U.S. futures are down this morning as the nation braces for Hurricane Laura and the Fed’s annual monetary policy summit. Yesterday, Kansas City Fed President Esther George warned of her fears for a double-dip recession should COVID cases spike again.
• That National Weather Service warned overnight that Laura packs an “unsurvivable storm surge” as it barrels into the Texas-Louisiana coast. Insurers are bracing for losses in the tens of billions of dollars.
• Salesforce shares soared 26% on Wednesday a day after reporting blockbuster top- and bottom-line beats. Even still, the company said it will go ahead with its plans to eliminate nearly 1,000 jobs.
• Unemployment claims numbers come out in a few hours. The consensus estimate is right around 1 million. The markets have largely ignored this data. Bull Sheet won’t.

Elsewhere

• Gold is down, trading around $1,950/ounce.
• The dollar is down slightly.
• Crude is remarkably stable ahead of the big storm.

***

An update from the C-suite

Here at Bull Sheet we’ve been covering over the months Deloitte‘s quarterly CFO surveys to provide a glimpse into how finance chiefs view the markets and the prospects of a larger economic recovery. The latest survey goes live this morning, and Bull Sheet got an early peek. (Here’s the link to the full survey. Be patient; it may not go live for a few more hours.)

The upshot: CFOs see a mixed business climate. In a pandemic, “mixed” isn’t a bad modifier, but may not be the word bulls want to hear.

Let’s take business operations. Roughly four in ten (42%) CFOs surveyed say their company is already at or above its pre-crisis operating level, or will get there by the end of Q3. Last quarter, the survey showed less than 20% could say the same.

So, there is progress to report. But it’s not quite a glass-half-full situation. One-quarter of respondents don’t see getting back to normal operations until Q1 2021 or beyond, underscoring that this is a highly uneven recovery.

Now, I want to turn to the debt and equities market, and CFO’s overall risk appetite.

First, equities.

CFOs overwhelmingly think the valuation for stocks is out of whack, with 84% of respondents describing equities as overvalued. Reminder: BofA equity analysts said the exact same thing here in this space on Bull Sheet yesterday (and the markets promptly rallied to fresh highs on the Nasdaq and S&P a few hours later.) That 84% figure, btw, is the second highest reading Deloitte has ever recorded, as today’s chart show:

Looking at the debt market, finance chiefs are understandably bullish. In this period of rock-bottom interest rates, debt financing is as attractive as ever (middle chart, blue line). Even cash-rich Apple has turned to the debt markets—twice!—in recent months.

But even with all this cheap financing available to corporates, the risk appetite is fairly flat, to a pre-pandemic norm of 41%.

Overall, the survey results show yet another disconnect between the financial markets and the wider economy. CFOs—yes, a fairly conservative bunch—have a pretty good beat on where the larger economy is heading.

Yes, things are getting better. But not at a record-setting pace.

***

Have a nice day, everyone. I’ll see you here tomorrow. 

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.

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