Daily News Round Up
Wednesday, 02 Jul 2025
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- Equity Markets Demonstrate Resilience Despite Macroeconomic and Geopolitical Headwinds Equity markets posted gains in the first half of 2025, shrugging off concerns related to tariffs, geopolitical tensions, and persistent (though moderating) inflation. This resilience suggests investor optimism and a belief in continued economic growth, even with forecasts for moderate growth of 1.4% for the remainder of the year. (ETF Trends), (Seeking Alpha)
- Geopolitical Risks Are Rising, But Impact on Energy Markets Remains Limited Escalating geopolitical tensions, particularly concerning Iran and Israel, have led to increased oil price volatility, with UBS revising its 2025 Brent crude forecast upwards to $67/barrel. However, a limited impact on US energy markets is anticipated due to U.S. energy independence and a reluctance from Iran to disrupt the Strait of Hormuz. (FMP), (ETF Trends)
- Divergence in Asset Performance Highlights the Appeal of Diversification U.S. stock market dominance has waned in 2025, with gold and foreign equities outperforming, signaling a shift in investor preferences. This underscores the importance of diversification as a strategy to mitigate risk and capture opportunities outside of the traditionally high-performing U.S. market, as evidenced by a recent shift in investor flows towards international equities. (Seeking Alpha)
- Policy Uncertainty Increases with New Tariffs and Fiscal Expansion The potential implementation of new tariffs – reaching as high as 50% in some scenarios – and a significant $3.3 trillion fiscal package are introducing substantial uncertainty into the economic outlook. The Federal Reserve is adopting a “wait-and-see” approach regarding rate cuts, closely monitoring the impact of these policies on inflation and economic growth. (FMP), (WSJ)
- Sector-Specific Developments Present Both Opportunities and Challenges Several sector-specific developments present nuanced investment implications: Alibaba’s substantial investment in cloud computing and AI, Moody’s downgrade of Huntsman International, and strong earnings from Greenbrier Companies. Notably, continued political risk clouds Tesla’s stock after friction with President Trump. (FMP), (FMP)
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What happened yesterday?
Macro
Commodity Prices: UBS has raised its 2025 Brent crude oil forecast by $1 to $67 per barrel, citing elevated geopolitical risks following the Q2 Iran-Israel conflict, which temporarily pushed prices above $80 per barrel. For Q3 2025, UBS now expects Brent to average $65, up from a prior forecast of $62, but predicts prices could dip into the low $60s by late 2025. OPEC+ production hikes are expected to continue in August, and waning summer demand and rising inventories are also key factors. UBS warns that Brent could fall below $60 with additional OPEC+ supply increases or weaker global demand. A key date to watch is the OPEC+ decision on August production, scheduled for July 6th, with an early August decision seen as a more important indicator. (FMP)
Economic Growth: The path of least resistance looks to be higher, as the U.S. economy’s resilience is reason for hope. Charting the direction on tariffs is nearly impossible, but investors can be aware of where potential volatility triggers lie. (Seeking Alpha)
Economic Growth: Australian retail sales rose less than expected in May as a rare drop in the food sector offset gains in clothing and department stores, underlining the case for another cut in interest rates as early as next week. (Reuters)
Economic Growth: US stocks have lost their top performance spot in 2025, with gold and foreign equities outperforming and most US gains coming in June. The US stock market remains extremely expensive, suggesting lower future returns; diversification is finally rewarding investors after a decade of US dominance. (Seeking Alpha)
Economic Growth: Despite Volatility, Equities Post Gains in First Half of 2025 Despite tariff concerns, geopolitical risks, and inflation worries, equity markets posted positive returns in the first half of the year amid decreasing policy uncertainty, strong earnings, and a resilient—although slowing—economy. (ETF Trends)
Economic Growth: Markets shrugged off geopolitical and economic concerns in June, with the S&P 500 and NASDAQ reaching all-time highs despite valuations pointing to a deeply overbought market. Investors remain optimistic about a second quarter GDP rebound, even as annual growth is projected to be a modest 1.4% for all of 2025, which outpaces that of Japan and Europe. (Seeking Alpha)
Geopolitics: SUMMARY We believe US market impact of the Iran-Israel conflict will be limited. US energy independence, as well as Iran’s reticence to close the Strait of Hormuz, is likely the reason for this limited impact, in our view. (ETF Trends)
Inflation: Gold prices were steady in Asian trade on Wednesday, with spot gold at $3,337.25/oz and August gold futures at $3,347.40/oz (-0.1%). Gold is up over 2% this week, rebounding from last week’s selloff. President Donald Trump’s tax-and-spending bill is expected to add $3.3 trillion to the national debt, supporting gold’s safe-haven appeal. Fed Chair Jerome Powell indicated a wait-and-see approach regarding potential economic fallout from Trump’s tariffs, with expectations for a rate cut by September rising. The U.S. nonfarm payrolls report is scheduled for Thursday. (FMP)
Interest Rates: The U.S. dollar is near its weakest levels in over two years, with the dollar index hovering around 96.74, close to Tuesday’s low of 96.37, its weakest since February 2022. It is also near its lowest point since September 2021 against the euro and close to levels not seen since January 2015 against the Swiss franc. Federal Reserve Chair Jerome Powell, speaking at the ECB Forum in Sintra, indicated a “patient approach” to rate cuts and emphasized a data-dependent strategy, with Thursday’s nonfarm payrolls being a key factor. A recent bill passed by the Senate, associated with President Donald Trump, is projected to add $3.3 trillion to the national debt over the next decade. The House vote is pending, with a July 4 signing deadline. (FMP)
Interest Rates: Markets today eye ADP payrolls, Senate spending talks, and Fed rate signals as traders position for Thursday’s key jobs data. (FXEmpire)
Interest Rates: Trade wars causing a hiring freeze. Artificial intelligence taking human jobs away. (Market Watch)
International relations: Asian markets generally declined on Wednesday, July 3, ahead of the July 9 U.S. tariff deadline. Japan’s Nikkei 225 fell 1%, and the TOPIX index shed 0.5%. South Korea’s KOSPI dropped 1.5%, with SK Hynix declining 4%. The Shanghai Composite slipped 0.1%, and the CSI 300 index was little changed. Hong Kong’s Hang Seng Index rose 0.5%. Singapore’s Straits Times Index gained 0.4%, and India’s Nifty 50 futures were largely unchanged. Australia’s S&P/ASX 200 edged up 0.3% after May retail sales rose 0.2% month-on-month, below the expected 0.3%. President Donald Trump stated the July 9 deadline would not be extended, potentially imposing 30-35% tariffs on Japanese imports. U.S. Treasury Secretary Scott Bessent indicated negotiations with India were “very close” to an interim agreement. Qantas Airways shares fell more than 4% due to a data breach affecting customer information. (FMP)
International relations: With US-China tariff tensions looming, the Hang Seng Index faces pivotal resistance as traders assess Powell’s tone and China’s recovery. (FXEmpire)
International relations: So far in 2025, European stocks have left U.S. ones in the dust. (Barrons)
Labour: The number of job openings in the U.S. increased by 374,000 in May and reached 7.77 million on the last day of the month. [contact-form-7] That figure was up from 7. (PYMNTS)
Policy: U.S. stock futures were near flat Tuesday evening, with S&P 500 Futures at 6,253.75, Nasdaq 100 Futures at 22,714.50, and Dow Jones Futures at 44,829.00. The Senate approved a tax-and-spending bill expected to add $3.3 trillion to U.S. debt over the next decade, with President Trump aiming to sign it by July 4. Tesla shares fell 5.3%, impacting the NASDAQ Composite, which dropped 0.8%, due to a rift between Trump and Tesla CEO Elon Musk regarding government subsidies. In Tuesday’s regular session, the S&P 500 fell 0.1%, the NASDAQ Composite dropped 0.8%, and the Dow Jones Industrial Average gained 0.9%. A July 9 tariff deadline looms, potentially triggering reciprocal tariffs between 20% and 50%. Investors are awaiting commentary from Fed Chair Jerome Powell and observing the July 4 and July 5 (shortened session) deadlines related to the tax bill and trade agreements, respectively. (FMP)
Policy: Fed Chair Jerome Powell said tariff concerns delayed interest rate cuts, stating the central bank would have likely reduced rates this year if not for potential consumer price hikes. (Fox Business)
Policy: States like California have led the charge in policing AI, to the displeasure of tech giants. (Barrons)
Policy: Asked about Trump’s barrage of insults, Powell’s comment that the Fed was focused “100%” on its inflation and jobs target drew applause from the audience at a European Central Bank conference and from Powell’s colleagues at other central banks. (New York Post)
Policy: Federal Reserve officials are trying to assess how tariff increases will reshape the outlook for the U.S. economy and inflation. (WSJ)
Policy: Jerome Powell says inflationary impact of the president’s trade policies needs to be assessed before borrowing costs can be reduced (The Guardian)
Trade: On Tuesday, the S&P 500 edged lower while the Dow Jones Industrial Average climbed 400 points. The Nasdaq Composite dropped nearly 0.8%. Investor optimism cooled following a report indicating a U.S. shift to narrower, issue-specific trade agreements, potentially delaying large-scale tariff rollbacks and pushing back a July 9 deadline. A baseline 10% tariff remains in place. Rising Treasury yields added pressure, particularly on technology stocks. The Federal Reserve has maintained a cautious stance despite weaker-than-expected inflation data last week, with Chair Jerome Powell suggesting a “wait and see” approach. President Trump has urged aggressive rate cuts. Market participants are divided on whether the Fed will cut rates by September. Tariffs could reach as high as 50% if reimposed. (FMP)
Trade: Hong Kong’s retail sales by value rose 2.4% in May from a year earlier, the first increase in more than a year, government data showed on Wednesday. (Reuters)
Trade: U.S. manufacturing activity contracted for a fourth straight month in June, indicating continued uncertainty among firms surrounding tariffs and their effect on costs. (WSJ)
Industry
Agriculture: Turkey said on Wednesday it will shut down all livestock marketplaces to control the spread of highly contagious foot and mouth disease. (Reuters)
Banking: The top U.S. watchdog agency for consumer finance this week canceled a $95 million settlement reached last year with Navy Federal Credit Union, a lender officials in the prior administration had accused of illegally charging surprise overdraft fees, according to an order published Wednesday. (Reuters)
Chemicals: Moody’s Ratings downgraded Huntsman International LLC’s senior unsecured ratings to Ba1 from Baa3, removing it from investment-grade territory, with a negative outlook. This downgrade stems from reduced earnings, higher leverage, and diminished financial flexibility. Adjusted debt/EBITDA surged to 5.7x at the end of Q1 2025, up from 2.1x in 2022, and Moody’s anticipates it will average around 4.0x over the cycle. The sector has faced pressure for over three years, exacerbated by Huntsman’s exposure to cyclical products like MDI, maleic anhydride, and epoxy resins. Concerns include weak demand in construction, autos, and European industrial activity, along with governance red flags relating to aggressive dividend payouts. Moody’s expects 2025 to be another difficult year, anticipating some demand normalization in 2026. High U.S. interest rates, a sluggish recovery in China’s property market, and European industrial stagnation are cited as ongoing pressures. (FMP)
Cloud Computing: Alibaba Group Holding Ltd. is investing $53 billion over the next three years to expand its cloud computing and AI operations. It recently launched its third data center in Malaysia and plans to open a second facility in the Philippines by October 2025. A new AI-centric hub has also been established in Singapore. These moves are part of Alibaba Cloud’s strategy to meet growing demand and position itself in Southeast Asia, amid global supply chain shifts and rising digital adoption. The Cloud unit is a key growth driver for Alibaba, despite AI investment impacting short-term margins. Alibaba Cloud directly competes with Amazon AWS, Microsoft Azure, and Google Cloud in the global AI market. (FMP)
Investment Management: Traditional money managers, after years of cutting fees, look to tap in to higher-cost private investments. (WSJ)
Pharmaceuticals: China’s biotech sector is rapidly advancing due to heavy R&D investment and a push for technological self-sufficiency, creating new opportunities for global investors. Chinese firms excel as ‘fast followers,’ licensing and commercializing Western drugs, while expanding their own innovation capabilities and global licensing deals. (Seeking Alpha)
Corporate
Amazon: Jeff Bezos sold approximately 3.3 million Amazon (NASDAQ:AMZN) shares in a transaction valued at $737 million on Tuesday, according to an SEC filing. This follows a previous filing indicating an intent to sell 25 million shares worth $5.4 billion. Bezos currently holds around 905.4 million shares. Total offloads in 2024 have exceeded $5 billion. Amazon’s stock price reached record highs earlier this year, but has been relatively flat in 2025 due to macroeconomic uncertainty and concerns about potential reciprocal tariffs under U.S. trade policy. (FMP)
BlackRock Inc: Moody’s Ratings affirmed BlackRock Inc.’s (NYSE:BLK) senior unsecured ratings at Aa3, maintaining issuer ratings at Aa3 (long-term) and P-1 (short-term), and upgraded the outlook from negative to stable. The acquisition of HPS Investment Partners, completed today, added approximately $190 billion in private credit assets under management, positioning BlackRock among the top five private credit managers globally. Moody’s cited BlackRock’s leverage remaining below the 1.5x downgrade threshold, alongside acquisitions of HPS, Global Infrastructure Partners (GIP), and Preqin, as reinforcing financial resilience. (FMP)
Greenbrier Companies: Greenbrier Companies (GBX) reported Q3 2025 earnings of $1.86 EPS, exceeding the expected $1.17. Revenue was $842.7 million, below the expected $885.6 million. Gross margin was 18% and operating margin was 11%. The company delivered 5,600 railcars and received 3,900 new orders valued over $500 million. Lease fleet utilization was 98.2%, with a backlog of 18,900 units worth $2.5 billion. For FY2025, Greenbrier maintained its railcar delivery outlook of 21,500-23,500 units and revenue guidance of $3.15-$3.35 billion, while raising its gross margin guidance to 17.7-18.3% (from 17.0-17.5%) and operating margin forecast to 10.6-11.0% (from 10.2-10.7%). The stock increased over 10% in post-earnings trading, marking the company’s seventh straight quarter of meeting or exceeding its gross margin goal. (FMP)
Intel Corp: Intel Corp. may exit external marketing of its 18A chip manufacturing technology under CEO Lip-Bu Tan, who took over in March 2025. The company incurred an $18.8 billion annual loss in 2024 primarily due to foundry performance. Abandoning 18A for external clients could trigger a multibillion-dollar write-down. Intel plans to shift focus to its 14A process to attract clients like Apple and NVIDIA, who currently utilize TSMC’s 3nm and 5nm nodes. The board will review Tan’s proposal later this month, with a final decision potentially in the fall. Investors will monitor Intel’s next earnings release and key metrics, including revenue per share and R&D investment trends. (FMP)
JPMorgan Chase & Co / Bank of America / Wells Fargo: U.S. banking giants announced plans on Tuesday to raise their third-quarter dividends after clearing the Federal Reserve’s annual health check last week. (Reuters)
MSC Industrial Direct (MSM): MSC Industrial Direct (MSM) shares rose over 4% intra-day following Q3 results. Adjusted earnings per share were $1.08, exceeding the $1.03 consensus estimate, while revenue was $971.1 million, slightly above the expected $970.26 million. Net sales decreased by 0.8% year-over-year, and adjusted diluted EPS fell nearly 19% from $1.33. Adjusted operating income was $87.2 million, resulting in an adjusted operating margin of 9.0%, down from 11.4% the previous year. The company anticipates Q4 average daily sales growth between -0.5% and 1.5% year-over-year, reaffirmed a full-year free cash flow conversion target of roughly 120%, and projected capital expenditures between $100 million and $110 million. (FMP)
Nike Inc: Argus upgraded NIKE (NYSE:NKE) from Hold to Buy, with a price target of $85. Following the upgrade, the company’s shares rose more than 3% intra-day. The upgrade is based on signs of recovery due to inventory normalization, improved e-commerce pricing, and brand dominance. The firm notes aggressive inventory clearing occurred in the second half of fiscal 2025, resulting in a more current product lineup. Argus remains bullish on Nike’s long-term prospects and expects Nike to sustain growth through global scale, product innovation, and expansion in emerging markets. (FMP)
Nvidia / Goldman Sachs / Nike: Nike rose nearly 17% in June, although most of the increase came in a single day. (Investors Business Daily)
Orion Energy Systems, Inc.: Orion Energy Systems (NASDAQ:OESX) reported an EPS of -$0.06, matching estimates, on revenue of $20.87 million in Q4 2025, down from $26.4 million in Q4 2024. Fiscal year 2025 revenue was $79.7 million, a decrease from $90.6 million in fiscal year 2024. Gross margin increased to 25.4% in fiscal year 2025, a 230 basis point improvement. The company projects 5% revenue growth in fiscal year 2026, anticipating approximately $84 million in revenue. Key financial ratios include a P/E ratio of -2.72, a price-to-sales ratio of 0.23, a debt-to-equity ratio of 0.75, and a current ratio of 1.40. (FMP)
Pinterest: Guggenheim maintains a Buy rating and $39 price target for Pinterest (NYSE:PINS). Pinterest’s global Ads Manager Audience Reach grew by +2.6% in June, an acceleration from +2.2% in May, with U.S. reach improving to +6.0% from +4.9% during the same period. Guggenheim projects Q2 global MAU net adds of +4 million, resulting in an annualized growth rate of +9.9%, a slight deceleration from +10.0% in Q1. For full-year 2025, Guggenheim forecasts 44 million net MAU adds, exceeding the Street’s consensus of 41 million. Apptopia download trends showed softness, but Guggenheim emphasized the divergence since late 2024 between downloads and strong Ads Manager data. (FMP)
Primo Brands: Morgan Stanley initiated an Overweight rating on Primo Brands (NYSE: PRMB) citing a nearly 20% pullback. The company currently trades at a 16x 2026 EV/EBITDA multiple, compared to a peer average of approximately 18x. Morgan Stanley’s price target is $38, based on a 11x 2026 EV/EBITDA valuation. The company has achieved 21% revenue growth in the last twelve months and aims for $300 million in merger synergies by year-end 2026—approximately 23% of 2024 pro forma EBITDA. Barclays, BofA, Mizuho, and RBC all maintain Buy/Outperform ratings with price targets between $40 and $43. Recent activity included the sale of 47.5 million shares in a secondary offering and a subsequent $100 million buyback announcement. (FMP)
Tesla Inc: Tesla Inc. (NASDAQ:TSLA) shares fell over 6% on Tuesday morning due to escalating political tensions between CEO Elon Musk and U.S. President Donald Trump. Trump criticized Musk for receiving what he called “more subsidy than any human being in history” and hinted at potentially revoking federal support for EVs, rockets, and satellite projects. The feud originated from Musk’s criticism of the Republican tax bill’s elimination of the $7,500 EV consumer tax credit, to which Musk responded by saying to “CUT IT ALL. Now.” Trump suggested the Department of Government Efficiency (DOGE) would scrutinize taxpayer funding linked to SpaceX and Tesla. Tesla last reported Q1 deliveries at 336,691, below analyst expectations, with Q2 delivery numbers expected soon. Investors are factoring in regulatory and subsidy risks into Tesla’s valuation. (FMP)
Tesla Inc: According to a recent Morgan Stanley note, Tesla (NASDAQ:TSLA) is positioned at the forefront of the humanoid robotics race due to its vertically integrated approach to factory automation. Analysts describe Tesla’s manufacturing ecosystem as the “mother” of physical AI, enabling robotic development through real-world, physical environments. Tesla recently achieved a fully autonomous vehicle delivery and launched its first fully autonomous ride-hailing service in Austin. Morgan Stanley maintains Tesla as a “top pick,” despite regulatory and investor scrutiny regarding safety. The report highlights China’s rapid robotics development and its potential impact on U.S. national security policies. Tesla remains publicly committed to humanoid robotic integration, including the development of its “Optimus” robot. Financial performance can be tracked through the Earnings Calendar API and Advanced DCF API, allowing customization of cash flow forecasts based on autonomous vehicle revenue and robotics monetization assumptions. (FMP)
Tesla Inc: JPMorgan reiterated an Underweight rating and $115 price target for Tesla (TSLA), citing weak demand and forecasting a sharper decline in Q2 deliveries. They now estimate Tesla will deliver 360,000 vehicles in Q2, a 19% year-over-year decrease from 444,000 deliveries in Q2 of the previous year. This represents an 8% shortfall compared to the consensus estimate of 392,000, and 6.5% below Tesla’s own consensus of 385,000. The revised forecast is a 9% reduction from JPMorgan’s prior estimate of 395,000 made in April. (FMP)
Textron: Goldman Sachs downgraded Textron (NYSE:TXT) from Buy to Neutral, setting a price target of $85. The downgrade stems from concerns regarding Textron’s ability to deliver further gains despite strengths in business jets and the Future Long-Range Assault Aircraft (FLRAA) contract. Goldman noted these positives have been present for “some time” without significant stock appreciation and flagged concerns over potential market share loss in the business jet segment and limited growth prospects for the Systems and Industrial divisions. Despite trading at a discount to peers, Goldman Sachs expressed skepticism about catalysts for a stock rerating, viewing upside potential as now balanced against risks. (FMP)
The Trade Desk: Citi raised its price target on The Trade Desk (TTD) from $82 to $90, maintaining a Buy rating, causing the company’s shares to rise approximately 3% intra-day. A recent media buyer survey ranked TTD highest in the demand-side platform (DSP) space for attributes like inventory quality and data capabilities. Take rates were ranked low in advertiser priorities, suggesting TTD can maintain pricing power. Analysts observed that Amazon’s DSP is gaining share for off-Amazon ad spend but TTD is not significantly impacted. Citi initiated a 90-day positive catalyst watch on TTD shares, anticipating potential guidance and consensus estimate beats based on improved Q2 ad spending trends. (FMP)
UniFirst Corporation: UniFirst Corporation (NYSE:UNF) has a new consensus price target of $195, set by Robert W. Baird, following a downward adjustment from $185.75 last year to $174.50 in recent months. The company announced a $100 million share repurchase authorization. Recent second-quarter earnings reported EPS of $1.40, exceeding the Zacks Consensus Estimate of $1.31 and up from $1.22 per share in the same quarter last year. Revenue reached $602.2 million, a 1.9% increase. The stock has experienced a 20.84% decline recently, and currently holds a Zacks Rank #2 (Buy) rating. (FMP)
Wayfair (NYSE:W) / Morgan Stanley: Morgan Stanley raised its price target for Wayfair (NYSE:W) to $70.00 from $50.00, maintaining an Overweight rating, representing a roughly 35% upside from its current share price of $51.99. Wayfair has returned 15.4% over the past six months. The bull case scenario suggests a potential 92% upside, while the bear case indicates a 42% downside. The revised target is based on 0.85x of Morgan Stanley’s 2026 sales estimate of $12.1 billion, a 15% discount to Wayfair’s historical EV/Sales average of 1.0x. Wayfair currently reports revenue of $11.85 billion, a gross margin of 30.31%, and a current ratio of 0.83. (FMP)
Wells Fargo / Citigroup / Goldman Sachs: Major U.S. banks, including Wells Fargo, Citigroup, and Goldman Sachs, announce significant dividend hikes after all 22 pass the Fed’s 2025 stress test. Paramount settles Trump’s lawsuit over a ’60 Minutes’ interview for $16M, with no apology and funds directed to legal fees and a presidential library. (Seeking Alpha)
