Daily News Round Up
Monday, 07 Jul 2025
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- Equity Markets Exhibit Resilience Despite Emerging Trade Risks The Dow continues its upward trajectory, nearing all-time highs, while the S&P 500 and Nasdaq reached new peaks driven by strong jobs data and sustained optimism. However, this bullish sentiment is countered by escalating trade tensions as President Trump prepares to impose tariffs on countries aligning with BRICS, potentially disrupting global supply chains and impacting corporate earnings. (Invezz) (WSJ) (FXEmpire) (Barrons)
- Inflationary Pressures Remain a Concern Amidst Tariff Threats While some indicators suggest inflation is cooling, the potential for prolonged inflationary effects due to President Trump’s proposed tariffs is raising alarms. The Atlanta Fed President warns tariffs could cause sustained price increases, contradicting earlier narratives of transitory inflation. This resurgence of inflationary concerns may influence the Federal Reserve’s rate cut timeline and impact sector performance, particularly consumer staples and sensitive industries. (Fox Business) (Seeking Alpha) (WSJ)
- Sector Performance Diverging with AI, Quantum and Geopolitical Considerations The technology sector continues to draw investor interest, particularly around AI and emerging technologies like quantum computing where UBS highlights potential benefits for semiconductor equipment companies. However, geopolitical uncertainties and trade tensions are weighing on sectors heavily reliant on international trade, like European IPOs and Asian currencies. Industry specific factors such as improved profit margins due to AI efficiencies such as those pointed out at Software companies are prompting investors to revaluate valuations. (FMP) (FMP) (Seeking Alpha) (Reuters)
- Interest Rate Outlook Remains Fluid with Central Bank Divergence Global central banks are exhibiting diverging monetary policies, with the RBA expected to further cut rates while the Fed faces pressure to maintain rates amid persistent economic resilience and potential tariff-driven inflation. Banks are also hesitant to alter bond portfolios due to market volatility, impacting bank valuations, The shifting rate environment creates both opportunities and risks for equity investors, particularly in rate-sensitive sectors. (Seeking Alpha) (Seeking Alpha) (WSJ)
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What happened over the weekend?
Macro
Economic Growth: The Dow Jones Index continued its strong bull run last week as it neared its all-time high. It has jumped in the last six consecutive days, and is trading at $44,828, a few points below its all-time high of $45,045. (Invezz)
Economic Growth: The question is for how long. Are the effects of geopolitical and tariff uncertainty on the economy still to come, or were they overestimated? (WSJ)
Economic Growth: Home inventory in a number of major metropolitan areas have hit levels higher than they were before the COVID-19 pandemic, a new report from Realtor.com found. (Fox Business)
Economic Growth: Strong jobs data drives S&P 500 and Nasdaq to record highs in holiday week. Powell’s Fed comments keep rate cut hopes alive despite economic resilience. (FXEmpire)
Energy: The global oil market is likely heading for a surplus this year following a higher than expected production hike by OPEC+ over the weekend. (Forbes)
Inflation: Atlanta Federal Reserve President Raphael Bostic warned that effects of President Donald Trump’s tariffs could cause prolonged inflation rather than a one-time price spike. (Fox Business)
Inflation: The high inflation was transitory in the end. It has now essentially been defeated. (Seeking Alpha)
Inflation: Tom Barkin is looking for clarity about inflation, tariffs and employment the old-fashioned way: He’s talking to people. (WSJ)
Interest Rates: This week was heavily focused around the US with Indices hitting almost daily all-time highs in a stringent euphoric mood, with markets turning from War fears back to ‘TACO’ trades, bullish on global economic outlook. The Reserve Bank of Australia, after cutting its cash rate by 25 bps to 3.85% in May, is widely expected to shave another 25 bps to around 3.60% at its upcoming meeting as inflation cools but global headwinds linger. (Seeking Alpha)
Interest Rates: Bank bond portfolios remained underwater in the first quarter and valuations have not improved much in the second quarter as fears of persistent inflation and budget deficits have pushed intermediate rates higher since the recent low point in early April. Many banks have been hesitant to take significant action in their bond portfolios amid market volatility that caused considerable swings in bank stock valuations. (Seeking Alpha)
International relations: President Donald Trump said that any countries aligning with the “anti-American” policies of the BRICS group of nations would face additional levies on imports. (Barrons)
International relations: European stocks took an early lead in 2025, outperforming Wall Street thanks to erratic U.S. policymaking and Germany’s once-in-a-generation fiscal shift, but U.S. markets have caught up. (Reuters)
International relations: DAX fell 0.61% on July 4 as EU-US trade talks stall ahead of Trump’s new August 1 tariff deadline. Factory data and market sentiment point to rising downside risk. (FXEmpire)
International relations: Margin pressure and Fed uncertainty weigh on Hang Seng while stimulus hopes buoy Mainland Chinese stocks. (FXEmpire)
International relations: Tariffs and Middle East turmoil are spooking European companies and the investors weighing their initial public offerings even as volatility subsides and money flows back into equity markets, advisers told Reuters. (Reuters)
Investment Strategy: UBS strategists’ *House View Briefcase* addresses market risks and provides recommendations. They anticipate U.S. government borrowing is sustainable and suggest hedging volatility with high-quality bonds. UBS maintains a bearish outlook on the U.S. dollar, projecting EUR/USD to reach 1.20 by mid-2026. They advise investors not to hold idle cash, preferring high-grade corporate bonds, private credit, and dividend stocks, noting better risk-adjusted returns than savings accounts. They recommend phasing into markets over weeks or months to reduce timing risk. Tariffs are expected to settle around 15%, and UBS has raised its S&P 500 year-end target to 6,200, forecasting 6% earnings growth in 2025 and 7.5% in 2026. Preferred sectors include Financials, Technology, Healthcare, Utilities, and Communication Services. UBS favors investment opportunities in India, Taiwan, Mainland China, and Europe (specifically post-election Germany and defense-linked plays). (FMP)
Market Sentiment: The S&P 500 is trading at new all-time highs, with investors turning bullish as markets react to easing trade tensions and reduced geopolitical uncertainty. (Finbold)
Market Sentiment: Tariffs, market volatility and war in the Middle East couldn’t slow down the buying spree by individual investors, as they traded a record amount of stocks in the first half of the year. (Market Watch)
Market Sentiment: Markets kicked off the second half of 2025 with a strong finish to Q2, propelled by easing geopolitical fears, falling oil prices, and a reaffirmation of the Fed’s dovish tone. While the strong finish to Q2 has given investors reason to celebrate, the underlying structure of the rally calls for caution. (Seeking Alpha)
Policy: At the 2025 ECB Forum in Sintra, discussions focused on balancing inflation and growth amidst geopolitical and structural pressures. Eurozone unemployment was 6.3% in May, near record lows. Inflation peaked with a difference of 18.6 percentage points between Estonia and France. ECB leaders cautioned that a EUR/USD exchange rate above 1.20 could hinder export recovery. The forum highlighted the impact of domestic substitution in China, particularly in high-tech sectors, and concentration risk with geographically distant suppliers. The forum also emphasized the need for fiscal and structural reforms, alongside tools like the Transmission Protection Instrument (TPI) and Outright Monetary Transactions (OMT) due to economic fragmentation. (FMP)
Policy: Fifty years ago, President Richard Nixon famously leaned on Fed Chair Arthur Burns to keep interest rates low going into the 1972 presidential election. It didn’t end well. (Barrons)
Policy: The Fed can never be independent. Economists should spare readers of any further commentary calling for what can’t be. (Forbes)
Policy: By Kevin Flanagan Key Takeaways Speculation is mounting that President Trump may announce a new Federal Reserve chair well before Jerome Powell’s term ends in May 2026, potentially as early as this summer or fall. With Fed Governors Waller and Bowman—both Trump 1. (ETF Trends)
Policy: The president is pressuring the Fed to lower rates to make deficits easier to finance. This could end badly, but for now investors are on board. (WSJ)
Trade: Most Asian stocks edged lower on Monday following U.S. President Donald Trump’s announcement of a 10% tariff hike targeting BRICS countries, including India and China. Trump had previously proposed tariffs ranging from 10% to 50%. Formal notices will begin Monday, with implementation set for August 1, delayed from the original July 9 deadline. Asian indexes declined: China’s Shanghai Composite -0.1%, CSI 300 -0.4%, Hong Kong’s Hang Seng -0.5%, Japan’s Nikkei 225 -0.5%, and TOPIX -0.5%, Australia’s ASX 200 -0.1%. South Korea’s KOSPI and India’s Gift Nifty 50 Futures were flat. S&P 500 Futures declined by -0.4%. The Australian ASX 200 hovered near recent highs in anticipation of the Reserve Bank of Australia’s Tuesday interest rate decision, with a 25-basis point cut to 3.60% widely expected, though not guaranteed. (FMP)
Trade: Gold prices declined in Asian trading on Monday, falling 0.7% to $3,312.12 per ounce for spot gold and 0.8% to $3,320.67 per ounce for September gold futures (as of 04:10 GMT). This pullback followed a strong U.S. nonfarm payrolls report last week. President Trump threatened a 10% tariff on BRICS countries, but extended the tariff enforcement deadline from July 9 to August 1, reducing the immediate risk. Formal tariff letters are scheduled to be sent starting Monday, although specific rates are yet to be finalized; previous tariff levels considered ranged from 10% to 50%. The dollar index remains near recent highs. (FMP)
Trade: On Monday, Asian currencies and the U.S. dollar declined amid caution regarding U.S. trade policy. The U.S. Dollar Index fell 0.2% and Dollar Index Futures decreased by 0.1%. Formal tariff letters will be sent starting Monday at 12:00 p.m. ET, with countries aligned with the BRICS bloc facing an additional 10% tariff, alongside baseline duties of 10% and potential escalations up to 70%. USD/KRW rose 0.4%, USD/THB gained 0.7%, USD/MYR added 0.5%, USD/CNY edged up 0.1%, and USD/CNH rose 0.2%. The Australian dollar led losses in G10 currencies, with expectations of a 25 basis-point interest rate cut by the Reserve Bank of Australia (RBA), potentially lowering the cash rate to 3.60%. (FMP)
Trade: U.S. stock index futures declined Sunday evening: S&P 500 Futures fell 0.3% to 6,303.0, Nasdaq 100 Futures dropped 0.3% to 22,987.0, and Dow Jones Futures declined 0.3% to 44,972.0 as of 19:15 ET (23:15 GMT). President Trump moved the tariff deadline to August 1, postponing it from July 9, while tariffs could reach up to 50% if trade deals aren’t secured. Agreements have been signed with the UK, Vietnam, and a framework deal with China, with ongoing negotiations with Japan, the European Union, and India. June’s nonfarm payrolls report showed stronger-than-expected job growth, significantly reducing expectations for interest rate cuts in July or September. Wall Street closed last week at all-time highs, with the S&P 500 and Nasdaq boosted by AI-driven tech stocks. Corporate earnings updates are due in mid-July. (FMP)
Trade: The U.S. will send letters to approximately 100 smaller trading partners by July 9, offering a three-week grace period to finalize trade agreements. New tariff rates will take effect on August 1; nations failing to reach agreements by then will face tariffs reverting to rates outlined on April 2, including a base 10% duty on most imports with additional levies up to 50%. Agreements have been finalized with the United Kingdom and Vietnam, with partial progress made with China. Ongoing negotiations are occurring with the European Union and India. Kevin Hassett suggested potential extensions, but the final decision rests with the U.S. President. The evolving trade policy is impacting currency markets, U.S. stock futures, and safe haven assets like gold. (FMP)
Trade: President Trump said he would put an extra 10% tariff on countries aligning themselves with ‘anti-American’ BRICS policies (WSJ)
Trade: Tariffs will kick in Aug. 1, U.S. President Donald Trump confirms. U.S. stock futures slipped Sunday. (CNBC)
Trade: The key event of the week is the July 9 deadline when the 90-day pause in U.S. reciprocal tariffs ends. (WSJ)
Trade: All three major U.S. indexes ended higher last week, notching three record closing highs despite an abbreviated trading week. (Barrons)
Trade: As the Wednesday deadline looms, Treasury Secretary Scott Bessent echoes the president’s talk of an Aug. 1 date, saying tariffs would revert then to levels announced in April. (WSJ)
Trade: Tariff deadline is Wednesday with Trump saying he will already be sending out tariff letters. Delta, Conagra, and Levi Strauss report earnings. (Seeking Alpha)
Trade: Treasury Secretary Scott Bessent said President Donald Trump will send letters to some trading partners saying tariffs will boomerang back to April 2 levels on Aug. 1 if there is no progress. Bessent rejected that Aug. 1 is a new trading deadline, but it could still give countries more time to negotiate. (CNBC)
Trade: The market may be underestimating the risk of higher US tariffs post-July 9, with clues suggesting rates could exceed the expected 10%. Currency markets are signaling greater concern than equities, as countries facing tariffs have seen their currencies strengthen sharply against the dollar. (Seeking Alpha)
Trade: Wall Street’s focus next week will squarely be on trade developments, as a 90-day pause on reciprocal tariffs against U.S. trading partners is set to expire on Wednesday. U.S. President Donald Trump has said he will not extend the pause and will start sending letters to countries specifying the tariff rates they will have to pay. (Seeking Alpha)
Trade: Canada has discussed offering financial support to large aluminum producers like Rio Tinto impacted by a U.S.-led trade war, in the event that Washington’s 50% tariff on imports of the metal persist in the medium term, the CEO of a key industry trade group said on Saturday. (Reuters)
Industry
Asset Management: Jio BlackRock Asset Management, a joint venture between Reliance Industries and BlackRock Inc., raised over $2.1 billion across three debt and cash mutual fund schemes during a three-day initial offer period, which commenced on Monday. The offering attracted participation from over 90 institutional investors and more than 67,000 retail investors. Jio BlackRock aims to disrupt India’s $580 billion asset management industry and plans to launch additional products in equity, hybrid, and index fund categories in the coming quarters. (FMP)
Semiconductors: Nvidia CEO Jensen Huang recently stated that quantum computing is nearing an inflection point, alongside a collaboration with Harvard and MIT. IBM plans to launch a practical quantum system by 2029 and scale it further by 2033. Alphabet, Microsoft, and Amazon are expanding internal quantum initiatives, while Intel is touting its 12-qubit chip. UBS analysts highlight semiconductor equipment companies, including Applied Materials, Lam Research, and GlobalFoundries, as early beneficiaries, noting overlap in chip design, lithography, and etching. A key challenge remains qubit stability, requiring significant redundancy to offset speed advantages. UBS suggests using Revenue Product Segmentation and Company Rating APIs to track quantum R&D monetization and analyst sentiment. (FMP)
Software: Cost savings from AI-driven efficiencies are rarely reflected in software companies’ profitability forecasts, yet they could soon become a significant catalyst as firms frenetically push for the adoption of GenAI tools. According to a recent report by Mizuho analysts, efficiencies generated by AI could lead to an improvement of up to 7.5% in operating margins at software companies in its universe by 2027 in a moderately optimistic scenario. (Seeking Alpha)
Corporate
Amazon: A Jefferies survey of nearly 700 U.S. consumers revealed that 62% are spending the same or more on Amazon in the past three months, despite 80% expressing concern over price increases due to tariffs. Only 3% have completely stopped purchasing on Amazon, 31% are spending less, and 34% have reduced shopping frequency. If inflation worsens, 45% indicated they would reduce Amazon spending rather than switch retailers. 73% of surveyed shoppers are Amazon Prime members, compared to 26% for Walmart+ and 22% for Target Circle. 57% intend to retain their Prime membership, while 19% are considering cancellation. Amazon’s Prime Day event is scheduled for July 8-11. Amazon ranked #1 for shipping (72% vs. 13% for Walmart) and product selection (74%), and second for pricing (37% value) behind Walmart (46%). Jefferies maintains a Buy rating on Amazon stock. (FMP)
Coinbase (COIN) / Circle Internet (CRCL): Circle Internet (CRCL) and Coinbase (COIN) have a strategic partnership centered around the stablecoin USDC. Coinbase’s stablecoin revenue surged nearly 51% in Q1. The revenue-sharing agreement dictates that 100% of interest income from USDC held on Coinbase’s platform goes to Coinbase, while a 50:50 split occurs for USDC held off-platform. This agreement is renewed every three years, with the next review in 2026. Coinbase holds a 67% market share of the U.S. crypto market. Coinbase will launch a perpetual futures platform on July 21, using USDC as principal collateral. (FMP)
Ero Copper Corp.: BMO Capital upgraded Ero Copper Corp. (NYSE:ERO) to “Outperform” on July 4, 2025, increasing the price target from C$24 to C$27, while the stock was priced at $17. ERO’s stock closed at $16.97, a 2.81% decrease from the previous day, despite the S&P 500 increasing by 0.83%. Over the past year, ERO’s stock increased by 9.81%, outperforming the Basic Materials sector (5.33% gain) and the S&P 500 (4.99% increase). Ero Copper’s anticipated financial results for July 31, 2025, project an EPS of $0.51, an 183.33% increase year-over-year, and revenue of $195 million, a 66.52% rise year-over-year. The stock’s daily range is $16.68 to $17.84, with a 52-week high of $23.40 and a low of $9.30. Ero Copper’s market capitalization is $1.76 billion, with a trading volume of 929,900 shares. (FMP)
Franklin Covey Co: Franklin Covey Co. (NYSE:FC) reported an EPS of $0.18 on July 2, 2025, exceeding the Zacks Consensus Estimate of -$0.08, representing a 325% earnings surprise. This EPS is down from $0.43 reported in the same quarter last year. Revenue for the quarter was $67.12 million, below the estimated $67.5 million and a decrease from $73.37 million in the prior year. Over the past four quarters, FC exceeded EPS estimates three times and revenue estimates once. Key financial metrics include a P/E ratio of 16.28, a price-to-sales ratio of 1.00, an enterprise value to sales ratio of 0.88, a debt-to-equity ratio of 0.057, and a current ratio of approximately 0.90. (FMP)
Paramount Group, Inc.: Paramount Group, Inc. (PGRE) is a REIT focusing on office properties in New York City, San Francisco, and Washington, D.C. On July 4, 2025, UBS updated its rating to Positive while maintaining a hold recommendation; the stock price was $6.03 at the time. Currently, PGRE stock is priced at $6.03, experiencing an 8.29% decrease and a $0.005 change, with daily fluctuations between $5.99 and $6.10. Over the past year, the stock has ranged from $3.75 to $6.62, with a market capitalization of $1.32 billion. Trading volume on the NYSE is 948,312 shares. (FMP)
Tesla Inc: According to a Wedbush Securities research note, Tesla Inc. (NASDAQ:TSLA) faces increased investor concern following CEO Elon Musk’s announcement of a new political entity, the “America Party.” This occurs amidst falling vehicle sales, margin compression, and increased regulatory scrutiny. Wedbush analysts state this political pivot is “exactly the opposite direction” shareholders want, potentially distracting from strategic initiatives like autonomous vehicles and robotics. Tensions have escalated between Musk and former President Donald Trump following criticism of Trump’s “big beautiful bill.” Tesla shares are down nearly 17% year-to-date in 2025, below 2024 levels. Wedbush flagged the potential for Tesla’s board to intervene. This marks a rare venture by a Fortune 500 CEO into third-party politics, with limited historical success in the U.S. Investors are advised to monitor Tesla’s earnings calendar and company rating API. (FMP)
