Today's Update 07-01-2025
Key Points and Metrics
Key Points and Metrics:
US Market Overview:
Equity Futures Dip: US equity futures retreated slightly after the S&P 500 notched its best quarter since 2023, amid concerns over trade talks and debates over President Trump's tax bill in Washington.
S&P 500 Futures: Down 0.2% following consecutive record highs.
Federal Reserve Insights:
Chair Jerome Powell:
Stated he cannot confirm if a rate cut in July is imminent; decisions will depend on incoming data.
Mentioned a solid majority at the Fed expect rate cuts later this year.
Anticipates higher inflation readings over the summer.
Asserted that the US economy is in a strong position.
European Central Bank (ECB) Notes:
President Christine Lagarde:
Emphasized the need to remain vigilant on inflation.
Will not commit to a future rate path; decisions will be data-driven.
ECB Officials:
Kazaks: Any further rate adjustments would be small.
Müller: It's sensible for ECB interest rates to stay on hold for a while.
de Guindos: Growth in Q2 and Q3 will be close to zero; the euro's rapid appreciation is more concerning than its level.
Economic Indicators:
United States:
S&P Manufacturing PMI Final (June): 52.9 (Forecast: 52.0, Previous: 52.0)
Redbook YoY: 4.9% (Previous: 4.5%)
Eurozone:
Core CPI YoY Flash: 2.3% (Forecast: 2.3%, Previous: 2.3%)
CPI YoY Flash: 2.0% (Forecast: 2.0%, Previous: 1.9%)
CPI MoM Flash: 0.3% (Forecast: 0.3%, Previous: 0.0%)
Manufacturing PMI Final: 49.5 (Forecast: 49.4, Previous: 49.4)
Germany:
Unemployment Rate: 6.3% (Forecast: 6.4%, Previous: 6.3%)
Unemployment Change SA: +11K (Forecast: +15K, Previous: +34K)
Manufacturing PMI Final: 49.0 (Forecast: 49.0, Previous: 49.0)
France:
Manufacturing PMI: 48.1 (Forecast: 47.8, Previous: 47.8)
Italy:
Manufacturing PMI: 48.4 (Forecast: 49.5, Previous: 49.2)
United Kingdom:
BoE Governor Andrew Bailey:
Observed signs of softening in the economy and labor market.
Indicated interest rates are on a gradual downward path.
Manufacturing PMI Final: 47.7 (Forecast: 47.7, Previous: 47.7)
China:
Caixin Manufacturing PMI: 50.4 (Forecast: 49.3, Previous: 48.3)
Corporate News:
Tesla, Inc.:
Leadership Update: Tesla's China Chief, Zhu, will oversee global manufacturing.
Market Reaction: Shares fell over 4% in pre-market trading after President Trump threatened to withdraw subsidies from Elon Musk's companies.
Saudi Arabia:
Contingency Plan Activated: Due to escalating conflicts between Israel and Iran, Saudi Arabia instructed Aramco to reallocate oil volumes to overseas storage to ensure seamless supply.
International Monetary Fund (IMF) Projections for Switzerland:
Economic Growth:
Forecasted at 1.3% for 2025.
1.2% for 2026.
Inflation Rates:
Expected at 0.1% by end of 2025.
0.6% by end of 2026.
Goldman Sachs Forecast:
Federal Reserve Rate Cuts: Now expects the Fed to implement three 25 basis point rate cuts in 2025 starting in September, revising the prior prediction of one cut in December.
Upcoming Earnings Estimates for July 15th:
BlackRock, Inc. (BLK):
Time: 6:00 AM ET
EPS: $10.68
Revenue: $5.38 billion
JPMorgan Chase & Co. (JPM):
Time: 6:55 AM ET
EPS: $4.43
Revenue: $44.1 billion
Wells Fargo & Company (WFC):
Time: 7:00 AM ET
EPS: $1.40
Revenue: $20.78 billion
Citigroup Inc. (C):
Time: 7:00 AM ET
EPS: $1.65
Revenue: $20.77 billion
Market Movers
📈 Positive:
S&P 500 just completed best quarter since 2023
Euro hitting 9-day winning streak vs USD (longest since 2004)
Job openings surge suggests labor market resilience
📉 Pressure Points:
Tesla down 4%+ premarket on subsidy withdrawal threats
Manufacturing still contracting globally
Trump tax bill uncertainty creating volatility
Upcoming Catalysts
This Week:
Thursday: Nonfarm Payrolls (critical for Fed policy)
Central banker panel today (Powell, Lagarde, Bailey, Ueda)
July 15th Earnings:
JPM: EPS $4.43, Rev $44.1B
BlackRock: EPS $10.68, Rev $5.38B
Wells Fargo & Citi also reporting
Final Thoughts
The market is sitting at a fascinating crossroads. We've got the S&P 500 hitting records after its best quarter in over a year, but underneath the surface, there's real tension brewing. The JOLTS number beating expectations by nearly half a million jobs is huge - it tells us the labor market isn't rolling over despite all the recession chatter.
What's really catching my eye is this divergence between manufacturing (still contracting globally) and services/labor markets (holding up well). The ISM at 49 is still below 50, but the trajectory is improving. Meanwhile, Powell's comments today were dovish enough to keep rate cut hopes alive, but not so dovish as to panic markets about economic weakness.
The euro's 9-day winning streak against the dollar is historic - we haven't seen this since 2004. That's telling us something big about relative monetary policy expectations and economic resilience across the pond.
Here's what I'm watching: If Friday's jobs report comes in hot like today's JOLTS data, we could see the Fed pause their dovish pivot. But if it disappoints, we're looking at a July rate cut becoming very real. Either way, this market has momentum, and momentum tends to persist until it doesn't.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.
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Harry