Today's Update 07-17-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
US Retail Sales MoM: Actual 0.6%, beating the forecast of 0.1%, and previous of 0.9%.
US Core Retail Sales MoM: Actual 0.5%, surpassing the forecast of 0.3%, with a previous reading revised to 0.2%.
US Initial Jobless Claims: Came in at 221K, lower than the forecast of 233K, and previous revised figure of 228K.
US Philly Fed Business Index: Actual 15.9, significantly above the forecast of 1 and previous 4.0.
US Import Prices MoM: Actual 0.1%, below the forecast of 0.3%, with the previous revised to 0.4%.
US NAHB Housing Market Index: Actual 33, matching the forecast of 33, and up from the previous 32.
US Business Inventories MoM: Actual 0%, meeting the forecast of 0%, unchanged from the previous reading.
Federal Reserve Updates:
Fed’s Kugler Remarks:
Stated it's appropriate to keep the policy rate steady "for some time" due to low unemployment and inflation pressures from tariffs.
Mentioned that inflation remains above the 2% target, with a stable and resilient labor market.
Noted that core goods inflation is reflecting the pass-through of tariffs, and there are reasons to expect a larger tariff impact coming.
Market Movements:
US Dollar:
The dollar strengthened, recovering some losses from the previous day, supported by diminishing expectations of interest rate cuts this year.
Equities:
Tech Stocks: Edged higher, buoyed by positive earnings forecasts and cooling concerns over the Fed's leadership.
US Indexes: Showed strength following robust economic data releases.
Corporate Earnings:
Upcoming Earnings:
Netflix (NFLX): Reporting today at 4:01 PM ET. Estimated Earnings Per Share (EPS) is $7.08, with expected revenue of $11.06 billion.
Global Developments:
Trade Discussions:
President Trump indicated a softer stance towards China, aiming for a potential summit with President Xi to negotiate a trade deal.
Announced intentions to notify over 150 countries about potential tariff rates ranging from 10% to 15%.
Eurozone:
Eurozone CPI YoY Final: Reported at 2.0%, in line with forecasts.
Eurozone Core CPI YoY Final: Came in at 2.3%, matching expectations.
Other Notable Events:
Energy Sector:
Angola plans to increase oil exports to 1.03 million barrels per day in September, according to preliminary plans.
Commodities:
China's June Copper Output: Increased by 14.2% year-on-year to 1.302 million tons.
🎯 Fed Watch & Policy Outlook
Fed's Kugler: Advocating for rates to stay "steady for some time"
Trump on Powell: "Unlikely to fire Powell" - reducing political uncertainty
Market Pricing: Less than 2 rate cuts expected in 2025 (down from 3)
📈 Key Market Movers
Dollar: +0.4% recovery after Wednesday's volatility
10-Year Treasury: 4.47% (+2bps)
Yen: Weakening to 148.51 per dollar
Tech Futures: Positive momentum on TSMC results
Final Thoughts
The market narrative is crystallizing around three key themes: resilient US economic data, persistent inflation pressures, and reduced Fed dovishness. Today's retail sales and employment data reinforce the "no landing" scenario where the economy maintains momentum despite higher rates.
The Fed's increasingly hawkish tone, combined with Trump's tariff policies creating inflationary pressures, suggests we're entering a period where traditional monetary policy tools face new challenges. The dollar's strength reflects this reality - investors are pricing in a Fed that stays restrictive longer than previously anticipated.
For traders, watch the 4.50% level on 10-year yields as a key technical resistance. A break above could signal a broader repricing of rate expectations. The extreme greed readings suggest we're due for some consolidation, but the underlying economic momentum argues against any significant pullback.
The earnings season is off to a solid start with tech leading the charge, but keep an eye on how companies guide for Q4 given the uncertain policy landscape ahead.
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