Global markets recovered from last week’s tariff slump to post gains this week, despite tariff pressures. President Donald Trump. Trump has suggested a 100% tariff on semi-conductors in addition to the reciprocal tariffs on multiple countries which went into effect this week. Apple has announced its plans to invest $100 billion in the U.S. over the next four years. In global geopolitics, Swiss President Karin Keller-Sutter was unable to secure a trade deal during his visit to the U.S. The U.S. special envoy Steve Witkoff’s meeting with President Putin was reported to be productive. Putin is expected to meet Trump in the coming days. The U.A.E. and India have increased their cooperation and trade ties with Russia, despite the threat of tariffs and sanctions. Canada and Mexico also worked to deepen their trade ties and cooperation over the coming months.

Global Updates
  • The MSCI All Country World Index rose this week. Global equity markets were higher, driven by corporate earnings, despite the continued trade uncertainty. Russia’s willingness to negotiate with Russia also raised investor sentiment. The broad-based Japan equity index Topix also crossed the 3,000 benchmark for the first time this week, driven by corporate earnings.
  • Bank of England eased its policy rate to 4% with a quarter percentage cut after a narrow vote. 
  • German arms manufacturer Rheinmetall’s stock price fell after the company reported a less-than-expected $2.8 billion in second quarter sales
  • Softbank’s share price rose after the company posted a higher-than-expected profit of 421.8 billion Yen for the April-June quarter.
  • The stock price of Lloyds rose, after the U.K. supreme court’s ruling on the motor vehicle loan case came in less adverse than expected. 
  • Novo Nordisk’s stock price rose on the news of poor results in Eli Lilly’s clinical trials. 
  • Taiwan Semiconductor Manufacturing Company (TSMC) has reported a 26% jump in July’s AI driven sales revenue. 
  • Samsung has announced its plans to manufacture iphone’s image sensors for Apple in Texas. 
  • The oil futures fell slightly driven by OPEC+’s announcement of increased output in September. The market continues to be unable to meet summer demand. Increasing pressure on consumers of Russian oil to restrict purchases has also tightened markets. 
  • The 39.5% tariff on Swiss exports, which is one of the largest refiners of gold, has raised gold futures this week.
U.S. Equity
  • The S&P 500, Nasdaq and Dow Jones indices posted gains in the equities market this week, driven by the corporate returns announced this week. The gains were partially offset by the global tariffs on multiple countries which came into effect this week. Semiconductor manufacturers like Nvidia, Broadcom, TSMC and AMD also benefitted from President Trump’s tariff exemption announcement for companies manufacturing in the U.S. 
  • The firing of Bureau of Labor Statistics (BLS) Commissioner Erika McEntarfer by President Trump this week, was widely criticized. The move followed the release of July payroll data indicating a lower-than-expected 73,000 jobs added and a higher unemployment rate of 4.2% in July. The BLS also revised down the earlier reported job gains in May to 19,000 from 144,000 and in June to 14,000 from 147,000. Given the poor job reports the markets have raised the expectation of a rate cut in September. 
  • Apple CEO Tim Cook announced plans to invest $2.5 billion in the expansion of Corning’s Kentucky plant and a $100 billion spend on domestic U.S. companies by 2029. The company also committed to incentivizing its foreign suppliers to purchase U.S. made inputs. 
  • Pharmaceutical company Eli Lilly reported higher-than-expected second quarter adjusted EPS of $6.31 on a 38% growth in revenue to $15.56 billion. The performance was driven by the demand for its metabolism control drugs. 
  • Advanced Micro Devices (AMD) posted a 32% growth in its second quarter revenue of $7.67 billion driven by the 73% growth in their gaming revenue. AMD’s adjusted EPS of $0.48 was in line with expectations.
  • Palantir Technologies posted an adjusted EPS of $0.16 on a higher-than-expected revenue growth of 48% to $1 billion in the second quarter driven by the growing demand for AI software.
  • The maker of ChatGPT, OpenAI, has been reportedly planning to float its shares for a $500 billion valuation through a secondary stock sale of employee held equity.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose slightly this week.
  • The U.S. 10-year Treasury yield edged up to 4.2440% and the yield on the 2-year note rose to 3.734% over the week.
  • The U.S. Dollar Index declined to 98.25 this week.

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