U.S. and global equity markets continued to register gains this week. Investors were enthused by the higher-than-expected employment number from June. However, markets continue to be apprehensive about the 90-day pause in tariffs set to expire next week. The Trump administration has given mixed signals if the deadline would be enforced or extended. U.S. Treasury Secretary Scott Bessent has also indicated that many countries are in the process of negotiating trade deals with the U.S. 

President Trump announced the finalization of a trade deal with Vietnam this week. The U.K. government had to abandon the proposed welfare reforms to avoid the defeat of its landmark welfare bill. The U.S. government has lifted the restrictions on semiconductor software exports to China as part of the trade agreement between the two countries. The U.S. Senate and House of Representatives have passed the U.S. tax bill, which now awaits President Trump’s signature.

Global Updates
  • The MSCI All Country World Index continued to rise for the second consecutive week closely tracking the U.S. security markets. While investors were increasingly optimistic due to the positive employment data emerging from the U.S., some measure of volatility has emerged due to the upcoming tariff deadline. 
  • The U.K. security markets experienced some volatility this week due to the rollback of welfare reforms by the Starmer government in the U.K. parliament. The reforms would have significantly reduced the impact of government welfare on its budget. It was also a political setback for Prime Minister Stahmer due to the opposition by his own party members.
  • London pharmaceutical company AstraZeneca is considering moving its listing to the U.S. This announcement had a major negative impact on European stocks as it is the largest company by valuation listed on the London Stock Exchange. 
  • President Trump announced the finalization of a trade deal with Vietnam, on Truth Social this week. The deal is said to include tariff free access for U.S. goods to Vietnam’s markets, a 20% tariff on Vietnamese imports to the U.S. and a 40% tariff on transshipped goods.
  • China’s Caixin/S&P Global manufacturing purchasing manager’s index for the month of June indicated a continued expansion in manufacturing indicated by the PMI reading of 50.4.
  • Oil futures continued to rise this week due to the planned increase in crude output by OPEC+. However, Iran’s expression of commitment to the NPT partially offset the rising prices.
U.S. Equity
  • The S&P 500, Dow Jones and Nasdaq continued to rise sharply for the second consecutive week. Both the broad market indices the S&P 500 and the Nasdaq closed on record highs ahead of the Independence Day holiday. A better-than-expected job report raised investor sentiments, even as the markets priced out a rate cut in July.  Nvidia’s valuation rose to $3.89 trillion this week, close to surpassing Apple and reaching the $4 trillion mark. The passing of the tax and spending bill by the U.S. congress, with its large spending cuts yet large deficit has increased consumer apprehension for its net impact on the economy. 
  • The nonfarm payrolls data showed an additional 147,000 jobs in June which was higher than the early estimate of 110,000 jobs. The unemployment rate also declined to a better-than-expected 4.1% in June. Earlier in the week, ADP data raised fears of economic slowdown with a decrease of 33,000 in private payrolls.
  • As part of the U.S.-China trade agreement, the U.S. Department of Commerce has lifted its restrictions on export of semiconductor software to China. This was confirmed by Siemens AG, Synopsys, and Cadence.
  • Federal Reserve Chair Jerome Powell has said that the Fed would have cut interest rates already this year, if President Trump would have not raised worldwide tariffs and introduced market volatility and inflationary pressures in the markets.
  • The U.S. Department of Justice has approved the $14 billion takeover of the networking company Juniper Networks by Hewlett Packard Enterprise. 
  • First Solar’s stock price rose following the passing of the latest version of the tax bill by the senate which includes provisions for new taxes on imported equipment for renewable energy. 
  • Palantir Technologies stock rose after the announcement of its collaboration with Accenture to provide services to the federal government. 
  • Goldman Sachs, Citigroup and the Bank of America announced higher dividend payouts following the Federal Reserve’s stress test. 
  • Morgan Stanley and JP Morgan have announced stock buyback programs of $20 billion and $50 billion, respectively.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index rose slightly this week.
  • The U.S. 10-year Treasury yield rose to 4.348% and the yield on the 2-year note also rose to 3.886% over the week. 
  • The U.S. Dollar Index depreciated slightly to 97.0 this week.

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