Morning Brew July 25 2025

Good morning,

Yesterday saw a mixed performance in the market, with Alphabet lifting Microsoft, Nvidia, and Amazon, while Tesla, American Airlines, United Health, IBM, and Honeywell declined significantly. The key indices performed as follows: S&P 500 up by 0.07%, Nasdaq up by 0.18%, and Dow down by 0.70%.

In the U.S., business activity gained momentum in July. However, companies raised prices on goods and services, prompting economists to predict faster inflation in the upcoming months, largely due to increased import tariffs.

The $8.4 billion merger between Paramount Global and Skydance Media received approval from U.S. regulators.

Intel announced plans to reduce its workforce by 22% by the end of the year.

Volkswagen reported disappointing earnings and outlook, resulting in a pre-market decline of approximately 1.5%.

As anticipated, the European Central Bank left interest rates unchanged. Christine Lagarde remarked, "Domestic price pressures have continued to ease, with wages growing more slowly. At the same time, the environment remains exceptionally uncertain, especially due to trade disputes." Market participants now perceive a 25% probability of a 25 basis point rate cut in September, down from 40% earlier in the week. The two-year yield rose by 7 basis points to 1.92%, marking the highest level since May 15, with the largest daily sell-off since early June.

The U.S. dollar steadied near two-week lows on Friday, poised for its largest weekly drop in a month. The dollar index, measuring the U.S. currency against six other currencies, stood at 97.448. Current exchange rates were EUR/USD at 1.1740, USD/JPY at 147.10, and GBP, which dipped to 1.35 following weak UK PMI data indicating manufacturing contraction and services below expectations.

Gold and silver are trading flat at 3360 and 39.00, respectively, awaiting new market catalysts.

In a peculiar exchange, Donald Trump visited the Federal Reserve construction site yesterday, engaging in a notably tense dialogue with Jerome Powell regarding the construction costs. DJT seemed to attempt to humiliate Powell, who was unyielding. While this altercation is relatively unimportant in a broader sense, it highlights the significant rift between the two, which is crucial.

Today, the most important release will be the U.S. Durable Goods Orders. Additionally, attention will be on the U.S./EU trade deal, with the deadline rapidly approaching. In the event of new revelations from the Epstein files affecting Trump, anticipate possible attempts to deflect, which may lead to short-term market movements.

Friday, July 25

- UK: Retail Sales

- Germany: Ifo Business Climate, Current Conditions, Expectations.

- Eurozone: ECB Survey of Professional Forecasters.

- Italy: Business and Consumer Confidence.

- Eurozone: Loans to Companies/Households, M3 Money Supply.

- US: Durable Goods Orders

- US: Baker Hughes Oil and Total Rig Count.