Morning Brew August 8 2025

Good Morning,

Markets continue to be headline-driven, and equities had a calm day overall. The three major US indexes moved less than 0.5%. Eli Lilly lost 14% due to poor test results, while Novo Nordisk may rise on the news. Intel shares fell 3% after Donald Trump called for the immediate resignation of CEO Lip-Bu Tan due to his ties to Chinese firms. Apple continued to rise, as the tariffs affected it less than feared.

Reports indicate that Fed Governor Waller is Trump's leading candidate for the next Fed Chair. President Trump also appointed Council of Economic Advisers Chair Miran as the interim replacement for Fed Kugler, who will serve until the end of January.

Rheinmetall missed its target, resulting in a 6% drop in stock value. Jacob commented on the results: https://www.home.saxo/content/articles/equities/rheinmetall_q2-07082025. Rheinmetall earnings: waiting for Europe’s rearmament to fire.

• Q2 softness was driven by political delays, not demand weakness, with a record EUR 63 billion backlog supporting future growth.
• Major German orders are expected in Q4, likely boosting revenue, margins, and potentially triggering a guidance upgrade.
• Valuation is demanding, so future gains depend on flawless execution and contract delivery.

US Yields are broadly stable, with the 1-year at 3.92 and the 10-year at 4.24. The USD Index stands at 98.15. EUR/USD is at 1.1655, GBP/USD at 1.3430, and USD/JPY at 147.20. The Swiss Franc is at 0.8070 against the USD and 147.25 against the Yen. The Pound rose after the Bank of England cut rates as expected, but the vote was very controversial.

Gold and silver are at 3395 and 38.23, respectively. US-based Gold Futures hit an all-time high amid reports of DJT looking to impose tariffs on gold bars. If we see volatility in gold like we have in copper recently, it would be concerning.

Today is another very slow day for data, but not for headlines:

• Israel is aiming to take control of Gaza City, a very controversial move.
• The ultimatum Trump set for Russia expires today.
• The U.S. government promised to amend a presidential executive order to remove overlapping tariffs on Japanese goods.
• Donald Trump signed an executive order on Thursday aimed at allowing more private equity, real estate, cryptocurrency, and other alternative assets in 401(k) retirement accounts. This move had been advocated for by lobbyists.
• India's Tata Consultancy Services cut 12,000 jobs due to AI competition.

It is a tricky day to predict because the focus remains a moving target. With little data to focus on, tariffs, Ukraine, the middle east and maybe most importantly any changes expected from the US Fed will have an impact on markets. Watch Gold if the rumors on tariffs on Gold Bars come true.

Ole commented this morning: Gold futures in New York soaring relative to the London spot prices after the FT reported that the US would now apply tariffs on imports of one-kilogram gold bars, the bars that are being accepted by the COMEX exchange, adding a fresh blow to Switzerland, the main precious metals hub. The December contract trades USD 100 above spot gold, a USD 60 increase in the last week. Spot gold, meanwhile, continues to hover near USD 3,400, with key resistance around USD 3,450, supported by the prospect of easier Fed policy ahead, robust China demand, and the latest mayhem in the exchange for physical (EFP) market. While we wait for confirmation or another TACO moment the market will trade nervous. In the long run, the existence of US tariffs on deliverable gold products raises the question on the role of futures trading in the US as a means to hedge and whether other centres eventually step up as alternatives

Friday, August 8, 2025

Economic Events

•        Canada: Employment Report

Top Earnings Releases

•        Algonquin Power & Utilities (AQN)

•        Alpha Metallurgical Resources (AMR)

•        Enbridge (ENB)

•        Lamar Advertising (LAMR)

•        Tempus AI (TEM)