Morning Brew July 24 2025

Good morning,

The EU and US are nearing a trade deal with a 15% US tariff on EU goods, with possible exemptions for select EU products, according to Reuters, initial reports there had been an agreement were premature it seems – traders are optimistix

The S&P 500 gained 0.8%, the Nasdaq +0.6% and the Dow +1.15% on the trade deal with Japan and hopes for one with the EU. The GER40 rose to 24533 and is within 0.5% of it`s all time high

There is little change in US Yields nevertheless the USD falls with the index at 97.15, EURUSD at 1.1780, GBPUSD 1.3580 and USDJPY 146.

Precious metals are pausing their ascend, gold is 3380, Silver 39.10 and Platinum 1410.

• Tesla posted the worst quarterly sales decline in more than a decade and a profits miss, in the investor call, Elon Musk pointed out the company was facing a few tough quarters due to the cut in tax credits for EV buyers. The stock fell 5% after hours.
• Thermo Fischer could gain 9% after beating results.
• Google has strong revenue and earnings but capital expenditures worried traders, the stock ended extended hours friendly . Charu took a look: Alphabet earnings: Five key takeaways investors need to know

• Strong quarter overall, with both revenue and earnings beating expectations—though the market reaction was dampened by a sharp upward revision in capital expenditure guidance.
• Cloud stood out, with 32% year-on-year growth, rising profitability, and a surge in large enterprise deals.
• Search remains resilient for now, despite growing AI disruption. Google’s dominance is intact, but the long-term threat from AI-native challengers is beginning to take shape.

 

• IBM Beat expectations but fell 5% in extended trading.
• Nestle posted better-than-expected first-half organic sales growth
• GM gained 6% yesterday after the sharp selloff on Tuesday.

The ECB is not expected to take any action to cut or hike rates today and with the trade deal still not fully completed, I expect comments to be fairly open. There is a 94% probability of no action and only one cut priced in by December

Ursula von der Leyen is visting China today to discuss Chinas stance on Ukraine and trade.

Trump was told he is in the Eppstein Files acc to the Wallstreet Journal, he is also expected to visit the Federal Reserve today. This is a somewhat explosive mix as he has the tendency to deflect from issues he is not comfortable with – the Eppstein Files are clearly in that category and the Fed Independence as well as Jerome Powell a well positioned target.

We expect key PMI Data today: France 8:45, Germany 9:30, EU 10:00, UK 10:30 and US 15:45

Watch for news at any point in time, we have a considerable event risk both ways! 

Thursday, July 24

- Global Flash PMIs (Germany, Eurozone, UK, US, France

- European Central Bank Interest Rate Decision and press conference

- Switzerland: SNB Chairman Schlegel Speech.

- UK: CBI Business Optimism Index, CBI Industrial Trends Orders.

- Turkey: Interest rate decision.

- Japan: Tokyo CPI and Core CPI updates.

- US: S&P Global Manufacturing, Services, and Composite PMI Flash Initial and Continuing Jobless Claims, Fed Balance Sheet.

Earnings: American Airlines, Nokia, Nasdaq, Intel, Blackstone,honeywell

Roche: The Swiss drug giant reported 6% growth in group sales in Q1, driven by an 8% increase in pharmaceutical sales, though diagnostics was flat. The company stuck to its full-year guidance of mid-single-digit sales growth, despite a 5% negative impact from currency fluctuations. The key focus could be on Trump’s tariffs on pharmaceuticals, which he has threatened to introduce by 1 August. Roche said in the Q1 earnings call it was satisfied with mitigating tariffs, for example by shifting inventories. Investors will want further reassurances in the Q2 call – so far the stock has failed to recover much from its post Liberation Day lows.

Nestle: The world’s largest packaged foods group said the impact of US tariffs was "unclear" when it reported better-than-expected first-quarter organic sales growth. The firm, which at the same time hiked prices for its Kit-Kat chocolate bars and Nescafe coffee, maintained its 2025 outlook, expecting organic sales growth to improve operating profit margin of at least 16%. Investors will be searching for whether management can offer any fresh perspective on tariffs, and how it judges tailwinds from declining cocoa prices, which have halved since the start of the year.

Lloyds: Shares of the UK bank have risen about 40% so far this year and expectations are for continued growth in net interest income (NII), which rose 3% in Q1 to £3.29bn. Q1 saw net interest margins rise to 3.03% from 2.97%. Morgan Stanley forecasts this to tick up further to 3.06% and 2.1% QoQ growth in NII. About the same time as the results we are expecting a Supreme Court ruling on motor finance, which several analysts have said could be a positive catalyst for the stock and the broader bank sector in the UK.Investors will be happy to get clarity on this front as it could remove an overhang for the shares. Investors will also want to hear more about the £4bn investment plan to develop new revenue streams to make it less reliant on NII. Lloyds Q1 profits fell 7% to £1.5bn, in line with forecasts, due to increased provisions for bad loans and the expected impact of tariffs – look for signs that they are less worried than three months ago on those fronts.

Blackstone

The world’s largest alternative asset manager will offer a window into institutional demand, private credit momentum, and real estate performance. Investors are eager to see how fundraising and exits have trended amid a more favorable capital markets backdrop. With earnings of $1.09 per share expected and a 4.7% move implied, Blackstone’s results could have broader implications for financials. Also relevant: updates on retail flows into BREIT and performance of recent private-equity exits.

Honeywell

Often seen as a proxy for the broader industrial economy, Honeywell’s report will speak volumes about supply chains, automation demand, and aerospace aftermarkets. EPS is forecast at $2.66 on $10 billion in revenue, with a 3.6% expected move. Any revision to full-year guidance will be closely watched. Look for signals on warehouse automation, building technologies, and whether aerospace continues to offset softness in other segments.

Intel

Closing out our top ten is Intel, a company still fighting to regain relevance in a rapidly evolving chip landscape. Investors will want updates on its foundry ambitions, government subsidies, and competitive positioning. The bar is low—just $0.02 in expected EPS on $12 billion in revenue—but the stakes are high. The options market is bracing for an 8.1% move, the largest on this list. Commentary on Arrow Lake timing, gross margin trajectory, and traction with AI workloads will be critical.

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.