Morning Brew August 4 2025

Good morning,

Today is the first trading day after Donald Trump announced tariffs on Switzerland at 39% on Friday, which is the Swiss National holiday. This is among the highest in the world, and the US is the biggest export market for Switzerland. While pharma is excluded from these tariffs, there is significant pressure on the sector, in addition to the tariffs, to reduce prices. Roche and Novartis are likely to open under pressure. The expected shift in the SMI is currently approximately 3%. The Swiss Franc remained relatively stable given the overall shift in the market. Minister Guy Parmelin stated that the tariffs could trigger a recession in Switzerland.

A miss in the Nonfarm Payroll and massive revisions caused great irritation on Friday. The data showed that there was hardly any growth in the labor market over the past three months. July was revised from 110,000 to 73,000, and the data for May and June was corrected down from a combined total of 291,000 to 33,000. Donald Trump announced that the head of the agency publishing the data was manipulating them. This resembles a poorly managed monarchy more than a modern state.

Simultaneously, Fed Governor Kugler resigned, giving Trump an early opportunity for an appointment to the Fed. Yields fell dramatically: the 1-year yield to 3.88%, the 10-year yield to 4.24%, and the 30-year yield to 4.85%. The USD lost significantly. Stocks fell: the S&P lost 100 points to 6,237, the Nasdaq dropped 2.2%, and the Dow ended 1.2% lower. For the week, the S&P gave up 2.36%, the Dow 2.9%, and the Nasdaq 2.17%.

The CBOE Volatility Index climbed to 21.90, its highest since June 23. Minister Guy Parmelin said, as experts warned, the 39% import duties announced by President Donald Trump could trigger a recession in Switzerland.

The USD Index is at 98.80, EUR/USD is at 1.1585, GBP/USD at 1.3280, and USD/JPY at 147.80. Gold and silver are trading at 3,360 and 37.05, respectively. Bitcoin fell to 114k over the weekend.

Headlines:

• Berkshire also reported a 4% decline in quarterly operating profit.
• India to maintain Russian oil imports despite Trump threats, according to government sources.
• License applications by U.S. companies to export goods and technology globally, including to China, are apparently delayed due to staffing cuts.

We expect a crazy week, even if there is significantly less data and earnings compared to last week. Expect US politics and shifts in the US yield curve to drive markets around! We now price in more than two cuts this year and see an 85% chance for a cut in September.

August 4, 2025

Economic Events

•        U.S.: Factory Orders (June), Durable Goods Orders final (June)1.

•        Switzerland: Inflation Rate (YoY, MoM), Manufacturing

Top Earnings Releases

•        Palantir Technologies (PLTR) — After Market Close

•        AMC Networks (AMCX)

•        American Axle (AXL)

Tuesday, August 5, 2025

Economic Events

•        Global PMI inclISM Non-Manufacturing Composite (July)1.

• US International Trade

  •        Canada: Merchandise Trade Balance (June)1.

  Top Earnings Releases

  •        Vertex Pharmaceuticals (VRTX)

  •        The Trade Desk (TTD)

  Wednesday, August 6, 2025

  Economic Events

  •        Eurozone: Retail Sales

• Germany Industrial Orders

  Top Earnings Releases

  •        Amgen (AMGN)

  •        Open Text (OTEX)

  •        Ball Corp (BALL)

  Thursday, August 7, 2025

  Economic Events

• China Trade
• Germany Industrial Output
• UK House Prices
• UK Rate decision

•        U.S.: Productivity (Q2, preliminary), Wholesale Inventories (June, final), Consumer Credit

•        Japan: Leading Indicators (June, preliminary), Trade Balance, Current Account

•        UK: Bank of England

Top Earnings Releases

•        Shopify (SHOP)

•        Trex Co (TREX)

•        Under Armour (UAA)

•        Wendy’s (WEN)654.

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)