Morning Brew August 7 2025

Good morning,

We remain in headline driven markets, here we go:

• Trump and Putin may meet as early as next week to discuss Ukraine.
• There is currently no change to the 39% tariff charged on Swiss goods.
• The White House announced a new 25% tariff on Indian imports due to India's Russian oil imports, doubling U.S. levies on India to 50%.
• The U.S. is considering imposing tariffs of 100% on semiconductors, exempting companies that are either producing or planning to produce in the U.S.
• Apple will invest an additional $100 billion to boost local production, bringing the total planned U.S. investment to $600 billion.
• China's exports beat forecasts in July, growing by 7.2% compared to the expected 5.4%.
• President Donald Trump's administration has instructed U.S. diplomats in Europe to start a lobbying campaign against the European Union's Digital Services Act, according to Reuters.
• Neel Kashkari is advocating for two rate cuts this year in response to the slowing U.S. economy.
• The Bank of England is expected cut interest rates for the fifth time in 12 months. We estimate a 90% probability of a rate cut, despite uncomfortably high inflation.
• Sony raised its full-year operating profit forecast on Thursday by 4% to 1.33 trillion yen, while Toyota Motor cut its full-year operating profit forecast by 15% due to foreign exchange effects and higher U.S. tariffs.

Stocks had a good day yesterday with Apple being a key driver. The Dow rose 0.2%, the S&P 500 gained 0.7%, and the Nasdaq increased by 1.2%. Apple rose by 5%, McDonald's added 3%, while AMD lost 6% and Super Micro fell by 18%.

The GER40 is testing the 24k mark again; the reaction of the SMI will be interesting.

EUR/USD rose to 1.1670, GBP/USD to 1.3365, and USD/JPY to 147.30. Gold and Silver are stronger at 3377 and 38.05 respectively, and Platinum is at 1330. The USD Index is approaching 98.20 again, currently at 98.20.

It is very interesting that, similar to last year, we observed a significant drop in risk sentiment at the end of July, only to see a strong recovery at the beginning of August. Passive investments, like ETF savings plans, are likely to be a key force driving this trend as they continue to gain popularity. This factor is often overlooked in the markets but should be kept in mind by traders and investors.

Today, news remains the biggest risk factor. Aside from the Bank of England, there are few major scheduled events.

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

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)