Market Report.
📆 It seems that August 1 has become the new deadline in the U.S. for implementing higher tariffs on certain countries if trade agreements are not finalized or in progress. However, it’s unclear which specific countries are affected or which agreements are at stake.
✉️ According to Treasury Secretary Bessent, President Trump will be sending letters to some of our trading partners indicating that if they do not expedite negotiations, tariffs will revert to their April 2 levels on August 1. These letters are expected to be sent to around 10 to 12 countries today, likely the same ones that were meant to be sent out last Friday.
📈 Secretary Scott Bessent mentioned that the countries that receive these letters will encounter the most severe U.S. tariffs, with some, particularly those aimed at the EU, potentially reaching as high as 50%. These tariffs are set to take effect on August 1.
💶 According to ECB Governing Council member Gabriel Makhlouf, the euro cannot swiftly replace the dollar as the cornerstone of the global financial system because the countries that utilize it are not adequately integrated financially and economically. He acknowledged that while the dominance of the dollar is expected to decrease over time, Europe currently lacks a unified fiscal capacity and a reliable safe asset.
🇺🇸 Elon Musk seeks to challenge the “uniparty duopoly” in Washington through the creation of a new third party. Elon Musk has officially filed paperwork with the Federal Election Commission (FEC) to create a new political party called the “America Party” (AMEP). The party will be headquartered at the same address as Musk’s SpaceX company in Hawthorne, California. The Custodian of Records and Treasurer is listed as Vaibhav Taneja, who is the CFO of Tesla.
🗳️ Musk announced the formation of the America Party after a poll on X (formerly Twitter) showed 66% of respondents wanted a new political party in the US. The announcement comes after a public falling out between Musk and Trump, with Trump threatening to cut off subsidies to Musk’s companies.
🎭 Elon Musk “can have fun with it,” according to Trump, but a new party is “ridiculous.”
🛢️ Eight oil-producing nations of the OPEC+ alliance agreed to increase their collective crude production by 548,000 barrels per day in August. The group, which includes major producers like Russia and Saudi Arabia, had been expected to increase output by a smaller 411,000 barrels per day. This could be seen, one more time, as Saudi Arabia putting the squeeze on higher-cost producers to capture market share, with low-margin U.S. shale output under particular pressure. It’s OPEC’s answer to the U.S. fracking industry.
💷 The British pound was poised for a weekly loss on Friday, marking a lacklustre end to a week that saw fiscal and political uncertainties rattle investor appetite for UK assets. On a weekly basis, the pound was down 0.4% against the US dollar and had fallen about 1% against the euro, its biggest one-week drop against the single currency since early April. UK stocks, bonds, and the pound witnessed a selloff earlier in the week, after the government’s welfare reforms were not well received by ruling Labour Party members and stirred speculation about the future of finance minister Rachel Reeves.
🤔 Uncertainties prevail over the options the Keir Starmer-led government has to balance public accounts. There is speculation that tax rises are likely in the Autumn Budget, as the government faces difficulties in finding savings from welfare budgets.
🇪🇺 According to the Euractiv news, next week the EU will impose penalties on Israel for its military campaign in the Gaza Strip.
☀️ China is funding the building of 55 solar parks in Cuba, each of which will generate about 21 MW. By 2028, there are plans to add 37 more parks. In order to add 2,000 MW to the grid, nearly two-thirds of the island’s current electricity demand.
Market Review
📉 As the day approaches for the return of tariffs, the US stock market seems to be slowing down. The Mini S&P 500 futures are retreating slightly from the highs reached on Thursday, currently trading around 6,295 points. The Nasdaq 100 is showing similar movements, trading at 22,930 points.
📊 The Russell 2000 chart is particularly interesting, as it begins to display very strong bullish patterns, with price projections that could lead to new all-time highs.
💵 Meanwhile, the dollar is also attempting a recovery, with the DXY index forming reversal patterns on the charts and currently ascending to 97.15 points. This has caused the EUR/USD to appear to halt its ascent, and some pairs like GBP/USD are even initiating significant pullbacks.
📉 In Europe, the equity market does not appear very optimistic, with futures contracts trading below Thursday’s levels. DAX 40 futures are positioned at 23,935 points, while Eurostoxx 50 futures are trading around 5,310 points.
🛢️ The crude oil market is experiencing some declines following announcements of increased supply, with WTI crude retreating to levels near $65.50 before rebounding to the current $66.30.
🥇 Gold has also fallen at the start of the week, with futures trading at $3,320 per ounce, losing the $3,370 reached on Thursday.
₿ Bitcoin remains relatively strong, not far from its highs, trading at $109,100.
