It’s the End of a Trade Truce – Markets on Edge
Tomorrow the US‑China trade truce is set to expire, and investors are bracing for a headline that could ripple through the markets. So far, stock action has been genial: the FTSE 100 nudged up 0.25 %, DAX sat on a platter of flatness, and US futures tipped a touch firmer.
Nvidia & AMD: A Pay‑up for the U.S. Treasury
In an odd twist, Nvidia and AMD will hand over 15 % of certain Chinese earnings to the U.S. government. The exchange? Export licences for Nvidia’s H2O and AMD’s MI308 chips, as the Financial Times reported. While the numbers look modest in the big picture, the deal feels like everyone’s politely tapping a dance card to Trump’s tune.
Trump Meets Putin, Gold Shifts, and Other Global Buzz
- Trump & Putin Rendezvous: The presidents will meet in Alaska on 15 August to hash out the Ukraine crisis.
- Gold Prices Slip: With the White House hinting at an executive order clarifying the stance on gold tariffs, Comex futures in New York traded down, reflecting a lighter geopolitical risk premium.
- US Data on the Horizon: This week we’ll see CPI, PPI, retail sales, and industrial production. The Federation’s eyes are on core inflation – expected to climb 0.3 % mo‑mo in July, nudging close to 3 % and tightening Fed leeway.
- UK Economic Snapshot: Unemployment climbed to 4.7 % last month, a four‑year high, amidst a payroll slump. The Bank of England will have to confront a shaky labour backdrop.
Tech Titans Shine – Earnings & Concentration Risks
The S&P 500 almost broke another all‑time high, while the Nasdaq did. The so‑called “Mag 7” (Amazon, Apple, Microsoft, Netflix, Alphabet, Meta, and ExxonMobil) continue to dominate with superior earnings. Tech earnings are booming, largely driven by AI investments and an unexpected surge in capital expenditure.
Factor count has popped back up: investors are scrambling for premium returns, but the market feels a pinch because not everyone knows where their capital should go. FactSet data show the Mag 7 posted 25.7 % YoY earnings growth in Q2 versus just 6.3 % across the rest of the S&P 500.
Materials & Europe – A New Narrative
Materials stocks are down 5 %. Europe’s earnings lag and face a steep 15 % tariff on exports, making the continent less attractive relative to the US.
Dollar Dynamics & the Bullish Tech Pulse
The dollar has pounded the market hard this year, helpful for US exporters and balancing the index against the UK/Europe. While the S&P 500 is up roughly 8 % YTD in USD, it’s flat when measured in sterling terms. Many are still betting on US tech, even if the year‑to‑date gains level out.
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