Macro & Geopolitical Overview
Trump’s Tariff Threats vs Market Optimism
Despite President Trump’s insistence that sweeping tariffs will start August 1 (with no extensions), markets have demonstrated remarkable resilience. Wall Street appears to view these threats as a continuation of negotiation tactics rather than fixed policy.
The S&P 500 is up ~6% YTD, trading close to record highs, underpinned by robust corporate fundamentals and expectations of looser monetary policy.
Banks including Goldman Sachs, Bank of America, JPMorgan, Deutsche Bank, Citigroup, and Barclays have raised their S&P 500 forecasts, projecting additional 6–11% upside over the next 12 months.
Treasury Secretary Scott Bessent claims tariffs could yield $300bn in revenue this year, with $100bn already collected.
Market Read: Consensus suggests that repeated tariff postponements have desensitized investors, with strategists highlighting the continued strength in mega-cap tech and broader earnings momentum as outweighing trade policy risks.
EU Seeks Temporary Trade Deal
The EU is negotiating a provisional deal to maintain tariffs at 10% and avoid full-scale retaliation. German finance officials have warned of potential countermeasures if no fair resolution is reached.
Implications: A temporary truce could reduce volatility in European equities and alleviate pressure on the euro. Eurozone markets already showed optimism, with the Stoxx 600 up 0.3% and DAX and CAC 40 both gaining 0.6%.
Ukraine’s Financing Strains Intensify
The EU is urgently seeking to fill Ukraine’s projected $19bn budget gap for 2025 as ceasefire prospects diminish. Options under discussion include front-loading loans from G7 support packages and leveraging frozen Russian assets.
Trump’s promise to resume defensive arms deliveries provides a partial relief but does not fully address fiscal shortfalls.
EU leadership aims to finalize support plans before winter to ensure operational stability in Ukraine’s defense and civil services.
Strategic View: Ukraine’s funding gap underscores ongoing geopolitical risk in Eastern Europe, which could impact energy markets, defense equities, and the euro.
Port of Rotterdam Defense Preparations
Europe’s largest port is preparing for potential conflict with Russia by designating military cargo spaces and coordinating with Antwerp. This forms part of an EU-wide rearmament and strategic stockpiling effort.
Proposals include stockpiling critical raw materials (copper, lithium, graphite) and essential supplies.
Supports broader EU resilience efforts to reduce dependency on imports from China and Russia.
Implications: Reinforces the structural bullish thesis on critical raw materials and European defense contractors.
Corporate & Sector Updates
Wall Street Earnings Sentiment Turning Positive
Despite tariff noise, optimism around earnings season is rising.
Big banks expect solid Q2 results supported by labor market strength and easing inflation trends.
Analysts highlight that U.S. corporates have maintained guidance despite higher input costs.
Investment Implication: Reinforces overweight positioning in U.S. large caps, especially in tech and industrials with strong balance sheets.
Former UK PM Sunak Joins Goldman Sachs
Rishi Sunak rejoining Goldman Sachs as senior adviser highlights geopolitical expertise premium at major financial institutions.
Expected to advise on economic and geopolitical strategy while maintaining parliamentary role.
His compensation will support charitable projects, minimizing domestic political fallout.
BCG’s Gaza Fallout
BCG’s involvement in controversial Gaza post-war relocation plans has led Save the Children to cut ties after 20 years, severely damaging the firm's reputation.
Implications: Could impact BCG’s client relationships and broader consulting industry reputational risks, especially in ESG-conscious markets.
BP and Shell Return to Libya
BP and Shell have signed MoUs to explore and redevelop major Libyan oil fields, signaling re-engagement despite ongoing political instability.
Libya aims to raise output from 1.3m to 2m b/d.
These moves underscore Western energy majors' renewed focus on fossil fuels amid investor pressure for returns.
Investment View: Supports medium-term oil production growth; bullish for European oil majors despite ESG headwinds.
Asia & EM Updates
China’s Overcapacity and Deflation Concerns
China criticized local firms and governments for excessive price competition (neijuan), which has entrenched factory gate deflation for 33 consecutive months.
Beijing is signaling potential “supply-side reforms” to manage capacity and stabilize prices.
Overcapacity concerns extend to green sectors (solar, EVs), threatening global price dynamics.
Implications: May support global industrial metals prices if successful. However, near-term risks for global trade tensions remain elevated.
Southeast Asia Tariff Wall
Trump threatens 25–40% tariffs on Cambodia, Indonesia, Laos, Malaysia, and Thailand to counter Chinese transshipment practices.
Vietnam accepted a 20% base tariff, rising to 40% for transshipped goods.
Analysts predict higher production costs and consumer prices, potentially slowing ASEAN manufacturing relocation trends.
Strategic View: Increases risk premium on regional supply chains and may provide a tailwind for nearshoring/U.S. manufacturing.
Brics Pushback and De-dollarization Drive
Brics leaders sharply criticized Trump’s new 10% "anti-Brics" tariff threat. The bloc reaffirmed its commitment to reduce USD dependence and reform global financial governance structures.
Market Lens: Accelerated shift toward local currency trade settlements could support alternative reserve currencies and precious metals.
Alternative Assets and Innovation
Tokenized Treasury Funds Surge
Crypto traders and institutions are pivoting to tokenized Treasury and money market funds (assets up 80% YTD to $7.4bn) as an alternative to stablecoins.
Advantages: yield generation, rapid blockchain-based settlement, and new collateral options.
BlackRock, Franklin Templeton, and Janus Henderson products seeing robust inflows.
Implications: Bullish for blockchain infrastructure and tokenization service providers. Early-stage adoption curve but strong growth potential.
Sector Themes
Private Equity (PE): U.S. public universities are increasing PE allocations (targeting up to 30%) despite valuation and exit risks. Signals belief in long-term outperformance vs. muted public equity expectations.
Agriculture & EU Budget: CAP subsidies to farmers remain protected despite budget consolidation, driven by strong lobbying. Confirms ongoing policy support for European agricultural income stability.
Energy Transition & Defense: EU budget and port strategies reflect dual focus on green resilience and military preparedness, providing structural support to both ESG and defense-linked investments.
Markets Summary & Outlook
S&P 500 +6% Near all-time highs, supported by earnings optimism.
Euro Stoxx 600 +0.3% EU trade optimism offsetting geopolitical tensions.
DAX +0.6% Strong industrials rebound; trade negotiations key.
FTSE 100 +0.5% Supported by commodity strength and oil majors.
Dollar Index: +0.2%, moderate safe haven demand.
US 10Y yield: ~4.63%, reflecting ongoing macro uncertainty and strong U.S. data.
Gold: Supported by Brics de-dollarization narrative and geopolitical hedging.
Trump’s Tariff Threats vs Market Optimism
Despite President Trump’s insistence that sweeping tariffs will start August 1 (with no extensions), markets have demonstrated remarkable resilience. Wall Street appears to view these threats as a continuation of negotiation tactics rather than fixed policy.
The S&P 500 is up ~6% YTD, trading close to record highs, underpinned by robust corporate fundamentals and expectations of looser monetary policy.
Banks including Goldman Sachs, Bank of America, JPMorgan, Deutsche Bank, Citigroup, and Barclays have raised their S&P 500 forecasts, projecting additional 6–11% upside over the next 12 months.
Treasury Secretary Scott Bessent claims tariffs could yield $300bn in revenue this year, with $100bn already collected.
Market Read: Consensus suggests that repeated tariff postponements have desensitized investors, with strategists highlighting the continued strength in mega-cap tech and broader earnings momentum as outweighing trade policy risks.
EU Seeks Temporary Trade Deal
The EU is negotiating a provisional deal to maintain tariffs at 10% and avoid full-scale retaliation. German finance officials have warned of potential countermeasures if no fair resolution is reached.
Implications: A temporary truce could reduce volatility in European equities and alleviate pressure on the euro. Eurozone markets already showed optimism, with the Stoxx 600 up 0.3% and DAX and CAC 40 both gaining 0.6%.
Ukraine’s Financing Strains Intensify
The EU is urgently seeking to fill Ukraine’s projected $19bn budget gap for 2025 as ceasefire prospects diminish. Options under discussion include front-loading loans from G7 support packages and leveraging frozen Russian assets.
Trump’s promise to resume defensive arms deliveries provides a partial relief but does not fully address fiscal shortfalls.
EU leadership aims to finalize support plans before winter to ensure operational stability in Ukraine’s defense and civil services.
Strategic View: Ukraine’s funding gap underscores ongoing geopolitical risk in Eastern Europe, which could impact energy markets, defense equities, and the euro.
Port of Rotterdam Defense Preparations
Europe’s largest port is preparing for potential conflict with Russia by designating military cargo spaces and coordinating with Antwerp. This forms part of an EU-wide rearmament and strategic stockpiling effort.
Proposals include stockpiling critical raw materials (copper, lithium, graphite) and essential supplies.
Supports broader EU resilience efforts to reduce dependency on imports from China and Russia.
Implications: Reinforces the structural bullish thesis on critical raw materials and European defense contractors.
Corporate & Sector Updates
Wall Street Earnings Sentiment Turning Positive
Despite tariff noise, optimism around earnings season is rising.
Big banks expect solid Q2 results supported by labor market strength and easing inflation trends.
Analysts highlight that U.S. corporates have maintained guidance despite higher input costs.
Investment Implication: Reinforces overweight positioning in U.S. large caps, especially in tech and industrials with strong balance sheets.
Former UK PM Sunak Joins Goldman Sachs
Rishi Sunak rejoining Goldman Sachs as senior adviser highlights geopolitical expertise premium at major financial institutions.
Expected to advise on economic and geopolitical strategy while maintaining parliamentary role.
His compensation will support charitable projects, minimizing domestic political fallout.
BCG’s Gaza Fallout
BCG’s involvement in controversial Gaza post-war relocation plans has led Save the Children to cut ties after 20 years, severely damaging the firm's reputation.
Implications: Could impact BCG’s client relationships and broader consulting industry reputational risks, especially in ESG-conscious markets.
BP and Shell Return to Libya
BP and Shell have signed MoUs to explore and redevelop major Libyan oil fields, signaling re-engagement despite ongoing political instability.
Libya aims to raise output from 1.3m to 2m b/d.
These moves underscore Western energy majors' renewed focus on fossil fuels amid investor pressure for returns.
Investment View: Supports medium-term oil production growth; bullish for European oil majors despite ESG headwinds.
Asia & EM Updates
China’s Overcapacity and Deflation Concerns
China criticized local firms and governments for excessive price competition (neijuan), which has entrenched factory gate deflation for 33 consecutive months.
Beijing is signaling potential “supply-side reforms” to manage capacity and stabilize prices.
Overcapacity concerns extend to green sectors (solar, EVs), threatening global price dynamics.
Implications: May support global industrial metals prices if successful. However, near-term risks for global trade tensions remain elevated.
Southeast Asia Tariff Wall
Trump threatens 25–40% tariffs on Cambodia, Indonesia, Laos, Malaysia, and Thailand to counter Chinese transshipment practices.
Vietnam accepted a 20% base tariff, rising to 40% for transshipped goods.
Analysts predict higher production costs and consumer prices, potentially slowing ASEAN manufacturing relocation trends.
Strategic View: Increases risk premium on regional supply chains and may provide a tailwind for nearshoring/U.S. manufacturing.
Brics Pushback and De-dollarization Drive
Brics leaders sharply criticized Trump’s new 10% "anti-Brics" tariff threat. The bloc reaffirmed its commitment to reduce USD dependence and reform global financial governance structures.
Market Lens: Accelerated shift toward local currency trade settlements could support alternative reserve currencies and precious metals.
Alternative Assets and Innovation
Tokenized Treasury Funds Surge
Crypto traders and institutions are pivoting to tokenized Treasury and money market funds (assets up 80% YTD to $7.4bn) as an alternative to stablecoins.
Advantages: yield generation, rapid blockchain-based settlement, and new collateral options.
BlackRock, Franklin Templeton, and Janus Henderson products seeing robust inflows.
Implications: Bullish for blockchain infrastructure and tokenization service providers. Early-stage adoption curve but strong growth potential.
Sector Themes
Private Equity (PE): U.S. public universities are increasing PE allocations (targeting up to 30%) despite valuation and exit risks. Signals belief in long-term outperformance vs. muted public equity expectations.
Agriculture & EU Budget: CAP subsidies to farmers remain protected despite budget consolidation, driven by strong lobbying. Confirms ongoing policy support for European agricultural income stability.
Energy Transition & Defense: EU budget and port strategies reflect dual focus on green resilience and military preparedness, providing structural support to both ESG and defense-linked investments.
Markets Summary & Outlook
S&P 500 +6% Near all-time highs, supported by earnings optimism.
Euro Stoxx 600 +0.3% EU trade optimism offsetting geopolitical tensions.
DAX +0.6% Strong industrials rebound; trade negotiations key.
FTSE 100 +0.5% Supported by commodity strength and oil majors.
Dollar Index: +0.2%, moderate safe haven demand.
US 10Y yield: ~4.63%, reflecting ongoing macro uncertainty and strong U.S. data.
Gold: Supported by Brics de-dollarization narrative and geopolitical hedging.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.