Money Talks Report 24/07/2025
📜 Market Report.
🛠️ The information about the Japan trade pact on Trump's desk was manually changed. A card on Trump's desk during the meeting shows discrepancies and last-minute edits to the details: The card displays a 10% tariff rate, with 15% only for certain industries. The investment amount is listed as $500 billion, not $550 billion as Trump stated.
🤝 Treasury Secretary Bessent said Japan got the 15% tariff rate because they offered guarantees of equity credit and funding for large U.S. projects, suggesting a more nuanced deal. Japanese officials describing the $550 billion figure as a cap and inclusive of government loan guarantees, rather than a direct investment.
🇪🇺 The European Union is heading towards a trade deal with the United States that would result in a broad 15% tariff on EU goods imported into the U.S., avoiding a harsher 30% levy slated to be implemented from August 1. The 15% rate could apply to sectors including cars and pharmaceuticals, and would not be added to long-standing U.S. duties, which average just under 5%. However, Washington does not appear willing to lower its current 50% tariff on steel.
💶 The EU is preparing to submit counter-tariffs on $109 billion worth of U.S. goods to EU members for approval, though no measures would be imposed until August 7. EU officials say Washington has shown little sign of budging on car tariffs, but the Japan deal could hint at flexibility.
🇰🇷 Talks between top South Korean and U.S. officials to negotiate over President Trump's tariffs have been postponed due to a scheduling conflict for U.S. Treasury Secretary Scott Bessent. The postponement casts fresh doubts on whether South Korea will be able to reach a deal to avert the 25% U.S. tariffs set to take effect on August 1.
💼 South Korea is set to propose an investment package plan worth at least $100 billion, involving major conglomerates like Samsung and Hyundai, in an effort to secure market access and avoid the tariffs.
🏦 The European Central Bank (ECB) is expected to keep interest rates on hold this week, pausing after seven straight cuts, as it waits for clarity on Europe's trade relations with the United States. The ECB has halved its policy rate from 4% to 2% in the past year. The threat of higher-than-expected U.S. tariffs could negatively impact growth and inflation in the Eurozone. Inflation in Europe rose from 1.9% in May to 2% in June. In line with the ECB's objective, but possibly trending upwards again.
🇨🇳 China is likely to signal a lower GDP growth target of around 4.5-5% in its upcoming 15th Five-Year Plan, with a greater focus on consumption over investment. Policymakers are expected to prioritize "common prosperity" and reducing the urban-rural income gap to boost domestic consumption. In the near-term, the economy may need some additional stimulus, such as cash transfers, to support demand.
📈 Alphabet reported Q2 2023 results that beat analyst estimates on revenue and earnings per share. The company said it will increase its capital investments by $10 billion in 2025, up to $85 billion, to meet "strong and growing demand" for its Cloud products and services. Alphabet's cloud computing business revenue grew 32% year-over-year to $13.62 billion. The company is partnering with OpenAI to provide cloud infrastructure for ChatGPT. Total operating expenses increased 20% to $26.1 billion, driven in part by a $1.4 billion legal settlement charge.
🚗 Tesla reported a 16% decline in automotive revenue as sales fell for a second straight quarter, trailing analyst estimates. Tesla's earnings per share came in at 40 cents, below the expected 43 cents. Revenue was $22.50 billion, compared to the expected $22.74 billion. Tesla CEO Elon Musk and CFO Vaibhav Taneja warned of "a few rough quarters" ahead, citing higher tariff costs and the expiration of federal electric vehicle tax credits. Tesla's auto revenue declined to $16.7 billion, down from $19.9 billion a year earlier, with revenue from sales of auto regulatory credits also declining. Tesla's stock performance has been the worst among tech's megacaps this year, down about 18% as of the market close on Wednesday.
🌍 Geopolitics:
📜 According to the WSJ, attorney General Pam Bondi and her deputy informed President Trump that his name was in the Epstein files multiple times, and many other high-profile figures were also mentioned. Trump was told that being mentioned in the records isn't a sign of wrongdoing. The Justice Department didn't plan to release more documents related to the investigation.
🤔 Trump said last week that Bondi hadn’t told him his name was in the files. “This is another fake news story, just like the previous story by The Wall Street Journal,” the White House said.
🇺🇦 Ukrainian President Volodymyr Zelenskyy's decision to weaken the independence of Ukraine's anti-corruption agencies has drawn strong criticism from Ukraine's allies, especially the European Union. Zelenskyy's move has drawn comparisons to the 2014 Euromaidan protests that ousted the pro-Russian president, as Ukrainians take to the streets to defend anti-corruption efforts and the country's European integration aspirations. However, mainstream media avoids talking about it, since in this case, it is the pro-European candidate who is being questioned. Zelenskyy has sought to reassure allies.
🇫🇷 According to BBC, French President Emmanuel Macron and his wife Brigitte have filed a defamation lawsuit against right-wing US influencer Candace Owens. Owens has repeatedly claimed on her podcast and social media that Brigitte Macron was born male under the name Jean-Michel Trogneux. The influencer has also questioned the safety of COVID-19 vaccines, the moon landing, and the Holocaust.
🇧🇷 Brazil has announced its formal decision to join South Africa's genocide case against Israel at the International Court of Justice (ICJ), according to CGTN.
💬 U.S. President Donald Trump outlined his approach to maintaining military support for Ukraine, stating, "We send it to Europe and Europe pays." This proposal suggests shifting the financial burden of arming Ukraine onto European nations, reflecting Trump's emphasis on reducing U.S. expenditures in international conflicts while urging greater responsibility from allied countries.
📊 Market Review:
📈 US markets have reached new highs, with the mini S&P 500 at 6,400 points. This is buoyed by Alphabet-Google's results, despite Tesla's poor performance. Nasdaq 100 futures are also strong, trading close to the 23,400-point level.
💵 The dollar has continued to weaken significantly this week, with the DXY index recording a drop of nearly 1.4% from its weekly highs. This has caused the EUR/USD pair to push further upwards, surpassing 1.175 and currently sitting at 1.1765.
💹 In Europe, equities also appear to be strengthening, with DAX 40 futures climbing to nearly 24,600 points and EuroStoxx 50 futures reaching 5,440 points in the last few hours.
🛢️ The crude oil market shows slight gains, with Brent crude surpassing $69 per barrel, though it remains within a lateral range.
🥇 Gold has lost momentum; after rising to $3,450 per ounce, it fell during the last trading session and is now at $3,380.
💰 Bitcoin continues to fluctuate but remains above its support levels between $117,000 and $116,500. A wedge formation is still visible on its charts, which could trigger a breakout to the upside if breached.