Last Week
Wall Street was stuck on the tariff seesaw, teetering up on Monday and tottering down on Friday. The final tilt was slightly negative, with the S&P 500 -0.3% and the Nasdaq Composite -0.1%. Small caps had a rougher ride, with the Russell 2000 losing -0.6%, suggesting a slightly more “risk off” view on the week’s announcements, primarily President Donald Trump’s tariff moves. The President issued letters outlining stiff tariffs to trading partners Japan, South Korea, Canada, Brazil, and the Philippines. Additionally, President Trump suggested a 50% tariff on copper imports and a 200% levy on pharmaceuticals. Further evidence of the “risk off” mood was the rise of gold to new record levels, now up 44% from a year ago. The yield on the 10-year Treasury increased 7 basis points to 4.43%, reflecting renewed concerns about the inflationary impact of the upheaval in global trade relationships.
We polled our summer interns for stories that stood out beyond the tariff headlines. They noted that investor enthusiasm for AI remained robust, with Nvidia’s surge to a $4 trillion market cap highlighting the market’s conviction in long-term growth themes, even as traditional sectors like consumer defensives and financials lagged.
On the Chicago Sports Scene, the White Sox lose about 66% of their games, while the Cubs win about 60% to hold a slim lead over the Brewers. The Sky has the 10th-best record of the WNBA’s 13 franchises. Football season is around the corner, and hope springs eternal for the Bears. The Bulls have set a low bar for the upcoming season, so perhaps they can surprise on the upside.
This Week
Whereas the Tariff seesaw will continue to sway, corporate earnings and economic data could capture investors’ attention.
Earnings season kicks off with results from the big banks and 48 S&P 500 companies. The consensus forecast calls for 4.8% growth in overall second-quarter earnings, which would mark a significant slowdown from results over the last several decades. Of particular interest will be any guidance companies can provide about the impact of trade policies on forward results.
On Tuesday, the Bureau of Labor Statistics releases the consumer price index for June. Economists expect a slight uptick from May to 2.6%. The Census Bureau reports retail sales on Thursday, with a modest increase expected following a 0.9% decline in May. On Friday, the University of Michigan releases its Consumer Sentiment index for July. Consumers’ expectations for year-ahead inflation reached a four-decade high in May before moderating in June.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.