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President Trump’s latest round of tariff turmoil ripples through markets and the global economy
U.S. company earnings results continue to trickle in
Policymakers in Britain and Mexico decide on monetary policy rates, and
Oil-exporting countries meet to adjust output quotas
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) More Q2 S&P500 Earnings Results Come Out
A raft of bellwether blue chips are reporting to Wall Street with Caterpillar (CAT - Free Report) , due on Tuesday, then Disney (DIS - Free Report) and McDonald's (MCD - Free Report) on Wednesday.
All are in the Dow 30 index, which has been flirting with record highs. Beats or upbeat outlooks from these could help lift this bellwether over the line. It is the only benchmark that has yet to hit a new peak after April's tariff panic.
Some data points will help gauge the health of the world's largest economy, with durable goods orders out on Monday, and the ISM services purchasing managers' index on Tuesday.
Meanwhile, U.S. Treasury auctions for benchmark 10-year and 30-year bonds will show if strong demand seen in shorter-dated papers in recent days can be replicated further out the curve.
(2) Mainland China Macro Data Informs
It's been a challenge for Beijing: how do you stir animal spirits while pivoting the world's number two economy to one built on consumers instead of factories?
Trade data on Thursday and inflation figures two days later will give the latest reading on how arduous the task remains. The numbers come on the back of a closely-watched Politburo meeting, where policymakers vowed a crackdown on crippling domestic price wars but not offering much concrete new stimulus — much to the chagrin of domestic investors.
Analysts say that's a good thing, chalking up slowing support measures to a stronger-than-expected economy and smoother-than-anticipated tariff negotiations with Washington.
Meanwhile, trade talks with the U.S. ended without a breakthrough, though look on track for an extension to the August 12th deadline.
(3) On Thursday, the Bank of England (BoE) Meets
Rising inflation and falling employment will be at the heart of the Bank of England's conundrum when policymakers meet on Thursday to set interest rates.
Analysts expect a quarter-point cut to 4% and another "gradual and careful" message about its following moves. Markets are pricing another cut before year-end and one more in 2026.
But some analysts think the BoE might have to call a halt to the process perhaps as soon as next week, given the warning signals about inflation.
Another three-way split among policymakers looks likely amid differences over which danger is most pressing.
The BoE is expected to assess the impact of its push to run down government debt stockpiles ahead of a September decision on the pace of sales over the following 12 months.
British consumer prices increased to an annual rate of 3.6% in June from 3.4% in May.
(4) On Thursday, Mexico’s Central Bank Also Meets to Set Monetary Policy
Mexico's central bank policymakers also meet on Thursday to decide on interest rates, and are expected to deliver another 25-basis-point cut to lower rates to 7.75% — which would be a three-year trough.
But the outlook is clouded — minutes from the July meeting confirm a shift in the easing cycle, notably, policymakers pre-committing to more easing as they face persistent inflation and weak domestic demand.
And the outlook for Mexico's trade relationship with its northern neighbor is adding to uncertainty. Mexican President Claudia Sheinbaum said on Thursday she secured a pause on new tariffs coming into effect and a 90-day period to work on a trade deal.
(5) OPEC and Allies Meet
The Organization of the Petroleum Exporting Countries and allies led by Russia are meeting on Sunday to decide on increasing oil output for September.
Expectations are the group will raise output by 550,000 barrels per day in what would be its last move for now, though the decision comes at a delicate moment for energy markets.
Analysts are trying to sift through the fog of what the economic impact — and change in crude oil demand — will be in the wake of Trump's tariff onslaught.
Looming even larger is the question of secondary sanctions on Russian oil exports from Washington: Trump said on Monday that Russian President Vladimir Putin had only 10 to 12 days to reach a deal to end the war in Ukraine before Washington would impose such curbs, short circuiting the previous 50-day timeframe set on July 14.
Zacks #1 Rank (STRONG BUY) Stocks
I found two interesting Health Care stocks on our #1 list this week.
Plus, one over-extended tech stock (to no surprise!).
(1) Tenet Healthcare (THC - Free Report) : This is a $156 a share stock, with a market cap of $14.5B. It is found in the Medical-Hospital industry. There is a Zacks Value score of A, a Zacks Growth score of B, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Founded in 1967 and headquartered in Dallas, TX, Tenet Healthcare Corp., is an investor-owned health care services company, which owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in California and Florida. The company has investments in other health care companies and is one of the largest investor-owned health care delivery systems in the United States.
Tenet Healthcare and its subsidiaries provide healthcare services primarily through general hospitals and related healthcare facilities. Its hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, and pharmacies; intensive care, critical and coronary care units; physical therapy along with orthopedic, oncology, and outpatient services. The related health care facilities include rehabilitation hospitals, specialty hospitals and long-term care facilities.
As of Dec 31, 2024, the company operated an expansive care network that included 49 hospitals and more than 575 other healthcare facilities, including ambulatory surgery centers, urgent care centers, imaging centers, surgical hospitals, off-campus emergency departments and micro-hospitals through its units, partnerships and joint ventures.
Effective fourth-quarter 2023, the company combined its Conifer segment with the Hospital segment and now has two reporting segments: Hospital Operations and Services and Ambulatory Care.
Hospital Segment (78.1% of total segment revenues in 2024): It includes 61 hospitals catering to primarily urban and suburban communities in nine states. The unit also provides a number of services primarily to healthcare providers to assist them in generating sustainable improvements in their operating margins, while also managing patient, physician and employee satisfaction.
Ambulatory Care (21.9%): The company's Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities.
(2) Genmab (GMAB - Free Report) : This is a $22 a share stock, with a market cap of $14.5B. It is found in the Medical-Biomedical industry. There is a Zacks Value score of B, a Zacks Growth score of C, and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Genmab A/S is a biotechnology company.
It specializes in development of antibody therapeutics for the treatment of cancer.
The company's product pipeline includes DARZALEX(R), Arzerra(R), tisotumab vedotin, enapotamab vedotin, HexaBody-DR5/DR5(R) and DuoBody-CD3xCD20 (R), which are in clinical stage.
Genmab A/S is based in Copenhagen, Denmark.
(3) Allegion (ALLE - Free Report) : This is a $164 a share stock, with a market cap of $14.1B. It is found in the Security and Safety industry. There is a Zacks Value score of D, a Zacks Growth score of C, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Allegion plc is a leading global provider of security products and solutions for business and domestic purposes.
Allegion offers an extensive portfolio of mechanical and electronic security products including doors and door systems, electronic security products, biometric and mobile access control systems, locks, locksets, exit devices, portable locks, and workforce productivity systems and other accessories.
Market-leading brands offered by Allegion include CISA, DEXTER, FALCON, LCN, Interflex, Schlage, Von Duprin, SimonsVoss and many more.
The company's products and solutions are sold to end users in residential, institutional and commercial facilities including residential, government, education, healthcare and commercial office markets.
Notably, the company sells products through distribution and retail channels like specialty distribution, wholesalers, e-commerce and several retail channels including online platforms and small specialty showroom outlets.
Key Global Macro
After the nonfarm payroll print, this week looks fairly quiet on the macro data front. It is the summer holiday period of August in the Western Hemisphere.
On Monday, Australia’s TD-MI inflation gauge for July came in at +0.9%, which is the biggest one-month jump in 18 months. Annually, this consumer inflation reading remains +2.4%.
U.S. Factory Orders for June (in m/m terms) reach -4.8% this morning, 10 basis points better than projected. The prior month’s reading was up 8.2% m/m, the highest in more than 10 years.
On Tuesday, the Eurozone services PMI for June comes out. The prior reading was 51.2.
The ISM Services PMI for the USA also comes out. The prior reading was 50.8.
On Wednesday, Eurozone retail sales for June comes out. The prior reading was -0.7% m/m.
On Thursday, Mainland China’s exports for July come out. The prior reading was up +5.8% y/y.
Mainland China’s imports for July also come out. The prior reading was up +1.1% y/y.
On Friday, Mainland China’s new loans data for July comes out. Remember, this is a centrally-planned economy. New loans are a key substance. The prior reading was 2,240B. Showing the same thing, that is 2.24T in new loans here!
Zacks Research Director Sheraz Mian supplied his latest Q2 earnings update on July 29th—
Here are his key points:
(1) The picture emerging from the Q2 earnings season, with almost 40% of the results already in, is one of strength and steady improvement.
Not only are an above-average proportion of companies beating consensus estimates, but estimates for the current and coming periods are also going up.
(2) For the 198 S&P 500 companies that have already reported Q2 results, total earnings are up +7.0% from the same period last year on +5.5% higher revenues.
82.8% beat EPS estimates and 79.8% beat revenue estimates.
(3) For the Tech sector, we now have Q2 results from 22.4% of the sector’s market capitalization in the S&P 500 index.
Total earnings for these Tech companies are up +15.2% from the same period last year on +10.6% higher revenues, with 90.9% beating EPS estimates and 100% beating revenue estimates.
(4) For the Finance sector, we now have Q2 results from 64.5% of the sector’s market capitalization in the S&P 500 index.
Total earnings for these Finance companies are up +17.6% from the same period last year on +5.8% higher revenues.
Image: Bigstock
An August Trading Lull? Global Week Ahead
What is going on in the Global Week Ahead?
Next are Reuters’ five world market themes, re-ordered for equity traders—
(1) More Q2 S&P500 Earnings Results Come Out
A raft of bellwether blue chips are reporting to Wall Street with Caterpillar (CAT - Free Report) , due on Tuesday, then Disney (DIS - Free Report) and McDonald's (MCD - Free Report) on Wednesday.
All are in the Dow 30 index, which has been flirting with record highs. Beats or upbeat outlooks from these could help lift this bellwether over the line. It is the only benchmark that has yet to hit a new peak after April's tariff panic.
Some data points will help gauge the health of the world's largest economy, with durable goods orders out on Monday, and the ISM services purchasing managers' index on Tuesday.
Meanwhile, U.S. Treasury auctions for benchmark 10-year and 30-year bonds will show if strong demand seen in shorter-dated papers in recent days can be replicated further out the curve.
(2) Mainland China Macro Data Informs
It's been a challenge for Beijing: how do you stir animal spirits while pivoting the world's number two economy to one built on consumers instead of factories?
Trade data on Thursday and inflation figures two days later will give the latest reading on how arduous the task remains. The numbers come on the back of a closely-watched Politburo meeting, where policymakers vowed a crackdown on crippling domestic price wars but not offering much concrete new stimulus — much to the chagrin of domestic investors.
Analysts say that's a good thing, chalking up slowing support measures to a stronger-than-expected economy and smoother-than-anticipated tariff negotiations with Washington.
Meanwhile, trade talks with the U.S. ended without a breakthrough, though look on track for an extension to the August 12th deadline.
(3) On Thursday, the Bank of England (BoE) Meets
Rising inflation and falling employment will be at the heart of the Bank of England's conundrum when policymakers meet on Thursday to set interest rates.
Analysts expect a quarter-point cut to 4% and another "gradual and careful" message about its following moves. Markets are pricing another cut before year-end and one more in 2026.
But some analysts think the BoE might have to call a halt to the process perhaps as soon as next week, given the warning signals about inflation.
Another three-way split among policymakers looks likely amid differences over which danger is most pressing.
The BoE is expected to assess the impact of its push to run down government debt stockpiles ahead of a September decision on the pace of sales over the following 12 months.
British consumer prices increased to an annual rate of 3.6% in June from 3.4% in May.
(4) On Thursday, Mexico’s Central Bank Also Meets to Set Monetary Policy
Mexico's central bank policymakers also meet on Thursday to decide on interest rates, and are expected to deliver another 25-basis-point cut to lower rates to 7.75% — which would be a three-year trough.
But the outlook is clouded — minutes from the July meeting confirm a shift in the easing cycle, notably, policymakers pre-committing to more easing as they face persistent inflation and weak domestic demand.
And the outlook for Mexico's trade relationship with its northern neighbor is adding to uncertainty. Mexican President Claudia Sheinbaum said on Thursday she secured a pause on new tariffs coming into effect and a 90-day period to work on a trade deal.
(5) OPEC and Allies Meet
The Organization of the Petroleum Exporting Countries and allies led by Russia are meeting on Sunday to decide on increasing oil output for September.
Expectations are the group will raise output by 550,000 barrels per day in what would be its last move for now, though the decision comes at a delicate moment for energy markets.
Analysts are trying to sift through the fog of what the economic impact — and change in crude oil demand — will be in the wake of Trump's tariff onslaught.
Looming even larger is the question of secondary sanctions on Russian oil exports from Washington: Trump said on Monday that Russian President Vladimir Putin had only 10 to 12 days to reach a deal to end the war in Ukraine before Washington would impose such curbs, short circuiting the previous 50-day timeframe set on July 14.
Zacks #1 Rank (STRONG BUY) Stocks
I found two interesting Health Care stocks on our #1 list this week.
Plus, one over-extended tech stock (to no surprise!).
(1) Tenet Healthcare (THC - Free Report) : This is a $156 a share stock, with a market cap of $14.5B. It is found in the Medical-Hospital industry. There is a Zacks Value score of A, a Zacks Growth score of B, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Founded in 1967 and headquartered in Dallas, TX, Tenet Healthcare Corp., is an investor-owned health care services company, which owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in California and Florida. The company has investments in other health care companies and is one of the largest investor-owned health care delivery systems in the United States.
Tenet Healthcare and its subsidiaries provide healthcare services primarily through general hospitals and related healthcare facilities. Its hospitals offer acute care services, operating and recovery rooms, radiology services, respiratory therapy services, clinical laboratories, and pharmacies; intensive care, critical and coronary care units; physical therapy along with orthopedic, oncology, and outpatient services. The related health care facilities include rehabilitation hospitals, specialty hospitals and long-term care facilities.
As of Dec 31, 2024, the company operated an expansive care network that included 49 hospitals and more than 575 other healthcare facilities, including ambulatory surgery centers, urgent care centers, imaging centers, surgical hospitals, off-campus emergency departments and micro-hospitals through its units, partnerships and joint ventures.
Effective fourth-quarter 2023, the company combined its Conifer segment with the Hospital segment and now has two reporting segments: Hospital Operations and Services and Ambulatory Care.
Hospital Segment (78.1% of total segment revenues in 2024): It includes 61 hospitals catering to primarily urban and suburban communities in nine states. The unit also provides a number of services primarily to healthcare providers to assist them in generating sustainable improvements in their operating margins, while also managing patient, physician and employee satisfaction.
Ambulatory Care (21.9%): The company's Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities.
(2) Genmab (GMAB - Free Report) : This is a $22 a share stock, with a market cap of $14.5B. It is found in the Medical-Biomedical industry. There is a Zacks Value score of B, a Zacks Growth score of C, and a Zacks Momentum score of C.
Image Source: Zacks Investment Research
Genmab A/S is a biotechnology company.
It specializes in development of antibody therapeutics for the treatment of cancer.
The company's product pipeline includes DARZALEX(R), Arzerra(R), tisotumab vedotin, enapotamab vedotin, HexaBody-DR5/DR5(R) and DuoBody-CD3xCD20 (R), which are in clinical stage.
Genmab A/S is based in Copenhagen, Denmark.
(3) Allegion (ALLE - Free Report) : This is a $164 a share stock, with a market cap of $14.1B. It is found in the Security and Safety industry. There is a Zacks Value score of D, a Zacks Growth score of C, and a Zacks Momentum score of A.
Image Source: Zacks Investment Research
Allegion plc is a leading global provider of security products and solutions for business and domestic purposes.
Allegion offers an extensive portfolio of mechanical and electronic security products including doors and door systems, electronic security products, biometric and mobile access control systems, locks, locksets, exit devices, portable locks, and workforce productivity systems and other accessories.
Market-leading brands offered by Allegion include CISA, DEXTER, FALCON, LCN, Interflex, Schlage, Von Duprin, SimonsVoss and many more.
The company's products and solutions are sold to end users in residential, institutional and commercial facilities including residential, government, education, healthcare and commercial office markets.
Notably, the company sells products through distribution and retail channels like specialty distribution, wholesalers, e-commerce and several retail channels including online platforms and small specialty showroom outlets.
Key Global Macro
After the nonfarm payroll print, this week looks fairly quiet on the macro data front. It is the summer holiday period of August in the Western Hemisphere.
On Monday, Australia’s TD-MI inflation gauge for July came in at +0.9%, which is the biggest one-month jump in 18 months. Annually, this consumer inflation reading remains +2.4%.
U.S. Factory Orders for June (in m/m terms) reach -4.8% this morning, 10 basis points better than projected. The prior month’s reading was up 8.2% m/m, the highest in more than 10 years.
On Tuesday, the Eurozone services PMI for June comes out. The prior reading was 51.2.
The ISM Services PMI for the USA also comes out. The prior reading was 50.8.
On Wednesday, Eurozone retail sales for June comes out. The prior reading was -0.7% m/m.
On Thursday, Mainland China’s exports for July come out. The prior reading was up +5.8% y/y.
Mainland China’s imports for July also come out. The prior reading was up +1.1% y/y.
On Friday, Mainland China’s new loans data for July comes out. Remember, this is a centrally-planned economy. New loans are a key substance. The prior reading was 2,240B. Showing the same thing, that is 2.24T in new loans here!
Zacks Research Director Sheraz Mian supplied his latest Q2 earnings update on July 29th—
Here are his key points:
(1) The picture emerging from the Q2 earnings season, with almost 40% of the results already in, is one of strength and steady improvement.
Not only are an above-average proportion of companies beating consensus estimates, but estimates for the current and coming periods are also going up.
(2) For the 198 S&P 500 companies that have already reported Q2 results, total earnings are up +7.0% from the same period last year on +5.5% higher revenues.
82.8% beat EPS estimates and 79.8% beat revenue estimates.
(3) For the Tech sector, we now have Q2 results from 22.4% of the sector’s market capitalization in the S&P 500 index.
Total earnings for these Tech companies are up +15.2% from the same period last year on +10.6% higher revenues, with 90.9% beating EPS estimates and 100% beating revenue estimates.
(4) For the Finance sector, we now have Q2 results from 64.5% of the sector’s market capitalization in the S&P 500 index.
Total earnings for these Finance companies are up +17.6% from the same period last year on +5.8% higher revenues.
90.0% beat EPS estimates.76.0% beat revenue estimates.
This is August. I would expect a number of traders to take summer vacations. That could mean lower daily trading volumes.
Nonetheless, enjoy an excellent week, trading and investing.
Warm regards,
John Blank