- In a move that is weighing on investor sentiment, the Trump administration's reciprocal tariffs have taken effect today. While the announcement was made now, the new rates for most countries will be implemented in seven days. However, tariffs on Canada are effective immediately.
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New tariffs include: 20% on Vietnam, 15% on the EU, 19% on Indonesia, 20% on Vietnam, 10% on Australia, 15% on New Zealand, 15% on Israel, 15% on Turkey
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The Swiss franc is reacting negatively to the announcement of a 39% tariff. The franc is losing 0.2% against the euro and a similar amount against the dollar. Over three days, it has lost as much as 1% against the dollar.
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The Canadian dollar remains relatively calm after the final tariff on Canada was raised from 25% to 35%. Donald Trump indicated that he is open to negotiations. The new tariffs are not expected to apply to products that qualify under the USMCA agreement.
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US futures began to fall in the evening and the decline continued, even despite very strong results from Apple and Amazon. The S&P 500 lost 0.37% yesterday, while the Nasdaq closed the session down 0.03%. The sell-off in futures is continuing today. The US500 and US100 are both losing 0.1%.
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The Asian session is mixed. The CHN.cash is down 0.36%, and the CH50cash is down 0.5%. Australia's AU200 is down 0.12%. Japan's JP225 is up a mere 0.01%.
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Amazon reported EPS of $1.68 billion, compared to the previous level of $1.33 billion. Revenue was $167.7 billion, against an expectation of $162.15 billion. However, Amazon is losing 6.6% in post-market trading. This is a result of a lower-than-expected increase in cloud-division results.
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Apple's shares are up 2.4% in post-market trading following a very high earnings surprise. EPS came in at $1.57, well above the expected $1.43. Revenue grew to $94.04 billion, compared to the expected $89.3 billion. This is the largest revenue increase since December 2021. Tim Cook announced major investments in AI and did not rule out acquisitions in this area. The company also reported better results from China and a smaller impact from tariffs than expected.
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The EUR/USD yesterday limited its rebound after the release of US Core PCE inflation, which remained at an elevated level of 2.8%. Overall PCE inflation increased to 2.6% y/y from 2.4% y/y.
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China's Caixin Manufacturing PMI fell to 49.5, against an expectation of 50.3 and a previous level of 50.4.
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Japan's Final Manufacturing PMI came in at 48.9, compared to the previous month's level of 50.1. The preliminary reading was 48.8.
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Australia's Q2 PPI grew by 0.7% q/q, against a previous increase of 0.9% q/q. The annual rate was 3.4% y/y, compared to the previous 3.7% y/y.
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Building permits in New Zealand fell by 6.4% m/m, against a previous increase of 10.3% m/m. The consumer confidence index also fell to 94.7, from a previous level of 98.8.
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China announced a series of initiatives aimed at investment in artificial intelligence, stabilizing economic growth, and stimulating internal demand.
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Gold is seeing slight gains of 0.13%, but is trading below $3,300 per ounce.
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WTI crude oil is trading flat, just above $69 per barrel. Brent is below $72 per barrel. The price of natural gas is stabilizing above $3/MMBTU.
