July 7th Market Overview

Happy Monday

Markets sold off on Trump's fresh tariff announcements. Japan and South Korea getting hit with 25% levies starting August 1st. Tesla took abeating from Musk's new political party?

Here's what's wild to me, Bessent promising "several announcements in the next 48 hours." I’m basically in a headline driven market mode now. Sometimes the anticipation is worse than the actual news.

August 1st is the new date everyone's watching. That's when tariffs hit or deals get done.

Let's dig in...

Executive Summary

1. Trump announced tariffs on Japan and South Korea, extending the broader deadline to August 1st while threatening additional levies on BRICS-aligned nations.
   

2. Tesla $TSLA ( ▲ 4.73% ) doown after Elon Musk announced formation of the “America Party,”
   

3. Treasury Secretary Bessent promised “several announcements in the next 48 hours” on trade deals, setting up a busy week ahead.

Market Overview

Key Market Drivers

1. Tariff Details Emerge: Trump’s Truth Social posts revealed specific rates—Japan and South Korea face tariffs, while Kazakhstan and Malaysia get hit with levies, South Africa sees a rate, and Myanmar and Laos receive the highest at rates. The market sold off as investors digested the scope.
   

2. BRICS Tensions Escalate: The administration’s threat of additional tariffs on countries aligning with “Anti-American policies of BRICS” came as the bloc met in Rio de Janeiro. The group had criticized “unilateral tariff measures” over the weekend.
   

3. Dollar Strength: The Dollar Index $DXY ( 0.0% ) gained as trade uncertainty drove investors toward the greenback. Japanese yen and euro weakened in response.
   

Stock Spotlight

Tesla $TSLA ( ▲ 4.73% ) faced pressure from Elon Musk’s weekend announcement of forming the “America Party.” Investors have grown increasingly concerned about Musk’s political involvement as a distraction from the core business.

Uber $UBER ( ▼ 0.25% ) hit fresh all-time highs after Wells Fargo raised its price target to $120. The analyst cited solid bookings growth and favorable currency trends as key drivers for the rideshare company.

IBM $IBM ( ▼ 0.93% ) received a boost from Melius Research, which raised its price target to $350. The firm highlighted IBM’s transition to “sticky” infrastructure software that’s harder for customers to replace, supporting multiple expansion.

Big Name Updates

Apple $AAPL ( ▲ 0.6% ) filed a lawsuit challenging the EU’s €500 million antitrust fine over App Store restrictions, arguing the ruling forces confusing terms that hurt users.

Netflix $NFLX ( ▼ 2.93% ) was downgraded to neutral by Seaport Research ahead of July 17 earnings. The firm said the long-term opportunity is now priced into shares after the stock’s strong run.

Wells Fargo $WFC ( ▲ 0.7% ) got downgraded to market perform by Raymond James. The bank has climbed since the Fed removed its asset cap on June 3rd, with the analyst saying good news is now reflected in the valuation.

Other Notable Company News

WNS Holdings $WNS ( ▼ 0.08% ) jumped on Capgemini’s $3.3 billion cash acquisition offer at $76.50 per share, representing a premium to last week’s close.

CoreWeave $CORZ ( ▼ 1.86% ) fell after announcing an all-stock deal to acquire Core Scientific. The AI company’s acquisition of the data center provider was valued at approximately $9 billion.

Geo Group $GEO ( ▼ 0.76% ) and CoreCivic $CXW advanced after the “Big Beautiful Bill” allocated $45 billion for immigrant detention facilities out of $145 billion total immigration enforcement funding.

Clean energy names declined as the spending bill ended federal subsidies. $TAN ( ▲ 0.88% ) 

Sector Watch

Bond Market

The 10-year Treasury yield climbed to 4.387% as trade tensions and dollar strength pressured bonds.

• Yield rise suggests expectations for continued economic resilience
• Dollar strength indicates flight to safety amid market short term uncertainty

Policy Watch

Treasury Secretary Scott Bessent confirmed “several announcements in the next 48 hours” regarding trade deals.

The European Union reports progress in talks ahead of the original Wednesday deadline, though Trump’s August 1st extension provides additional time.

• Only three countries have secured agreements: UK (May), China (June), and Vietnam (last week)
• Bank of America maintained its forecast of zero rate cuts this year, assuming economic resilience continues

What to Watch

1. Trade Deal Timeline: Bessent promised multiple announcements in the next 48 hours. Countries that secure deals avoid tariffs while others face the full rates, creating clear sector winners and losers.
   

2. August 1st Tariff Implementation: Countries without agreements revert to April 2nd tariff levels. This directly hits import costs and margins for affected companies.
   

3. Tesla Distraction Risk: Musk's political party formation raises questions about management focus. Watch if this pattern continues to pressure the stock beyond fundamental issues.
   

4. BRICS Meeting Fallout: The Rio summit runs through the week. Any coordinated pushback against Trump's tariff threats could escalate tensions and move currencies.
   

5. Netflix Earnings Preview: July 17th results offer the first major look at consumer spending and streaming fundamentals as earnings season begins.
   
   
   Thanks for reading 🙂
   
   - John
   

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