On Thursday, President Trump revealed new tariffs affecting many countries, signaling a return to the trade-war strategies he first presented in April. The announcement caused a decline in stock markets globally, although all the major asset classes have maintained gains for the year through Thursday’s market close (July 31). With the White House re-embracing a combative trade approach, the immediate forecast for risk assets must now account for the potential impacts of unpredictable policy changes.
President Trump signed an executive order on Thursday that updated “reciprocal” tariffs for numerous countries, adjusting import fees to range from 10% to 41%. “That doesn’t mean that someone won’t come along in a few weeks and suggest that we can strike some sort of deal,” he commented in a recent interview. The new tariff rates will take effect on August 7, according to an email from a White House spokesperson.
This is the view from my “office” for the next several days, which means that the typical routine will pause until I return to the headquarters of The Capital Spectator on Friday, Aug. 1. Wishing you all a wonderful week; I certainly will enjoy it. Cheers!
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The US economy appears poised to report moderate recovery in the upcoming second-quarter GDP data, according to forecasts collected by CapitalSpectator.com. Concurrently, new PMI survey results for July indicate that growth is likely to strengthen further as we enter the first month of Q3.
US jobless claims declined for the sixth consecutive week, hitting a three-month low, indicating a robust labor market. “The weekly jobless claims leave Fed officials without any justification for cutting interest rates at next week’s meeting,” remarked Christopher Rupkey, chief economist at FWDBONDS.
Global equities outside the US have significantly outperformed US stocks in 2025, even before the recent trade agreement announced between the US and Japan. Following the announcement, Japanese shares surged, boosting international stocks overall. The US market reacted positively as well, elevating the S&P 500 Index to a new all-time high. Nevertheless, in comparative terms, the international return premium has continued to expand this year, based on a selection of ETFs through Wednesday’s close (July 23).
U.S. existing home sales dropped 2.7% in June, exceeding economists’ forecasts. This decline resulted in the lowest number of homes sold since September 2024. The year-over-year change remained flat, while the median home price rose 2% compared to a year ago, reaching a historic high of $435,300 for the month of June. “Years of insufficient supply are driving the record-high home prices,” remarked NAR chief economist Lawrence Yun.
As reported yesterday on CapitalSpectator.com, the bond market is exhibiting a certain degree of resilience despite the inflation risks associated with tariffs. Particularly leading this stability this year are medium-term corporate bonds, as shown in a selection of ETFs tracking various types of US fixed-income securities through Tuesday’s close (July 22).
Trump announced a trade agreement with Japan, involving tariffs set at 15%. He stated that Japan will “open their Country to Trade including Cars and Trucks, Rice, and certain other Agricultural Products, and additional items.” Subsequently, stocks in Japan experienced a significant uptick.
The recent developments surrounding tariffs and trade agreements continue to shape the financial landscape. As the markets react to these changes, investors must stay informed and adapt strategies accordingly. The coming weeks will likely reveal the longer-term implications of these aggressive trade policies on both domestic and global markets.
