Thursday, 31 July 2025

Another Missed Fed Opportunity. TACO China. Tariff Madness.

Baltic Dry Index. 1995 -114          Brent Crude 73.00

Spot Gold 3296                 US 2 Year Yield 3.94 +0.08

US Federal Debt. 37.171 trillion

US GDP 30.170 trillion.

Creditors have better memories than debtors.

Benjamin Franklin

It is the last day of July, Trump tariff madness starts tomorrow for much of the rest of the world. Already Trump Tariff Madness has slowed the US and global economy. But we haven’t seen anything yet.

Just wait until rising unemployment turns much of the world anti-American.

Just wait until the global economy starts contracting.

Just wait until the global stock casinos start crashing back to earth from the exosphere.

Look away from that US Federal Debt to US GDP ratio now.

Asia-Pacific markets trade mixed as investors assess BOJ rate decision and fresh tariffs on India, South Korea

Updated Thu, Jul 31 2025 11:14 PM EDT

Asia-Pacific markets traded mixed Thursday as investors assessed the Bank of Japan’s decision to stand pat on short-term interest rates at 0.5% for the fourth consecutive time, in line with expectations.

Investors are also evaluating the U.S.′ blanket 15% tariffs on imports from South Korea and 25% duties on imports from India, along with an unspecified “penalty.”

South Korean auto stocks fall after Trump slashes duties to 15%

South Korean auto stocks plunged Thursday after U.S. President Donald Trump imposed a blanket 15% tariff on imports from the country including autos, which he had threatened with a 25% tariff earlier.

The Asian country’s Kia Corp was trading 5.25% lower, while Hyundai Motor fell 3.48% as of 10.53 a.m. local time (9.53 p.m. ET Wednesday).

— Amala Balakrishner

Chinese and Hong Kong stocks fall in early trade

Chinese and Hong Kong stocks started the day lower Thursday, following mixed trading in the other key Asia-Pacific markets.

As of 9.39 a.m. local time (9.39 p.m. ET Wednesday), the Hang Seng Index fell 0.91%, while mainland’s CSI 300 was flat.

— Amala Balakrishner

Asia stock markets today: live updates

S&P 500 futures rise after Meta and Microsoft post quarterly beats: Live updates

Updated Thu, Jul 31 2025 12:30 AM EDT

S&P 500 futures and Nasdaq 100 futures rose on Thursday morning following solid earnings reports from tech giants Microsoft and Meta Platforms.

S&P 500 futures jumped 0.94%, and Nasdaq 100 futures climbed 1.34%. Futures tied to the Dow Jones Industrial Average advanced 132 points, or 0.3%.

“Magnificent Seven” titans Microsoft and Meta respectively rose about 8% and 11% in extended trading on the back of better-than-expected quarterly earnings. Software giant Microsoft said that annual revenue from its cloud computing service Azure exceeded $75 billion. Meta issued an upbeat third-quarter sales outlook, surpassing the Street’s estimates.

On Wednesday evening, President Donald Trump also announced that the U.S. had reached a trade deal with South Korea, setting tariffs at 15%. That’s lower than the 25% rate Trump had threatened in a letter to Seoul earlier this month. The announcement arrives just ahead of Friday’s big tariff deadline.

In regular trading Wednesday, the S&P 500 closed lower after Federal Reserve Chair Jerome Powell signaled that the U.S. central bank is still not ready to cut interest rates. The broad market index shed 0.12%, while the Dow Jones Industrial Average lost 171.71 points, or 0.38%. The Nasdaq Composite, on the other hand, notched a 0.15% gain.

While the Federal Reserve left its benchmark overnight policy rate steady at its July meeting, not all members agreed with the decision. Fed governors Michelle Bowman and Christopher Waller dissented with the call to keep the key interest rate at a range of 4.25% to 4.50%. When asked about a potential policy change in September, Powell said that the Fed has “made no decisions.”

Ross Mayfield, investment analyst at Baird, said that Wednesday’s losses made sense given the market’s currently “stretched” valuations. The S&P 500′s decline marked its second day of losses following a streak of six record closes in a row.

“There’s a lot of good news priced in, so I think little things on the margin can have a bigger impact when you’ve had such a run, like slightly hawkish comments in the FOMC presser,” Mayfield said to CNBC. “Sentiment has shifted back to a pretty bullish tenor, and I think the market needs to consolidate and take a breather, and it’ll grab on to whatever it needs to as an excuse.”

On Thursday, traders will watch out for June’s personal consumption expenditures price index reading, the Fed’s preferred inflation gauge. Economists polled by Dow Jones see headline PCE rising 2.5% on a 12-month basis and 0.3% from the prior month. Weekly jobless claims are also due.

ComcastBristol-Myers SquibbCignaCVS HealthShake ShackAbbVie and Mastercard are among the companies set to report earnings before Thursday’s opening bell. Results from Apple and Amazon are on deck for the afternoon.

Stock market today: Live updates

U.S. and China Buy More Time With Another 90-Day Tariff Truce Extension

By Zeng Jia  Published: Jul. 30, 2025  1:37 p.m.  GMT+8

The U.S. and China have agreed to extend a truce in their long-running trade conflict for another 90 days following high-level talks in Stockholm, Sweden this week.

The agreement, reached during two days of negotiations that concluded Tuesday, provides temporary stability in the fraught economic relationship between the world’s two largest economies. For businesses and global markets, the deal signals that both Washington and Beijing are, for now, prioritizing dialogue over the immediate re-escalation of a trade war that has disrupted supply chains and roiled markets since it began during President Donald Trump’s first term.

More, subscription required.

U.S. and China Buy More Time With Another 90-Day Tariff Truce Extension

Trump slaps 25 per cent tariffs on India over ties with Russia 

Updated:  Wednesday 30 July 2025 2:19 pm

President Donald Trump has vowed to slap India with 25 per cent tariffs on imports from India, with an extra unspecified “penalty” to be introduced, in an attack on its trade with Russia and “obnoxious” rules and standards. 

Ahead of a Friday deadline for “reciprocal” tariffs, Trump revealed Indian exports would be subjected to higher taxes. 

In a post on Truth Social, the US president said: “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. 

“Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”

Several countries including Canada and South Africa are set to face varying levels of higher tariffs from this Friday. 

Brazil is set to face the highest tariffs at 50 per cent while other countries have dodged a heightened trade war by securing deals. 

The UK was the first country to agree to lower tariffs but an agreement on steel is yet to be made. 

The European Union agreed to facing 15 per cent tariffs while China saw its tariff rate drop from 145 per cent to 30 per cent, while imposing 10 per cent tariffs of its own on US imports. 

Trump has insisted he would not extend the deadline on the introduction of reciprocal tariffs again, with his latest attack on India setting the scene for a tense week of hard negotiations and wrangling over tariff rates. 

Trump’s tariff effects

The IMF upgraded its global growth forecast in reaction to recent trade deals struck by the US president and major economies. 

A global risk survey by Oxford Economics suggested businesses saw geopolitical tensions as a greater threat to the world economy than a trade war. 

“Business uncertainty about global growth prospects appears relatively contained, in contrast with the substantial rise in uncertainty seen in the pandemic and in the aftermath of Russia’s invasion of Ukraine,” economists at the consultancy said.

Trump to slap 25 per cent tariffs on India 

US First-Half Growth Comes in Slower Than 2024

July 30, 2025 at 10:27 PM GMT+1

US economic growth slowed through the first half of the year as consumers reduced spending and companies sought to inoculate themselves from the Trump administration’s frequent and unpredictable shifts in trade policy.

Inflation-adjusted gross domestic product, which measures the value of goods and services produced in the US, increased an annualized 3% in the second quarter, according to the US government. But as solid as the pace was, economic growth averaged 1.25% in the first half, a full percentage point below the pace for 2024.

Because swings in trade and inventories have distorted overall GDP this year, economists are paying closer attention to final sales to private domestic purchasers, a narrower metric of demand. This measure rose at a 1.2% pace in the second quarter, the slowest since the end of 2022.

“The trend of cooling demand is very clear over the past two quarters, and growth now appears to be slipping below its longer-term potential pace,” Scott Anderson, chief US economist at BMO Capital Markets, said in a note. “We believe this will soon give the [Federal Open Market Committee] the room to start cutting interest rates again before too long.” David E. Rovella

Maybe not too long, but definitely not today. Despite months of public pressure, threats and all-caps social media attacks from Donald Trump, Federal Reserve Chair Jerome Powell said interest rates are in the right place to manage continued uncertainty around tariffs and inflation as the central bank kept rates steady.

“There are many, many uncertainties left to resolve,” Powell said Wednesday following the central bank’s decision to keep rates unchanged. “It doesn’t feel like we are very close to the end of that process.”

The FOMC voted 9-2 to hold its benchmark federal funds rate in a range of 4.25%-4.5%, as they have at each of their meetings this year. Governors Christopher Waller and Michelle Bowman—both Trump appointees—voted against the decision in favor of a quarter-point cut.

The slowing economy was a big reason for the continued caution. Meanwhile the US president’s desire for rate cuts and his public musings about firing Powell, likely an illegal move that would trigger litigation, has already unmoored global confidence in the future independence of the Fed.

Trump is making new threats in his trade war (and backing off some, too). He now promises a 25% tariff on India’s exports to the US starting Aug. 1 while threatening an additional penalty over the country’s energy purchases from Russia.

Trump, 79, claimed Tuesday in a social media post that India has tariffs that are “among the highest” in the world. The Republican however has repeatedly threatened tariffs and then backed down, ostensibly as party of a negotiating strategy. Plus the overall legality of Trump’s global trade war is the subject of litigation before the US Court of Appeals in Washington. 

For its part, India had been among the first to engage Washington in talks, following Narendra Modi’s high-profile White House visit in February. India and the US had already finalized terms of reference for a bilateral trade accord in April, with both sides committing to a fall deadline. Before Trump’s latest statement, officials in New Delhi had said they would continue negotiating with the US on the earlier framework. Now that may be up in the air.

Copper prices collapsed Wednesday by more than 19% in just minutes after Trump retreated from his broad-based threat to impose tariffs on copper. He instead sought to exclude the most widely imported form of the metal from his threatened levies.

US copper futures on Comex plunged after the announcement in the largest intraday fall on record. Until Wednesday afternoon, US copper prices had been trading around 28% above benchmark copper futures on the London Metal Exchange, as traders anticipated the tariff would be applied to all refined metal imports.

The decision is the latest surprise from Trump to upend the copper market. When he first flagged the likelihood of tariffs early this year, he triggered a surge in US copper prices relative to the rest of the world and set off a race to ship copper to the US to beat any tariffs. That delivered substantial profits to some of the world’s biggest metals traders.

US First-Half Growth Comes in a Point Lower Than 2024: Evening Briefing - Bloomberg

HSBC announces $3 billion share buyback after second-quarter profit misses estimates

Published Wed, Jul 30 2025 12:10 AM EDT

Europe’s largest lender HSBC on Wednesday missed second-quarter profit expectations, mostly on account of impairment charges related to a Chinese bank and loss of income from businesses it disposed in the first half of 2024.

HSBC, which reported profit before tax for the three months ended June of $6.3 billion — down 29% from a year ago — announced a share buyback of $3 billion.

Here are HSBC’s second-quarter 2025 results compared with consensus estimates compiled by the bank.

  • Profit before tax: $6.3 billion vs. $6.99 billion
  • Revenue: $16.5 billion vs. $16.67 billion

Operating expenses rose by 10% compared to the same period a year ago, and were largely owed to restructuring and other related costs as well as from increased spending and investment in technology, the bank said.

Hong Kong-listed shares of HSBC declined 2.71%.

HSBC Group CEO Georges Elhedery flagged “structural challenges” to the global economy that have caused uncertainty and market volatility, citing “broad-based tariffs” and “fiscal vulnerabilities.”

“This is complicating the inflation and interest rate outlook creating greater uncertainty. Even before tariffs take effect, trade disruptions are reshaping the economic landscape,” Elhedery said.

The bank said it was “well-positioned” to manage the uncertainty, including tariffs, although its return on tangible equity — a measure of generating profits — could be hit.

“While we would expect the direct impact from tariffs to have a relatively modest impact on our revenue, the broader macroeconomic deterioration may see RoTE excluding notable items fall outside of our mid-teens targeted range in future years,” the bank’s statement read.

HSBC warned that demand for lending would remain muted for the rest of the year, while forecasting further growth in its wealth division.

“We continue to expect double-digit percentage average annual growth in fee and other income in Wealth over the medium term,” the bank said.

HSBC is planning to terminate several employees in its equities team in its Germany office,  as part of a broader effort to scale back its investment banking operations outside of Asia and the Middle East, Bloomberg reported last week. 

More

HSBC announces $3 billion share buyback after second-quarter profit plunges 29%

In other news.

European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse

30 July 2025

Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany.

Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago.

And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits.

The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended.

Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7%

“With the 15% U.S. universal tariff likely to subtract around 0.2% from the region’s GDP, growth is likely to remain weak in the rest of this year,” said Franziska Palmas, senior Europe economist at Capital Economics.

Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy.

Economist Palmas said that Germany "is likely to be hit harder than other major economies by tariffs and continue to struggle this year" before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026.

European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse

Adidas slumps 7% as sportswear giant warns tariffs to drive up U.S. prices

Published Wed, Jul 30 2025 3:13 AM EDT

Shares of Adidas fell Wednesday after the German sportswear giant flagged a double-digit million euro hit from U.S. tariffs in the second quarter and warned that current import levies will push up the cost of its U.S. goods.

The world’s second-largest sports retailer said that added costs associated with tariffs could total 200 million euros ($231 million) in the second half of this year.

---- The company also flagged potential risks to consumer demand should U.S. tariffs set off a surge in inflation.

“We do also not know what the indirect impact on consumer demand will be should all these tariffs cause major inflation,” CEO Bjørn Gulden said.

The company nevertheless maintained its full-year guidance, but noted this could change as it cited “elevated uncertainty due to U.S. tariffs and macroeconomic risks.”

It currently expects full-year currency-neutral sales to increase at the high-single digit rate and operating profit to rise to between 1.7 billion euros and 1.8 billion euros.

It comes as the sports retailer posted an uptick in second-quarter sales, with the U.S. seeing the softest sales growth.

Revenues rose 2% year-on-year in the three months to June 30 to 5.95 billion euros, the company said flagging a negative currency impact of 300 million euros. LSEG analysts had forecast sales of 6.23 billion euros.

Operating profit rose 58% annually in the quarter 546 million euros versus the 518 million euros forecast.

ADIDAS (ADS) earnings Q2 2025

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

The second vice is lying, the first is running in debt.

Benjamin Franklin

Companies from Stanley Black & Decker to Conagra are saying tariffs will cost them hundreds of millions

Published Wed, Jul 30 2025 6:51 AM EDT

Companies behind some of America’s best-known brands are warning that tariffs will raise costs by hundreds of millions of dollars as Friday’s key deadline nears.

Firms are gearing up for the long-awaited Friday deadline, when the White House says it will start imposing higher import taxes on foreign countries. Now businesses in a range of industries are saying this shakeup in global trading practices will cost them.

Tool maker Stanley Black & Decker said Tuesday it expects an $800 million annualized hit from policy changes tied to tariffs. That doesn’t include costs in connection with steps the company is taking to mitigate the effects of the levies, according to finance chief Patrick Hallinan.

For Marie Callender’s and Slim Jim parent Conagra Brands, higher tariffs are expected to raise its costs of goods sold by 3%, equivalent to an annual increase of more than $200 million, CEO Sean Connolly said earlier this month.

Most of the Chicago-based company’s production is in the U.S., but management says it still has to contend with steel and aluminum tariffs that will raise the cost of packaging.

Tesla, led by President Trump’s erstwhile ally Elon Musk, said that costs tied to tariffs have increased by about $300 million. Roughly two-thirds of that is tied to the electric vehicle maker’s auto business, while the rest is from the energy arm.

“While we are doing our best to manage these impacts, we are in an unpredictable environment on the tariff front,” finance chief Vaibhav Taneja told analysts and investors on Tesla’s earnings call last week.

Those pressures extend throughout the auto industry. General Motors said earnings before interest and taxes in the latest quarter suffered a $1.1 billion hit that the Detroit-based automaker chalked up to the net effect of tariffs.

Air conditioner maker Carrier Global said Tuesday that it now expects to spend about $200 million to offset the impact of tariffs. The same day, appliance maker Whirlpool said North American sales and earnings were hurt in the second quarter as Asian competitors rushed to export goods to the U.S. in advance of higher tariffs.

Inflation focus

U.S. consumers haven’t yet experienced meaningful bumps to inflation as a result of higher tariffs. That can be attributed to domestic companies currently absorbing cost hikes, but some economists warn that business may soon start passing the increases on to shoppers after this week’s deadline passes.

As a result, the “core” version of the consumer price index, which excludes volatile food and energy prices, should rise at an annual rate of 3.2% in the third quarter, up from 2.1% in the second quarter, according to Nancy Lazar, Piper Sandler’s chief global economist.

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Stanley Black & Decker, Conagra say tariffs will cost hundreds of millions

Reeves's tax hikes leave 50,000 firms on the brink as stagflation fears grip Britain

29 July 2025

The High Street has suffered a tenth consecutive month of decline as higher prices hit shoppers – fuelling fears Britain is facing a painful period of stagflation.

In a bleak update, the CBI said its gauge of how retail sales compared with a year earlier stood at minus 34 this month as customers baulked at rising living costs.

Although that was better than minus 46 seen in June, it was the tenth month of decline in a row, stretching back to October last year, according to the lobby group’s figures.

The slump came as firms battered by the Chancellor’s £25billion National Insurance tax raid and an increase in the minimum wage pushed up prices – hitting customers in the pocket. 

The High Street is also grappling with higher business rates following Labour’s failure to reform the hated levy on shops and other business properties.

The CBI report sparked fresh concerns over the state of the economy as corporate restructuring specialist Begbies Traynor warned a record number of companies are in ‘critical financial distress’. 

Its ‘Red Flag Alert’ found there are 49,309 firms on the brink – up 21.4 per cent on a year ago.

Begbies said ‘consumer-facing industries continued to experience some of the most extreme rises in critical financial distress’ and highlighted a 41.7 per cent rise among bars and restaurants and a 17.8 per cent increase in general retail.

A host of household names have been hit, with River Island battling for survival following the collapse of maternity brand Seraphine and fashion chain Quiz.

It is feared Rachel Reeves will hammer households and private business again with another round of tax hikes in the Budget this autumn to pay for Labour’s lavish spending on the public sector.

The rising costs faced by business have already pushed up inflation to 3.6 per cent – well above the 2 per cent target – while the economy has also contracted for two months in a row. 

That has raised the spectre of stagflation – a period of economic stagnation and inflation that hits living standards and costs jobs.

It has also cast doubt over how far and fast the Bank of England can cut interest rates this year.

The CBI urged ministers to ‘seek to build shorter-term confidence’ in the Government’s economic plans and deliver an autumn Budget ‘that acknowledges the burden firms are facing’.

Cautioning over the impact of the new workers’ rights Bill, Martin Sartorius, principal economist at the CBI, said: ‘Firms reported that elevated price pressures – driven by rising labour costs – and economic uncertainty continue to weigh on household demand.’

Reeves's tax hikes leave 50,000 firms on the brink as stagflation fears grip Britain

Covid-19 Corner

This section will continue only occasionally when something of interest occurs.

 

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Rust-based battery connects to an electricity grid for the first time

An iron-air battery in the Netherlands, which can store energy for 100 hours or more to make renewable power sources more consistent, has become the world’s first “rust” battery to connect with an electricity grid

By Jeremy Hsu  30 July 2025

An iron-air battery that stores and releases energy through a reversible rusting process has become the first of its kind to connect with a public electricity grid. On 30 July, the startup Ore Energy announced its batteries had connected to the grid at The Delft University of Technology in the Netherlands.

Batteries can help deliver a consistent supply of electricity by storing renewable energy from solar or wind farms – ensuring that a sudden change in sunlight or wind doesn’t mean an immediate drop in available electricity.

“You need to be able to store that excess energy when the wind is blowing and the sun is shining, to be able to deploy it when you need to during critical demand periods during the day,” says John-Joseph Marie at The Faraday Institution, a battery research institute in the UK. “Essentially, batteries can help to smooth out that power output to make it usable on the grid.”

Most grid-connected batteries are lithium iron phosphate batteries manufactured in China. But they typically hold power for just 4 to 6 hours, and they are prohibitively expensive, says Marie. In contrast, the iron-air batteries, developed by Netherlands-based Ore Energy, can store power for 100 hours or longer, and they are made from cheap and widely available materials.

“Iron is the most mined metal in the world, it’s incredibly cheap,” says Marie. “And when you combine that with air, which is literally all around us and basically free, those are almost the two cheapest components that you could find.”

The battery system charges and stores energy by using electricity to convert iron oxides – a form of rust – into metallic iron. The iron can then discharge or release its stored energy by chemically reacting with oxygen from the air to form rust again.

“When the battery is discharging, we are actually taking the iron and turning it into a special type of rust,” says Aytac Yilmaz, CEO of Ore Energy. “And when we are charging the battery, we are taking the rust back into iron, and we do this over and over again [while] the battery is breathing in and out the oxygen from atmospheric air.”

The batteries are stored in standard 12-metre shipping containers and can hold multiple megawatt-hours of energy storage – with one megawatt-hour being enough to supply more than a month of electricity to a typical US home.

Separately, the Massachusetts-based company Form Energy has several US iron-air battery projects in the works. They are slated for installation in New England and the Midwest.

In addition to iron and air, such batteries incorporate water-based electrolytes that are also cheap and abundant – not to mention greatly reducing the risk of battery fires. “I wouldn’t want to be the one to say never, but you can’t set fire to water,” says Marie.

But the main goal of the battery technology is to help renewable power sources replace fossil fuels in electricity grids.

“Energy companies still rely a lot on gas-fired [power] generation to provide the flexibility needed when wind and solar are not sufficient,” says Bas Kil, business development manager at Ore Energy. “But in the long term we will need a different type of flexibility, and that is where our battery really excels – to provide this multi-day flexibility.”

Rust-based battery connects to an electricity grid for the first time | New Scientist

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

If you would know the value of money, go and try to borrow some.

Benjamin Franklin

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