Good morning,
I hope you had a relaxing holiday weekend—at least as good as it was for global equity markets heading into the break. The S&P 500 and Nasdaq closed at fresh all-time highs, driven by bullish momentum (FOMO), a better-than-expected monthly jobs report (despite murky details beneath the headline), and a trade agreement between the U.S. and Vietnam. For the holiday-shortened week, the S&P 500 rose 1.72%, in line with most major global indices, while the bond rally paused—yields on the 10-year U.S. Treasury rose 8bps to 4.86%.
The market narrative has shifted back to tariffs, with the 90-day pause set to expire this Wednesday (7/9). It’s unclear whether investors are taking the presidential tariff threats at face value. That uncertainty could prove to be a trap door for the market. In some ways, Trump is playing with house money—his budget bill passed on schedule and markets are hitting new highs—so he may feel emboldened to play hardball in the next round of tariff negotiations.
Treasury Secretary Bessent said this morning he expects several deals to be announced within the next 72 hours, and that new tariffs—whatever form they take—will go into effect on August 1 if agreements aren’t reached.
There’s no market-moving economic data on the calendar this week, so stagflation-watchers will have to wait a bit longer for signs of rising inflation and slowing growth.
Be well,
Mike