Weekly Market Update (July 13, 2025)
- Market Hedwig
- Jul 12
- 2 min read
HIGHLIGHTS
Trade policy uncertainty escalated due to the extended deadline of negotiations and new tariffs. In the coming weeks, markets are going to take direction from the US inflation data, Q2 earnings and trade deals.
Tariff: Trump extended tariff deadline to Aug 1. He also announced higher tariff rate on more than 22 countries unless a new deal is reached. Tariff impact is likely to vary across markets depending on the direct revenue exposure to the US.
Asia: In Japan, even with the tariff and foreign exchange risk, its manufacturers are able to afford wage hikes that sustain the wage and inflation synergy. In China, PPI deflation is worsening and CPI is still low, which suggests deflationary pressure.
Currencies: USD is weakening, while most Asian currencies have appreciated this year. The gains are 6-12% against USD year-to-date, supported by the fading narrative of US exceptionalism. Like China, if other Asian countries could get a favorable trade deal with US, it could be a tailwind to currency appreciation.
MARKETS
20,585.53 | -0.08% | |
S&P 500 | 6,259.75 | -0.31% |
Dow | 44,371.51 | -1.02% |
10-Year | 4.42% | +7bps |
Brent | 70.36 | +3.03% |
DXY | 97.87 | +0.91% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Goldman Sachs: We expect S&P500 to increase by 10% to 6900 in the next 12 months. Although some investors think the current valuation multiples are too high, our models suggest that it is appropriate amid the environment of lowering interest rates, increasing profitability and low unemployment.
UBS: As the reporting season is approaching, we expect earnings-per-share (EPS) growth will down from 9% in Q1 to 4% in Q2. However, we also believe the upcoming reports will show the resilience of corporate profits, and the near-term cash flow will be boosted by the OBBA.
Fixed Income
Standard Chartered: Emerging markets (EM) currency bonds are going to continue to benefit from weakening USD and rate cuts in EM. Besides, we are bullish on UK government bonds. We expect the slow growth will lead to BoE rate cuts later in 2025.
HSBC: US Treasuries dropped slightly and yield curve flattened after better-than-expected jobless claim data and 30Y Treasury debt auction.
Economy
UBS: We expect the 15% effective tariff rate will cause economic slowdown in the US over the next 6 months. However, we do not expect a recession. Job markets remain healthy, and the strong US consumer balance sheets and international supply chains' adaptability will also cushion the impact.
Standard Chartered: There is uncertainty in second half of the year driven by tariffs and geopolitical outlook. Most tech firms have tariff exemptions, except chipmakers.
KNOWLEDGE TRANSFER
GLP-1
Here's all you need to know about the Game-Changing Obesity Drugs.
DISCLOSURE
This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.
Comments