As we near the end of July, momentum is building across several key areas of the market—and today delivered some encouraging news on the trade front. One of the most anticipated developments has been the status of the tariff negotiations, originally expected to take effect on July 9but later delayed toAugust 1 as a strategic move to apply additional pressure. That delay raised concerns among investors, but recent headlines suggest a shift in tone and progress on multiple fronts.
Tariff Relief: Progress in Motion
Investors were understandably nervous about the looming August deadline, concerned it could trigger a broad market pullback if major trade deals failed to materialize.
But today, we saw real movement:
- The Philippines finalized an agreement with the U.S., locking in a 19% tariff rate.
- Japan signed a reciprocal 15% tariff deal, accompanied by a major commitment to invest $550 billion in the U.S.
- Indonesia tariff rate is 19%.
These developments mark clear progress. Here's a look at how things have shifted since July 9:
Markets responded positively to the news, with equity futures rising as investors began to price in reduced trade uncertainty. These announcements are viewed as significant wins for the U.S. and a sign that tensions may be easing in key regions.
Macro Backdrop: Improving Economic Data
Beyond trade, the economic data for July continues to support a cautiously optimistic view:
- Core CPI for June was tame, which keeps inflation in check.
- Earnings season has been generally positive.
- Regional Fed surveys show signs of strength:
- Philadelphia: Activity turned positive.
- New York and Richmond: Mixed, but expectations for the next six months have improved.
Two out of three Fed districts are beating expectations—particularly in current conditions and outlooks—suggesting that the economic engine is still humming.
Market Dynamics: Buyers Stepping In
Markets have been showing resilience throughout July. We’ve seen a few pullbacks, but in nearly every case, buyers have stepped in quickly—an encouraging signal of continued strength. Historically, July tends to be favorable in the first year of a presidency, and 2025 is tracking that seasonal pattern well.
We’re also approaching the July FOMC meeting, where rate policy will be top of mind. Most indicators suggest the Fed may not shift its tone until September, but any hint of dovishness could be a tailwind for certain asset classes.
If you have questions about how this evolving macro landscape could impact your portfolio—or you'd like to revisit your current allocation—don't hesitate to reach out. We’re here to help you stay informed, confident, and on course.
The views stated in this letter are not necessarily the opinion of Cetera Advisors LLC. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.