Equities Mark Another Record Before Retreating, As Wall Street Awaits FOMC, Mag7: July 29, 2025

Stocks are near the flatline after the S&P 500 and Nasdaq 100 benchmarks marked fresh records again today even as economic figures signaled healthy labor demand and improving consumer confidence. In the aftermath of a fierce rebound from the April lows, which was then followed by a relentless surge to all-time highs, investors are now waiting for an all-clear sign to take this thing higher. Top of mind is tomorrow’s Fed monetary policy decision and earnings reports from the majority of the magnificent 7 scheduled for this week. Meanwhile, cross-border commerce statistics this morning pointed to a narrowing goods trade deficit in the states amounting to a nearly two-year low, which bodes well for the second-quarter GDP print, which is out in less than 24 hours. Indeed, Wall Street is projecting a robust recovery following the drop in the first three months of the year driven by a significant escalation in imports. But despite the strong data, overall, rates are plunging in bear flattening fashion led by the long-end as fixed-income watchers throw a thumbs up from recent messaging from the Treasury regarding financing plans. Lighter borrowing costs aren’t derailing Washington’s tender though, as the greenback flies and builds on its run, which has been motivated by firmer growth differentials in the US. Also seeing interest are volatility protection instruments, the entire commodity complex, especially natural gas, and forecast contracts. Bitcoin is facing some selling pressure, however.

Job Vacancies Remain at Healthy Level

Labor demand remained healthy last month despite vacancies dropping slightly. June’s total job openings of 7.437 million missed expectations of 7.55 million and came in beneath May’s 7.712 million. Quits also fell, descending from 3.27 million to 3.142 million, which together with fewer for-hire signs, signals marginally softer employment conditions. Indeed, workers tend to resist voluntarily separating from their employers when confidence about other opportunities dims.

Consumer Confidence Climbs

An improvement in household outlooks for income and business employment conditions drove an advance in this month’s consumer confidence figures from the Conference Board. July’s headline score of 97.2 exceeded the median estimate of 95.8 and came in ahead of June’s 95.2. The present situation and expectations sub-indices shifted in bifurcated fashion, however, with the former dropping from 133 to 131.5 while the latter rose from 69.9 to 74.4. Weighing on current moods were difficulties in attaining jobs. Overall, folks reflected concerns about tariffs and the costs of living but were mixed on the impact of the recent tax legislation passed in Washington. Additionally, respondents were more bullish on stocks and rates, increasingly believing that borrowing charges would decline.   

US Trade Deficit Narrows

The US’s goods trade deficit narrowed to $85.99 billion in June, a 21-month low. The result topped expectations of $98.4 billion and May’s $96.42 billion.

Fed May Signal September Cut

President Trump is likely to be angered by a widely expected Fed pause tomorrow afternoon, but the good news is that the committee’s written materials may point to an upcoming rate cut occurring at its next meeting. With price pressures running in the mid 2s, the central bank could sneak in a benchmark reduction now and still maintain a restrictive posture, in my view. But the monetary policy authority is hell bent on waiting on any inflationary impact from shifting cross-border commerce trends. I strongly believe that US tariffs between 10% and 20% won’t be enough to move the needle folks, with core goods being a small percentage of our economy and the inflation picture continuing to decline decade after decade as our landscape increasingly becomes more services oriented. Indeed, core goods comprise roughly one-fifth of the Consumer Price Index, which is significantly more influenced by services, food and energy as a whole.

International Roundup

Singapore International Trading Prices Strengthen

Singapore’s cross-border commerce experienced marginal month-over-month (m/m) price increases in June after sinking in May. For June, imports were 1.3% more costly following a 1.8% drop in the preceding month, according to Statistics Singapore. Export prices climbed 0.1%, a reversal from sinking 2% in May. in June, oil shipped to Singapore cost 6.3% more, a significant change from the 7.7% collapse in May. It accounted for the entirety of June’s headline increase. The recent result for the commodity was driven by political turmoil in the Middle East.

In a similar manner, domestic enterprises charged 3.4% more for petroleum products after being hit with a 2.9% drop in May. Conversely, Singapore businesses fetched 0.6% less for non-oil items.

Regarding year-over-year (y/y) results, import and export stickers descended 6.5% and 7.8%, respectively. The declines eased slightly from May’s changes of -8.2% and -8.1%. The recent result was driven by oil products being cheaper than in the year-ago period despite the m/m increase.

UK Shoppers Experience Higher Prices

Retail prices climbed 0.7% y/y this month after moving 0.4% in the same direction during June, according to the British Retail Consortium Shop Price Index. July exceeded the three-month-average rate of 0.3%. The primary culprit was food, up 4% after a 3.7% jump in June. It was the sixth-consecutive month that food dished out higher pain at cash registers. Fresh food was somewhat better, climbing 3.2%, matching the June rate but exceeding the three-month average of 2.9%.

The organization maintains that tight global supplies of staples, such as tea and meat, have pushed up costs. Additionally, a tax increase of approximately £7 billion has contributed to overall inflation.