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Business Insider
2 minutes ago
- Business Insider
Trump's trade deals are set to unleash an 11% rally for stocks through year-end, Oppenheimer says
Call it a comeback. After markets went haywire in April, Trump's trade deals might have just saved the bull market, according to Oppenheimer's chief investment strategist John Stoltzfus. After lowering his year-end S&P 500 price target after the Liberation Day tariff announcements, Stoltzfus has reinstated his 7,100 target from December 2024, setting the stock market up for its third consecutive year of 20% gains. In the wake of President Donald Trump's EU and Japan trade deal, Stoltzfus believes the coast is clear for the S&P 500 to continue reaching all-time highs. "We believe that enough ' tariff hurdles ' have been overcome for now to reinstate our original price target for the S&P 500 of 7100 by year-end," Stoltzfus wrote in a note on Monday morning. US exceptionalism in the stock market remains intact, Stoltzfus said. The EU trade deal Trump announced on Sunday sets tariffs of 15% on most European imports, half of the 30% Trump initially threatened. The EU has also agreed to purchase a "vast amount" of US military equipment and invest an additional $600 billion in the US. It's not just trade deals, though. US companies have held up financially through the volatility, and they're on track for a better-than-expected second quarter earnings season, Stoltzfus said. Out of the companies that have already reported second quarter earnings, 84% have beaten analyst estimates. Wall Street will be watching this week closely, as 164 companies — including the S&P 500's biggest names such as Apple, Amazon, Microsoft, and Meta —are set to report results. Helping the S&P 500's continued climb is the slow place of inflation. Price increases have remained relatively steady and inflation has drawn closer to the Fed 's 2% target despite tariff volatility. "Monetary policy by the Fed has brought down the pace of inflation (if not yet to its 2% target level) without thus far causing a recession. This in our view is a substantial achievement considering inflation has gone from 9% in June of 2022 when the Fed recognized that inflation was out of hand to around 2.7% in June of this year," Stoltzfus wrote. Stoltzfus' 7,100 year-end price target implies a forward multiple of 25.8x and an earnings projection of $275. Investors should continue to bet on information technology, consumer discretionary, communications services, industrials, and financials, according to Stoltzfus.
Business Insider
32 minutes ago
- Business Insider
Markets are about to kick off a huge week of earnings and macro data
The stock market is headed for its biggest week of the summer. Investors are watching Magnificent Seven earnings, the Fed meeting, and a barrage of macro data. Trump's August 1 deadline for tariff negotiations will cap off the week. This week is jam-packed with potential catalysts to move markets. Investors are looking at a heavy week of economic data and market-moving updates, with the Federal Reserve set to kick off its latest policy meeting, four out of the Magnificent Seven due to report earnings, and GDP and jobs data on deck. Here are the things investors can expect to look forward to: Mag 7 earnings More of the biggest tech giants in the US are set to report earnings for the last quarter, offering investors some insight on the state of the AI trade and whether companies are still willing to shell out for artificial intelligence chips. Here's who is on deck to report after the close: Of the Mag 7 group, Alphabet and Tesla already reported earnings last week. Alphabet beat earnings and revenue estimates for the second quarter, but investors were concerned about the company's unexpected $10 billion increase in capital expenditures. Tesla, which has been mired in a long-running EV sales decline, saw its biggest quarterly revenue drop in at least a decade. Chip titan Nvidia will report at the end of August. Of the 34% of S&P 500 companies that have reported their results so far, 80% have beat earnings estimates, above the running average for the last 10 years, according to the latest update from FactSet. Data deluge The market is also gearing up for fresh inflation, jobs, and economic growth data coming out this week. Here's the timeline of what investors can expect: Wednesday Second-quarter GDP (second estimates). Economists expect the second estimate for second-quarter GDP to show that the economy expanded 2.3% year-over-year last quarter. Advanced estimates from the Commerce Department suggested that real GDP rose 2.8% year-over-year. ADP private payrolls. Economists expect the private sector to add 82,000 in July. That compares to the 33,000 jobs the private sector lost in June, according to last month's ADP report. Thursday Personal Consumption Expenditures inflation. The Fed's preferred inflation measure will get an update this week. Core PCE rose 2.7% in May, with June's figure also expected to clock in at 2.7%. Friday July Jobs report. Economists expect the US to add 102,000 jobs in July, down from the 147,000 payrolls added in June. Trump's tariff deadline Trump's August 1 deadline for tariff negotiations is coming up at the end of the week. Trump announced a fresh trade deal with the European Union on Sunday, which includes a 15% tariff on European imports and several stipulations for the EU to invest in the US and purchase more goods in key sectors. Yet, other countries are still negotiating. The US has only inked a handful of trade agreements with other countries, but Trump's team has said in recent weeks it expects more deals to follow. Some investors are hoping Trump will extend his deadline for tariffs, as he did earlier in the year, but Commerce Secretary Howard Lutnick said the deadline is set in stone with "no more grace periods" planned when speaking to Fox News on Sunday. Countries that haven't reached a trade agreement with the US by then will be subject to the tariff rate the president proposed on Liberation Day, or the tariff rate he proposed in a slew of letters sent to 23 countries that he also published on Truth Social. Some sector tariffs, like Trump's 50% tariff on copper imports, are also set to kick in on Friday. Fed meeting All eyes are on Fed Chair Jerome Powell on Wednesday as the central bank concludes its July meeting and announces its next interest rate decision to the public. Markets largely expect the central bank to keep rates steady as it eyes the impact of tariffs on inflation. Investors are pricing in a 98% chance the Fed will leave its benchmark rate unchanged this week, and a 44% chance the Fed will cut rates just once or twice by the end of the year, according to the CME FedWatch tool. "While the Federal Reserve is under pressure to cut interest rates, it's clear that this economy has been able to and should continue to be able to withstand the current level of interest rates. Stocks are up almost 10% so far this year, and we haven't seen a rate cut in eight months," Paul Stanley, the CIO of Granite Bay Wealth Management, wrote in a note. Trump has been highly critical of the Fed Chair, pushing for lower interest rates this year. But the president seemed to suggest he would accept whatever decision FOMC members came to when visiting the Fed last week. "Well, I'd love him to lower interest rates. Other than that, what can I tell you?" Trump said when speaking to reporters on Wednesday. "We would be helped if interest rates would come down, but we're going to see how the Board rules on that soon. I'd love to see them come down a lot," he later added.
Yahoo
36 minutes ago
- Yahoo
Dollar Extends July Rally After US-EU Trade Deal: Markets Wrap
(Bloomberg) -- Wall Street kicked off a pivotal week with the dollar climbing after President Donald Trump reached a tariff deal with the European Union and signs mounted that the US and China will extend their trade truce. Stocks held near a record and bonds edged lower. The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Can This Bridge Ease the Troubled US-Canadian Relationship? Budapest's Most Historic Site Gets a Controversial Rebuild Trump Administration Sues NYC Over Sanctuary City Policy The start of a week that will set the tone for the rest of the year in markets saw the greenback extending a rally for July,which is poised to be its best month in 2025. The S&P 500 hovered around 6,400. Treasuries saw small losses before a pair of US debt sales. Oil rose as Trump said he would reduce the deadline for Russia to agree to a truce in Ukraine. Subscribe to the Stock Movers Podcast on Apple, Spotify and other Podcast Platforms. In the run-up to the Aug. 1 US tariff deadline, traders will go through a raft of key data from jobs to inflation and economic activity. The big event comes Wednesday, when the Federal Reserve is expected to keep rates unchanged. Then there's a string of big-tech earnings, with four megacaps worth a combined $11.3 trillion reporting results. 'This is about as busy as a week can get in the markets,' said Chris Larkin at E*Trade from Morgan Stanley. 'This week could make or break that momentum in the near term.' US and Chinese officials kicked off two days of talks aimed at extending their tariff truce beyond a mid-August deadline and hashing out ways to maintain trade ties while safeguarding economic security. President Trump said he would impose a new deadline of 10-12 days for Russian leader Vladimir Putin to reach a truce with Ukraine, ramping up pressures on Moscow to bring the fighting to a halt. This earnings season is off to a solid start, but now all eyes are on quarterly results from Microsoft Corp. and Meta Platforms Inc. on Wednesday, and Apple Inc. and Inc. on Thursday. electronic devices and software to cloud-computing and e-commerce. So far, Corporate America appears to be taking tariffs in stride. With about a third of S&P 500 firms having reported, roughly 82% have beaten profit forecasts, on track for the best quarter in about four years, data compiled by Bloomberg Intelligence show. The US reporting season is off to a strong start, but it would be premature to write off the impact of tariffs on inflation and corporate earnings, according to RBC Capital Markets strategists led by Lori Calvasina. 'It's still too early to assume tariffs won't generate inflation pressures,' Calvasina wrote in a note that was published Sunday, after the trade agreement between the European Union and the US was announced. 'It also poses a risk to the path of stock prices if company outlooks for 2026 don't end up being as rosy as investors have been anticipating.' Progress in trade negotiations will take the S&P 500 to a third consecutive year of 20% gains, according to Oppenheimer Asset Management, a feat unseen since the late 1990s. Chief investment strategist John Stoltzfus raised his year-end target for the US benchmark to 7,100 points from 5,950. Some market forecasters including Morgan Stanley's Michael Wilson have turned more optimistic about the S&P 500 as they expect earnings to remain upbeat. The technical evidence suggests a broadening of participation in equities off the April low, according to Craig Johnson at Piper Sandler. 'Despite a slight easing in momentum as investors await earnings, the combination of several major indices at all-time highs and improving market breadth continues to draw investors off the sidelines, offering opportunities to buy the dip,' he said. Corporate Highlights: Samsung Electronics Co. will produce AI semiconductors for Tesla Inc. in a new $16.5 billion pact that marks a win for its underperforming foundry division. Cisco Systems Inc. was downgraded to inline at Evercore, which mentioned valuation following recent gains. Nike Inc. was raised to overweight at JPMorgan Chase & Co., which cited the earnings impact of the sportswear maker's five-pronged multi-year recovery plan. PayPal Holdings Inc. will soon allow businesses to accept more than one hundred cryptocurrencies at checkout. US regulators are investigating the death of an 8-year-old boy in Brazil who received Sarepta Therapeutics Inc.'s Elevidys. Some of the main moves in markets: Stocks The S&P 500 was little changed as of 10 a.m. New York time The Nasdaq 100 rose 0.5% The Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 fell 0.2% The MSCI World Index fell 0.2% Bloomberg Magnificent 7 Total Return Index rose 0.7% The Russell 2000 Index was little changed Currencies The Bloomberg Dollar Spot Index rose 0.5% The euro fell 0.9% to $1.1633 The British pound fell 0.2% to $1.3415 The Japanese yen fell 0.4% to 148.29 per dollar Cryptocurrencies Bitcoin fell 0.4% to $118,366.28 Ether rose 0.4% to $3,841.2 Bonds The yield on 10-year Treasuries advanced three basis points to 4.41% Germany's 10-year yield declined three basis points to 2.69% Britain's 10-year yield advanced two basis points to 4.65% Commodities West Texas Intermediate crude rose 2.5% to $66.78 a barrel Spot gold fell 1% to $3,303.08 an ounce Burning Man Is Burning Through Cash It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Confessions of a Laptop Farmer: How an American Helped North Korea's Wild Remote Worker Scheme Scottish Wind Farms Show How to Counter Nimby Opposition ©2025 Bloomberg L.P. 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