The passage of bulls does not stop. What the unemployment of Jerome Powell at the head of the Fed is imminent? President Trump summons a large group of Republican legislators to the White House to treat a package of laws on cryptocurrencies. There they anticipate their drastic decision. “Confirmed,” says Anna Paulina Luna, the former model and veteran of the Armed Forces, representative of Florida, in an explicit post. What Trump does not eye in his efforts to resume the high reciprocal tariffs that caused anxiety in April? It’s true. The deadline imposes is urgent: August 1. Bull did not care.
The saga continues. It does not rest. Is that records are also imminent. But, first of all, already difference from the above, they are a palpable reality. In the S&P 500 and in the Nasdaq they follow each other. The S&P 500, which has been nine in the year, climbed 0.6% in the week hilvanando three rings of the last four. The Nasdaq was the main ram with a powerful weekly advance of 1.5%. The bag knows the dangers, but it does not regret.
Trump – who already introduced a universal tax of 10% – requires the European Union to pay a 30%tariff. The Financial Times, on Friday, quotes sources that say that discussions are red. At least, Washington intends that Brussels accept a unilateral tribute of 15%-20%. Wall Street is uncomfortable with the dispute reminder. Correct in the early hour, although it is rewarded later. Corollary? The S&P 500 closes 0.01% below Thursday’s record. Apparently, with Trump he wins for scares.
With Powell, Trump wants Gold and Moor
If it is about scares, none (in the week) as Powell’s development simulation. They were not mere rumors. The White House turned on the fan and the legislators who heard the firm determination of Trump’s own mouth spread it to the four winds. The New York Times pointed out that the president already wrote the letter of dismissal. Never – the eyes of the markets – Powell was so outside the Fed since he entered the institution in 2012. Last Wednesday, in the morning, its dismissal quoted with a 54% probability in betting markets. And the square accused receipt. It was a fleeting cimbronazo. And it was enough. A little later, loose body, also in the White House, the president denied the plan. “I don’t rule out anything, he said, but I think it’s highly unlikely, unless you have to go for fraud.”
This is a war of attrition. And, indeed, Russell Vought, director of the Government Administration and Budget Office, already launched a formal investigation into Powell’s responsibility in possible irregularities committed in the refaction work of the headquarters and a set of Fed buildings. The original budget was US $ 1,900 million. The works were delayed, and climbed to US $ 2,500 million. Powell denied any anomaly. With equal forcefulness, refutes resignation. No, he will exhaust his mandate to the helm of the entity in May 2026. Trump attacks him on all fronts in pursuit of an ax of the interest rates he retouches. And he tests his nerves. Incidentally, with such a plausible dismissal simulation, the market reaction also probe in case of executing an untimely exit.
If not for the tariffs, Powell Dixit, the Fed would have already resumed the descending path of rates that premiered with Biden last September. But Trump wants gold and moro. The rise of tariffs and the loss of rates. And more intends: that monetary policy is fixed at will. Wall Street, who attended this same double mess in April, understands that the story is repeated as farce. And the succession of records confirms that it rules out a tragedy. As seen, with the unbearable lightness that Trump characterizes him, he wrinkled with Powell. What will happen to the Brega for reciprocal tariffs? The deadline (which can always be postponed) is August 1. To disdain there is still time.
The bag is fixed with little and corporate balances help
Wall Street makes a triumphal way of a positive agenda. Of course, unlike Trump, its fulfillment is facilitated by a remarkable prior pruning of its ambitions. The markets want to believe and make up with little. The economy no longer carries the vibrant rhythm of the second semester of 2024. It slowed, but the expansion persists. Retail sales recounted 0.6% in June after two months in setback. It is more than expected, partly because it was not expected much. There was also a mild rise in consumer confidence, the second consecutive month, although it remains in a depressed range. Their inflation expectations were reduced significantly. If at any time they exceeded 7% to one year seen, they are now 4.4%. Which is still a very high step. The labor market, where it titrates a yellow light, contributed an encouraging decrease in the orders of unemployment subsidies. But the labor demand cools, the total current subsidies grow and slowly converge towards the critical threshold of the 2 million. It is a half full glass. For the bag – for the moment – it reaches and left over. That the American Express CEO will pond the resilience of the consumption spending of its client portfolio is an incentive. And the empty half does not do much damage: it feeds the expectation of a low rate of rates in the not very distant future.
Against what could be thought, corporate balances are another rally support. The official season started this week with the right foot thanks to the good numbers provided by the big banks. But no one escapes the strong negative incidence that tariffs and commercial tensions will have on the profitability margins and the projections of the companies. However, expectations have already been conveniently adjusted. If the profits per action grew 13.3% year -on -year in the first quarter, what is discounted is a strong deceleration: 5.6% in the second. It will be the slowest rhythm since the end of 2023. But profitability is preserved and investors do not require anything else. And such a low rod well can overcome. Banks, by case, this week, contributed to raise it from 4.4%.
The profits slow down, the quotes are the highest in history. That is, the valuation of the actions is also on a roof: 22.3 times the expected profits in the next twelve months. Drawing a recession seems to be, ultimately, the real test of fire. And for this interest rates play a fundamental role. However, the bag lacks Trump’s urgent claims. He is confident that there will be a cut, or two, before the end of the year. He does not expect it at the end of the month, although the allegation of Governor Waller excites her. Strictly speaking, he added good arguments for the decline to occur in September. It is necessary, he explained, quickly prop up to the labor market. However, the June data is brought. He brought the first solid indications of a rebound in inflation because of tariffs. In futures markets, September chances are now a coin in the air. Even so, bulls did not stop them in their bullish onslaught. It has already been said, the bag is fixed with little. Essentially, that Trump is paid, who leaves mouth, if he wants; But don’t make a zancadilla.
Source: Ambito
