The State of Markets: “Equities -> All Change”
“Consumer spending grew by 1.4% (saar, Q2) after 0.5% in Q1 (and compared to 2.8% in 2024); business investment was only 1.9% in Q2 (after a strong 10.3% in Q1); while ‘final sales to domestic purchasers’ slowed to 1.1% (Q2) from 1.5% (Q1) and 3.0% growth in 2024”
Source: ‘Daily Dose of Macro & Markets’ 31st July 2025 “Hawkish Fed – More (Data) Evidence of Tight Money”
A big week for US data proved to be a stumbling block for US & global equity markets. Having broken out to new highs (in many instances) earlier this month, key global equity markets rolled over and moved lower this week.
By Thursday’s close, the majority of key country equity indices were down (i.e. WTD – see key chart below). With the stock market SELL-off continuing on Friday (after the disappointing payrolls data), those numbers will likely be worse by the US close tonight (i.e. Friday).
Poor US macro data and a growing sense of a slowing US economy fed that weakness. On Tuesday, the market had soft JOLTS data to contend with (7.44mn vs. consensus of 7.55mn); on Wednesday, while the headline GDP number was strong, the underlying trends were disappointing (see quote above); and then earlier today, the payrolls data was also weak (with significant downward revisions to the past two months of job creation and a below expectations July print – see today’s ‘Longview on Friday’ for more detail).
All of that encouraged money to move into bonds and out of equities (with the 10-year bond yield approx. 10bps lower this week), while the probability of a September rate cut jumped back above 50% once again (and is sitting currently at around 70%+).
Next week the ISM services data, published on Tuesday, will be watched closely. This has been at/around 50 for the past two months. A decisive move below that level would all but confirm that the US was in recession (or that it’s, at best, at stall speed). Elsewhere the Bank of England meets on Thursday. It’s expected to cut by 25bps (97% probability), while German factory orders (Wednesday) and Chinese trade (Thursday) will also both be watched closely. US Q2 corporate earnings continue. Key companies reporting include Palantir, AMD and Caterpillar. For a full list of key events see below.
Key chart: Key global equity markets –> performance (WTD %, as @ Thursday’s close)
Upcoming important data/events this week:
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Events: |
Bank of England policy decision (Thurs, 12pm) followed by press conference (12:30pm).
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Monday: |
Australian headline CPI (July, 2am). |
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Tuesday: |
Chinese Caixin services sector PMI (July, 1:45am); Eurozone PPI (June, 10am); US ISM services index (July, 3pm). |
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Wednesday: |
German factory orders (June, 7am); Eurozone retail sales (June, 10am). |
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Thursday: |
Chinese imports/exports, & trade balance (July, 4am); nonfarm productivity & unit labour costs (Q2 first estimate, 1:30pm). |
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Friday: |
N/A |
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Key earnings: |
Berkshire Hathaway, Palantir, (Mon); AMD, Caterpillar, BP (Tues); McDonald’s, Novo Nordisk (Wed); Eli Lilly (Thurs). |
Key Research
Longview on Friday, 1st August 2025:
“(MAG7) Alternatives are Emerging”
TINA (‘There Is No Alternative’) is back. The MAG7, or more accurately the MAG3, have dominated the global stock market performance since late April. As FIG 2 shows, they are back at their peak share of the US stock market capitalisation (i.e. 32%) and close to their peak of the global stock market capitalisation.
As the chart also shows, though, those peaks were initially reached in 2024. In the US, that was in July 2024. Relative to the global stock market, it was the end of 2024 (although the July 2024 peak was close). In that sense over the last year, the MAG7 performance has been broadly in line with the market as a whole.
Key North American macro data & events:
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Events: |
Market holiday in Canada on account of ‘Civic Holiday’ (Mon). |
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Monday: |
US durable goods orders (June final estimate, 3pm). |
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Tuesday: |
US trade balance, exports & imports (June, 1:30pm); US S&P service sector PMIs (July final estimate, 2:45pm); US ISM services (July, 3pm). |
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Wednesday: |
Canada S&P service sector PMI (July final estimate, 2:30pm). |
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Thursday: |
US nonfarm productivity & unit labour costs (Q2 first estimate, 1:30pm); US weekly jobless claims (1:30pm); US wholesale sales & inventories (June, 3pm); US New York Fed 1 year inflation expectations (July, 4pm); US consumer credit (June, 8pm). |
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Friday: |
Canadian employment data (change in employment, unemployment rate & participation rate, for July, 1:30pm). |
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Key earnings: |
Berkshire Hathaway, Palantir, MercadoLibre, Vertex (Mon); AMD, Caterpillar, Amgen, Arista Networks, Eaton, Pfizer, Duke Energy (Tues); McDonald’s, Shopify, Walt Disney, Uber, Applovin, DoorDash, McKesson, Airbnb, Emerson, Fortinet (Wed); Eli Lilly, Gilead, ConocoPhillips, Constellation Energy, Parker-Hannifin, Canadian Natural, Motorola (Thurs); Constellation Software (Fri). |
Fig B: US ISM services headline index
Key European macro data & events
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Events: |
ECB publishes their economic bulletin (Thurs, 9am); ECB’s Rehn speaks on geopolitics (Thurs, 11am). |
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Monday: |
Spanish unemployment rate (July, 8am); Eurozone Sentix investor confidence (August, 9:30am). |
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Tuesday: |
French industrial & manufacturing production (June, 7:45am); HCOB services sector PMIs for Spain (8:15am), Italy (8:45am), France (8:50am), Germany (8:55am) & EZ (9am) - all April final estimates apart from Spain & Italy; Spanish industrial production (June, 8am); Spanish home sales (June, 8am); Eurozone PPI (June, 10am). |
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Wednesday: |
German factory orders (June, 7am); French private sector payrolls (Q2 first estimate, 7:45am); HCOB construction sector PMI for Germany (July, 8:30am); Italian Industrial production (June, 9am); Eurozone retail sales (June, 10am). |
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Thursday: |
German industrial production (June, 7am); German imports/exports, & trade balance (June, 7am); French trade balance (June, 7:45am); French wages (Q2 first estimate, 7:45am). |
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Friday: |
French ILO unemployment rate (Q2, 6:30am). |
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Key earnings: |
Novo Nordisk (Wed). |
Fig C: German industrial production (Y-o-Y %)
Key UK macro data & events
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Events: |
Bank of England policy decision (Thurs, 12pm) followed by press conference (12:30pm); speech by the Bank of England’s Pill at the National MPC Agency briefing (Fri, 12:15pm). |
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Monday: |
N/A |
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Tuesday: |
New car sales (July, 9am); S&P service sector PMI (July final estimate, 9:30am). |
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Wednesday: |
S&P construction sector PMI (July, 9:30am). |
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Thursday: |
Halifax house price index (July, 7am). |
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Friday: |
N/A |
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Key earnings: |
BP (Tues). |
Fig D: UK S&P manufacturing & service sector PMIs
Key Asia-Pacific macro data & events
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Events: |
BOJ publishes minutes of June meeting (Tues, 12:50am). |
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Monday: |
Japanese monetary base (July, 12:50am); Australian headline CPI (July, 2am). |
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Tuesday: |
Australian S&P services sector PMI (July final estimate, 12am); Australian ANZ-Indeed job advertisements (July, 2:30am); Australian household spending (June, 2:30am); Chinese Caixin services sector PMI (July, 1:45am). |
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Wednesday: |
N/A |
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Thursday: |
Australian imports/exports, & trade balance (June, 2:30am); Chinese imports/exports, & trade balance (July, 4am); Japanese ESRI leading index (June first estimate, 6am). |
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Friday: |
Japanese household spending (June, 12:30am). |
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Key earnings: |
Mitsubishi Corp (Mon); Recruit Holdings, SoftBank Corp (Tues); NTT Inc (Wed); Sony, Tokio Marine Holdings, China Mobile, SMIC (Thurs). |
Fig E: China total imports and exports (6 month m.a)
This week:
Longview on Friday, 1st August 2025:
“(MAG7) Alternatives are Emerging”
The SHORTVIEW (& market positioning), 30th July 2025:
“UK: ‘Doom Loop’ or Something Else?”
Quant Monthly Appendix, 30th July 2025:
“Part I: S&P500 Sector Valuation Overview”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 1st August 2025:
“Today’s NFP Data -> All Eyes on: ‘Those Not in the Labour Force’”
Daily Dose of Macro & Markets 31st July 2025:
“Hawkish Fed – More (Data) Evidence of Tight Money”
Daily Dose of Macro & Markets 30th July 2025:
“Q3 –> Liquidity Set to Tighten”
Daily Dose of Macro & Markets 29th July 2025:
“Can Europe Continue to Outperform?”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 28th July 2025:
“Greed Rising - Complacency Abounds”
Last week:
Longview on Friday, 25th July 2025:
“Froth Is Building – Caveat Emptor”
Monthly Global Asset Allocation No. 68, 24th July 2025:
“Bonds: Fade the Fiscal Freakout A.k.a. Stay OW Treasuries in Strategic Portfolio”
Daily Dose of Macro & Markets:
Daily Dose of Macro & Markets 25th July 2025:
Daily Dose of Macro & Markets 24th July 2025:
Daily Dose of Macro & Markets 23rd July 2025:
“OIL: From Geopolitics to Supply Glut’”
Daily Dose of Macro & Markets 22nd July 2025:
“China’s Monetary Momentum Builds – Markets Sniff a Sugar Rush”
Weekly Risk Appetite Gauge:
'Weekly Risk Appetite Gauge', 21st July 2025:
“BUILDing signs of Complacency/Bullish Positioning”