The stock market and economy had a busy week, marked by significant company earnings announcements, a Federal Reserve meeting, fresh economic data, and, for some countries, the dreaded day of tariff implementation. Overall, this has been a strong earnings season for many companies. Companies are beating top and bottom-line estimates while forecasting solid growth for the rest of 2025. The Federal Reserve met on Wednesday, and Fed Chair Jerome Powell announced it will not be cutting rates. However, this may change when the Federal Reserve meets in September. Significant economic data was released on Wednesday and Friday, impacting the stock market. Of great long-term and global significance, and with the anticipation of most of the business world, President Trump's reciprocal tariffs have taken effect Friday.
In corporate news, this week marked one of the busiest weeks in earnings announcements, with more than 25% of companies reporting their results. Among the biggest were Microsoft, Apple, Amazon, Visa, and Meta, and each of these beat their revenue and earnings estimates. One company that had a great quarter was online used car retailer, Carvana. If you have seen what looks like a mini car garage on the side of main highways, this would be Carvana's "car vending machine." You can select your car online and have it delivered to your location, or you can visit a Carvana location, receive a car token, and your chosen car will be brought to you. This unique and memorable customer experience is paying off, as Carvana sold more than 143,280 vehicles in Q2, representing a 41% increase from the same period last year.
This week was marked by a fresh influx of economic data, including a new jobs report released on Friday morning. Wednesday was a very positive day for the economy. It was reported that GDP jumped 3% in Q2, surpassing the 2.3% estimate. Consumer spending rose 1.4% in Q2, better than 0.5% in Q1. The personal consumption expenditures price index (the key inflation index) showed a gain of 2.1% for Q2, slightly above the 2% target. A JPMorgan Chase Chief Strategist remarked this week on the economy that it is like a healthy tortoise. Although it may not be growing fast in some areas, consumers are remaining resilient, GDP handily beat Q2 estimates, and companies are reporting solid earnings and guidance.
Friday was a day marked by additional economic data releases, as well as the implementation of new tariffs. President Trump's new tariffs range anywhere from 10% to 41%. Of the key countries most affected by the changes in reciprocal tariff rates, China, Canada, Brazil, Switzerland, and India are notable. Wall Street analysts were surprised when Friday's July jobs report showed weaker-than-expected hiring and lowered revisions to prior months' data. Job growth totaled 73,000 for July, far below the 104,000 expected by economists. The bigger surprise is that May and June totals were revised sharply lower, down by 258,000 from previously announced levels. Along with this new data, the unemployment rate rose slightly to 4.2%. However, one of the silver linings in this is that the odds of the Federal Reserve cutting rates in September have dramatically increased. Following the jobs report’s announcement, future traders have increased the odds of a rate cut from 40% to roughly 75%.
For tennis fans, this coming week marks the start of the two-week Cincinnati Open, formerly known as the Western & Southern Open. The tournament is usually a nine-day spectacle, but this year it has been extended by five more days and 40 additional players. This year's tournament will also feature an enhanced fan experience, thanks to the Linder Family Tennis Center's $260 million campus renovation. This change has included a fresh coat of paint for courts, 10 new practice courts, a permanent shade canopy for fans, new park-like landscaping and greenery, expanded shopping, a new façade for the grandstand court, and a few other additions. Among the well-known players present are the top four women's players and the top three men's players. This includes both 2024 champions: Jannik Sinner and Aryna Sabalenka.
Ryan Motsinge
