This week on 7 Market Movers, tariffs are back in the news. Wealth Enhancement’s Deputy Chief Investment Officer Doug Huber walks us through the expiration of the 90-day moratorium on tariffs and what that could mean for the markets. He also covers the recent meeting of the Federal Reserve and the potential for rate cuts later in the year. Watch to find out what else happened this week, including what Amazon’s Prime Day Sales could indicate for consumer spending.

TRANSCRIPT

Hello, everybody, and welcome to this week's the week of July seventh, seven market movers weekly video series presented by Wealth Enhancement. My name is Doug Huber, and I'm the deputy chief investment officer, and I look forward to going through some of what's driving the markets this week.

For the week thus far, the S&P and Nasdaq indices are just slightly above flat, having ticked higher today, Thursday, the 10th. The 10-year, rate, is roughly flat for the week. So on just looking at market movements, it's been a pretty benign week. That being said, a lot has gone on in the background. And so this week, we have seen, more information come to light regarding trade tensions in our in our tariff policies. So the US administration allowed the 90-day moratorium on new tariffs to expire on July ninth. This moratorium is part of ongoing negotiations around the globe on trade reform, specifically aimed at China, the European Union, and other major trading partners.

President Trump has indicated the possibility of reintroducing tariffs by August first, and those are targeting some of our key trading partners such as Germany and South Korea. And that's and they have been expressing some concern, warning of some regulatory response if that goes forward. And so with that, we did see a little bit of volatility intra week, as, market participants were trying to figure out, you know, what was the impact of that. We've heard already that, we might be putting a tariff on copper of of 50%.

And so what you've seen is that multinational companies with large overseas exposure, particularly in the automotives and industrials area, have seen some analysts downgrade week to date. Investors are watching for the July fifteenth g twenty trade ministers meetings, and that there there's a view that that could be a potential diplomatic inflection point. So we will see. Keep your eyes on that.

Separately, we saw, the Federal Reserve, come out with their June FOMC minutes. The Fed did acknowledge cooling inflation in that, particularly in the housing and used goods sectors, but did remain cautious around core services inflation, especially in wages and health care. They did reiterate their data dependent approach, but they did signal that there could be two potential rate cuts, for the remainder of this year.

With that, the bond market didn't do too much with that information. The yield curve flattened slightly, and equities rallied originally on some of that dovish tone, but they've since tempered some of that as the jobs and CPI data, did appear stronger than expected.

The Fed is still balancing this inflation risk and the need to maintain employment, And so that stance has pushed institutions to kind of rotate more into quality equities, short duration bonds, and more dividend paying stocks. And so we've seen those kind of areas outperform, as of late. I talked about the jobs report. We did see the nonfarm payrolls come in at a plus 147,000. That was, against an expectation of a 130,000, so that was positive. Our unemployment rate did remain steady at 4.1%, expectations were that might have climbed up. And so strong job numbers showing, wage growth of 4.4% month over month and 4.2% year over year, and that is signaling persistent labor tightness.

Health care and education led gains. Manufacturing tech showed some modest improvement, and retail and hospitality was flat for this report. This is showing that the economy continues to remain, resilient, and so it supports this concept of the soft landing narrative, but I feel like participants and the Fed who is data dependent continues to be in this wait and see mode of, like, how much what are the tariff implications, number one, and what are the impacts of those, to the economy going forward? And so with the continued wage pressure that we're seeing, there is the potential that those two rate cuts that that fed, chair Powell has indicated could be delayed, if inflation resurges.

Finally, just a random touch point. Amazon had its Prime Day this this week, and I think, you know, not that that it begets a lot of information, but I thought what was really interesting is this year, they extended, the event to four full days. So if you haven't utilized Prime Day, I hope you did, but you could do it through the end of today, but they expect sales of over $21 billion dollars in four days. That's up 60% year over year. And so for all those that are concerned about the consumer, and I'm certainly one of them, you know, that is a data point that suggests spending is still very much in play, but people are looking for deals. And so, potentially, you will see, you know, some of these more sales oriented events. Some of the lower cost producers like the Dollar Shores and Dollar Trees have more success in these type of economies.

The Bonner FX, you know, that you are seeing a lot of competitors of the launch events. So I don't know if you've looked, but Target, Walmart, Best Buy, Costco, they're all having similar events at roughly the same time to try to not lose that buyer base to these four days. So that's interesting to see.

But with that, analysts are expecting a q three earnings uplift for major retailers on the back of this really strong kind of, Prime Day effect. So consumer remains strong. Labor remains strong. You know, that is positive for the economy.

I think everybody's waiting with bated breath to see what the tariff implications are. Hopefully, we'll get some, idea and some closure, in the g twenty trade meeting that's on July fifteenth, so we're keeping an eye out for that. And so with that, I'll sign off for this week. We look forward to chatting with you next week, hopefully to bring you more updates.

If you have any questions, please feel free to reach out to your adviser. With that, have a good day. Bye bye.