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- 🤝 Trump's Biggest Trade Deal So Far
🤝 Trump's Biggest Trade Deal So Far
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15% Tarif Rate Plus A $550bn Investment Fund
Donald Trump struck a headline-grabbing trade deal with Japan, lowering threatened auto tariffs from 25% to 15% and unlocking a whopping $550 billion investment fund for U.S. projects.
The pact came after a dramatic 75-minute Oval Office showdown where Trump pushed Japan for last-minute concessions.
In exchange, Japan agreed to accept U.S.-built cars meeting American safety standards without extra hurdles, a win for U.S. automakers.
Japanese markets rallied, with Toyota shares soaring as news of the deal broke.
Trump personally boosted the investment figure — scribbling higher numbers by hand — before sealing the agreement.
The deal not only avoids a trade war but positions Trump as a dealmaker once again, with the massive fund poised to reshape U.S. investments.
Our Takeaway
This trade deal is a big deal. It marks the first long-term trade agreement with a major economy since President Trump’s start of the trade war. The increases the pressure on other major trading partners so that major trade deals could follow shortly.
Though all details aren’t public yet, a $550bn investment in projects in America is a significant number. It could even lead to upward revisions of GDP growth.
The concessions may also help US car manufacturers who have historically been struggling in the US market.
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Market Overview
Tuesday's session ended on a mixed note as tariff tensions dominated headlines. The trade deal with Japan has the NIKKEI jump by 3.7% this morning and European stocks drop by around 1%.
The IMF sounded the alarm : U.S. current-account deficit ballooned to $1.13 trillion in 2024, warning that tariffs won’t correct global imbalances.
A Washington Post analysis flagged Trump’s tariffs as a hidden tax, saying they’re stoking inflation and hitting American consumers.
Reuters reported Tesla’s windfall profits from U.S. regulatory credits are drying up, squeezing margins amid weakening EV sales.
FT columnist Bruce Yandle highlighted mixed signals: +147,000 jobs in June but manufacturing soft, painting a cautiously optimistic economic portrait.
The BEA released figures showing U.S. direct investment abroad surged by $206 billion in 2024, led by a boom in manufacturing affiliates.
Headlines You Can't Miss
Morgan Stanley under deeper FINRA investigation – FINRA launched an expanded probe into Morgan Stanley’s anti–money laundering client‑screening across its wealth and trading units, covering Oct 2021–Sept 2024.
Microsoft-fed SharePoint hack at nuclear agency – A breach in a Microsoft SharePoint system at the U.S. nuclear weapons agency was disclosed, raising cybersecurity concerns
AstraZeneca pledges $50 billion investment in U.S.-based drug manufacturing and R&D, including a major plant in Virginia, as the company seeks to offset potential pharmaceutical tariffs and bolster its U.S. footprint.
U.S. GDP boosted by AI-driven corporate capex , with AI-driven spending on data centers, machinery, and re-industrialization lifting economic output in Q2.
Trending Stocks
Coca-Cola (KO): Coca‑Cola posted adjusted EPS of $0.87, beating estimates by $0.04, while revenue rose modestly by 1% to $12.5 billion.
Operating margins expanded sharply—up ~190 basis points to 34.7%—driven by disciplined cost control, deferred marketing spend, and pricing strength.
However, global unit case volume declined by 1%, reflecting weakened demand with volume dropoffs in key markets like North America, Asia-Pacific, and Latin America
CEO Quote🎤: “Amid a shifting external landscape in the second quarter, the ability of our system to stay both focused and flexible enabled us to stay on course in the first half of the year, … and are confident in our trajectory to deliver on our updated 2025 guidance and longer‑term objectives.”
RTX Corp (RTX ): Revenue grew 9% year-over-year, reaching $21.6 billion, driven by strong performance across all three business segments—Collins Aerospace, Pratt & Whitney, and Raytheon—with a book-to-bill ratio of 1.86
Adjusted EPS rose 11% to $1.56, surpassing Wall Street expectations (~$1.44), while GAAP EPS landed at $1.22, benefiting from lower interest costs.
Robust backlog climbed to $236 billion (+15% YoY), supporting strong near-term demand even as operating and free cash flow faced pressure from a Pratt & Whitney stoppage and tariff-related costs.
CEO Quote🎤: “We continued our momentum in the second quarter with organic sales and profit growth* across all three segments, including 16 percent commercial aftermarket growth… Our backlog grew to $236 billion, up 15 percent versus prior year, and we secured major awards for our geared turbofan engines and integrated air and missile defense capabilities in the quarter.”
Intuitive Surginal (ISRG ): Adjusted EPS came in at $2.19, beating expectations (consensus ~$1.92–1.93) thanks to a 21% year-over-year revenue surge to $2.44 billion.
Global da Vinci procedure volumes rose ~17%, supported by strong placements (395 systems installed in Q2).
Gross margin guidance for 2025 was raised slightly to 66–67%, with the new outlook factoring in a 1% tariff impact—improved from the previous 65–66.5% range
CEO Quote🎤: “We’re pleased with our solid performance this quarter, highlighted by continued customer adoption of our newer and existing platforms, including da Vinci 5.”
What’s Next?
Key Earnings Today 👇
Tesla (TSLA ): Annual revenue is forecast to rise by 4% to $88 billion. Earnings are expected to rise by double digits at a rate of 14% quarter-on-quarter.
Alphabet (GOOG ): Quarterly revenue is forecast at $33.55 billion vs. $32.80 billion last year. Adjusted earnings are expected to grow from $1.15 per share to $1.20 per share.
T-Mobile (TMUS ): Quarterly revenue is forecast grow by 6% $21 billion. Analysts project earnings to have grown by a robust 8% over the past 12 months.
IBM (IBM ): Analysts expect quarterly revenue growth of 5% and earnings growth of 9%, as the company looks to be turning its fortunes around.
Other Key News
Second-quarter tech earnings expected to show 14% growth vs 3.4% for other S&P 500 companies.
Norfolk Southern and Union Pacific merger talks could reshape the rail industry.
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