Markets on Thursday remained largely unfazed by the ongoing stream of tariff-related headlines, with equities continuing to climb and volatility indicators staying notably subdued—despite looming catalysts such as the upcoming earnings season, the Fed’s July meeting, and the 1 August tariff deadline.
Despite the official earnings season not taking off until next Thursday, Delta Air Lines (+12.1%) stock flew early as its second-quarter earnings print beat the Street’s estimates and, more importantly, its guidance was in line with analyst estimates—this comes after previously pulling its 2Q guidance citing tariff uncertainty. The other major US airlines followed its flight path, with United Airlines adding +15.2%, American Airlines gaining +13.7%, and Southwest Airlines rallying +7.8%. Each of the key US equity benchmarks—the S&P 500 (+0.3%), DOW (+0.6%), and NASDAQ (+0.2%)—was subsequently dragged higher. All of this was in spite of a fresh 50% tab on imports from Brazil being slated (even though the US runs a trade surplus against the South American giant) and a jobless claims print coming in well below consensus, representing another strike against a July rate cut. Bond yields held steady, with both the US two-year and 10-year yields adding +1bp to 3.872% and 4.348% respectively.
European stocks rose for the fourth consecutive session this week as investors bet on the latest flurry of US tariff announcements being significantly ‘less bad’ than initially announced, aligned with the TACO narrative. The STOXX 600 moved +0.5% higher, while the UK’s FTSE 100 benchmark added +1.2%, as the major mining names kicked into gear on the back of soaring copper prices due to 50% duties being slapped on the metal by the Trump Administration from 1 August. Anglo American (+3.8%), Glencore (+3.9%), and Rio Tinto (+4.0%) each took the cue.
Traders’ assessments of the latest tariff announcements on Brazilian imports and the Bank of Korea’s decision to keep its policy rate on hold caused Asian markets to turn in mixed results. China’s Shanghai Composite (+0.5%) and Hong Kong’s Hang Seng (+0.6%) gained alongside Korea’s Kospi (+1.6%), while Japan’s Nikkei 225 (-0.4%) and India’s BSE Sensex (-0.4%) each dipped. The ASX 200 had a positive session, lifted by gains on iron ore futures pushing Fortescue (+1.9%), BHP (+1.2%), and Rio Tinto (+1.0%) higher. Our local bourse was more muted, as the NZX 50 benchmark closed a shade lower (-0.1%) as travel- and tourism-related names Serko (-4.0%), SkyCity (+4.0%), and Tourism Holdings (-2.8%) weighed on the index in spite of relative strength from REITs (Investore +3.4%, Goodman Property Trust +2.5%). Key news came from the ACCC announcing it wouldn’t oppose the proposed acquisition of Fonterra’s (+0.2%) consumer business by French dairy giant Lactalis.
WTI crude dropped -2.3% to US$66.83/bbl, gold added +0.3% to US$3,322.12/oz, and iron ore slipped -0.2% to US$95.32/MT.