Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
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Key Stories from the past week: Earnings season well underway
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U.S. equity benchmarks once again break all-time highs. This week the gradual climb higher is driven by strong retail sales data, lower than expected jobless claims, a solid start to earnings season, and mounting pressure on the Fed to cut rates. Trade negotiations continue in the background, but investors main focus was the ongoing Powell v Trump spat. Stock specific, Nvidia expects a licence to sell H20 GPU to China again, Netflix and TSMC had strong earnings beats, and Seven&i shares dropped after a withdrawn takeover bid. More below on this week’s key stories.
Is Powell fired? Or not?
Rumours circulated on Wednesday citing Trump was likely to soon fire Fed Chair Jerome Powell. Markets moved accordingly with the greenback turning sharply weaker and front-end yields also dropping. The moves were reversed when Trump announced he has no current plans to oust the Fed Chair, but the event got markets thinking about risks of losing an independent Fed.
The Global Risks That Come With the Loss of an Independent Fed
ASML – strong numbers, poor outlook
Despite revenue and profit beats, shares in ASML fell over 11% on Wednesday after the company backtracked on 2026 growth commitments siting macro uncertainties. As of Friday morning, the price has recovered slightly, now down circa 8% since the release.
ASML Drops 7% After Cautious Earnings Outlook | Saxo
New legislation advances crypto
Thursday saw the US House of Representatives pass 3 bills that build regulations for the crypto industry. This is seen as a positive step towards acceptance and normalisation of such products and assets. Ethereum extended its rally and bitcoin held near record highs.
House Passes Crypto Bills
U.S. Bank earnings
Tuesday and Wednesday saw the usual flurry of U.S. Banks report their quarterly earnings. All 6 major US banks posted bigger adjusted profit hauls from a year ago. While trading revenues were at record highs as Trumps geopolitical uncertainty drove a surge of trading activity.
Bank Earnings Are Sending a Message: The Economy Isn't That Bad
Coming up, the Fed Blackout period begins on Saturday the 19th of July. Monday sees New Zealand CPI data while Japan is closed for a bank holiday. Wednesday is the big day for earnings with Alphabet, Tesla, and IBM. Thursday, we have the ECB rate decision, expectation is for a hold. Friday rounds off the week with markets watching CPI numbers from Japan.
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