Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Note: This is marketing material.
Global equities pushed higher as progress on tariff deals before the US imposed 1st August deadline provided market optimism. In US markets the S&P 500 and Nasdaq 100 continued to eke out new record highs even as indexes look a little stretched. Q2 earnings has been broadly positive, in the US 17.5% of companies have now reported, with an on average +7.36% earnings surprise. Crypto prices cooled following signing of the stablecoin bill in the US, while the action of Meme stocks seems to have made a return. More below in key stories.
US-Japan tariff agreement
The U.S. reached a trade agreement with Japan, setting import tariffs at 15%, bringing some clarity for the world's manufacturers. Global stocks rose as the progress raised investor optimism ahead of Donald Trump’s Aug. 1 tariff deadline.
US and Japan make a deal
Alphabet
Alphabet posted double-digit growth in revenue and profit during 2nd quarter as efforts to integrate AI start to bear fruit and demand for cloud computing surged. Core search and advertising grew +12% to $54.2bn ahead of expectations and reassuring investors.
Google stock roars
Tesla
Tesla shares slid following a concerning Q2 earnings report. A second straight quarter of year-over-year revenue decline, with automotive revenues -16% year on year, and admission from CEO Elon Musk that company could now face “a few rough quarters”.
Tesla: Does the bull case survive a tough Q2 report?
Meme stocks
For the time being at least Meme stocks are back with a new slate of names talked up on the r/wallstreetbets subreddit. Heavily shorted stocks including Kohl’s, GoPro and Krispy Kreme are some of the names in play this time around.
New Meme stocks to watch
Next week we reach the 1st August deadline that the US administration has deemed to be a hard deadline for tariff negotiations. Most keenly watched will be what happens between the US and EU. Economic releases bring US CB Consumer Confidence (Jul) and US JOLTS job openings (Jun) on Tuesday. German GDP (Q2), US GDP (Q2), US ADP employment change (Jul), FOMC rate decision out on Wednesday. China Manufacturing PMI (Jul), BOJ rate decision, US Core PCE price Index (Jun) due on Thursday. EU CPI (Jul), US Non-Farm Payrolls (Jul) on Friday.
Highlights from a major week in the earnings season include; Visa, UnitedHealth, Astrazeneca, Boeing, Spotify, Starbucks, Barclays, L’Oreal, Porsche (Tuesday). Microsoft, Meta, UBS, HSBC, Qualcomm, Arm Holdings, GSK, Hermes, Ford, Carvana, Airbus (Wednesday). Apple, Amazon, Mastercard, Unilever, Strategy, Coinbase, Roblox, BMW, Societe Generale (Thursday). Exxon, Chevron, IAG (Friday).