“Don’t sit down and wait for the opportunities to come. Get up and make them.”
-Madam C.J. Walker
Here’s what you need to know this week:
· Stocks climb due to strong jobs report
· The tariff deadline is here (kind of)
Hot Jobs
Markets posted strong gains last week due to a hotter-than-expected jobs report. The nonfarm payrolls (NFP) report showed the US economy adding 147,000 jobs in June, more than the 106,000 predicted by analysts. The report also showed unemployment falling to 4.1% as opposed to expectations of unemployment climbing to 4.3%[1]:
This report has two competing effects on the markets. First, it shows that the US economy has remained resilient even as corporations have started to batten down the hatches in preparation for tariffs to resume (more on that in a moment). Second, a strong jobs report disincentivizes the Federal Reserve to cut interest rates.
You may remember that the Federal Reserve has a dual mandate of managing inflation and unemployment. Fed officials have voiced concerns that prolonged tariffs will meaningfully increase inflation and have been waiting to the see effects of President Trump’s tariff plan. A strong jobs report gives them more evidence that they have time to wait.
This was immediately reflected in the bond market. One week prior to the release of the NFP report, bond yields implied a ~21% chance of an interest rate cut later this month and a 93% chance of a cut in September. After the report, the odds of a rate cut fell to less than 5% for July and ~68% for September:
Press Play
President Trump officially signed the One Big Beautiful Bill Act (OBBBA) into law on July 4th. The bill has a myriad of effects but the main effects are extending the tax cuts from the Tax Cuts and Jobs Act (TCJA), more commonly known as the “Trump Tax Bill” of 2017, as well as reallocating federal spending across healthcare and defense. The bill has had a muted effect on markets thus far so I won’t be covering it in depth this week, but of course feel free to reach out if you have any questions about it.
The main event in markets right now is President Trump’s tariffs which officially go into effect today. The actual implementation of these tariffs is still in flux: Trump sent letters to major trade partners on Monday outlining their impending tariffs but also offered the option of a three-week extension for negotiations, which would push the start date for countries that accept the extension to August 1st. Treasury Secretary Scott Bessent told Fox News Sunday that the sheer volume of current negotiations is constraining the US’s ability to finalize deals with each country and expects many countries to opt into the three-week extension[2].
As of writing, the only deals made have been with China, Vietnam and the UK, and all three of these are preliminary agreements and have yet to be finalized. Other countries such as Cambodia, Indonesia and Thailand have announced that they are close to reaching a deal, while others such as Japan and South Korea have indicated that they are likely to opt for the three-week extension[3].
The countries listed above comprise a significant amount of our international trade, but little progress has been reported for some of our largest trade partners:
As you can see, Mexico and Canada account for nearly one quarter of our international trade, and so far there has not been any reported progress in negotiations. In fact, the Canadian negotiations have reportedly been among the most contentious. It is possible that more deals will be announced between the time I write this (Tuesday morning) and when you read it, but for now it seems like a good chunk of negotiations will be extended to August 1st.
What Else
· More than 80 people have died from flash floods in central Texas
· Israel and Hamas are attempting to negotiate a new ceasefire as Israeli Prime Minister Benjamin Netanyahu travels to the US to meet with President Trump
· Russia unleashed its largest missile barrage to date on Ukraine on July 4th
· Ozzy Osbourne performed his final concert with Black Sabbath on Saturday in his hometown of Birmingham, England
· Wimbledon continues this week; the men’s and women’s championships are scheduled for this weekend
What We’re Reading
An interstellar comet dubbed “3I/ATLAS” by astronomers will pass by Earth in the next two months. This comet is only the third confirmed celestial object from outside our solar system to pass by Earth. Experts say that the comet will be roughly 150 million miles from Earth at its closest point which will make it visible to observatories through the end of September. Click below to read about the comet and see some early grainy photos:
What’s Happening Downtown
Midtown is hosting a Summer Time Shopping Spree this Friday through Sunday. This event coincides with the statewide Weekend of Local event and features deals and discounts from dozens of stores in Midtown as well as $2,500 in giveaways of gift cards. Click below to learn more:
· https://midtownokc.com/wol/?mc_cid=cbe8b05424&mc_eid=71bf387036
To read more from our blog, click here
Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, CFP®, Brandon Ingerson, Jenni Hess
Sources: [1] Yahoo! Finance [2] NYT [3] Bloomberg