Weekly Trends 📈
Global financial markets delivered mixed performances this week, shaped by anticipation of the upcoming July 29-30 US Federal Reserve meeting and the ongoing quarterly earnings season. US indices reached new all-time highs, with the S&P 500 crossing the 6,300 mark for the first time and the Nasdaq surpassing 21,000 points. This positive dynamic is explained by corporate results generally beating expectations, especially in the banking and technology sectors, and rising optimism around potential trade agreements. CNBC
Key Indicators 📊
US Federal Reserve Monetary Policy (The Fed)¹
Strategic Importance: Fed monetary policy directly influences global credit conditions, international capital flows, and the stability of the US dollar, thereby affecting the entire world economy.
Publication Schedule:
Last decision: June 18, 2025 – Rate: 4.25% – 4.50%
Next decision: July 29-30, 2025
Analysis: The Fed is expected to keep rates unchanged at its July 29-30 meeting despite mounting pressure from President Trump for a cut. Fed officials are adopting a cautious approach amid tariff uncertainties and persistent inflationary pressures. Fed Governor Christopher Waller may voice a dissenting vote in favor of a cut, highlighting growing divisions within the committee. Investopedia
US Inflation (CPI)²
Strategic Importance: The US Consumer Price Index (CPI) is a critical barometer for Fed policy decisions and shapes global inflation expectations.
Publication Schedule:
Last release: July 15, 2025 – Value: 2.7% (annual)
Next release: August 13, 2025
Analysis: US inflation accelerated for a second consecutive month in June 2025, reaching 2.7% year-over-year versus 2.4% in May. This uptick, in line with forecasts, reflects the early impact of tariffs on certain goods categories. Core inflation (excluding food and energy) came in at 2.9%, slightly below the 3.0% expectation, indicating moderate but persistent upward pressure above the Fed’s 2% target. Trading Economics
China Economic Growth³
Strategic Importance: As the world’s second-largest economy, China’s growth drives global demand for raw materials, influences worldwide supply chains, and significantly impacts international trade.
Publication Schedule:
Last release: July 15, 2025 – Value: 5.2% (Q2 2025, annualized)
Next release: October 2025 (Q3 2025)
Analysis: China’s economy remained resilient in Q2 2025, delivering 5.2% year-over-year growth, just above the 5.1% forecast. Although slightly slower than Q1’s 5.4%, this pace keeps China on track for its roughly 5% annual target. Growth was supported by industrial production and exports, despite persistent weakness in domestic demand and the real estate sector. Al Jazeera
EIA Inventories⁴
Strategic Importance: The US Energy Information Administration’s (EIA) weekly crude oil inventories data is a key indicator of supply-demand balance in the global oil market and directly influences energy prices.
Publication Schedule:
Last release: July 23, 2025 – Change: -3.169 million barrels
Next release: July 30, 2025
Analysis: US crude oil stocks fell by 3.169 million barrels for the week ending July 18, far exceeding expectations of a 1.6 million barrel drop. This third consecutive week of substantial draws brings total stocks to 419.0 million barrels, 9% below the five-year average. The trend reflects strong refining demand and reduced imports, tightening supply and likely supporting oil prices. Trading Economics
Brent Oil Price⁵
Strategic Importance: Brent, the benchmark for global oil prices, directly impacts global inflation, transportation costs, and geopolitical stability, serving as an essential barometer of the world economy.
Publication Schedule:
Last weekly close: July 25, 2025 – Value: $68.36 per barrel
Next publication: Continuous data
Analysis: Brent finished the week lower at $68.36 per barrel, down 1.19% on Friday for a roughly 1% weekly decline. This weakness stems from concerns about economic slowdowns in both the US and China, the world’s main energy-consuming economies. Despite lower US inventories, muted growth prospects weighed on oil demand expectations. Trading Economics
News 📰
1. US Banks Deliver Better-than-Expected Results
Major US banks posted second-quarter 2025 results that exceeded forecasts, with JPMorgan Chase reporting earnings per share of $5.24 versus $4.48 expected, and Goldman Sachs reporting $10.91 versus a $9.65 estimate. This exceptional performance is due to strong trading revenue and controlled financing costs. Wells Fargo also beat expectations with $1.60 per share versus the $1.41 consensus. FactSet
Analysis 📖 — These outstanding results from the US banking sector highlight the resilience of the American economy and the ability of financial institutions to navigate a high-rate environment. Widespread outperformance boosts investor confidence in the robustness of the US financial system and supports bullish market dynamics. FactSet
In brief 💡 — US banks demonstrate their strength with standout quarterly results that far exceed analysts’ expectations.
2. Alphabet (Google) Beats Expectations with AI-Fueled Growth
Alphabet reported better-than-expected Q2 results, with earnings per share of $2.31 versus $2.18 expected, and $96.43 billion in revenue versus $94.04 billion projected. The company announced a $10 billion increase in investments in artificial intelligence, sending tech stocks higher. Nasdaq
Analysis 📖 — Alphabet’s stellar performance illustrates artificial intelligence’s emergence as a key growth driver for tech giants. Google’s significant increase in AI investments demonstrates its commitment to and confidence in the long-term profitability of this transformative technology. FactSet
In brief 💡 — Google cements its leadership with strong results and massive investment in artificial intelligence.
3. Merger & Acquisition Activity Surges
Global M&A activity saw remarkable growth in Q2 2025, with total deal value reaching $1.1 trillion, up 15% from the previous quarter. Major July transactions included Merck’s $10 billion acquisition of Verona Pharma and CoreWeave’s $9 billion purchase of Core Scientific. Intellizence
Analysis 📖 — This consolidation wave reflects corporate confidence in growth prospects and capacity to fund strategic acquisitions. Increased M&A activity signals accessible credit markets and attractive valuations, especially in tech and pharmaceuticals. IMAA Institute
In brief 💡 — M&A markets revived with record deal flows in Q2 2025.
4. European Markets Outperform on Trade Deal Hopes
European stock exchanges advanced this week, buoyed by rising hopes of a US-EU trade deal. President Trump is set to meet European Commission president Ursula von der Leyen Sunday in Scotland. The STOXX 600 index gained 1.3% with Germany’s DAX up 1.8%. CNBC
Analysis 📖 — Growing optimism about transatlantic trade underscores the critical importance of US-EU relations for economic stability. A potential agreement could avert 30% tariffs scheduled for August 1, supporting already fragile European growth and boosting international investor appetite for European assets. Reuters
In brief 💡 — European markets rally on hopes of a last-minute US-EU trade deal before the August 1 tariff deadline.
5. Pharma M&A Activity Jumps Sharply
The pharmaceutical sector saw a notable consolidation wave with major transactions including Merck’s $10 billion acquisition of Verona Pharma, targeting COPD treatments, and AbbVie’s $2.1 billion buyout of Capstan Therapeutics. These moves reflect a strategy to diversify in anticipation of patent expirations. IMAA Institute
Analysis 📖 — Pharma sector consolidation addresses the need to replenish development pipelines and offset revenue losses from upcoming patent cliffs. Acquisitions target innovative therapies and high-growth niche treatments, illustrating the search for new, sustainable revenue streams. Intellizence
In brief 💡 — Pharmaceuticals are transforming with targeted acquisitions focused on therapeutic innovation.
6. ECB Holds Rates Amid Trade Uncertainty
The European Central Bank held its three key rates steady on July 24, keeping the deposit rate at 2.00%, main refinancing rate at 2.15%, and marginal lending facility at 2.40%. The ECB noted inflation had hit its 2% medium-term target while highlighting an exceptionally uncertain backdrop linked to trade disputes. ECB
Analysis 📖 — The ECB’s hold reflects a delicate balance between the need to support fragile European growth and maintaining price stability. The institution adopts a cautious stance amid geopolitical and trade uncertainties, favoring flexibility to adapt to future developments. ECB
In brief 💡 — ECB prioritizes monetary stability amid rising global trade uncertainties.
7. Eurozone Banks Tighten Lending Conditions
According to the ECB’s July 2025 Bank Lending Survey, eurozone banks slightly tightened credit standards for household mortgages and more significantly for consumer credit. Conditions for corporates remained broadly unchanged. Mortgage lending demand continued to surge while corporate loan demand stayed weak. ECB
Analysis 📖 — This selective tightening signals greater caution from European banks regarding economic risks. The contrast between strong mortgage demand and weak corporate investment reflects pronounced sectoral disparities in Europe’s recovery. ECB
In brief 💡 — Eurozone banks are more selective in lending, especially to households.
8. Deutsche Bank Doubles H1 Profits
Deutsche Bank reported €5.3 billion in pretax profit for H1 2025—more than double the figure for the same period in 2024. This outstanding result is mainly due to the absence of a one-off €1.3 billion provision related to the 2024 Postbank litigation. Return on tangible equity after taxes was 11.0%, matching the target of above 10% for 2025. Deutsche Bank
Analysis 📖 — Deutsche Bank’s strong results highlight the successful transformation of the German lender’s business model and its ability to generate sustainable profits. This sharp turnaround strengthens Deutsche Bank’s position as a major European banking player and demonstrates the effectiveness of its “Global Hausbank” strategy. Deutsche Bank
In brief 💡 — Deutsche Bank confirms its transformation with sharply higher profits and on-track 2025 objectives.
Strategic Outlook 📌
The July 29-30 Fed meeting will be a pivotal moment for markets, especially given expectations for a rate hold and possible committee dissent in the face of mounting political pressure. Investors will scrutinize Jerome Powell’s comments for clues of a potential September rate cut. Investopedia
The August 1 tariff deadline remains a major uncertainty catalyst. Ongoing negotiations with the EU and recent agreements with Japan may significantly shape global growth prospects and market stability. Wall Street Journal
The quarterly earnings season continues with highly anticipated results from Microsoft, Apple, Amazon, and Meta next week—which will determine whether tech giants can justify high valuations amid a potential economic slowdown. Charles Schwab
Good News 😊
Investors can celebrate the exceptional performance of European markets, which have outperformed US peers in 2025—MSCI Europe is up 24.0% year-to-date, compared to 6.2% for the S&P 500. This silent revolution is powered by a weaker US dollar, strengthening economic fundamentals, and ambitious investment plans, notably in Germany with substantial fiscal and defense spending increases. The EU also boasts a healthier budget situation, with a public debt-to-GDP ratio of 81% versus 100% for the US, offering more sustainable long-term growth prospects. Edelman Financial Engines
Thanks 🤝
Thank you for reading and have an excellent week.
Glossary 📚
- US Federal Reserve Monetary Policy (The Fed)¹: The primary tool of US monetary policy, defining the overnight federal funds rate at which banks lend to each other.
- US Inflation (CPI)²: The Consumer Price Index (CPI) measures the average change in prices paid by urban consumers for a basket of goods and services, published by the Bureau of Labor Statistics (BLS).
- China Economic Growth³: A measure of Chinese economic health, usually via Gross Domestic Product (GDP), industrial production, or retail sales, published by the National Bureau of Statistics of China.
- Oil Price (EIA Inventories)⁴: The US Energy Information Administration (EIA) publishes weekly US crude oil inventory data, a key indicator of near-term demand and market balance.
- Brent Oil Price⁵: Brent is a type of light crude oil extracted from the North Sea. Its price is a global benchmark for most international oil transactions.
Strat Finance Advisory 