Earnings, Tariffs, and Tensions: The Balancing Act Begins, LFG Daily - July 15th, 2025
With inflation data looming and earnings season kicking off, markets are holding steady.
🧨 LFG Daily – July 15, 2025
Markets stay calm—but shifting currents signal a new phase ahead.
🟢 LFG Hot Takes — Crafted for Calm and Clear Action
Earnings season will test trade optimism
European and U.S. investors are riding modest gains ahead of Q2 earnings. Markets may be fine with tariff talk—but only if corporate numbers hold up. Don’t ignore the noise—it’s now about the real impact.This earnings season isn’t about Q2—it’s about Q4.
The numbers might come in decent now, but the real test is whether companies can hold margin and revenue expectations going into the holiday quarter. Forward guidance is the landmine.Banks are flashing orange—not red—on the consumer.
Credit card delinquencies are rising slowly. But banks aren't panicking—they’re padding reserves. That’s not bearish yet—but it’s no longer “all clear” either.Tech is still the earnings anchor—until it’s not.
The entire market is still leaning hard on AI and cloud. But if even one of the big names misses, the rotation into value could get violent.Cost cuts are the new “growth story.”
Watch for companies bragging about “efficiency” or “streamlining.” That’s code for: revenue is slowing, and we’re squeezing the bottom line. Not necessarily bad—but it’s not organic growth.Geopolitics are creeping into earnings calls.
CEOs are starting to reference tariffs, regulatory risk, and China uncertainty again. It’s not priced into most earnings models—and it could bite in Q3.Bottom Line - Look underneath the hood.. look at small caps, mid-caps, regional banks, utilities, and energy. Don’t focus on the Big AI names, those are biggest at risk.
CPI is the next test for Fed policy
June CPI is expected at +0.3% MoM, driven by tariffs. If inflation spikes, the Fed may hold off from easing in September. Watch headline vs. core closely for policy signals.Tech resilience masks broader uncertainty
Nvidia’s AI chip deal with China buoys sentiment, but it’s not an economy-wide fix. AI can carry market sentiment—but real-world growth needs breadth. Balance your exposure.
📉 Market & Economic Pulse
Big Banks Lead Off:
JPMorgan, Citigroup, Wells Fargo, and BlackRock all reported better-than-expected earnings, but most also warned of slowing consumer credit demand and rising loan loss reserves.
Trading revenue held up, but net interest margins are compressing with flatter yield curves.
S&P 500 Q2 Earnings Growth (Est.):
+8.1% YoY, led by tech and comm services.
Energy, healthcare, and consumer discretionary are showing mixed results, weighed by cost pressures.
AI/Tech Still Dominant:
Nvidia and AMD are expected to crush expectations again, while cloud/enterprise IT firms like Oracle and ServiceNow may show slower growth amid enterprise belt-tightening.
Apple and Microsoft facing scrutiny over hardware softness and cloud margin pressure.
Margins Under Pressure:
Companies are starting to lose pricing power. Input cost deflation isn't translating to profit gains, especially for consumer-facing names.
Guidance Will Be Key:
Companies are expected to be cautiously optimistic, especially those exposed to Europe/Asia, where demand is softening.
European shares edge higher
STOXX 600 rose ~0.3%, led by media, auto, and tech stocks—offsetting weakness in telecoms. Germany and France advanced while Spain lagged; U.S.–EU trade talks provided a tailwind.U.S. futures hint at cautious rally
Nasdaq futures rose post-Nvidia China update; investors are focused on upcoming earnings (JPM, Citi, Wells Fargo) and June CPI.Oil dips on Russia relief
Brent fell to ~$68.9 as Trump’s 50-day Russia ceasefire eased supply concerns. But OPEC remains cautiously bullish.Gold firm amid tariff jitters
Trading at ~$3,360/oz, gold climbed ~0.5%, buffered by trade tension and anticipation of U.S. CPI.Investor sentiment is hot—but shifting
BofA survey shows peak bullish positioning, but strategists expect rotations—not retreats. Euro overweight signals a cautious rebalancing.
🌐 Geopolitics & Trade
Trump signals openness to U.S.–EU talks
A renewed tone on trade negotiations buoyed European markets despite continued tariff threats.China shows growth resilience
Q2 GDP came in at 5.2% YoY—well-supported despite global trade friction. Global managers see this as a sign central banks can tread carefully.
U.S. Politics & Policy
Tariffs drive inflation narrative
Analysts expect June CPI to show 2.7% headline and 3.0% core YoY, fueled by tariff pass-through and gasoline. May data hinted at the rising pressures.Fed independence faces scrutiny
Trump’s renewed attacks on Powell, citing renovations, add to volatility—but rate markets remain cautiously optimistic.
📌 Bottom Line
Markets remain steady—but beneath the surface, risks are rerouting: earnings stress tests trade sentiment; tariffs potentially feed into inflation; and gold, bonds, and sentiment data signal caution. This week is all about whether fundamentals can support optimism—or expose cracks. Stay alert, but stay balanced.
— Luke Lloyd, Lloyd Financial Group
Sources:
https://www.reuters.com/business/wall-st-futures-wobble-fresh-tariff-threats-ahead-data-earnings-deluge-2025-07-14/
https://www.reuters.com/world/china/gold-prices-scale-three-week-peak-trump-widens-trade-war-2025-07-14/
https://apnews.com/article/ae7c307ff31e5dc388b131e480030555
https://www.reuters.com/business/bofa-sees-toppy-sentiment-leading-rotation-not-retreat-2025-07-15/
https://www.reuters.com/business/european-shares-edge-higher-us-eu-trade-talks-hopes-buoy-sentiment-2025-07-15/
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