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Trump will start sending out tariff letters to nations as Wednesday deal deadline nears. (0:17) Conagra to report earnings – bull v. bear. (1:54) Elon Musk announces American First party. (2:14)
The following is an abridged transcript:
Wall Street's focus this week will be on trade developments, as a 90-day pause on reciprocal tariffs against U.S. trading partners is set to expire on Wednesday.
President Donald Trump has said he will not extend the pause and will start sending letters to countries specifying the tariff rates they will have to pay.
UBS economists say: “The average current tariff rate of 13% is unlikely to change by year-end. Protectionism is still the name of the game for the US, although tariff rates will not increase back to reciprocal levels as of April.”
“The 10% baseline tariff is here to stay,” they say. “And we still expect sector-specific tariffs to rise in the third and fourth quarters as Section 232 and 301 investigations conclude, though these tariff rates will vary by trading partner, with either a reduced (most favored nation) rate or quotas in place.”
The targeted sectors are like to be: copper, lumber, cranes, critical minerals, pharma, semiconductors, shipbuilding, trucks and aircraft.
UBS adds that tariffs on cars and car parts, aluminum and steel are already in place.
“That means that the average US tariff rate will remain around its current level, e.g. between 12-15%, with the EU still facing some 10-15% and China around 50% tariff rates,” they say.
On the earnings calendar, Delta Air Lines (DAL), Conagra Brands (CAG) and Levi Strauss (LEVI) are the highlights. All report on Thursday.
For Delta, analysts expect the company to report EPS of $2.05 on revenue of $16.18 billion. The airline industry has lately been under pressure from geopolitical uncertainties, and customers' increasing concerns over risks of a recession. But analysts point out that Delta's premium services such as the SkyMiles loyalty program should help the airline continue its growth trajectory.
For Conagra, in the bull camp SA Analyst Brewvestor Insights gives the stock a Buy for its stability, consistent dividends, and potential 8-10% annual returns. But for the bears, TPQ Research says the company’s cost control efforts have failed to offset rising expenses, squeezing margins and reducing available free cash flow.
In the news this weekend, Elon Musk says the "America Party" had been "formed" a day after setting up a public poll on X asking whether there should be a new political party in the U.S.
Musk, who just months ago had been one of Trump's closest advisers, set up the poll on Friday. By the time Musk made his announcement, it had received nearly 1.25M votes with 65.4% in the affirmative.
"By a factor of 2 to 1, you want a new political party and you shall have it! When it comes to bankrupting our country with waste & graft, we live in a one-party system, not a democracy. Today, the America Party is formed to give you back your freedom,” he said.
Musk last year spent millions in supporting Trump's reelection bid and led the president's department aimed at cutting federal spending. But after a very public falling out with Trump in early June, Musk has since continued to criticize Trump’s signature spending bill.
Earlier this week, Trump accused Musk of profiting excessively from federal electric vehicle subsidies.
And Chinese mining companies are accelerating their international acquisitions, marking the busiest year for overseas deals in over a decade as they move to secure vital raw materials essential to global supply chains.
The Financial Times cited S&P and Mergermarket data, showing there were 10 Chinese mining deals valued at more than $100 million in 2023, the highest number since 2013. Separate research from the Griffith Asia Institute found that last year was the most active period for Chinese mining-related investments and construction projects abroad in more than a decade.
As the biggest global consumer of many key resources, China’s appetite for minerals has driven its companies to invest overseas for years. But analysts say this recent wave of dealmaking reflects an urgent push to lock in resources before geopolitical tensions further restrict access, particularly in nations like Canada and the United States, where Chinese investment faces mounting resistance.
For income investors, it’s a big week.
Micron (MU), GE Aerospace (GE), McCormick (MKC) and Quest Diagnostics (DGX) go ex-dividend on Monday.
Micron pays out on July 22, GE Aerospace pays out July 25, McCormick pays out on July 21 and Quest Diagnostics (DGX) pays out on July 21.
Dollar General (DG) goes ex-dividend on Tuesday with a July 22 payout date.
Mastercard (MA), and New York Times (NYT) go ex-dividend on. Wednesday, with Mastercard paying out on August 8 and the Gray Lady paying out on July 24.
On Thursday, Oracle (ORCL), Intuit (INTU) and heavyweight income stock AT&T (T) go ex-dividend. Oracle pays out July 24, Intuit on July 18 and AT&T on August 1.
Marvel (MRVL) goes ex-dividend Friday, paying out on July 31.
And in the Wall Street Research Corner
Deutsche Bank has its top technology sector stock picks for Q3.
Among the names are:
Amazon (AMZN). Analysts cite earnings growth driven by a “steady double-digit top-line growth backdrop supported by consistent Retail/e-commerce share gains and accelerating AI workload growth at AWS, coupled with stacking e-commerce profitability tailwinds in FY25."
Confluent (CFLT), which analysts say “remains the leader in data streaming ... After a disappointing cut to full-year guidance in April, largely attributed to macro, the near-term setup appears relatively derisked.
Meta Platforms (META), whose “best-in-class digital ad platform and AI tailwinds continue to support strong revenue growth with the WhatsApp platform now being monetized with ads potentially creating another $1bn+ business.”
And New York Times (NYT), which analyst say is “benefitting from several near-term fundamental tailwinds, including...tangible progress capturing the AI opportunity, including signing its first major AI licensing agreements with Amazon this quarter.”
