This week, the government’s non-farm payroll report was released on Thursday, with economists estimating a solid increase of 110,000 jobs for June, based on forecasts from Dow Jones. In contrast, the ADP report indicated 33,000 unemployment claims in the private sector, which created some negative sentiment before the official employment data was announced.
Monday, July 1st – ISM Manufacturing PMI
The production index remained in a contraction area but showed some improvement compared to the previous month.
Notable earnings yield mixed results
Tesla (TSLA) – On Wednesday, July 2: Tesla reported 384,122 electric vehicles delivered in the second quarter of 2025.
Additionally, Tesla announced it had deployed its energy storage products, achieving 9.6 GWH, down from 10.4 GWH in the last quarter. Deliveries were at the higher end of more conservative expectations, which helped bolster stock prices.
Constellation Brands (STZ) – Following Tuesday, July 1st: Constellation Brands, known for Modelo and Corona beers, is set to release revenue figures on Tuesday.
The company is navigating challenges brought on by tariffs affecting its Mexican beer operations.
MSC Industrial Direct (MSM) – Prior to Monday, June 30th: MSC Industrial Direct reported revenue that is likely to support stock price increases for industrial suppliers.
Powell underlines a data-driven strategy
Tuesday, July 1st – ECB Forum, Sintra (2:30pm GMT)
Federal Reserve Chair Jerome Powell remarked that if President Trump’s tariffs hadn’t been so substantial, the central bank would possibly have already cut interest rates.
When questioned about potential rate cuts at the upcoming Fed meeting, Powell responded, “I can’t say that it’s off the table, but it really hinges on the data.”
Market speculation around rate cuts intensified this month, after Powell suggested it might be premature to consider cuts in July. He stated that while they could happen soon, the timing would ultimately rely on economic indicators.
Powell’s perspectives on tariffs influencing monetary policy, coupled with his emphasis on a data-centric approach regarding rate reductions, kept the door open for potential cuts without giving a definitive approval.
Bonds indicate policy adjustments
Recent labor market data reaffirmed the resilience of the US economy and dampened expectations surrounding imminent interest rate cuts from the Federal Reserve. Following the robust employment reports, US Treasury yields increased as the bond market reassessed its stance on short-term Fed easing. This week, Treasury yields rose, particularly at the short end of the curve, leading to a flattening of the yield curve, mainly due to lower expectations of rapid rate cuts.
