Good morning investors! Apple and Amazon failed to do what Microsoft and Meta did.
Today we cover:
New tariffs!
Inflation and jobs
Major earnings
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Breaking: President Donald Trump signed an executive order on Thursday, setting “reciprocal” tariffs of 10% to 41% on dozens of countries. All transshipped goods to evade duties will face an additional 40% tariff. Unlisted countries will see a 10% duty. The new rates take effect 7 days after the order, with some exceptions.
📊 Economy and News
U.S. Inflation Rises in June, Delaying Fed Rate Cuts
U.S. inflation rose 0.3% in June, driven by tariff-induced price increases on goods like furniture (1.3%) and recreational products (0.9%).
The PCE price index increased 2.6% year-over-year, up from 2.4% in May.
Core PCE, excluding food and energy, rose 0.3% monthly and 2.8% annually.
The Federal Reserve, maintaining its 4.25%-4.50% rate, may delay rate cuts until October due to persistent inflation.
Consumer spending grew 0.3% in June, supporting a 3.0% Q2 GDP growth, though a cooling labor market and tariffs may slow future spending. The saving rate held at 4.5%.
Global hits:
About 154,000 federal workers took Trump administration’s buyout offers.
German inflation falls further to 1.8% in July.
Canada’s GDP shrinks in May, could avoid contraction in second quarter.
Look here: The Securities and Exchange Commission debuted “Project Crypto,” an initiative to modernize securities regulations to allow for crypto-based trading..
U.S. Unemployment Claims Rise Slightly, Labor Market Stable but Slowing
U.S. unemployment claims increased by 1,000 to 218,000 for the week ending July 26, slightly below the forecasted 224,000, indicating a stable but slowing labor market. It’s taking longer for laid-off workers to find jobs, partly due to uncertainty over tariffs and a decline in labor supply from immigration policies.
Labor costs rose 0.9% in Q2, above the expected 0.8%, with a 3.6% annual increase. The Employment Cost Index suggests labor market slack and potential inflation. Job openings fell to 1.06 per unemployed person in June, down from 1.33 in January.
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📈 Stocks
S&P 500 6,339.39 (-0.37%)
DJIA 44,130.98 (-0.74%)
NASDAQ 21,122.45 (-0.034%)
BRENT CRUDE 72.53 (-0.97%)
* Prices as of Aug 1st, 12:20 AM UTC
Apple, Amazon, and More Earnings
Apple reported third-quarter earnings that topped Wall Street expectations for profit and revenue. Sales of the iPhone grew 13% year-over-year and overall revenue grew 10% — Apple’s largest quarterly revenue growth since December 2021. Apple CEO Tim Cook said that Apple would “significantly grow” its AI investments, adding that the company is “open to M&A that accelerates our roadmap.” The company also saw success in China during the quarter, with sales rising 4% on an annual basis to $15.37 billion. Cook said a Chinese subsidy for some devices helped Apple in the region. The company, however, expects a $1.1 billion tariff hit this quarter.
Amazon reported second-quarter results after the bell that exceeded expectations. The company offered profit guidance for the current quarter that was lighter than Wall Street’s forecast. The guidance spooked investors who are eager to see Amazon’s hefty investments in artificial intelligence pay off, sending stock down -7% after the bell.
Reddit reported second-quarter earnings that beat on sales and guidance. The company’s sales grew 78% year-over-year in the second quarter and was 17% above consensus estimates, representing the biggest beat in the company’s short history as a public company. The company said third-quarter revenue will be in the range of $535 million to $545 million, ahead of Wall Street estimates of $473 million. This helped the stock jump 20%.
Ferrari shares fell more than 12%, setting the stock for its biggest one-day drop since its listing nine years ago, even as the luxury sports car maker maintained its guidance, although it said it would cut back prices in the U.S. Citi analysts said that although Ferrari continued to deliver solid results, the focus had now shifted to whether the Milan- and New York-listed group can sustain its high profitability amid slowing growth in sales volumes and pricing.
Coinbase shares fell -7% as second-quarter revenue came in shy of analysts’ estimates. Gains in the cryptocurrency exchange’s subscription revenue failed to offset weaker trading volumes. In the quarter ended June 30, Coinbase earned $1.43 billion, or $5.14 per share. Revenue rose slightly to $1.5 billion from $1.45 billion in the same quarter last year, but fell short of analyst estimates. Also, the company is launching tokenized stocks, predictions markets for U.S. users in coming months.
Cigna dropped 8% as concerns about a slightly elevated medical cost ratio overshadowed a strong Q2 performance, even with Wells Fargo maintaining its $341 price target.
CVS Health reported second-quarter earnings and revenue that topped estimates and raised its adjusted profit outlook. It also lifted full-year EPS outlook but kept a cautious eye on medical cost trends.
Good to know: Figma more than triples in NYSE debut after selling shares at $33. Also, Carvana had a great day jumping 18% to a record high as multiple brokers raised price targets following a better-than-expected quarter and upbeat guidance.
💵 Personal Finance
New Tax Rules for Charitable Donations in 2026
Starting in 2026, the One Big Beautiful Bill Act will change tax breaks for charitable giving.
Non-itemizers can deduct up to $2,000 (married joint filers) or $1,000 (singles) for cash donations to qualified charities, excluding property or stock gifts. Itemizers face new limits: a 0.5% adjusted gross income (AGI) deduction disallowance and a 35% cap (down from 37%) for top-bracket taxpayers.
Donors should plan now—accelerate 2025 gifts to avoid future limits, use qualified charitable distributions (QCDs) from IRAs if over 70½, or consider donor-advised funds (DAFs). The changes aim to boost giving but add complexity, so consulting a tax advisor is key.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.