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Good morning investors! Tariffs are once again hammering the market.
Today we cover:
What to expect this week
Berkshire Hathaway reports
What’s getting costlier
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📊 Economy and News
What to Expect in Markets This Week
Here’s what to keep an eye on this week:
Monday, August 4
Earnings: Palantir, Vertex Pharmaceuticals, Williams Cos., Axon Enterprise
Data: Factory orders (June)
Tuesday, August 5
Earnings: AMD, Caterpillar, Amgen, Eaton Corp., Arista Networks, Pfizer, BP
Data: U.S. trade deficit (June), S&P final U.S. services PMI (July), ISM services PMI (July)
Wednesday, August 6
Earnings: Novo Nordisk, McDonald’s, Walt Disney, Uber, Shopify, Sony, AppLovin, DoorDash, Airbnb
Fed Speaker: San Francisco Fed President Mary Daly
Thursday, August 7
Earnings: Eli Lilly, Gilead Sciences, ConocoPhillips, Constellation Energy, Motorola Solutions, Monster Beverage
Data: Initial jobless claims (week ending Aug. 2), U.S. productivity (Q2), wholesale inventories (June), consumer credit (June)
Fed Speaker: Atlanta Fed President Raphael Bostic
Friday, August 8
Fed Speaker: St. Louis Fed President Alberto Musalem
Global hits:
India is set to face the full brunt of U.S. tariffs starting August 1, with the 25% rate effectively unchanged from the original April announcement.
The Swiss government is open to revising its offer to the United States in response to planned heavy tariffs.
President Trump dismissed Dr. Erika McEntarfer, accusing her of manipulating job data to harm his image.
OPEC makes a bold move: OPEC+ will increase oil production by 547,000 barrels per day in September, reversing 2.5 million bpd of prior cuts to regain market share. This follows hikes of 138,000 bpd in April and 411,000–548,000 bpd from May to August. Brent crude closed near $70/barrel, up from $58 in April, supported by strong demand and low stocks.
Was it fair to fire BLS chief over weak jobs numbers?
Some think the president “wants his own people there,” suggesting that the data would be “more transparent and more reliable” with a Trump appointee.
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📈 Stocks
S&P 500 6,238.01 (-1.60%)
DJIA 43,588.58 (-1.23%)
NASDAQ 20,650.13 (-2.24%)
BRENT CRUDE 69.24 (-0.62%)
* Prices as of Aug 4th, 12:20 AM UTC
Berkshire Hathaway Q2 2025 Earnings: A Mixed Performance Amid Tariff Concerns
Berkshire Hathaway released its Q2 2025 earnings, reporting a 3.8% decline in operating earnings to $11.16 billion, down from $11.6 billion in Q2 2024. This marks the first report since Buffett, 94, announced his plan to step down as CEO by year-end, with Greg Abel named as his successor.
Operating Earnings: $11.16 billion for Q2, a 3.8% drop year-over-year; $20.8 billion for the first half of 2025, down 8.8%.
Net Income: Plunged 59% to $12.37 billion, primarily due to a $3.8 billion write-down on its Kraft Heinz stake.
Cash Reserves: Decreased slightly to $344 billion from $347 billion at the May 3 annual meeting.
Insurance Underwriting: Earnings fell 11% to $2.53 billion before taxes, compared to $2.84 billion in Q2 2024.
Railroad and Energy: BNSF Railway’s pre-tax earnings rose 11.5%, and Berkshire Hathaway Energy’s net income increased 18%.
Berkshire highlighted uncertainties from tariff policies, which escalated with new rates effective August 7. These policies contributed to revenue declines in consumer brands like Fruit of the Loom (-11.7%), Garan (-10.1%), and Jazwares (-38.5%), driven by order and shipment delays. The company noted it cannot reliably predict the economic consequences of these trade policies.
Despite the earnings dip, Berkshire’s diversified portfolio showed resilience, with growth in its railroad and energy segments. The company’s $344 billion cash hoard signals Buffett’s cautious approach, with no stock repurchases in the first half of 2025. Analysts suggest Berkshire may target acquisitions in energy or insurance.
Also check: Tesla ordered by Florida jury to pay $329 million in Autopilot crash.
Reminder: Despite U.S. tariffs, car prices remain stable due to high inventories and automakers absorbing costs to maintain market share, especially Korean brands. However, Morgan Stanley warns this may be temporary as inventories thin and supply tightens, potentially leading to price hikes soon.
💵 Personal Finance
New Tariffs Set to Raise Prices on Key Imports
New tariffs, effective next week, will likely increase prices for U.S. consumers on:
Electronics: Computers from China, Mexico, Taiwan, Vietnam, Malaysia, and India face higher tariffs (up to 30% for China and 25% for India). Prices could rise 18.2% short-term, 7.7% long-term.
Clothing: Imports from China, Vietnam, Bangladesh, India, and Indonesia may see prices jump 37.5% short-term, 17.4% long-term.
Watches: Swiss watches face 39% tariffs, with prices potentially up 39.7% short-term, 18.9% long-term.
Shoes: Tariffs on China, Vietnam, and Indonesia (minimum 19%) could raise prices significantly.
Alcohol: EU wine and spirits tariffs rise from 10% to 15%.
Furniture and Toys: Vietnam and China face higher tariffs, pressuring prices.
Also, as reported on CNN, Shein’s and Temu’s prices will get hit even harder by the new de minimis rule.
Impact Timeline: Price hikes may take 8 months to fully hit consumers due to business stockpiling.
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.