07/07/2025

BIZ & FINANCE MONDAY | JULY 7, 2025

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Investors benumbed and blase as tariff deadline nears o Stocks have risen despite volatility, dollar hurt

‘Probably 12’ trade letters being sent out today: Trump WASHINGTON: US President Donald Trump said last week that he had signed 12 trade letters to be sent out this week ahead of an impending deadline for his tariffs to take effect. “I signed some letters and they’ll go out on Monday, probably 12,” Trump told reporters, adding that the countries that the letters would be sent to will be announced on the same day. His comments come days before steeper duties – which the president said would range between 10% and 70% – are set to take effect on dozens of economies, from Taiwan to the European Union. The tariffs were part of a broader announcement in April where Trump imposed a 10% duty on goods from almost all trading partners, with a plan to step up these rates for a select group within days. But he swiftly paused the hikes until July 9, allowing for trade talks to take place. Countries have been pushing to strike deals that would help them avoid these elevated duties. So far, the Trump administration has unveiled deals with the UK and Vietnam, while Washington and Beijing agreed to temporarily lower staggeringly high levies on each other’s products. As his July 9 deadline approaches, Trump has repeatedly said he plans to inform countries of US tariff rates by sending them letters. He said sending notices would be much easier than“sitting down and working 15 different things”. “You know, with the UK, we did that. And it was great for both parties. With China, we did that, and I think it’s very good for both parties.” But he said it was “much easier to send a letter saying,‘Listen, we know we have a certain deficit, or in some cases a surplus, but not too many’”. “And ... this is what you have to pay, if you want to do business (with) the United States.”– AFP

SINGAPORE: Global investors are heading into US President Donald Trump’s Wednesday deadline for trade tariffs palpably unexcited and prepared for a range of benign scenarios that they believe are already priced in. Just days before the end of a 90-day pause he announced on his April 2 “Liberation Day” tariffs, Trump said the first batch of letters outlining the tariff levels they would face on exports to the United States would be sent to 12 countries today. Investors who have been tracking this date for months expect more details to emerge in the coming days and protracted uncertainty too, anticipating Trump will not be able to complete deals with all of America’s trading partners in the coming week. And they are not overly concerned. “The market has gotten much more comfortable, more sanguine, when it comes to tariff news,” said Jeff Blazek, co-chief investment officer of multi-asset at Neuberger Berman in New York. “The markets think that there is enough ‘squishiness’ in the deadlines – absent any major surprise – to not be too unsettled by more tariff news and believe that the worst-case scenarios are off the table now.” Both the tariff levels and effective dates have become moving targets. Trump said last Friday that tariffs ranging up to 70% could go into effect on Aug 1, levels far higher than the 10%-50% range he announced in April. So far, the US administration has a limited deal with Britain and an in-principle Musk made the announcement a day after polling his followers on the X social media platform he owns, declaring: “Today the America Party is formed to give you back your freedom.” Azoria was set to launch the Tesla ETF, which would invest in the electric vehicle company’s shares and options, this week. However, following Musk’s announcement, Azoria CEO James Fishback posted on X several critical comments of the new party and repeated his support for US President Donald Trump. That culminated in a post where Fishback announced the postponement of the ETF. “I encourage the Board to meet immediately and ask Elon to clarify his political ambitions and evaluate whether they are compatible with his full-time obligations to Tesla as CEO,” Fishback said. The announcement undermines the confidence shareholders had in Tesla’s future after Musk said in May he was stepping back from his role leading the Department of Government Efficiency, Fishback said. Tesla did not immediately respond to a Reuters’ request for comment. The announcement from Musk comes after Trump signed his self-styled “big, beautiful” tax-cut and spending bill into law last Friday, which Musk fiercely opposed. Azoria is also offering the Azoria 500 Meritocracy ETF that only invests in the top 500 US companies that do not impose hiring targets under diversity, equity and inclusion programmes, according to its website. – Reuters

The S&P 500 and Nasdaq indexes closed at record highs on Friday, notching a third week of gains. Europe’s STOXX 600 benchmark is up 9% in three months. But the risks of tariff-related inflation have weighed on US Treasuries and the dollar, and jostled expectations for Federal Reserve policy. Rate futures show traders no longer expect a Fed rate cut this month and are pricing in a total of just two quarter-point reductions by year-end. The dollar has suffered a knock to its haven reputation from the dithering on tariffs. The dollar index, which reflects the US currency’s performance against a basket of six others, has had its worst first half of the year since 1973, declining some 11%. It has fallen by 6.6% since April 2 alone. “The markets are discounting a return to tariff levels of 35%, 40% or higher, and anticipating an across-the-board level of 10% or so,” said John Pantekidis, chief investment officer at TwinFocus in Boston. Pantekidis is cautiously optimistic about the outlook for US stocks this year, but the one variable he is watching closely is interest rate levels. For now he expects to see interest rates dip in the second half, “but if the bond market worries about the impact of the bill and rates go up, that’s a different scenario”. – Reuters

agreement with Vietnam. Deals that had been anticipated with India and Japan have failed to materialise, and there have been setbacks in talks with the European Union. World stocks are meanwhile at record highs, up 11% since April 2. They fell 14% in three trading sessions after that announcement but have since rallied 24%. “If Liberation Day was the earthquake, the tariff letters will be the aftershocks. They won’t quite have the same impact on markets even if they are higher than the earlier 10%,” said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments in Singapore. “This financial system is so inundated with liquidity that it is hard to cash up or delever at the risk of lagging the markets, with April serving as a painful reminder for many who derisked and were then forced to chase the relentless recovery in the subsequent weeks.” Investors have also been distracted by weeks of wrangling in Congress over Trump’s massive tax and spending package, which he signed into law last Friday. Stock markets have celebrated the passage of the bill, which makes Trump’s 2017 tax cuts permanent, while bond investors are wary the measures could add more than US$3 trillion to the nation’s US$36.2 trillion debt.

Investment firm Azoria postpones Tesla ETF after Musk plans political party WASHINGTON: Investment firm Azoria Partners said on Saturday it will postpone the listing of its Azoria Tesla Convexity exchange traded fund after Tesla CEO Elon Musk said he was forming a new US political party.

Trump and Musk at a press conference in the Oval Office of the White House in May. – REUTERSPIC