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“A great wind is blowing, and that gives you either imagination or a headache.” – Catherine the Great
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Looking at the quote above from Catherine the Great, isn’t that just the way you feel when it comes to AI? While the possibilities are endless, the pace of change and trying to keep on top of everything going on can be exhausting!
The S&P 500 has declined for two straight sessions, but futures are looking modestly higher this morning on little in the way of news. Investors will continue to monitor Washington for any tariff-related headlines, but the letters and policies released and announced this week have, broadly speaking, had little impact. It’s another quiet day for data as there are no economic reports on the calendar, but minutes from the last FOMC meeting will be released at 2 PM.
Speaking of the FOMC, the Wall Street Journal is reporting this morning that the President is currently leaning towards Kevin Hassett over Kevin Warsh to replace Fed Chair Powell. Warsh is reportedly falling out of favor for some of his past criticism of the Fed’s zero-interest rate policy and asset purchase programs.
In international markets, Asian stocks were mostly lower overnight following Trump’s comments that he wouldn’t extend his August 1st tariff deadline. The only major index to buck the negative trend was Japan, where the Nikkei rallied 0.33%. In Europe, the tone is much more positive with the STOXX 600 up over 0.7% as defense stocks lead the charge.
As mentioned above, the President’s various tariff policies announced this week haven’t had much impact on a macro basis, but for certain areas like copper, the impacts have been significant. After the year has already seen incredible rallies in the price of gold, platinum, and silver, yesterday, President Trump gave copper the boost it needed when he announced 50% tariffs on all copper imports. The news came just as copper was starting to pull back last week after testing its highs from earlier in the year. That resistance proved no match for the 50% tariff bazooka, and prices broke out to a record high, eclipsing $5.40 per pound, finishing up more than 13% on the day. Strength in copper is often considered a sign of economic strength, but we’re not sure a rally artificially propelled by trade policy would qualify.
Yesterday’s 13.1% rally in copper was a record one-day gain for the commodity, eclipsing the prior record of 12.3% from October 2008. Since 1990, it was also only the third time the commodity rallied more than 10% in a single day.
