Inflation, Trump, US Results: Should We Fear a Crash in July?
July begins with an explosive sequence for financial markets: US inflation figures, Donald Trump’s renewed threats of tariffs against Europe, and the start of earnings season for America’s largest companies. In this context, how should you react and adjust your investment strategies? Here’s a detailed analysis.
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US Inflation: The July Surprise
On Tuesday, July 15, the highly anticipated US inflation announcement captured all investors’ attention. The figure came in at 2.7% year-on-year, slightly above expectations (2.6%) and well above last month’s 2.4%. This increase reignites the debate over Fed monetary policy. Many had hoped that this figure would send a strong signal in favor of a first rate cut as early as September. As a result, the market remains puzzled, and hopes for a rapid monetary easing are postponed.
Markets Under Pressure: Indices, Dollar, Cryptocurrencies
Stock indices, especially the S&P 500, are reacting with measured but noticeable volatility. The dollar remains firm, limiting risk-taking in emerging markets. In cryptocurrencies, caution is dominating: after an attempted rebound at the start of the week, Bitcoin is stuck below $60,000. In Europe, the CAC 40 and DAX are consolidating, slowed by monetary uncertainty and the less active summer season.
Tariffs: Trump Restarts the Trade War
Another element of tension: Donald Trump has announced plans to reinstate, as of August 1, tariffs of up to 30% on several European products. This statement, just months before the US presidential election, has rekindled concerns about a return to the US-Europe trade war, with direct consequences for many sectors: automotive, luxury, technology.
Earnings Season: Big Companies Under the Microscope
The earnings season is off to a strong start with reports from JP Morgan, Citi, Netflix, and other major names. Expectations are high, but caution prevails, as any disappointment could trigger a swift correction, especially after the recent rise in indices.
Strategies to Favor in July
In this uncertain context, here are some pointers to refine your trading or investment strategy:
- Monitor key technical levels on the S&P 500, Nasdaq, and major European indices.
- Pay close attention to Fed announcements, as well as retail sales and PPI figures, which can move the markets.
- Adopt active and adaptive management: tight stop-losses, quick profit-taking on rebounds, and capital protection in case of increased volatility.
- Diversify your exposure, especially in gold and defensive sectors, while waiting for more clarity on US inflation and growth.
In Summary
Markets remain under pressure, torn between hopes for monetary easing and fears of renewed trade tensions. For investors, now is the time for caution, analysis, and reactivity. Follow our upcoming reviews to stay updated on stock market news and discover the best trading opportunities.