Stocks are waffling after the long holiday weekend. Gold and silver are lower, crude oil and Treasuries are flattish, while the dollar is higher.
It’s crunch time for trade and tariff policy. The original July 9 deadline that President Trump had set for countries to reach trade deals with the US is only two days away. Ahead of that, the administration said it will fire off letters to multiple countries outlining what tariffs they face if they don’t agree to broader deals.
SPY, BKF, USO (YTD % Change)
Data by YCharts
While implementation of those new tariffs might be postponed until Aug. 1, investors are worried about potential economic fallout in the weeks ahead. That concern increased after Trump separately threatened countries who allied themselves with the “BRICS” nations on Sunday.
He said he would hit them with an extra 10% tariff if they aligned themselves with the “Anti-American policies of BRICS.” The acronym stands for Brazil, Russia, India, China, and South Africa. The iShares MSCI BIC ETF (BKF), which tracks stocks in some of those markets, is up 13.5% year-to-date, roughly double the 6.7% return of the SPDR S&P 500 ETF Trust (SPY).
In other news, the OPEC+ nations announced Saturday that they would boost production by 548,000 barrels per day in August. They had already raised production by 411,000 BPD in May, June, and July, and said another 548,000 BPD hike could be announced for September after further consultations.
Those moves would completely reverse the supply cuts OPEC originally announced in 2023. Crude oil prices were steady in the wake of the news. But US WTI futures are still down about 6.6% year-to-date, recently trading for $67 a barrel.
Lastly, is it time to sell the S&P 500? Bank of America Corp.’s strategist Michael Hartnett said the answer is “Yes” – if we hit 6,300. The index closed at 6,279.35 before the Fourth of July holiday. Hartnett added that bubble risks were rising, though he acknowledged that “overbought markets can stay overbought.”
