Date Issued – 18th July 2025
Key Points
- S&P 500 Hits Fresh Record: The S&P 500 closed at a record 6,297.36, boosted by strong corporate earnings and better-than-expected U.S. retail sales, reinforcing optimism about consumer resilience.
- EU Tightens Russian Oil Sanctions: The EU approved its 18th sanctions package against Russia, introducing a lower price cap on Russian crude to further limit Moscow’s oil revenues while maintaining global supply stability.
- European Stocks Rise on Earnings Optimism: European indices edged higher, supported by positive earnings, with Burberry showing signs of recovery and Saab raising its sales forecast, while German producer prices confirmed weak inflation pressures.
- Dollar Pares Gains but Holds Weekly Strength: The U.S. dollar slipped 0.4% Friday but stayed on track for a second consecutive weekly gain as solid U.S. economic data delayed Fed rate-cut expectations.
S&P 500 Hits New Closing Record on Strong Earnings
U.S. stocks climbed Thursday, with the S&P 500 rising 0.54% to a record 6,297.36 and the Nasdaq gaining 0.75% to 20,885.65, marking its tenth record close this year. The Dow advanced 0.52% to 44,484.49. Investor sentiment was buoyed by robust corporate earnings — 88% of S&P 500 companies reporting so far have beaten estimates — and upbeat economic data. PepsiCo surged over 7% and United Airlines gained 3% after strong results. Retail sales rose 0.6% in June, well above forecasts, and jobless claims fell to 221,000, reinforcing confidence in U.S. consumer resilience.
EU Lowers Price Cap for Russian Crude Under New Sanctions Package
The European Union has approved its 18th sanctions package against Russia, introducing a lower oil price cap aimed at further squeezing Moscow’s energy revenues while maintaining global supply stability. The previous $60-per-barrel limit, set in December 2022, restricted non-G7 buyers from accessing G7 transport and insurance services if they paid above that price.
EU officials, including Commission President Ursula von der Leyen, said the new “dynamic” cap strikes at Russia’s war financing, while also sanctioning Rosneft’s largest refinery in India for the first time. Details of the revised cap level remain undisclosed.
European Stocks Gain on Earnings Optimism; Burberry Signals Recovery
European markets edged higher Friday, supported by strong corporate earnings and Wall Street’s overnight rally. Germany’s DAX rose 0.5%, France’s CAC 40 gained 0.6%, and the U.K.’s FTSE 100 added 0.2%. Burberry reported a smaller-than-expected 1% decline in Q1 comparable retail sales, hinting at a turnaround, while Saab raised its full-year growth forecast after a 32% surge in Q2 sales.
Reckitt Benckiser agreed to sell its Essential Home business for $4.8 billion, and Electrolux returned to profit. Brent crude rose 0.6% to $69.92 amid Iraqi supply disruptions, reinforcing concerns over tight global oil markets.
Dollar Slips but Remains on Track for Weekly Gain Amid Strong U.S. Data
The U.S. dollar edged lower Friday, with the Dollar Index down 0.4% to 98.10, but it remains on course for a 0.7% weekly gain as solid U.S. economic data bolstered expectations the Federal Reserve could delay rate cuts. Retail sales rebounded more than expected in June, jobless claims fell to a three-month low, and inflation rose at its fastest pace in five months, partly due to tariffs.
EUR/USD rose 0.3% to 1.1623, while GBP/USD climbed 0.2% to 1.3432 but remained set for weekly losses. USD/JPY traded at 148.63, weighed by political uncertainty in Japan.
Conclusion
Global markets are navigating a complex backdrop: EU tightening oil caps to pressure Russia, while U.S. equities hit fresh records underpinned by robust earnings and consumer data. In Europe, corporate results and earnings momentum in luxury and industrials are bolstering sentiment.
The dollar trades modestly lower but is set for weekly gains amid resilient U.S. economic indicators, even as Fed Governor Waller signals a likely rate cut by month-end. Meanwhile, Japan’s export slump underscores trade vulnerabilities as tariff talks with the U.S. stall. Investors should remain alert to monetary signals and geopolitical shifts that could reshape market risk across asset classes.
Investment Insights
- U.S. Equity Momentum: Record S&P 500 and Nasdaq closes, driven by strong earnings and resilient retail sales, signal continued investor confidence, favoring growth and consumer stocks, though valuations are becoming stretched.
- EU Sanctions & Oil Cap: The EU’s lowered price cap on Russian crude reinforces supply-side constraints, supporting medium-term bullishness in energy equities and oil-linked currencies. Investors should monitor potential retaliatory measures from Moscow.
- European Corporate Recovery: Positive earnings from Burberry, Saab, and Reckitt suggest selective opportunities in European luxury, defense, and consumer sectors despite lingering trade tensions.
- Dollar Strength: Strong U.S. economic data and delayed Fed rate-cut expectations continue to underpin dollar demand, benefiting dollar-denominated assets but pressuring emerging-market currencies.
Upcoming Key Dates to Watch
| Date | Event | Why It Matters |
|---|---|---|
| Jul 22, 2025 | Fed Chair Powell speaks at banking conf. | Insights on timing and direction of interest rate cuts |
| Jul 29–30, 2025 | U.S. Federal Reserve FOMC meeting | Markets await possible rate cut and updated commentary on inflation trajectory |
| Aug 1, 2025 | U.S.–Japan reciprocal tariffs take effect | Could further pressure Japanese exports and influence global trade dynamics |
Find below some of our Buy/Sell Recommendations
Balfour Capital Group is a distinguished global boutique investment management firm with $400 million AUM and over 1000 Clients.| Direction | Date | Symbol | Asset Name | Price at Recommendation | Target Price | Current Price |
|---|---|---|---|---|---|---|
| Buy | July 10, 2025 | UNM | Unum Group | $80.10 | $105.00 | $78.97 |
| Buy | July 10, 2025 | CE | Celanese Corporation | $63.24 | $85.00 | $57.51 |
| Buy | June 23rd, 2025 | MDLZ | Mondelez International, Inc. | $68.31 | $95.00 | $66.74 |
| Buy | June 23rd, 2025 | ALKT | Alkami Technology, Inc. | $27.95 | $44.00 | $27.99 |
| Buy | June 23rd, 2025 | BMRN | BioMarin Pharmaceutical Inc. | $55.00 | $84.00 | $56.62 |
| Sell | March 7th, 2025 | KTB | Kontoor Brands, Inc. | $61.17 | $37.00 | $64.96 |
| Sell | February 25th, 2025 | RIVN | Rivian Automotive, Inc. | $12.00 | $8.00 | $12.63 |
