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July 4, 2025
  
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Today


Markets are looking quiet this morning as U.S. markets are closed for the July 4 holiday, with no trading on the NYSE, Nasdaq, or bond markets. This follows yesterday’s record close for both the S&P 500 and Nasdaq. The TSX also hit a record high, and Canadian markets remain open today, with futures trading lower to start the day. Meanwhile, Canadians, particularly Albertans, are in a festive mood as the Calgary Stampede kicks off, running from July 5 to 14. The ten-day celebration brings a burst of cowboy charm to the province, complete with rodeos, pancake breakfasts, rides, and our personal favorite, live music. Giddy up!

While most in the U.S. are taking the day off, there seems to be one exception. Trump announced that his administration will begin notifying trading partners as soon as today of new U.S. tariffs, ranging from 10% to as high as 70%, with the levies set to take effect August 1. He emphasized a preference for unilateral action over lengthy negotiations, stating that letters outlining tariff rates will be sent to about a dozen countries, with more to follow. While some nations like the UK and Vietnam have reached preliminary deals, others (including South Korea, the EU, and Japan) are scrambling to finalize agreements ahead of the July 9 deadline. The planned tariff hike marks a significant escalation, potentially pushing average U.S. import duties from pre-Trump levels 

Trump got his OBBB (One Big Beautiful Bill) wish with the House passing a sweeping $3.4 trillion tax cuts and spending package, marking a significant shift in U.S. economic policy. The bill slashes taxes by $4.5 trillion, imposes deep cuts to safety-net programs like Medicaid and food stamps, rolls back Biden-era clean energy initiatives, and boosts military and immigration enforcement funding. Despite internal GOP resistance, Trump managed to sway most of the dissenters, with only two Republicans voting against it. Democrats strongly opposed the bill, arguing it prioritizes tax cuts for the wealthy at the expense of vulnerable populations and risks stripping millions of healthcare. The legislation is expected to increase the federal deficit but eliminates the risk of a near-term debt default by raising the debt ceiling. 

A stronger-than-expected U.S. jobs report for June pushed Treasury yields higher and erased market bets on a July Fed rate cut. Most jobs came from government hiring, while stricter immigration policies may be weighing on labor supply. These mixed data give the Fed room to delay interest rate cuts until at least September, despite political pressure from the Trump administration. Markets now expect two cuts by year-end, with upcoming inflation data likely to shape the Fed’s next move. Two-year yields jumped 10 bps and 10-year rates climbed to 4.35%, while the dollar briefly strengthened. The report showed a 147,000 increase in payrolls and a drop in unemployment to 4.1%, but weak private-sector hiring (just 74,000 jobs) pointed to a slowing labour market. While some Fed officials remain open to cuts, the market is taking a more cautious view, awaiting inflation data and the broader economic impact of Trump’s tariff policies. 

Canada’s share of exports to the U.S. fell to 68.3% in May, its lowest level since 1997 outside the pandemic, amid ongoing U.S. tariffs under Trump, contributing to a fourth straight monthly decline in U.S.-bound shipments. While trade with the U.S. slowed, exports to other countries rose to record highs, led by gold to the UK, crude oil to Singapore, and aluminum and pharmaceuticals to Italy, helping narrow Canada’s trade deficit to $5.9 billion from April’s $7.6 billion. Despite this diversification, economists warn the overall export outlook remains weak due to softening global demand and declining integrated trade sectors like autos and energy. 

The U.S. tech IPO market showed signs of revival in June, with five offerings (more than double the monthly average this year) providing long-awaited liquidity for venture capital firms. Highlighted by Circle’s blockbuster debut, which rallied sixfold to a $42 billion valuation, the activity marks a tentative reopening of the public markets after years of stagnation driven by high interest rates and regulatory pressure. While firms like Meta facilitated major secondary exits, such as its $14 billion stake in Scale AI, many top private companies remain on the sidelines, and recent IPOs beyond Circle have had mixed results. Venture capitalists are cautiously optimistic, preparing more companies for public offerings, but remain mindful of ongoing risks like geopolitical tensions, tariffs, and uncertain Fed policy. 

Classic Joker.  Djokovic notched his 99th Wimbledon win and made his 19th trip to the third round, edging past Federer for the most by any man in the Open Era. After cruising past Dan Evans in straight sets, the 38-year-old couldn’t resist poking fun at his age, saying that “the number of my appearances here is older than the top two players in the world right now,” a cheeky nod to young top seeds Carlos Alcaraz and Jannik Sinner.  Alcaraz, who has bested Djokovic in the last two Wimbledon finals, is looking sharp and could be on track for a third straight showdown with the seasoned legend. For tennis fans, that would be another generational dream matchup. As for the Canadians, it’s been a rough go with Félix Auger-Aliassime, Leylah Fernandez, and 18-year-old Victoria Mboko all bowing out early. 


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Company news


Canada’s largest grocers, including Loblaw, Empire, Metro, Walmart, and Costco, are accelerating store openings and renovations after years of slow growth, aiming to meet changing consumer demand for discount and fresh-food formats. However, analysts warn that this simultaneous expansion could strain earnings, particularly in the context of flat population growth and rising lease and construction costs. While grocers are responding to market shifts and intensifying competition from discount giants like Walmart and Costco, experts caution that development costs and limited consumer growth may pose significant challenges, forcing grocers to seek creative solutions like repurposing vacant retail spaces.

Cargojet Inc. announced the extension of its Air Transportation Services Agreement with Amazon Canada Fulfillment Services, ULC . The new Contract has a term of additional four years until March 31, 2029 and Amazon will also have the option to renew the Contract until March 31, 2031. Cargojet has been shipping Amazon packages for a number of years. In 2021, Cargojet entered into a new agreement with Amazon that expanded on its existing commercial relationship. 


Commodities


Oil prices are lower for a second day in the lead up to an OPEC+ meeting that’s expected to deliver another substantial production hike, while President Trump’s latest tariff threat put a damper on wider risk appetite. The OPEC+ meeting on Saturday is expected to bring about a 411,000 bpd increase for August as their base-case scenario as they seek to recoup lost market share. The Organization of the Petroleum Exporting Countries has disrupted markets in recent months by speeding up the return of halted output, despite faltering demand and an impending surplus. Further OPEC+ increases threaten to create a glut. Global oil inventories have been building at a brisk clip of around 1 million barrels a day in recent months as demand cools in China and supplies continue to swell across the Americas.

What’s Dr. Copper saying? Copper prices declined for a second straight day, falling as much as 1% to $9,860 a ton on the London Metal Exchange, as Trump announced plans to impose new tariffs on U.S. trading partners starting August 1. The renewed trade tensions have reignited market fears of a global economic slowdown that could weaken demand for industrial metals. Investors are awaiting the outcome of trade negotiations after a previous 90-day tariff pause, while metals like aluminum and zinc also slipped. The volatility follows a recent copper rally and a sharp squeeze in LME stockpiles, with prices having briefly topped $10,000 earlier this week. 


Fixed income and economics


Bankruptcies among private U.S. companies rose to their highest level since 2010, with 2025 expected to bring even more financial strain as high interest rates and rising costs erode profits and solvency. Over 20% of mid-sized firms analyzed had interest coverage ratios below 1, signaling they can’t meet debt obligations. Private credit lenders face mounting pressure, with concerns that rapid capital inflows have led to poor underwriting standards and looming losses. While major players warn of cracks in the market, some firms are preparing to capitalize on the distress by offering rescue financing, often in exchange for equity.

Japanese bond yields were pulled higher yesterday despite a good 30-year government bond auction on concerns about fiscal spending with yields being dragged higher by a rise in government borrowing costs globally. The 30-year government drew bond auction drew a bid-to-cover ratio of 3.58, which was the strongest since February and well above 2.92 at the sale in June, and is showing policymakers that they are having some success in bringing down debt-market volatility. Thursday’s auction in Japan was the first of that tenor since the Ministry of Finance announced a plan to cut sale amounts for longer bonds. 


Chart of the day

 


Markets


Quote of the day

 

To observe attentively is to remember distinctly

 Edgar Allan Poe

Contributors: A. Innis, A. Nguyen, P. Kwon

Charts are sourced to Bloomberg unless otherwise noted.

The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson Wealth Limited or its affiliates. Assumptions, opinions and estimates constitute the author’s judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. Richardson Wealth Limited, Member Canadian Investor Protection Fund. Richardson Wealth is a trademark of James Richardson & Sons, Limited used under license.

 

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