Daily Brief | July 29 2025

Top News

·     The International Monetary Fund expects stronger growth in 2025 but warns that tariff-related risks remain elevated.

·     U.S. and Chinese officials began a second day of talks in Stockholm on Tuesday, aiming to resolve economic disputes and de-escalate the ongoing trade war.

·     Later today, the Conference Board Consumer Confidence Index will be released. Market consensus expects it to reach 95 points in July, up from 93 in June.

·     The U.S. trade deficit in goods narrowed sharply in June (-10.8% y/y), driven by a decline in imports and a modest increase in exports.

Economic Outlook

The International Monetary Fund expects stronger growth in 2025 but warns that tariff-related risks persist. In its latest update, the IMF outlined a macroeconomic outlook that is less pessimistic than in April, projecting global growth of 3.0% in 2025 (previously 2.8%) and 3.1% in 2026 (previously 3.0%). The revised forecasts reflect front-loaded imports ahead of new tariff measures, a lower effective tariff rate in the U.S. than previously expected, improved financial conditions due to a weaker dollar, and fiscal expansion in some countries. As a result, growth forecasts for several economies were slightly revised upward: the U.S. from 1.8% to 1.9%, the Eurozone from 0.8% to 1.0%, Japan from 0.6% to 0.7%, the U.K. from 1.1% to 1.2%, Canada from 1.4% to 1.6%, China from 4.0% to 4.8%, and Mexico from -0.3% to 0.2%. As for global inflation, the IMF expects it to reach 4.2% in 2025 and 3.6% in 2026, following a trajectory similar to the one projected in April. In our view, the global economy has remained resilient across several regions despite tariff threats and bilateral agreements imposed by the United States requiring minimum tariff levels of 15%. However, the uncertainty surrounding future tariff decisions continues to cast a negative bias over the outlook.

Markets and Stocks

U.S. equity indexes opened slightly higher this Tuesday, following a previous session of marginal movements in which the S&P 500 and the Nasdaq reached new all-time highs. Market optimism has been driven by generally positive corporate earnings reports and reduced concerns over trade conflicts. On the latter, President Trump announced an agreement with the European Union that imposes 15% tariffs on most imported goods from Europe. Additionally, investors are awaiting progress in U.S.-China negotiations, which continue this week in Stockholm ahead of Friday’s deadline for new tariffs.

This week brings key market-moving events: in addition to the Federal Reserve’s monetary policy decision on Wednesday (where the benchmark rate is expected to remain unchanged at 4.25%–4.5%), more than 150 S&P 500 companies are scheduled to report earnings. Highlights include Meta and Microsoft (Wednesday), as well as Amazon and Apple (Thursday). Today, companies such as UPS, Procter & Gamble, Merck, and Boeing will release their quarterly results. On the economic front, today brings the U.S. job openings report (JOLTS), followed by Q2 GDP on Wednesday and July’s nonfarm payrolls on Friday.

In the bond market, U.S. Treasury yields are retreating ahead of the Fed’s decision tomorrow. The 2-year yield stands at 3.90%, while the 10-year yield trades at 4.39%.

In commodities, oil prices continue to rise amid optimism over the U.S.-EU trade deal and the potential extension of the tariff truce with China. Gold is posting a modest rebound but remains near a three-week low as risk appetite increases.

Livepol reported mixed results, with pressure on profitability. Consolidated revenues rose 8.0% y/y. However, the quarter was marked by higher cost of goods sold (+10.6%), increased operating expenses (+12.4%), and a sharp rise in provisions for bad debt (+56.3%), leading to a 7.1% drop in EBITDA and a 47.0% decline in net income. As such, the report was negative.

Chedraui delivered positive figures in 2Q25. Consolidated sales increased 9.5%, driven by strong performance in both Mexico and the U.S. The quarter was marked by the operational transition to a new distribution center in California, which generated $5.6 million in transition costs that affected U.S. operations. However, those effects have been decreasing over recent quarters and are expected to phase out in the second half of the year.

Femsa reported total revenues of Ps. 211.4 billion, representing a 6.3% annual increase in 2Q25. Growth was driven mainly by advances across all business units and favorable exchange rate effects, which contributed 3.1 percentage points to revenue growth. However, results came in below our expectations (+10.1%) and below market consensus.

Oma posted positive results in 2Q25, with both revenues and earnings exceeding expectations. Revenues rose 16.8%, and EBITDA increased 18.9%, both well above our forecasts. The report was favorable, supported by strong growth in domestic passenger traffic, a recovery in international travel, and exchange rate depreciation that positively contributed to aeronautical revenues.

Regional reported a 10.5% y/y increase in its loan portfolio, an 8.3% y/y rise in pre-provision net interest income, and a 1.9% y/y increase in net income. Results were in line with expectations in terms of loan and revenue growth but came in slightly below expectations in terms of net profit. We believe the report may be interpreted as neutral to slightly negative.

Corporate News

– Stellantis shares are trading lower after the company reported a net loss of €2.3 billion in the first half of the year, in sharp contrast to the €5.6 billion profit recorded in the same period last year.

– UnitedHealth stock is declining after the company issued 2025 guidance below market expectations. The company anticipates adjusted earnings of $16 per share and annual revenue of $448 billion, both falling short of consensus estimates.

– UPS shares are under pressure after the company reported adjusted earnings of $1.55 per share for the quarter, slightly below expectations. The company did not provide revenue guidance due to macroeconomic uncertainty.

– Merck stock is trading lower after missing revenue expectations for the second quarter. Additionally, the pharmaceutical company announced a $3 billion cost-cutting plan through 2027.

– Whirlpool shares are plunging after the company missed quarterly estimates, citing pressure from tariffs. Whirlpool also lowered its full-year earnings guidance and cut its dividend.