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New U.S. single-family home sales in June grew by a modest 0.6% to an annualized rate of 627,000 units, falling short of economists' expectations of 650,000 units, as reported by the Commerce Department's Census Bureau. This slowdown, attributed to mortgage rates hovering just under 7% for a 30-year fixed-rate loan, has led to an inventory of unsold homes reaching 511,000 units—the highest since October 2007. With a supply duration of 9.8 months, the glut is pressuring prices, with the median new home price dropping 2.9% to $401,800 year-over-year. Builders are increasingly cutting prices to attract buyers, a trend noted in a recent National Association of Home Builders survey. Regionally, sales rose in the South and Midwest but plummeted in the Northeast and West. Meanwhile, the Federal Reserve, having cut rates three times in 2024, is expected to maintain its benchmark rate between 4.25%-4.50% at its upcoming meeting. Economic concerns, including potential inflation from protectionist trade policies, alongside declining homebuilding and permits, suggest residential investment will continue to drag on GDP growth in the second quarter.
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Microsoft (MSFT) is gearing up to release its fiscal Q4 earnings, with analysts forecasting adjusted EPS of $3.37 and revenue of $73.89 billion, driven by robust growth in its AI and cloud businesses. The Intelligent Cloud segment, including Azure, is expected to hit $29.09 billion, a 22% rise, with AI sales playing a significant role. Following Google's strong Q2 performance, fueled by cloud revenue and a boosted $10 billion AI investment, optimism surrounds Microsoft’s potential for similar gains. However, while AI use cases are expanding in FY25, experts like Wedbush’s Dan Ives suggest FY26 will be the pivotal year for Microsoft’s AI growth, with tools like Copilot poised to drive future revenue. Despite a 21% year-to-date stock increase, Microsoft faces hurdles in its partnership with OpenAI, as disputes over equity and OpenAI’s restructuring into a public benefit corporation could jeopardize $20 billion in investments. This earnings report will be a critical indicator of Microsoft’s trajectory in the competitive AI landscape.
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Meta Platforms, Inc. (META) is gearing up for its Q2 earnings report, with analysts anticipating an EPS of $5.89 and revenue of $44.83 billion, a significant rise from last year’s figures. The company, under CEO Mark Zuckerberg, is aggressively investing in AI, spending hundreds of billions on multi-gigawatt data centers like Hyperion and recruiting top talent from OpenAI, Apple, and other firms to bolster its Superintelligence Lab. This AI push is already yielding results, with a 5% increase in ad conversion rates and a 15% expected rise in advertising revenue to $44.09 billion. Additionally, Meta is venturing into AI-driven smart glasses, including Ray-Ban Meta and Oakley Meta, aligning with Zuckerberg’s vision of "personal superintelligence" for all. While the hefty AI investments continue, early returns and Wall Street’s optimism—highlighted by BofA Global Research’s positive outlook on Meta’s AI integration into advertising—suggest potential revenue upside. Meta’s strategic focus on AI and innovative products positions it as a key player in the tech landscape, despite the stock’s recent 2.46% dip to $700.00 at close on July 29.
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US and Chinese trade negotiators concluded two days of talks in Stockholm, Sweden, without a definitive announcement on extending a tariff pause, raising concerns as higher duties loom on August 12. Treasury Secretary Scott Bessent called the discussions "very constructive," hinting at a potential 90-day delay, though President Trump will make the final call. Topics ranged from semiconductors, including Nvidia's AI chip exports to China, to rare earth minerals and Russian oil consumption, but no plans for a Trump-Xi meeting were set. Trump's team warned that tariffs could revert to triple-digit levels seen earlier this year if no deal is reached. This third round of talks in recent months builds on prior meetings in Geneva and London, with both sides committing to ongoing dialogue. Meanwhile, Trump's broader trade agenda includes a new EU tariff pact and negotiations with other nations like India and Canada before a self-imposed deadline. Markets remain on edge, hopeful for a delay to avoid economic disruption, as analysts suggest a pause could stabilize investor sentiment. The outcome of these talks, alongside Trump's decisions, will significantly impact global trade dynamics and economic forecasts in the coming weeks.
