US and the EU may be nearing a trade deal, Tesla misses expectations

Market Trends & Trade Deals - European and Asian markets show optimism for tariff relief, driven by potential EU-US trade deal imposing 15% tariffs on European imports, a significant reduction from the current 27.5% levy on cars [1][3][4][6] - US has been charging an extra 10% tariff on EU exports since April on top of pre-existing duties, which average just below 5% [5] - Optimism grows for more trade deals after Japan clinched a pact with the US on Wednesday [3] Company Earnings & Performance - Alphabet (Google's parent) beat expectations with adjusted earnings per share at $2.31 and revenue at $81.2 billion, driven by advertising and cloud businesses, but capital expenditure will climb to $85 billion [2][10] - Tesla's second-quarter profits fell by around a fifth, with adjusted earnings of 40 cents per share and revenue of $22.5 billion, falling short of expectations; plans to start production of its cyber cab in 2026 [2][11][12] - American Airlines' Q2 passenger revenue came in at $13.12 billion, slightly above the expected $13.11 billion, with adjusted earnings per share at 95 cents, higher than the expected 79 cents, despite the stock being down over 4.5% in pre-market [23] - Southwest Airlines' Q2 revenue came in at $7.24 billion, below the expected $7.3 billion, with adjusted earnings per share at 43 cents versus the forecasted 53 cents; expects economic turmoil to erase as much as $1 billion of its annual pre-tax profit this year [26][27] - Keurig Dr Pepper posted second-quarter revenue of $4.16 billion, slightly above the expected $4.14 billion, with adjusted earnings per share at 49 cents, meeting expectations [27][28] Sector Analysis & Investment Strategies - Cyclical sectors (consumer discretionary, industrials, materials, financials, tech, communication services, real estate) sales and profits swell in economic expansions and shrink in recessions [32] - Defensive sectors (consumer staples, healthcare, utilities, energy) demand stays steady in booms or busts [34][35] - Two stocks (Nvidia plus Microsoft) are now approaching the entire value of all the defensive sectors in the S&P 500 [36][38] European Banks & Luxury Goods - Deutsche Bank reported its highest second-quarter pre-tax profits in nearly two decades [46] - BMP Parabar recorded second quarter boosted by its fixed income and currency traders [46] - Lloyd's Bank reported higher than expected pre-tax profit and increased its dividend [47] - LVMH is down more than 35% from 6 months ago, analysts expect sales to LVMH's key fashion and leather goods division to have dropped by 7.8% in the second quarter [55][57] Cryptocurrency - Bitcoin may reach $300,000 by the end of next year [60] - Bitcoin is about 10% of the AUM of gold [60]