Core Viewpoint - The retail sector, particularly Walmart, is facing significant challenges due to the impact of tariffs, leading to increased costs and pressure on profit margins [1][2][3] Group 1: Walmart's Financial Performance - Walmart reported Q2 revenue of $177.4 billion, exceeding analyst expectations of $176.16 billion, but adjusted earnings per share were $0.68, below the expected $0.74, marking the first miss in three years [1] - Despite the profit miss, Walmart raised its full-year sales and profit guidance, expecting sales growth of 3.75% to 4.75%, up from a previous forecast of 3% to 4% [1] Group 2: Impact of Tariffs - The company has begun raising prices on certain imported goods to offset tariff costs, which has drawn criticism from President Trump [2] - Walmart's CFO indicated that while some costs have been absorbed, others have had to be passed on to consumers, with overall tariff-related costs continuing to rise [2] - A broader trend is emerging, with nearly one-third of U.S. businesses planning to raise prices in the next six months due to increased input and import costs [2] Group 3: Employment Market and Economic Outlook - The U.S. job market is showing signs of weakness, with initial jobless claims rising by 11,000 to 235,000, the largest increase since late May [3] - High unemployment rates may not fully reflect the underlying economic conditions, as labor demand is weakening and job vacancies are decreasing [3][4] - Economic forecasts suggest that the U.S. economy will continue to slow down, impacting consumer spending and overall economic health [3][4]

Core Viewpoint - Home Depot, the largest home improvement retailer in the U.S., is forced to raise prices on certain products due to increased import costs stemming from U.S. tariff policies [1] Group 1: Company Impact - Home Depot is seeking to diversify its supply sources, but nearly half of its inventory still comes from suppliers outside the U.S. [1] - The company's net profit was adjusted downward in the second quarter due to rising operational costs from tariffs [1] - Home Depot anticipates a continued decline in earnings per share for the year, influenced by economic uncertainty and high interest rates affecting consumer home renovation plans [1] Group 2: Industry Context - The U.S. Department of Commerce reported that the import value of furniture and home goods exceeded $10 billion in the first quarter of this year [1] - The increased tariffs have pressured many U.S. home brands with rising costs, impacting importers, distributors, and retailers who must share the burden of these costs [1] - Ultimately, U.S. consumers will face the reality of price increases on goods due to these tariff policies [1]

Core Viewpoint - German Commercial Bank indicates that U.S. companies may pass on tariff costs to consumers, which will heighten economic concerns and lead to a weaker dollar [1] Group 1 - U.S. companies are likely to transfer tariff costs to consumers [1] - This transfer of costs could exacerbate economic worries [1] - A weaker dollar is anticipated as a consequence of these developments [1]

Core Viewpoint - The report from CITIC Securities indicates that the U.S. inflation in July was largely in line with expectations, with tariffs continuing to moderately push prices up, although at a slower pace compared to the previous month [1] Group 1: Inflation and Tariffs - Tariffs are expected to have a prolonged but milder impact on prices due to a slower transfer of costs from businesses to consumers [1] - The rebound in service inflation does not show significant signs of a slowdown in service consumption demand [1] Group 2: Economic Outlook - CITIC Securities forecasts that the Federal Reserve will implement three consecutive rate cuts within the year, each by 25 basis points [1] - The increase in rental vacancy rates and a slowdown in labor demand suggest a more stable outlook for service inflation [1]

Core Viewpoint - The report from CITIC Securities indicates that U.S. inflation in July was largely in line with expectations, with tariffs continuing to moderately push up prices, although at a slightly slower pace compared to the previous month [1] Group 1: Inflation and Tariffs - Tariffs are expected to have a more moderate and prolonged impact on prices due to a slower pass-through to consumers [1] - The rebound in service inflation does not show significant signs of a slowdown in service consumption demand [1] Group 2: Economic Outlook - The increase in rental vacancy rates and a slowdown in labor demand suggest a more stable outlook for service inflation [1] - The company now anticipates that the Federal Reserve will implement three rate cuts within the year, each by 25 basis points [1]

Core Viewpoint - The article indicates that the U.S. inflation is entering a structural upward phase, with core CPI rebounding to over 3%, moving further away from the Federal Reserve's 2% target, which may increase internal disagreements within the Fed regarding policy decisions [2][5][6]. Inflation Data Summary - In July, the core CPI adjusted month-on-month increased by 0.3%, and year-on-year rose from 2.9% to 3.1%, exceeding market expectations. Overall CPI increased by 0.2% month-on-month and remained at 2.7% year-on-year, slightly below expectations [2][5]. - The inflation characteristics in July showed moderate goods prices and a rebound in services. Tariff costs are still being passed on to consumers, but some prices have started to decline [3][4]. Goods Price Analysis - The core goods price index increased by 0.2% month-on-month, consistent with the previous month. Notable increases were seen in furniture (+0.9%), curtains (+1.2%), and audio-visual equipment (+0.8%). However, some previously rising categories like appliances (-2.2%) and men's clothing (-1.3%) showed weakness [3]. - Used car prices rebounded to a month-on-month increase of 0.5%, while new car prices stabilized, indicating a potential shift in pricing strategies by manufacturers due to institutionalized tariff policies [3][5]. Services Price Analysis - The supercore price index, excluding rent, increased by 0.5% month-on-month, with significant contributions from previously declining airfares, which surged by 4%. This suggests a stabilization in travel activities [4][5]. - Other service prices, including vehicle maintenance (+1.2%) and medical services (+0.8%), continued to rise, indicating persistent inflationary pressures in the service sector [4]. Overall Inflation Outlook - The July CPI data does not alter the outlook for U.S. inflation, which is expected to rise structurally. The effects of tariff cost pass-through are anticipated to become more evident in the coming months, with core goods inflation facing upward risks [5][6]. - The Fed may struggle to reach a consensus on policy direction due to the mixed signals from inflation data, leading to increased volatility in the market [6].

Group 1 - The core inflation rate in the U.S. has reached its highest increase in two years, with the CPI rising by 2.7%, indicating a potential economic crisis [1] - Companies face a dilemma of either passing on tariff costs to consumers, which could suppress consumer spending, or absorbing the costs, which would squeeze profit margins and hinder investment and innovation [1][2] - Historical data suggests that U.S. importers and Chinese exporters typically share tariff costs, but ultimately, U.S. consumers bear the majority of the burden, highlighting the unintended consequences of protectionist policies [1] Group 2 - The Federal Reserve is caught in a challenging position, balancing between rising inflation pressures and a cooling growth outlook, which complicates monetary policy decisions [1][2] - The potential for layoffs looms as companies struggle with profit margins, which could put additional pressure on the labor market, affecting lower-wage workers and job seekers [1]

Group 1: Federal Reserve and Interest Rates - The Dallas Fed President, Logan, emphasized the necessity of maintaining the 4.25% interest rate range for at least 6 to 12 months to control inflation, indicating a cautious yet restrictive policy stance [3] - Following Logan's remarks, the probability of a rate cut in September dropped from 65% to 58%, and the likelihood of two rate cuts within the year fell from 93% to 76% [3] - The June CPI rose by 2.7% year-on-year, marking a four-month high, while core CPI increased by 2.9%, significantly exceeding the Fed's 2% target [3] Group 2: Inflation and Economic Indicators - The inflationary pressures are evident with clothing prices rising by 0.4%, furniture by 1%, and household appliances by 1.9% [3] - A survey indicated that 88% of manufacturing firms and 82% of service firms plan to pass on tariff costs to consumers within three months [3] - The "super core inflation" (excluding food, energy, and housing) increased by 0.12%, surpassing previous months' growth rates [4] Group 3: Global Market Reactions - The announcement of Nvidia's approval to export AI accelerators to China boosted its stock by 4%, pushing its market cap over $4.1 trillion and contributing to a record high for the Nasdaq index [4] - The U.S. Treasury issued a record $1.2 trillion in bonds in Q2, leading to a structural decline in demand and causing a surge in 30-year Treasury yields above 5% [8] - The global market experienced a downturn, with the MSCI Asia-Pacific index falling by 0.1% and gold prices dropping below $3,330 per ounce [8] Group 4: Political Pressures and Future Outlook - Political pressure from figures like Trump, who called for a 300 basis point rate cut, adds complexity to the Fed's decision-making process [6] - The selection process for the next Fed Chair has begun, with potential candidates like Hassett emerging amid concerns over market stability [6] - The market's expectation for a rate cut in July has plummeted to 15%, reflecting growing uncertainty about future monetary policy [10]

Core Viewpoint - Federal Reserve Governor Waller stated that some tariff costs will be passed on to consumers, but this will not lead to sustained inflation [1] Group 1 - The impact of tariffs on consumer prices is acknowledged, indicating a potential increase in costs for consumers [1] - Waller emphasizes that the transmission of these costs will not result in persistent inflationary pressures [1]

Group 1 - The new wave of tariffs announced by President Trump has set an average tax rate of 20% for products imported from various countries, leading to a projected price increase of at least 10% for consumer electronics in the US market, including iPhones and laptops, to reflect the added tariff costs [1] - Companies such as Asus, Acer, MSI, Gigabyte, and HTC are expected to be affected by the impending price hikes, as they prepare to respond by either raising prices or cutting supply chain costs to avoid scaring off consumers [1][2] - Currently, there is no immediate price increase for consumer electronics in the US, as major brands like Apple, HP, Dell, Asus, and Lenovo have already stocked up inventory in the first half of the year, relying on previously accumulated stock for sales [1] Group 2 - Asus has been proactive in response to the tariffs, having started strategic inventory preparations in the US market since Q4 of last year, with stock levels sufficient for three to six months depending on the product category [2] - In contrast, Acer has not engaged in preemptive stocking in the US, maintaining an inventory level of about six to eight weeks, which is considered normal [2] - As brand inventories in the US continue to decrease and the final tariff rates are confirmed, it is anticipated that noticeable price increases for consumer electronics will begin in the second half of the year, particularly for newly launched models [2]