Group 1 - The stock prices of Japanese trading companies are hovering at the highest valuation levels in 20 years, leading to investor hesitation about whether to continue buying into the rally initiated by Warren Buffett's investment five years ago [1][2] - Mitsubishi Corporation's 12-month forward P/E ratio has reached its highest level since 2005, while Itochu Corporation's P/B ratio has hit a peak not seen since 2008 [2] - The surge in valuation levels is closely linked to Buffett's initial disclosure of holdings in Japan's five major trading companies in 2020, with average stock prices of these companies rising by 320% since then, significantly outperforming the Tokyo Stock Exchange index [2] Group 2 - The Japanese trading sector is facing challenges with slowing profit growth, raising concerns among analysts [3] - External factors such as Trump's tariff policies, a strengthening yen, and declining commodity prices are expected to exert pressure on the trading companies' business operations [3] - Despite Buffett's long-term investment commitment providing some support for these stocks, the uncertainty surrounding resource prices, exchange rates, and tariff policies makes it difficult to justify further investments at current high valuation levels [3]

Group 1 - The overall unemployment rate in the U.S. remained at 4.2% in July, but the unemployment rate for the Black community rose to 7.2%, the highest level since October 2021 [1] - In Michigan, the Black unemployment rate reached 10% in the first quarter of this year, nearly double the state's overall unemployment rate, while South Carolina's rate increased by 3 percentage points to 6.9% [1] - The rise in Black unemployment may indicate broader cracks in the labor market, as Black workers are often the first to be impacted during economic downturns [1] Group 2 - The Black unemployment rate had previously dropped to 4.8% in 2023, the lowest level since 1972, with the gap between Black and White unemployment rates narrowing to a historical low [1] - However, as the job market slows and economic distortions from the pandemic become apparent, this gap has widened again [1] - The U.S. manufacturing sector lost 11,000 jobs from June to July, and wholesale trade saw a reduction of 7,800 jobs, with a higher proportion of Black workers in these industries [1] Group 3 - Recent cuts to diversity, equity, and inclusion (DEI) programs in Republican-led states and companies, along with federal layoffs, have negatively impacted Black employment [2] - Black workers make up about 18% of federal employees, significantly higher than their 12% share in the overall labor market, with even higher proportions in certain departments [2] - For instance, the Department of Education has a Black employee ratio of approximately 36%, while the International Development Agency and the Department of Health and Human Services have ratios of 21% and 20.5%, respectively [2]

Core Insights - The Central Bank of Bosnia and Herzegovina released the 2024 Foreign Direct Investment (FDI) survey report, indicating a decrease in FDI inflow to 1.76 billion marks, down by 301 million marks compared to 2023 [1] Investment Sources - The largest FDI inflow in 2024 comes from Croatia at 391.1 million marks, followed by Germany at 255.3 million marks and Slovenia at 247.1 million marks [1] Investment Sectors - The financial services sector attracted the highest investment totaling 503.8 million marks, followed by retail trade at 219.8 million marks and wholesale trade at 205.1 million marks [1] Total FDI Stock - By the end of 2024, the total FDI stock in Bosnia and Herzegovina is projected to be 21.22 billion marks, which includes both the 2024 FDI and previous investments along with the operational results of foreign enterprises [1] FDI Stock by Source - The largest share of FDI stock comes from Croatia at 3.22 billion marks (15.2% of total stock), followed by Austria at 2.9 billion marks (13.7%) and Serbia at 2.8 billion marks (13.3%) [1] FDI Stock by Sector - The financial services sector also holds the largest FDI stock at 4.27 billion marks, followed by telecommunications at 2.02 billion marks and wholesale trade at 2.01 billion marks [1]

Economic Outlook - Singapore's Ministry of Trade and Industry has revised its GDP growth forecast for 2025 from 0.0%-2.0% to 1.5%-2.5% based on stronger-than-expected performance in the first half of the year [1][2] - The economy grew by 4.4% year-on-year in Q2, slightly up from 4.1% in Q1, with a seasonally adjusted quarter-on-quarter growth of 1.4%, reversing a contraction of 0.5% in Q1 [1] Sector Performance - Growth was primarily driven by outward-oriented sectors such as wholesale trade, manufacturing, financial services, and transportation and warehousing, which engaged in preemptive trade activities in response to impending U.S. tariffs [1][2] - However, the local food and beverage sector experienced a contraction due to increased outbound tourism [1] Future Challenges - The report warns of potential economic slowdown in the second half of 2025, particularly for outward-oriented industries facing weakened demand [3] - The anticipated impact of U.S. tariffs on global end-market demand may lead to reduced growth in the manufacturing sector, although sectors like aerospace engineering and precision engineering may continue to see growth due to ongoing maintenance and refurbishment work [3] - The Ministry will closely monitor global and domestic economic developments and adjust growth forecasts as necessary [3]

Economic Outlook - Singapore's Ministry of Trade and Industry (MTI) raised the GDP growth forecast for 2025 from "0.0% to 2.0%" to "1.5% to 2.5%" due to unexpected resilience shown in the economy during the first half of the year [1] - The second quarter GDP grew by 4.4% year-on-year, slightly above the market expectation of 4.3%, continuing the growth momentum from the first quarter's 4.1% [2] - The economy avoided technical recession with a seasonally adjusted quarter-on-quarter growth of 1.4% in Q2, reversing the 0.5% contraction in Q1 [2] Key Growth Drivers - The strong performance in the first half was primarily driven by trade-related sectors, including wholesale trade, manufacturing, and transportation and warehousing [2] - Net exports significantly contributed to GDP growth, with export growth outpacing import growth [2] - The arts, entertainment, and recreation sector saw a remarkable 22.5% year-on-year growth in Q2, supported by government consumption vouchers [2] Risks and Challenges - Despite the upward revision of the annual forecast, MTI and several institutions expressed caution regarding the economic outlook for the second half, citing significant downside risks [3] - Three main risks identified include: 1. Escalation of tariff actions leading to increased economic uncertainty and reduced spending and hiring by businesses and households [4] 2. Financial market shocks due to tighter global financial conditions potentially causing disruptive capital flows [5] 3. Geopolitical tensions that could disrupt energy supply and exert new pressures on global energy prices [6] Labor Market and Consumer Sentiment - The uncertainty surrounding tariffs is affecting the labor market, with leading indicators showing signs of economic activity slowing down [7] - A survey by Singapore's Ministry of Manpower indicated a decline in companies' willingness to hire and increase salaries over the next three months [7] - Despite challenges, there are still positive aspects, such as ongoing investments in AI-related semiconductors supporting the precision engineering cluster [7]

Market Performance - US stock market experienced a significant drop after a disappointing services sector report, with the Dow Jones falling approximately 100 points and both the Nasdaq and S&P 500 declining about 0.5% [3][4] - The ISM services index for July showed almost zero growth, raising concerns about stagflation, which is characterized by high inflation and low employment [4][5] Economic Indicators - The ISM services index decreased to 50.1, below all economists' forecasts, indicating a slowdown in the services sector, which constitutes about 70% of the US economy [5] - The employment index fell to 46.4, marking the fourth contraction in five months and reaching one of the lowest levels since the pandemic [5] - The new orders index dropped to 50.3, nearing stagnation levels, reflecting a slowdown in business activity [6] Industry Insights - Despite some sectors like transportation, wholesale trade, and finance showing growth, seven industries contracted, with the accommodation and food services sector experiencing the largest decline [6] - Concerns over tariffs and rising prices were frequently mentioned by survey participants, indicating ongoing challenges for businesses [6] Investor Sentiment - Major Wall Street firms, including Morgan Stanley and Deutsche Bank, are warning investors to prepare for a market pullback due to high stock valuations and deteriorating economic data [8][9] - Predictions suggest that the S&P 500 could see a short-term decline of up to 10% to 15% in the coming weeks to months [9][10] - Historical data indicates that August and September are typically weak months for the S&P 500, with an average decline of 0.7% [10] Market Valuation - The S&P 500's 14-day Relative Strength Index (RSI) reached 76, indicating overbought conditions, as it surpassed the 70 threshold considered as a warning sign [10] - The cost of options to hedge against a 10% decline in the SPDR S&P 500 ETF (SPY) is nearing the highest level since the regional banking crisis in May 2023, reflecting increased concerns about potential market downturns [10]

Group 1: Economic Activity - The ISM's Services PMI for July recorded at 50.1%, indicating continued economic expansion despite a slight decline from June's 50.8% [1] - The Services PMI has been in the expansion zone for 12 out of the last 13 months, reflecting resilience in the sector [1] - Business activity index for July was at 52.6%, down from 54.2% in June, but still indicates overall business activity [1] Group 2: Employment and Orders - The employment index fell to 46.4%, marking the fourth contraction in the last five months, indicating a decline in labor demand [1] - The new orders index decreased from 51.3% in June to 50.3% in July, showing a slowdown in growth but remaining in the expansion zone [1] Group 3: Supply Chain and Inflation - The supplier deliveries index was at 51%, indicating delays in supply for the eighth consecutive month, which is typically a sign of increased economic activity [2] - The prices index rose to 69.9%, the highest level since October 2022, reflecting ongoing inflationary pressures faced by businesses [2] - The inventory index was at 51.8%, while the inventory sentiment index dropped to 53.2%, indicating a slight decrease in satisfaction with current inventory levels [2] Group 4: Industry Performance - In July, 11 service industries reported growth, with transportation and warehousing, wholesale trade, and finance and insurance showing the strongest performance [3] - Seven industries reported contraction, including accommodation and food services, construction, and mining [3] - Seasonal factors and weather changes were noted as negative impacts on business, alongside supply chain pressures due to transportation congestion [3]

Economic Overview - In April 2025, Canada's real GDP decreased by 0.1%, ending the growth trend observed in March [1] - The goods-producing sector experienced an overall decline of 0.6%, with manufacturing being a significant drag, falling by 1.9% [1] - Durable and non-durable goods manufacturing dropped by 2.2% and 1.6% respectively, indicating negative impacts from tariff uncertainties on transportation equipment manufacturing and the food and oil industries [1] Service Sector Performance - The service-producing sector saw a slight increase of 0.1%, with public administration, finance and insurance, and arts and entertainment contributing to this growth [2] - The finance and insurance sector grew by 0.7%, marking the largest increase since August 2024, driven by high-frequency trading activities due to U.S. tariff announcements [2] - The arts, entertainment, and recreation sector achieved a growth of 2.8%, primarily due to increased attendance at NHL playoff games in Canada [2] Trade and Resource Sector Insights - The wholesale trade sector declined by 1.9%, significantly impacted by reduced imports and exports in motor vehicles and parts [7] - In the resource sector, while the oil and gas extraction sub-sector was affected by decreased natural gas and crude oil production, oil and gas support activities saw an increase due to rising drilling activities [7] Government Financials - In Q1 2025, the total deficit for all levels of government in Canada was CAD 12.4 billion, a reduction of CAD 19.6 billion compared to the same period last year [7] - The federal government significantly reduced its deficit to CAD 8.7 billion, while provincial and territorial governments faced pressures from increased spending and reduced revenues [7] Future Economic Outlook - The real GDP is expected to continue declining by 0.1% in May 2025, indicating challenges for short-term economic growth [7] - Growth in real estate rental activities may partially offset declines in other sectors [7] - The economic situation reflects the impact of global trade tensions on Canada's manufacturing and export-oriented industries, while also highlighting the supportive role of the service sector and other areas in economic growth [7]

Group 1 - Canada's GDP contracted by 0.1% in April, primarily due to a 0.6% decline in the goods-producing sector, which contributes 25% to GDP [1] - The manufacturing sector, significantly impacted by U.S. tariffs, saw a 1.9% decrease in output, marking the largest drop in four years [1] - Economic forecasts suggest a potential further contraction of 0.1% in May, indicating ongoing economic challenges [1] Group 2 - Despite growth in the financial and public administration sectors, declines in manufacturing and wholesale trade sales offset these gains [1] - Economists warn that consecutive contractions may reveal the full impact of tariffs imposed by the Trump administration on Canada [1] - The Bank of Canada has cautioned that growth in the second quarter will be significantly weakened [1]

Group 1: Trade Negotiations - The U.S. has refused to grant Japan a full exemption from "reciprocal tariffs" during recent trade negotiations, with only a consideration to lower specific tariffs by 14% [1][3] - India has proposed zero tariffs on certain quantities of steel, auto parts, and pharmaceuticals in trade talks with the U.S., aiming to expedite a bilateral trade agreement expected to be reached by fall [1][3] Group 2: Economic Data - The ISM reported that the U.S. services PMI for April was 51.6, indicating a return to expansion and significantly above the expected 50.2, following a previous value of 50.8 [5][6] - In April, 11 industries reported growth, with hospitality, wholesale trade, mining, and real estate performing the best, while 6 industries contracted [6] Group 3: Market Reactions - Following the positive services data, U.S. stock indices narrowed their losses, with the Dow Jones Industrial Average rising by 0.14% and the Nasdaq's decline reducing to 0.45% [8][9] - U.S. Treasury yields increased, with the 10-year yield rising close to 4.35% and the 2-year yield reaching a daily high of 3.8467% [9][10] Group 4: Inflation and Employment Indicators - The services employment index for April was recorded at 49, indicating a slowdown in employment but an improvement from the previous value of 46.2 [7] - The services price index reached 65.1, significantly above the expected 61.4, indicating rising inflationary pressures due to tariffs [6][7]