Bitcoin Eyes Breakout, US Policy Reshapes Markets, Europe Gains Ground

Analyst Weekly, July 7, 2025

Tax Reconciliation Invoice Handed: Core Implications

The tax reconciliation invoice (nicknamed the One Massive Stunning Invoice, or OBBB) was handed and signed by President Trump on July 4, with the Senate needing a tie-breaking vote by VP Vance.

The invoice consists of:

100% quick expensing for capital investments

Greater internet curiosity deductibility
Elevated tax credit score (from 25% to 35%) for semiconductor manufacturing investments starting 2026
An growth of the Orphan Cures Act, shielding multi-condition orphan medicine from Medicare worth negotiations
A $5 trillion improve within the debt ceiling, permitting new Treasury issuance weighted towards short-term T-bills

Funding Takeaway:

Optimistic for capex-heavy sectors: industrials, protection, chemical substances, and telecoms profit from full expensing.
Semiconductors (tools makers and fab-heavy corporations) stand to realize from the improved manufacturing tax credit score.
Pharma/biotech corporations with orphan drug pipelines profit from the expanded pricing exemption.
Treasury market affect: Emphasis on short-duration issuance (20% → 30% T-bill share) favors decrease curiosity price however will increase rollover danger – supportive of the quick finish of the curve over lengthy bonds

Corporations that profit from a number of provisions of the tax invoice embrace:

Industrials & Supplies: UPS (UPS), Worldwide Paper (IP), Northrop Grumman (NOC), Basic Dynamics (GD), Lockheed Martin (LMT)
Pharma/Biotech: Pfizer (PFE), Vertex (VRTX), Novartis (NOVN-CH), Amgen (AMGN), Illumina
Chemical substances: Celanese (CE), Dow (DOW), LyondellBasell (LYB)
Telecom/Media: AT&T (T), Verizon (VZ)
Client & Staples: Altria (MO), Yum! Manufacturers (YUM), Tyson Meals (TSN)

Rising Tariffs, Shifting Provide Chains: Vietnam as a Take a look at Case and North America as a Commerce Winner

Opposite to widespread perception amongst some buyers, current US commerce offers aren’t resulting in decrease tariffs. As an alternative, the Trump administration is locking in a common 10% tariff flooring, with country-specific charges which might be typically considerably larger. Specifically, Asian international locations are being focused on account of their proximity to China and the administration’s concentrate on curbing transshipment, the apply of routing Chinese language items via third international locations to keep away from direct tariffs. This method is geared toward imposing stricter guidelines of origin and shutting longstanding commerce loopholes.

The brand new US-Vietnam commerce deal illustrates this coverage in motion. Vietnam will face a 20% tariff on most of its items and a 40% fee on items imported from China after which shipped to the US This deal additionally exempts US items from Vietnamese tariffs, underscoring its uneven nature.

In distinction, Mexico and Canada are rising as beneficiaries of the administration’s commerce coverage. Each already adjust to stringent guidelines of origin below USMCA and face no common tariff, making a widening price benefit over Vietnam. This will likely speed up onshoring and provide chain migration nearer to the US.

Whereas Vietnam has but to verify the tariff particulars, the coverage framework now has clear boundaries, providing some certainty to Vietnam-exposed equities, which have underperformed since late 2024. India might strike a deal subsequent, with diplomatic stress mounting on Japan, the place negotiations stay stalled. The early completion of the Vietnam deal is seen as a strategic transfer to affect talks with different key buying and selling companions within the Asia-Pacific area.

In abstract, a brand new take care of Vietnam:

Raises tariffs to twenty% on most Vietnamese imports
Hikes to 40% on items made in China and rerouted by way of Vietnam
US items enter Vietnam tariff-free

Funding Takeaway:

Tariffs are going up, not down, even below commerce offers. That is damaging for multinationals sourcing by way of Asia.
July 9 is the deadline for Trump’s new reciprocal tariff bulletins, focusing on tariffs above 10% beginning August 1.
Vietnam now serves as a take a look at case for “guidelines of origin” enforcement to stop tariff evasion by way of transshipment.
Capital rotation towards North American suppliers: We see Mexico and Canada positioned as relative winners. These international locations already adjust to stricter origin guidelines below USMCA and keep away from the brand new tariffs.
Industrials and logistics corporations with publicity to US-Mexico/Canada commerce might profit from commerce re-routing and provide chain onshoring.

Bitcoin on the Verge of a Breakout? This Week Might Be Essential

This week might develop into some of the essential for all the crypto market within the second half of the yr. Bitcoin has not too long ago approached its all-time excessive, which was set in Could at $110,872.

Above this degree, there aren’t any clear technical reference factors on the chart. Nonetheless, instruments like Fibonacci extensions can nonetheless present steering. The subsequent potential worth goal is close to $130,000, primarily based on the 161.8% retracement of the current correction.

As is well-known, worth motion within the crypto market can transfer shortly. However solely a transparent breakout above the document excessive would considerably enhance the probabilities of reaching this subsequent goal.

Due to the sharp rally since April, a number of assist zones—so-called Honest Worth Gaps—have shaped under present ranges. The primary of those zones lies between $98,000 and $100,000. This space was efficiently defended three weeks in the past and should act as a assist once more.

If this zone fails to carry, nonetheless, a pullback towards the $86,000 to $92,000 vary might observe.

Bitcoin, weekly chart

Capital Allocation Dilemma: Structural Strengths of Europe and the US

The place ought to I make investments my cash – in Europe or the US? Few funding matters have sparked as a lot debate in 2025. Many buyers stay unsure. To date this yr, European fairness markets have outperformed their US counterparts. The STOXX Europe 600 is up 7.6%, in comparison with a 5.9% achieve within the S&P 500. The lead is slim, however that’s solely half the story.

Forex results add one other layer of complexity. For the reason that starting of the yr, the US greenback has misplaced round 14% towards the euro. For US buyers with European holdings, that’s created a big increase in returns. Conversely, the weaker greenback has eroded earnings for European buyers in US belongings. From a world perspective, the weaker greenback would possibly truly seem enticing, appearing like a built-in low cost for shares.

Structurally, Europe is extra defensively positioned, much less growth-oriented, however gives larger dividend yields on common. In distinction, the US is pushed by innovation, simpler entry to enterprise capital and lighter regulation. In an surroundings that favors progress, the US might have the sting, particularly with megatrends like synthetic intelligence and robotics.

Lengthy-term buyers seeking to diversify broadly can hardly keep away from allocating to each areas. It’s much less about “either-or” and extra about getting the weighting proper. On a stock-by-stock degree, there are additionally progress alternatives in Europe and enticing dividend performs within the US.

Don’t make investments until you’re ready to lose all the cash you make investments. This can be a high-risk funding, and you shouldn’t count on to be protected if one thing goes incorrect. Take 2 minutes to study extra.
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