Niles Investment Management founder Dan Niles expects the “Magnificent Seven” names to post a strong second quarter– but he’s not entirely convinced that the stocks will push meaningfully to the upside.

In a recent interview with CNBC, Niles quoted examples of Alphabet and Netflix– both of which recorded upbeat results last week, but their respective share price response has been rather muted, raising concerns of lofty valuations and stretched positioning.

While high multiples and priced in optimism are making Niles approach upcoming tech earnings with caution, he still sees opportunity in select names with strong fundamentals, relative insulation from tariffs, and resilient growth narratives.

Here are the top 2 “Magnificent Seven” stocks Niles recommends owning heading into earnings.

Microsoft Corp (NASDAQ: MSFT)

Dan Niles is super bullish on Microsoft stock and views it as a top pick for the ongoing earnings season. On “Squawk on the Street”, he pointed to Azure’s turnaround as a key driver of renewed optimism.

After three consecutive quarters of disappointing cloud growth last year, Microsoft saw Azure reaccelerate in the March quarter, growing 2% faster than in December.

This rebound coincided with the company’s restructuring of its OpenAI partnership through the Stargate deal, which Niles believes will continue to pay dividends.

He also highlights MSFT shares’ rough performance last year as a setup for stronger relative gains now, especially as expectations remain high but not excessive.

With AI integration deepening across its product suite and enterprise demand holding steady, Microsoft appears well-positioned to deliver upside.

Niles did agree that consensus expectations are elevated, but sees enough fundamental momentum to justify owning the stock into earnings.

A 0.65% dividend yield on Microsoft stock offers another great reason to own it for the long term.

Nvidia Corp (NASDAQ: NVDA)

Another “Magnificent Seven” stock Niles recommends owning heading into the earnings is Nvidia, due to what he described as a more sustainable growth story driven by inference workloads.

While training large AI models has made the majority of artificial intelligence-related headlines so far, Niles argues that inference, where users get real-time answers, is the real long-term driver of demand.

On CNBC, the Niles Investment Management founder noted that CAPEX spending is surging in this area, providing NVDA shares with a durable revenue stream.

Dan Niles sees China re-entering Nvidia’s models, reversing earlier concerns about geopolitical risk and export restrictions.

Though Nvidia is off-cycle this quarter, he believes the company’s fundamentals remain strong and its positioning within the AI ecosystem is unmatched.

With demand shifting toward practical AI applications and infrastructure buildout, Nvidia stands out as a strategic long-term play – even if near-term expectations are high.

Note that Wall Street currently has a consensus “buy” rating on Nvidia stock.

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Pharmaceutical companies are seeking clarification on tariffs imposed under the new US-EU trade agreement. 

Analysts caution that sector-specific punitive levies could jeopardise the entire deal, according to a CNBC report.

Significant ambiguity surrounds the precise definitions and classifications of pharmaceutical goods within the framework of the trade truce finalised on Sunday. 

This agreement introduces a 15% tariff on a range of goods imported from the European Union into the US. 

Tariff ambiguity fuels concerns

The lack of clarity regarding pharmaceutical products is particularly problematic given the complexity and diversity of the industry, encompassing everything from bulk active pharmaceutical ingredients (APIs) to finished dosage forms, medical devices, and even research and development materials.

Industry experts and trade analysts are now grappling with how these new tariffs will be applied across the vast spectrum of pharmaceutical items. 

Key questions arise concerning the categorisation of combination products (drugs and devices), biologics, and novel therapies. 

This ambiguity could lead to differing interpretations by customs officials in both the EU and the US, potentially causing delays, disputes, and increased compliance costs for pharmaceutical companies operating across the Atlantic. 

The immediate concern is the potential impact on supply chains, pricing, and ultimately, patient access to essential medicines, as companies navigate these newly imposed financial barriers.

Conflicting statements

During a news briefing, US President Donald Trump announced a “straight across” tariff on “automobiles and everything else,” while noting that pharma was “unrelated to this deal.”

European Commission President Ursula von der Leyen described the agreed levy as “all-inclusive,” suggesting that Europe would not be subject to an upcoming announcement regarding pharmaceutical tariffs.

Von der Leyen said Sunday:

We have 15% for pharmaceuticals. Whatever the decision later on is, of the president of the US, how to deal with pharmaceuticals in general globally, that’s on a different sheet of paper.

Earlier this month, Trump indicated that an announcement regarding tariffs on pharmaceutical imports into the US was imminent and could reach up to 200%. 

This follows the administration’s “Section 232” investigation into the pharmaceutical sector, which assesses the impact of these imports on national security. The findings of this investigation are expected by August.

High stakes for European economy

Analysts indicated to CNBC that even a 15% pharma tariff would significantly impact European pharmaceutical companies and the broader economy of the bloc.

“The questions around pharma tariffs are highly material, given the volume of imports from the EU,” Wolfe Research analysts wrote in a note Monday.

In 2024, the EU’s exports of medicines and pharmaceutical products to the US reached approximately $120 billion, making it the EU’s largest export sector. 

Reuters had reported earlier that analysts project 15% levies could increase annual industry costs by $13 billion to $19 billion.

However, a higher rate could, according to them, jeopardize the painstakingly negotiated agreement.

“Any surprise increases to the 15% ceiling on pharma tariffs would threaten the broader trade truce,” Eurasia Group analysts were quoted in the report.

Rabobank analysts warned that if disputes over sectoral tariffs do not derail the wider agreement, the impact on the European economy could be severe.

Meanwhile, firms are struggling amidst this uncertainty.

“We’ve been asking for exemptions from [tariffs] in the US, in the EU, but also in China. That’s something we have been pleading for,” Philips CEO Roy Jakobs told CNBC.

In the current deal that has been announced, that was not part of it, so we keep having that dialogue.

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US President Donald Trump’s new blanket tariffs are scheduled to take effect on August 1, a move that experts warn could lead to increased prices on various food items for American consumers, according to a CNBC report. 

These tariffs, which are essentially taxes on imported goods, are designed to protect domestic industries by making foreign products more expensive. 

However, the ripple effect of such policies often extends to the consumer, who ultimately bears the brunt of these added costs.

The impending tariffs are expected to impact a wide range of imported foods, from fresh produce and seafood to processed goods and speciality items.

For example, if tariffs are placed on imported fruits and vegetables, grocery stores that rely on these international sources may have to raise their prices to offset the increased import costs. 

This could mean higher prices for staples like avocados, berries, and certain types of fish, which are frequently sourced from other countries.

Economists and trade analysts are closely monitoring the situation, anticipating potential shifts in consumer purchasing habits and supply chain dynamics. 

Retailers may explore alternative domestic suppliers, but this can be a complex and time-consuming process, especially for products that are not readily available or produced in sufficient quantities within the US. 

Furthermore, even if domestic alternatives are found, the initial transition period could still see price fluctuations as the market adjusts to the new trade landscape.

Consumers may prefer premium products

Trump’s tariffs aim to boost demand for American goods. 

However, some products, like Brazilian coffee, are not domestically produced.

Other imports, such as bananas, have limited US production that would not satisfy American demand, as per a Tax Foundation analysis released Monday.

According to Tax Foundation senior economist Alex Durante, some US consumers might opt to pay a premium for imported food items instead of selecting alternative products.

US food product imports in 2024 were approximately $221 billion. 

While most of these products are already subject to tariffs between 10% and 30%, the Tax Foundation noted that some countries could face levies exceeding 30% if Trump’s August 1 tariffs are implemented.

“We could see some large movements in prices over the next few months if the administration holds firm to that Aug. 1 deadline,” Durante was quoted in the report.

Top items at risk

According to an analysis by the Tax Foundation, the top five imported items by volume that may be subject to tariffs are liqueurs and spirits, baked goods, coffee, fish, and beer. 

These items collectively represent approximately 21% of total US food imports.

According to June’s US inflation report, grocery prices have increased by approximately 2.4% compared to last year.

However, experts note that the complete effect of Trump’s tariffs has yet to be observed.

Durante said:

It’s way too soon for the administration to be doing a victory lap because most of their planned tariff increases have not gone into effect yet.

Short-term rise in costs

A separate study by The Budget Lab at Yale, released on Monday, predicts that current tariff price increases will lead to a short-term rise of 3.4% in food costs, with prices remaining 2.9% higher in the long run. 

The analysis also suggests that fresh produce could initially see a 6.9% increase in price, eventually stabilising at 3.6% higher.

“The Administration has consistently maintained that the cost of tariffs will be borne by foreign exporters who rely on access to the American economy, the world’s biggest and best consumer market,” White House spokesperson Kush Desai told CNBC.

Desai presented a July analysis from the White House’s Council of Economic Advisers. 

This analysis indicated that the personal consumption expenditure price index, which measures the prices of imported goods, experienced a decline from December to May.

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Dow Futures were modestly higher early Monday, up by as much as 40 points before the open.

The broader market is coming off a strong session, both the S&P 500 and Nasdaq notched fresh record closes, while the Dow ended just shy of its December 2024 high, down less than a quarter percent.

Investors are stepping into a busy week.

The recent US-EU trade agreement has helped improve sentiment, and attention now turns to a packed calendar: a Federal Reserve meeting midweek, a wave of earnings from major companies, and ongoing trade talks, including those between the US and China.

With a mix of macro and company-level catalysts in play, traders are looking for direction as July draws to a close.

5 things to know before Wall Street opens

1. The S&P 500 and Nasdaq both closed at record highs on Monday, continuing a rally that’s gained momentum over the past several weeks.

While the gains reflect a broadly positive tone across markets driven in part by easing trade tensions and solid earnings, there’s still a sense of caution.

The question isn’t just whether the rally can continue, but whether the underlying data and policy signals will justify these levels.

With markets already priced for a lot of good news, any surprises, positive or negative, could set the tone for August.

2. It’s a packed day on the earnings calendar, with several major companies set to report before the market opens.

UnitedHealth, Boeing, UPS, and Procter & Gamble are all on deck this morning, and their results could offer a read on key sectors ranging from healthcare and industrials to logistics and consumer staples.

But the real spotlight is on tech. Later this week, some of the market’s biggest drivers like Meta, Microsoft, Amazon, and Apple will report quarterly results.

3. The Federal Reserve kicks off its two-day policy meeting today, and while markets widely expect interest rates to remain unchanged this time around, that doesn’t mean investors aren’t paying close attention.

In fact, the real focus is on the tone of the Fed’s statement and Chair Jerome Powell’s comments, both of which could offer critical hints about what comes next.

At the center of the conversation is the potential for a rate cut later this year. As of now, futures markets are pricing in a roughly 62% chance of a cut at the Fed’s September meeting.

4. President Trump’s new agreement with the European Union has taken some heat off the trade front. Instead of the previously threatened 30% tariffs, the two sides settled on 15%, which markets generally saw as a relief.

It’s not a full resolution, but it does reduce immediate tension.

At the same time, US-China talks are back on in Stockholm. Both sides are trying to lock in a 90-day extension to the current tariff pause before the August 12 deadline.

5. Investors are keeping an eye on key economic data today, with the Job Openings and Labor Turnover Survey (JOLTS) and the latest consumer confidence figures for July set to drop.

Either report could shift market sentiment, especially as traders look for clues about the health of the labor market and how consumers are feeling in the current environment.

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UnitedHealth Group Inc (NYSE: UNH) has reinstated its full-year guidance, but the management’s estimates hardly brought any good news for investors.

UnitedHealth Group is projecting per-share earnings of $16 on up to $448 billion in revenue.

Both figures are well below Wall Street estimates, which had expected earnings of $20.91 per share on $449.16 billion in revenue.

The downbeat guidance has triggered a fresh wave of selling, with UnitedHealth stock extending losses in Tuesday’s premarket session.

Shares are now down more than 55% from their year-to-date high on April 11.

Medical costs remain an overhang on UnitedHealth stock

UnitedHealth chief executive Tim Noel agreed the insurance firm faces challenges but said “we can resolve these issues and recapture our earnings growth potential while ensuring people have access to high-quality affordable health care.”

However, investors should note that his estimate for medical costs – a persistent overhang for UNH shares – still doesn’t signal possible moderation in the second half of 2025.

The healthcare behemoth sees its medical care ratio printing within the range of 89% to 89.5% this year, roughly the same as significantly elevated 89.4% in Q2.

What it suggests is: cost pressures remain entrenched, limiting near-term margin expansion and reinforcing investor concerns about sustained profitability headwinds.

Note that UnitedHealth stock has now plunged to levels not seen even at the peak of the pandemic in early 2020.

UNH shares down despite better-than-expected Q2 revenue

Broader concerns surrounding UnitedHealth shares are making investors ignore the company’s Q2 revenue that topped Street estimates on Tuesday.

UNH generated $111.62 billion in revenue in its second financial quarter – slightly above $111.52 billion that analysts had forecast.

For investors, however, what’s more important is the bottom line. In its recently concluded quarter, the NYSE-listed firm earned $4.08 on a per-share basis, notably below the consensus of $4.48.

That said, UNH stock currently pays a healthy dividend yield of 3.13%, which keeps it somewhat attractive to own, especially at a trimmed valuation at the time of writing.

How to play UnitedHealth after second-quarter earnings?

UnitedHealth remains the largest and, therefore, the most important health insurer in the world, trading at a historically low multiple and pays an attractive dividend as well.

However, its ongoing challenges suggest investors are better off adopting a “wait-and-see” approach – especially since UNH’s Medicare billing practices are currently under investigation.

The Department of Justice (DOJ) probe is concerning for UnitedHealth stock as Medicare business currently makes up nearly one-third of the firm’s overall revenue.  

Therefore, reputational damage, revised reimbursement policies, or financial penalties resulting from the investigation could weigh further on UNH shares moving forward.

That said, Wall Street hasn’t thrown in the towel on UnitedHealth Group Inc yet.

Heading into the earnings print today, analysts had a consensus “overweight” rating on the insurance giant with the mean target of about $355, indicating potential upside of well over 30% from current levels.

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The German DAX Index futures jumped by nearly 1% on Monday morning as investors reacted to the upcoming earnings and the US-EU trade deal announced on Sunday. It jumped to €24,555, much higher than Friday’s close of €24,217.

EU and US trade deal

The main catalyst for the DAX Index on Monday morning was the latest trade deal between the US and Germany. In a statement after meeting Ursula von der Leyen, Trump said that most goods shipped to the US from the EU will attract a 15% tariff.

These tariffs will apply to many popular items like vehicles. However, the statement added that steel and aluminum tariffs will remain at 25%. As a result, the effective US tariff on EU goods stands at about 16%. The EU also committed to making significant investments in the United States and increasing its energy supply. 

The new trade deal helped to prevent an escalation of the trade war on August 1, when the US would have placed a 30% tariff on European goods. Most importantly, the EU had prepared a list of goods worth over €100 billion to subject to tariffs.

The deal came a few days after the European Central Bank (ECB) left interest rates unchanged in its July meeting. Analysts at Goldman Sachs and BNP Paribas now believe that the bank has completed its rate cuts for this year.

Top Germany earnings ahead

The next key catalyst for the DAX Index will be the upcoming German earnings, which will provide more information about the second quarter and the impact of tariffs on German companies.

Automakers like Mercedes-Benz, BMW, and Porsche will be the ones to watch as they publish their earnings this week. These firms will provide more details on  what to expect with US tariffs at 15%.

Porsche stock price will be watched more closely because the US is its only growing make. China, Germany, and the rest of Europe continued to deteriorate in the first quarter. 

It is also more exposed because, unlike BMW and Mercedes-Benz, it manufactures all its vehicles in Germany. This means that all its vehicles will be subject to a 15% tariff.

The other notable DAX constituent to watch will be Adidas as it publishes its earnings. Adidas share price has plunged by 23% from its highest level this year as its business faces challenges. These results will provide more details on whether the business was growing. 

The other companies to watch include Siemens Healthineers, BASF, HeidelbergCement, Covestro, Lufthansa, Linde, and Daimler Truck. Additionally, the index will react to the US earnings season as companies like Microsoft, Apple, and Meta Platforms.

DAX Index technical analysis

The daily chart shows that the German DAX Index jumped after the US-EU trade deal. It has formed an inverse head-and-shoulders pattern, a popular bullish reversal pattern.

It has moved above the 100-day and 50-day Exponential Moving Averages (EMA), a popular bullish reversal pattern. Therefore, the index will continue rising as bulls target the key resistance level at €25,000. A drop below the 50-day moving average at €23,800 will invalidate the bullish view.

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Asia-Pacific stock markets began the trading week with a mixed and cautious performance on Monday, as investors eagerly awaited the outcome of crucial trade talks between the United States and China, which are set to kick off in Stockholm later in the day.

This high-stakes diplomatic engagement, coupled with a recent trade agreement between the US and the European Union, is setting a complex and somewhat uncertain tone for the region, with Indian benchmarks like the Sensex poised for a muted start.

The primary focus for investors today is the resumption of trade talks between Washington and Beijing, aimed at resolving long-standing economic disputes.

The talks will be led by US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. In a positive signal for the negotiations, Bessent told Fox Business that he expects a trade-truce extension to be discussed.

He also indicated that the negotiations will cover a broader range of topics than previous rounds, including sensitive issues such as Beijing’s oil purchases from Russia and Iran.

This meeting follows a significant development on the transatlantic trade front.

US President Donald Trump announced on Sunday US time that he had reached an agreement with the European Union, a move that averted his previous threat of imposing 30% tariffs on the bloc.

This successful negotiation with the EU has raised hopes for a similar outcome with China, though the issues at stake are arguably more complex.

A mixed picture across Asian bourses

The market’s reaction to this diplomatic flurry was varied across the region. As of 8:10 a.m. Singapore time, Japan’s Nikkei 225 benchmark fell 0.85%, while the broader Topix index moved down 0.44%.

In contrast, South Korea’s Kospi index added 0.15%, while the small-cap Kosdaq was flat. Over in Australia, the S&P/ASX 200 benchmark added 0.2%.

In Greater China, Hong Kong stocks started the day higher, with the Hang Seng Index adding 0.49% as of 10 a.m. local time. However, mainland China’s CSI 300 traded flat as investors awaited more details on the US-China talks.

Samsung surges on massive semiconductor deal

In corporate news, a standout performer was Samsung Electronics. Shares of the South Korean tech giant rose by as much as 3.49% on Monday following its announcement of a massive $16.5 billion contract for supplying semiconductors.

The memory chipmaker did not, however, name the counterparty in its announcement.

Indian markets poised for a tepid start

Indian stock market benchmark indices, the Sensex and Nifty 50, are likely to see a muted opening on Monday, tracking the mixed cues from other global markets.

The trends on Gift Nifty also indicated a tepid start for the Indian benchmark index, with Gift Nifty trading around the 24,832 level, a discount of nearly 18 points from Nifty futures’ previous close.

This follows a session on Friday where the Indian stock market ended with sharp losses, with the benchmark Nifty 50 closing below the 24,900 level.

The Sensex had crashed 721.08 points, or 0.88%, to close at 81,463.09, while the Nifty 50 settled 225.10 points, or 0.90%, lower at 24,837.00.

US markets: futures Rise on EU deal news

US equity futures rose in early Asian hours after President Trump lowered the threatened tariffs on the European Union to 15% from the previously stated 30%.

As of 8:03 a.m. Singapore time, S&P 500 futures had added 0.39%, while Nasdaq 100 futures were 0.53% higher. Futures for the Dow Jones Industrial Average increased by 156 points, or 0.35%.

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The Nifty 50 and Sensex indices remained under pressure on Monday as traders awaited key earnings and macroeconomic events. The Nifty index fell to ₹24,800, its lowest point since June 19, while the Sensex dropped to ₹81,370. This article explores some of the top catalysts for these blue-chip indices this week. 

India and the US trade deal

The most important catalyst for the Nifty 50 and the Sensex Index will be the upcoming deadline of tariffs between the United States and India. 

Trump initially announced a 26% tariff on Indian goods during his Liberation Day speech in August. He then extended the pause to August , when the new tariffs will kick in. 

These tariffs will disrupt a major trade relationship worth over $128.5 billion a year. The US exported goods worth over $47.2 billion to India and then bought goods worth over $85.5 billion. As a result, the US had a trade deficit worth over $38.4 billion last year. 

Analysts anticipate that the two sides will reach a deal in the next few days. Such a deal will mirror those made with Japan and the European Union. In these deals, the US will impose 15% tariffs and then receive investments worth billions of dollars. 

In Japan’s case, the country will invest $550 billion in the US, while the European deal will have its members purchase $750 billion worth of American energy and invest $600 billion in the US. EU member states will also buy “vast amounts” of US military equipment.

Indian corporate earnings ahead

The next key catalyst for the Nifty 50 and BSE Sensex indices will be the upcoming earnings by some of the biggest companies. Already, some of the top companies, including Indian banks, have published their financial results. 

Vedanta and IndusInd Bank will be the top Nifty 50 companies that will publish their financial results on Monday. IndusInd Bank share price has plunged by over 50% from its highest point last year. 

The other top Nifty 50 Index companies that will publish their earnings this wek are Larsen & Toubro, NTPC, Power Grid, Hindustan Unilver, Adani Enterprises, Sun Pharmaceuticals, Mahindra & Mahindra, Coal India, ITC, and Britannia Industries. 

US earnings and Federal Reserve decision

The Nifty 50 and BSE Sensex will also react to the upcoming US earnings season, where some of the biggest companies, such as Amazon, Meta Platforms, and Apple, will report their results. Over 50% of all companies in the S&P 500 Index will publish their earnings this week.

At the same time, the Federal Reserve will publish the July interest rate decision on Wednesday. Economists expect the bank to maintain interest rates unchanged between 4.25% and 4.50%. 

Historically, US earnings season and FOMC decision tend to have an impact on global assets, including Indian stocks.

Nifty 50 Index analysis

The weekly chart shows that the Nifty 50 Index has been under pressure in the past few months. It has retreated in the last four consecutive weeks and even formed a double-top pattern with a neckline at ₹21,730, its lowest point in April. 

A double-top is one of the most bearish patterns in technical analysis. At the same time, the Relative Strength Index (RSI) and the MACD have all turned downwards.

Therefore, the index will likely continue falling as sellers target the key support at ₹24,000. A move above the resistance at ₹25,720 will invalidate the bearish outlook.

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On Monday, CK Hutchison announced ongoing discussions with a consortium regarding its $22.8 billion ports business. 

The talks involve incorporating a significant Chinese strategic investor into the bid, according to a Reuters report. 

The development follows Beijing’s indication of a probe into the deal, prompted by escalating Sino-US tensions.

The Hong Kong-based conglomerate issued this statement a day after the conclusion of exclusive negotiations with a consortium. 

This consortium was spearheaded by BlackRock, a US investment firm, and MSC, the family-operated shipping company owned by Italian billionaire Gianluigi Aponte.

In March, a preliminary agreement was reached between the parties for 43 ports located in 23 countries, notably including two ports situated along the strategically important Panama Canal.

China COSCO Shipping Corp, a ports operator, intends to join the consortium, according to the Reuters report.

On Monday, CK Hutchison’s shares increased by 1.6%, outperforming the Hang Seng Index’s 0.9% gain. 

Adjustments

CK Hutchison stated that adjustments to the consortium’s composition and the transaction’s structure would be necessary to obtain regulatory approval, and they would dedicate sufficient time to achieve this.

CK Hutchison said in a filing to the Hong Kong Stock Exchange on Monday:

The company has stated on several occasions that it will not proceed with any transaction that does not have the approval of all relevant authorities.

With the exclusivity period now concluded, CK Hutchison is reportedly open to considering acquisition offers from various interested parties. 

The decision to entertain other bids suggests a strategic shift following the expiration of the previous exclusive negotiation window. 

This development could potentially lead to a more competitive bidding process for CK Hutchison’s assets or operations, attracting a wider range of potential suitors from different sectors or regions. 

Uncertain future

The deal’s future is now uncertain due to this development. It was initially proposed after US President Donald Trump called for the Panama Canal to revert to US control, a suggestion that angered both Panama and China.

Trump declared the agreement a “reclaiming” of the Panama Canal, following his administration’s earlier demand for the removal of what it had identified as Chinese ownership of the canal’s ports.

The State Administration for Market Regulation in China announced its intention to review the deal. 

This review will be conducted in accordance with the law, with the goals of protecting fair competition and safeguarding public interests.

State-backed media, generally reflecting the government’s views, criticised the deal. They argued that China held substantial national interests in any such transaction, and proceeding with the deal in its current form would constitute an act of betrayal.

New member 

CK Hutchison’s statement indicated that a new investor would need to be a “significant” member of the consortium.

“This is an interesting development. A PRC (China) investor with majority control of the consortium sounds like a non-starter in my view. An investor with a less than 50% stake you would think should keep everyone happy,” strategist David Blennerhassett of Ballingal Investment Advisors, who publishes on SmartKarma, was quoted in the report.

JPMorgan noted in a client brief that adding COSCO to the consortium could alleviate some Chinese government concerns, thereby increasing the chances of regulatory approval. 

The US brokerage also suggested that a new deal might not encompass all ports, specifically mentioning the two Panama ports. 

Furthermore, the buyer composition could shift due to geopolitical considerations, which might subsequently influence the final pricing.

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The CAC 40 Index futures jumped by over 1% on Monday, reaching a high of €7,930, up from last Friday’s closing point at €7,835. It has jumped by over 15% from its lowest point in April. 

US and European Union trade deal

The main catalyst for the ongoing surge in the CAC 40 Index is the US-EU trade deal announced on Sunday. This trade deal will see most European goods pay a 15% tariff to the United States.

At the same time, the European Union will make vast investments in the US and buy more goods, including military equipment and energy. 

This deal helped to prevent a trade escalation on August 1. Trump had threatened to implement a 50% tariff on all goods brought to the US from Europe. Europe, on the other hand, had created a slate of American goods that would be subject to tariffs. 

Still, the 15% tariff on European companies will negatively impact some top CAC 40 constituents, such as Airbus, Dassault Aviation, LVMH, Michelin, and Hermès. French companies exported goods worth over $55 billion to the United States last year. 

The US-EU trade deal came a few days after the European Central Bank (ECB) paused its interest rate cuts. In a statement, Christine Lagarde justified the decision, noting that her committee was in a wait-and-see for the trade deal.

Top CAC Index companies earnings

The next important catalyst for the CAC 40 Index this week are earnings from some of the biggest companies. Essilor, the biggest eyewear company globally, will be the first to watch. It will be the first earnings after Meta Platforms took a minority stake. 

The other notable companies to watch will be luxury goods firms like Kering and Hermes. Kering, the parent company of Gucci, has been in the spotlight in the past few years as its growth has slowed because of its Chinese business. 

Hermes, on the other hand, has performed well and outperformed other luxury stocks, such as LVMH and Burberry. 

L’Oréal, Air Liquide, and Orange will publish their results on Tuesday, while Airbus, Danone, Cap Gemini, and Worldline will release their numbers on July 30. 

The other top CAC 40 companies to watch will be Sanofi, Schneider Electric, Safran, and banks like Credit Agricole and Societe Generale. Firms like Vivendi, Air France, Renault, and Accor will also release their quarterly financial results. 

Most importantly, the largest global companies, such as Microsoft, Apple, and Amazon, will also publish their earnings. The Federal Reserve will also publish its interest rates decision.

CAC 40 Index analysis

CAC 40 Index chart | Source: TradingView

The daily chart shows that the CAC 40 Index has staged a comeback in the past few days. It has remained above the 50-day and 200-day Exponential Moving Averages (EMA), a sign that bulls are in control.

The index has moved above the upper side of the descending channel, which formed the flag section of the bullish flag pattern. Additionally, the Relative Strength Index (RSI) has risen to 55.

Therefore, the CAC 40 Index will likely continue rising as bulls target the key resistance at €7,960, the upper side at €7,960. A move above that level will point to more gains, potentially to €8,000.

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