Daily Bull Report August 21 2025: Mixed Economic Signals: Inflation, Tariffs, and Fed Uncertainty
Hello everyone, and welcome to your daily dose of market insights! Today, August 21st, 2025, we're seeing a mixed bag of news, from strong economic indicators to concerns about inflation and the ongoing impact of tariffs. Let's dive in!
Macroeconomic Trends: A Mixed Picture
U.S. selected services revenue grows 2.2% Q/Q in Q2 2025, Census Bureau says
The U.S. Census Bureau reported a 2.2% quarter-over-quarter growth in selected services revenue for Q2 2025, reaching $5,967.5B. While this is positive news, it's important to note that utilities revenue experienced a significant 13.6% decline. This signals a need to consider the nuances within the services sector.
US business activity picks up in August, with factories leading the way
Positive news on the business activity front! S&P Global's flash U.S. Composite PMI Output Index rose to 55.4 in August, its highest level since December. Manufacturing is particularly strong, with new order activity at its highest since February 2024. However, the rising input prices, driven by tariffs, are a cause for concern, as companies are increasingly passing these costs onto consumers.
U.S. unemployment claims surge to nearly 2 million, the most in almost 4 years
Unemployment claims surged to nearly 2 million last week, a significant increase. While still within a historically healthy range, this rise, coupled with slower job growth and a slight increase in the unemployment rate, warrants attention. The ongoing impact of President Trump's tariffs on employer confidence is also a factor to consider.
Corporate Spotlight: Walmart and the Tariff Tightrope
Walmart hikes sales and earnings outlook even as it says tariff costs are rising
Walmart exceeded sales expectations but slightly missed on earnings. Despite rising tariff costs, they've raised their full-year outlook, indicating continued consumer resilience. However, they've acknowledged that middle- and lower-income households are more sensitive to price increases due to tariffs. This highlights the ongoing tension between tariff impacts and consumer spending power.
Monetary Policy: September Rate Cut Uncertain
Kansas City Fed's Schmid shows hesitation about widely expected September rate cut
Kansas City Federal Reserve President Jeffrey Schmid expressed skepticism about a September rate cut, citing the need for more progress on inflation. This contrasts with market expectations and underscores the ongoing debate within the Federal Reserve regarding the appropriate monetary policy response to current economic conditions. The political pressures on the Fed are also noteworthy and complicate the decision-making process.
Other News
- ETF Flows: Mixed signals. Some sectors saw outflows, while Bitcoin experienced inflows. More investigation is needed to understand the underlying causes and potential market implications. I'll continue monitoring these trends closely.
Closing Thoughts
Today’s news paints a complex picture. While some sectors show strength, the looming impact of tariffs and the uncertainty surrounding monetary policy remain key concerns. I believe staying well-informed and adaptable is crucial for successful investing in this dynamic environment. As always, I'll keep you updated. Until next time, happy investing!