

US, European Union Strike Trade Pact; Australia Inks New Submarine Deal With UK
Jul 28, 2025
Join Paul Allen, Bloomberg's Australia Correspondent, and Clark Geranen, Chief Market Strategist at CalBay Investments, as they dive into the recent U.S.-EU trade agreement, which avoids a potential trade war with a 15% tariff on auto exports. They discuss the implications for the global economy and how it could influence earnings reports from tech giants. Additionally, Paul shares insights on the landmark 50-year defense treaty between Australia and the UK, focusing on nuclear submarines and job creation, while addressing geopolitical challenges in the AUKUS partnership.
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Positive Outlook on MegaCap Tech
- Big Cap tech earnings are expected to remain strong, continuing to beat expectations.
- Clarity from the US-EU trade deal boosts market confidence and tech sector outlook.
CapEx Guidance Signals Confidence
- CapEx guidance will be pivotal for assessing confidence amid past tariff and geopolitical uncertainties.
- Strong or growing CapEx signals companies' optimism and willingness to invest despite recent murky outlooks.
Market Valuations and MegaCap Tech
- S&P 500 valuations appear elevated with a PE ratio around 25, but excluding top tech firms, the PE is closer to 20.
- Strong earnings growth from major tech firms justify their higher valuations, balancing overall market concerns.