Bloomberg Daybreak: Asia Edition US and Japan Reach Trade Deal; Mag Seven in Focus
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Jul 23, 2025 Stephanie Leung, Chief Investment Officer at StashAway, and David Aspell, Partner and Co-Chief Investment Officer at Mount Lucas Management, delve into the recent US-Japan trade deal that has invigorated global stock markets. They discuss how this agreement eases tariff concerns and boosts major automakers in Japan. The focus shifts to the upcoming earnings reports from the Magnificent Seven, where AI's transformative role is highlighted. They also explore the challenges tech companies face from AI advancements and the implications for the Federal Reserve's monetary policy.
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U.S.-Japan Trade Deal Progress
- The U.S.-Japan trade deal sets a 15% tariff rate and opens Japanese markets to U.S. products.
- This agreement signals progress toward ending the tariff war and easing market concerns.
Tariffs’ Economic Impact
- Tariffs are largely paid by American businesses and consumers through higher prices.
- The economic impact is similar to a tax increase, but fiscal policy may offset some effects.
AI Powering Tech Earnings Growth
- The Magnificent Seven tech companies are driving strong earnings growth, especially due to AI developments.
- AI benefits have concentrated in big tech but will broaden to other companies in coming years.