“Many traders think that it’s only when they know what would happen in the future that they can make money. So, they make many assumptions about the future, including the belief that what is happening at the moment would persist forever — the trend would continue or the range market would persist. They trade as if the present condition is the default condition of the market.”– Ray Dalio

1. U.S. Mid-Atlantic Factory Activity Contracts at Fastest Rate This Year — the Fifth District Survey of Manufacturing Activity’s index for July sank sharply to minus 20 from minus 8 in June, the Federal Reserve Bank of Richmond said Tuesday. A consensus of economists polled by The Wall Street Journal expected it instead to inch up to minus 6.5. The reading below zero means more of the 66-72 firms responding to the survey this month reported decreasing activity than increasing, the fifth month in a row that has happened. Average growth rates of prices paid and received also fell a little in July, pointing to lighter inflationary pressures this month.
2. Trump Strikes Deal With Ally Japan Setting Tariff Rate at 15%-– President Donald Trump on Tuesday stateside announced a “massive” deal with Japan that includes “reciprocal” tariffs of 15% on the country’s exports to the U.S., with auto duties reportedly being lowered to that level as well. Following Trump’s post, Japanese Prime Minister Shigeru Ishiba said that auto tariffs on Tokyo will be lowered to 15% — from the current 25% that is levied across countries — as part of the deal, Reuters reported. Auto exports to the U.S. are a cornerstone of Japan’s economy, making up 28.3% of all shipments in 2024, according to customs data.
3. Trump Pushes Powell on Interest Rates During Tour of Fed — Donald Trump downplayed jostling with Federal Reserve Chairman Jerome Powell over cost overruns during a tour of the central bank’s renovation project, even as he used the interaction to again push for lower interest rates. The president’s visit was a rare spectacle and a public escalation of his clash with the central bank chief. While Trump has regularly lambasted Powell on social media — and pushed him over interest rates during a private White House meeting in May — Thursday’s visit offered him the chance to voice his concerns directly on the chairman’s own turf.
4. U.S. Durable Goods Orders Sink on Lower Aircraft Orders — total orders for goods made to last at least three years, such as automobiles, planes and electronic equipment, were 9.3% lower in June than in May, Commerce Department data said Friday. Economists polled by The Wall Street Journal expected an 11.1% slump. The slowdown in orders offset some of the upwardly revised 16.5% rise of May, much of which came from Boeing orders. That was shown in transportation equipment new orders falling 22.4% in June compared with May, with orders for nondefense aircraft and parts down 51.8%. Excluding transportation, durable goods orders increased 0.2% in June.
5. RFK Jr. to Oust Advisory Panel on Cancer Screenings, HIV Prevention Drugs — Kennedy plans to dismiss all 16 panel members of the U.S. Preventive Services Task Force because he views them as too “woke,” the people said. The task force has advised the federal government on preventive health matters since 1984. The Affordable Care Act in 2010 gave it the power to determine which screenings, counseling and preventive medications most insurers are required to cover at no cost to patients. The group, made up of volunteers with medical expertise who are vetted for conflicts of interest, combs through scientific evidence to determine which interventions are proven to work.

The week ahead — Economic data from Econoday.com: