Must read: S&P500 forecast, Porsche, Amazon, Shein IPO

GLOBAL MARKETS

Following yesterday’s down day on Wall Street, European markets have opened largely flat. Tariff headlines are the name of the game in terms of what’s dominating markets this week. Donald Trump sent letters outlining tariffs to 14 countries, while Wednesday’s deadline for when they come into effect looks like it has been pushed back to 1 August, at least for now.

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Negotiations will continue to take place with Trump leaving the door open to another deadline delay by saying the August date is ‘not 100% firm’. Most trade partners are yet to strike deals with the US.  

US futures are pointing to a flat to modestly higher open after the Nasdaq closed lower by almost 1%, dragged down by Tesla Inc (NASDAQ:TSLA) which shed $68 billion in market cap on Monday. After record highs stateside last week, Goldman Sachs has raised its forecast for the S&P 500. It now expects the Wall Street benchmark to gain 11% over the next 12 months citing deeper Federal Reserve easing and lower bond yields. 

It was a mixed picture in Asia with Trump tariffs centre stage. As it stands, Japan and South Korea are expected to face 25% tariffs. Meanwhile, the Reserve Bank of Australia kept its cash rate unchanged at 3.85% amid concerns about inflation and the strength of the labour market. The surprise decision not to cut rates has boosted the Aussie dollar.

PORSCHE 

Porsche Automobil Holding SE Vorz-Inhaber-Akt stimmrechtslos (XETRA:PAH3) reported a drop in first-half sales. Global sales were down by 6%, German sales fell by 23% and Chinese sales slumped by 28% with Porsche citing ‘challenging market conditions.’ However, North America was a bright spot with growth of 10%, marking the strongest first half in the region’s history. 

Porsche has been looking to grow market share in electric vehicles. Between January and June, 36.1% of vehicles sold were electrified, with about two-thirds fully electric and one third plug-in hybrid. Of its six model lines, the Macan saw the strong growth rate of 15%.

Echoing what its rival Mercedes-Benz Group AG (XETRA:MBG) said on Monday, car sales have had a tough few months as Trump’s tariff uncertainty takes its toll. Stiff competition from rivals globally like BYD in China and Tesla in the US is another major headwind. The green energy transition has been muddied this year by the US administration which is focusing on ‘drill, baby, drill’ instead.  

Shares in Porsche are under pressure today, landing the stock down nearly 28% so far this year and down almost 50% since its IPO in 2022.

AMAZON PRIME DAY 

Amazon.com Inc (NASDAQ:AMZN) has begun its biggest Prime Day event ever taking place from today until 11 July. As dedicated shopaholics scour the platform for its very best deals, investors will be paying close attention for clues into the strength of the US consumer and the economy. 

Shoppers are entering into a four-day spending frenzy, much longer than the two-day event last year with ‘millions of deals worldwide’, according to Amazon. In a year marked by trade tariff headwinds, shaky consumer confidence and a drop in US GDP, retailers will be hoping that sweetened offers this week will provide a shopping sugar rush on things like clothing and back-to-school items at the lower end, as well as big ticket electronics and appliances.

Amazon’s rivals Walmart Inc (NYSE:WMT) and Target Corp (NYSE:TGT) are also hopping on the bandwagon, with a slate of their own competing deals. For Amazon, it also provides an opportunity to lock in new shoppers to a Prime membership, potentially helping to drive higher recurring revenues over time. 

According to Adobe Analytics, sales across the Prime Day event are expected to rise by 28.4% versus the same period last year to $23.8 billion in online spend across US retailers.

SHEIN IPO 

According to the Financial Times, Chinese fashion retailer Shein has filed for an IPO in Hong Kong in an attempt to put pressure on the UK regulator to approve its London listing. Having filed for a London IPO 18 months ago, it is still waiting for the regulatory green light. China’s supply chain and concerns about human rights abuses appears to be at the heart of the regulatory stumbling block. 

Shein has reportedly struggled with a plunge in earnings last year amid stiff competition from copycat Temu, leaving Shein’s $66 billion valuation from back in 2023 at risk of getting slashed.  

The London listed market has suffered in recent years with the departure of some major businesses like CRH, Flutter and Wise. Just last week the FTSE 100’s most valuable company, AstraZeneca (LSE:AZN) suggested it wants to shift the company’s listing to the US from the UK in what would be yet another painful disappointment. Plus UK fundraising from IPOs has plunged to a 30-year low this year. 

Cheerleaders of the London market will be desperate that Shein’s much talked about IPO can overcome these regulatory hurdles. The hope would be that this could mark the start of a more positive chapter for the City of London, reigniting its status as a global financial hub and attracting further flotation interest in future.