Market Movers & Shakers

U.S. stocks retreated from all-time highs last week, though both the S&P 500 and Nasdaq remain near record levels set earlier this month. The Nasdaq closed relatively unchanged, down 0.08% on the week, while the S&P 500 slid 0.31% and the Russell 2000 declined by 0.63%. Energy was the top performing sector last week, followed by Utilities and Industrials. Financials, Consumer Staples, and Communication Services were the biggest laggards on the week. Volatility in both fixed income and equities has eased, reaching the lowest levels since mid-February. Longer-dated Treasury yields ticked higher last week, causing the yield curve to steepen a bit. The yields on the 30-Year U.S. Treasury Bond and 10-Year U.S. Treasury Note climbed 10 basis points, settling at 4.95% and 4.42% respectively. The U.S. dollar was stronger on the major crosses and rebounded slightly; however, the ICE U.S. Dollar Index (DXY) is still down nearly 10% year-to-date. WTI crude oil advanced towards $69 a barrel, up 2.2% as strong demand offset news of an OPEC+ output hike. In the metals complex, copper surged 8.9% to all-time highs, silver climbed to a 14-year high hitting $39 per ounce, and gold remained steady, consolidating around $3,350 per ounce. Bitcoin broke out to new highs in weekend trading, surpassing $123,000 for the first time ever.



Source: BofA Global Investment Strategy, Bloomberg. *Equal-weighted average of MOVE Index and VIX Index

Over the weekend, President Trump reignited trade tensions by announcing a 30% tariff on imports from the European Union and Mexico, effective August 1st, as negotiations with the United States’ major trading partners continue to stall out. The European Union’s chief trade negotiator, Maros Sefcovic, said that the EU would continue negotiating to try to prevent the tariffs from going into effect, and that the blanket 30% tariff would make US-EU trade “almost impossible”. The most recent escalation follows last week’s blanket tariff announcements ranging from 20% to 50% on 23 other countries, including Brazil, Canada, and Japan, as well as a 50% tariff on copper imports. So far, the market response has been fairly subdued, especially when compared to the sharp sell-off that followed the April 2nd “Liberation Day” tariff announcements. Some market participants view the administration’s more aggressive stance as simply a negotiating tactic—consistent with what has been dubbed the TACO trade, short for “Trump Always Chickens Out”. The acronym emerged in May after the administration pushed back deadlines and backed down from higher threatened tariff levels. However, not all market participants share that view. Another cohort of investors, perhaps most notably JPMorgan Chase CEO Jamie Dimon, believes markets are being too complacent and are underestimating the risk posed by tariffs. And that, as the saying goes, is what makes a market.



Source: FactSet

While trade headlines persist, AI related developments have continued to occupy much of the latest news flow. Last week, Nvidia became the first company to surpass the $4 trillion market cap threshold, fueled by reports that it plans to launch new AI chips designed specifically for the Chinese market in September. The company’s rise has been nothing short of extraordinary. Just a decade ago, Nvidia’s market cap stood at $10.5 billion—meaning it has grown more than 375x over the past ten years! Nearly as explosive is the intensifying war for AI talent, with reports of compensation packages reaching into the hundreds of millions to attract top talent in the field. According to a recent Bloomberg report, Ruoming Pang—Apple’s head of AI models—is leaving the company to join Meta, with a reported pay package exceeding $200 million. Pang played a key role in developing components of Apple Intelligence and other AI features. In a recent social media post, Meta CEO Mark Zuckerberg outlined the company’s AI expansion efforts, writing “for our superintelligence effort, I’m focused on building the most elite and talent-dense team in the industry”. The move to poach Ruoming Pang follows Meta’s recent recruitment of Scale AI founder Alexandr Wang and a dozen other OpenAI and Deepmind (Google’s AI research subsidiary) employees. And speaking of Google, the search giant recently scored big itself in the AI talent war, reaching a $2.4 billion deal to license technology from AI coding startup Windsurf. The deal brings on board CEO Varun Mohan, co-founder Douglas Chen, and several researchers into Google’s Deepmind division. The move by Google also effectively blocks OpenAI’s acquisition plan of Windsurf. Elsewhere, Amazon is reportedly considering investing more money into AI startup Anthropic, while Elon Musk’s xAI is planning to raise additional capital at a $200 billion valuation.

Second quarter earnings season is set to kick off this week with the big banks reporting results. We also get results from Taiwan Semiconductor, Netflix, GE Aerospace, American Express and PepsiCo. On the economic front, June Retail Sales data and Weekly Jobless Claims are set to hit the wires on Thursday morning, while the key datapoint on Friday will be July Consumer Sentiment (preliminary) from the University of Michigan.

Updates & News*

The pace of our investment of new accounts and new deposits has remained steady over the past few weeks. Market conditions since the sharp recovery off the April lows, characterized by elevated valuations and subdued volatility, have led to a deceleration in our transition process, which has since moderated. After two weeks under our management, new money is just over a third of the way in-line with our strategies. That figure rises to nearly 50% by the one-month mark and surpasses 70% by the end of the third month. As always, our transition process is driven by opportunities in individual stocks rather than moves in the broad market, and we continue to find attractive entry points across our portfolio holdings.

Turning to portfolio news, Synopsys announced that it had received approval from all necessary authorities to proceed with its $35 billion acquisition of Ansys after Chinese regulators gave the final green light. The decision from Chinese regulators comes a month after they postponed the approval of the deal, which was first announced in early 2024. The companies expect the transaction to close later this week. Sticking with the M&A theme, BlackRock recently announced the acquisition of ElmTree Funds. ElmTree is a real estate focused private-equity firm that specializes in net-lease agreements. The transaction will be paid for upfront in BlackRock stock, with the potential for additional consideration subject to ElmTree’s performance over the next five years. The deal highlights BlackRock’s continued push into private markets and follows its recent $12 billion acquisition of private-credit giant HPS Investment Partners. Elsewhere, Microsoft pledged $4 billion to offer AI training and resources to students, teachers, and workers worldwide through a new organization, Microsoft Elevate. The Microsoft Elevate Academy has a stated goal to help 20 million people earn an in-demand AI skill credential, ranging from foundational fluency to advanced technical training, over the next two years.

Source: Source of all data is FactSet, unless otherwise noted.

*The transition level activity taken by Tandem is applicable to new manager-traded accounts and new money in manager-traded accounts, not the composite or firm-wide level. New manager-traded accounts and new money in manager-traded accounts are not automatically invested on the first day. Rather, they are transitioned into our strategy over a longer time period that is dependent upon market conditions, this process differs from Tandem’s model-provided strategies, where money is invested on the day the account opens. Strategy level activity is applicable to the composite and action is taken at the firm-wide level.

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