China Customs: There are recent indications of recovery in US-China trade.

China Customs: There are recent indications of recovery in US-China trade.

There are recent indications of a recovery in US-China trade relations, as both nations show progress in their ongoing efforts to strengthen economic ties. The U.S. and China have reached a consensus on trade, marking a significant development in their relationship [1].

Market Recovery
U.S. markets are showing signs of recovery, with the S&P 500 advancing 0.55% and the Nasdaq Composite climbing 0.63%. This marks the third day of gains for both indexes, providing a much-needed boost to investors [1].

Tesla’s Surge
Tesla shares rose significantly, increasing by 5.7% after Elon Musk shared a video on X showing that Tesla was testing driverless vehicles in Texas. This news sent shockwaves through the tech industry, with many analysts praising Tesla’s innovative approach to autonomous driving [1].

Challenges in the Bond Market
Not all sectors are experiencing growth. Key readings on inflation, combined with two critical Treasury auctions this week, present a major test for the battered bond market [1].

Concerns Over Capital Flight
American fund managers are lobbying Congress over a provision that could lead to foreign investors quickly pulling investments out of the U.S. Tom Lauricella, chief investment officer at Fidelity International Asset Management, expressed concerns during an interview with Bloomberg Television [1].

Key Economic Indicators
As lawmakers consider Section 899, investors will be watching closely for any developments that could impact global markets and trade agreements. Key readings include:
- Personal income fell by less than expected last month.
- Consumer spending declined more than forecast.
- Consumer prices rose less than expected last month.
- Airline passenger traffic fell more sharply than forecast.
- New home sales surged more sharply than forecast.
- Costs associated with building homes fell more sharply than forecast.
- Preliminary data showed consumer confidence rebounded strongly last month [1].

Federal Reserve officials will speak publicly today, including Federal Reserve Chairman Jerome Powell. Economists expect discussions on interest rates, with inflation expectations remaining high despite recent declines [1].

Tesla’s Autonomy Goals
Tesla Inc.’s stock surged after Elon Musk posted footage online showing driverless cars navigating roads without human intervention. Musk stated his plans to ensure there won’t be any accidents involving Tesla’s Autopilot system during testing [1].

Upcoming Earnings Reports
Investors are also awaiting earnings reports from several companies, including:
- Home Depot Inc.
- Lowe’s Cos.
- Walmart Inc.
- Target Corp.
- Kohl’s Corp.

These companies will report quarterly results starting Thursday morning. Notable updates include:
- Home Depot reported same-store sales jumped by double digits compared to year-earlier levels.
- Walmart reported same-store sales excluding fuel increased by nearly double digits and raised its annual profit outlook amid strong demand for groceries.
- Target reported same-store sales excluding fuel jumped nearly double digits compared to year-ago periods.
- Kohl’s reported same-store sales excluding digital plummeted almost twice as much as Wall Street had predicted [1].

Political Landscape
During an appearance earlier Tuesday, Congressman Josh Gottheimer (D-N.J.) told CNBC that his party may try again next Congress if Democrats fail now. He emphasized the need for bipartisan support for the Democrats’ tax plan to raise revenue under President Joe Biden’s budget plan [1].

Trade negotiations between the US and China are progressing slower than anticipated, potentially leading to extended tariff deadlines. Deadlock persists, with limited progress in finalizing a deal. China's dominance in rare earth metal supply, controlling 90% of global capacity, poses a threat to the global automobile industry, particularly electric vehicle production [2].

The 90-day pause for trade negotiations which was initially set to end on July 9, has been extended to August 1. Trump has escalated trade tensions by sending tariff letters to more than 20 countries, warning that higher import duties will take effect from August 1, 2025 if bilateral trade deals are not reached [2].

Strained relations between the European Union and China have put their upcoming summit in late July at risk. During their discussions in mid-June, EU delegates opted not to hold an economic meeting with Chinese officials to discuss trade. The Financial Times reported that a “lack of progress on numerous trade disputes” was why the meeting was not held [3].

References:
[1] https://marklamplugh.com/u-s-and-china-reach-trade-consensus-as-markets-show-signs-of-recovery/
[2] https://timesofindia.indiatimes.com/business/international-business/slow-us-china-trade-deal-may-push-trumps-tariff-deadlines-rare-earth-metal-supplies-may-face-disruption-report/articleshow/122384882.cms
[3] https://www.forbes.com/sites/marktemnycky/2025/07/11/european-trade-tensions-rise-ahead-of-the-july-summit-in-china/