28 July 2025 | Weekly Snapshot

Saward Dawson > Wealth Advisory Insights > Weekly Snapshot > 28 July 2025

Did you know?

There are now over 600m users of bitcoin. The below chart compares the adoption rate between Bitcoin and the internet, which shows that Bitcoin has been adopted at a stronger, faster rate than the internet.

Market Movements

The Australian market was lower by 0.8% last week, led by financials (down 3.9%). CBA was one of the worst performers (down 5.3%) with some steam finally coming out of the share price. Resources became a rotation beneficiary (up 2.6%) from Bank weakness, with both Pilbara (lithium) and Whitehaven (coal) both up over 12% last week.

Globally, no sector was negative, showing that for the second week in a row, larger macro-factors are behind a systematic rally in stock prices, resulting in the broad sector strength. Materials were the strongest sector globally (up 2.%). Baker Hughes (a large US onshore oil drilling company) was higher by 15.9%.

Copper and Iron ore were both higher by 1.3% and 1.4% respectively, whereas gas prices (down -12.8%) and oil (down 1.2%) were soft.

Markets are pricing an inflation rate to average 2.1% in Australia over the coming 10 years, which is benign. Interest rates, historically, tend to average 1% above the inflation rate. Australia’s current interest rate is 3.85%, which would justify an interest rate of 3.1%

In the USA, markets are expecting a 5-year inflation rate of 2.6%, which is modestly above Australia, and can explain why interest rates in the USA are still above us (4.3% vs 3.85%). Using the same analogy as above, if US interest rates settle at a 1% premium to inflation, this would follow that US rates could be lowered from 4.3% to 3.6%.

This is all good news for markets – lower interest rates mean lower borrowing costs, which increases the liquidity pool of money chasing. In the real economy, the lowering borrowing costs mean more borrowing and more investing, which boosts earnings. On the flip side, investors should be enjoying the rally in stocks, yet remain vigilant towards any increase in the inflation numbers.

Portfolio Movements

Verizon beats Q2 estimates – Raises full year guidance

US telco giant, Verizon, reported a solid Q2 last week with Q2 EPS of $1.22 ex-items ahead of the $1.19 expected and up 6% year on year. Q2 revenue of $34.5B was also ahead of the $33.74B expected, with shares trading higher on the result.
CEO Hans Vestberg commented “Verizon’s strong second-quarter financial performance reflects our high-quality, industry-leading customer base, our multiple growth paths, the success of our disciplined, segmented approach, and the inherent strength of our company,”
Full year guidance was also upgraded slighty to EPS growth in the 1.0%-3.0% year on year ex-items range vs prior guidance of 0%-3.0% with the earnings turnaround at the company seemingly on track, helped by strong operational execution in the first half of 2025, coupled with favourable tax reforms from Trump’s recently enacted One Big Beautiful Bill Act.

Google beats Q2 estimates

Google reported a strong Q2 last week with Q2 EPS of $2.31, up 19% year on year and ahead of the $2.18 expected. Q2 revenue of $96.43B up 14% year on year was a decent beat on the $93.99B expected.
Google Services revenues increased 12% to $82.5 billion, reflecting strong performance across Google Search & other, Google subscriptions, platforms, and devices, and YouTube ads. Likely allaying some concerns Google could lose some search to Chat GPT.
CEO Sundar Pichai: “We continue to see strong performance in YouTube as well as subscriptions offerings. And Cloud had strong growth in revenues, backlog, and profitability. With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures in 2025 to ~$85B and are excited by the opportunity ahead.”

Lloyds Banking Group reports inline Q2, increase s dividend, reaffirms FY25 guidance

UK lender Lloyds reported a solid Q2 last week with net income of £4.52B vs consensus £4.51B. Underlying profit of £2.03B was decent beat on the £1.75B expected.
An interim ordinary dividend of 1.22 pence per share was declared, up 15% on last year and based on current macroeconomic assumptions the company maintained guidance for full year 2025.
“We have shown sustained strength in our financial performance in the first half of 2025, with income growth, cost discipline and robust asset quality, driving strong capital generation and increased shareholder distributions” said CEO Charlie Nunn.

The Week Ahead

Tuesday 29 July: USA Wholesale Inventories MoM (June) -0.1% (prior -0.3%).
Wednesday 30 July: USA Conference Board Consumer Confidence (Jul) 96.0 (prior 93.0m). Australia CPI QoQ (2Q) 0.8% (prior 0.9%), CPI YoY (2Q) 2.2% (prior 2.4%).
Thursday 31 July: USA, FMOC Rate Decision 4.25% – 4.50% (current 4.25% – 4.50%), Personal Income (Jun) 0.2% (prior -0.4%), Personal Spending (Jun) 0.4% (prior -0.1%), Initial Jobless Claims (26 Jul) 223k (prior 217k). Australia Building Approvals MoM (Jun) 1.8% (prior 3.2%), Retail Sales MoM (Jun) 0.4% (prior 0.2%). China Manufacturing PMI (Jul) 49.7 (prior 49.7).
Friday 1 August: USA Change in Nonfarm Payrolls (Jul) 109k (prior 147k), Unemployment Rate (Jul) 4.2% (prior 4.1%) , S&P Global US Manufacturing PMI (Jul F) 49.7 (prior 49.5). United Kingdom S&P Global
Saturday 2 August: USA ISM Manufacturing (Jul) 49.5 (prior 49.0), ISM Price Paid (Jul) 70.0 (prior 69.7), Construction Spending MoM (Jun) 0.0% (prior -0.3%), University of Michigan Sentiment (Jul F) 61.8 (prior 61.8)

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Saward Dawson Wealth Advisors Pty Ltd, a Corporate Authorised Representative of Akambo Pty Ltd t/a Accountants Private Advice

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