July 25, Market Update
As mentioned above, the sides reached a trade deal, although specific details will have to be hammered out in the coming months. The U.S. and the EU have reportedly agreed to lower industrial tariffs on both sides, and the EU has pledged to import more soybeans and liquefied natural gas and to give U.S. medical devices better market access. As for now, carmakers are not included in the deal, potentially creating big problems for German carmakers like BMW and Mercedes Benz.
In earnings, US-listed automakers General Motors and Fiat Chrysler also came under pressure, tumbling 4.6% and 11.8%, respectively, after both companies issued disappointing guidance for the fiscal year. GM narrowly beat earnings estimates, while Fiat Chrysler came up short.
The biggest news in after-hours trading was Facebook, which lost more than $140bn from its market capitalization as it forecast slowing revenue and lower margins, missed revenue expectations and saw about a million European users leave the platform in the last quarter. The new European privacy regulations, lower user growth, and mixed pricing in its new advertising approach all took its toll, sending the share price 20% lower.
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