Early Morning Reid: Macro Strategy

Research evidence excerpt

Early Morning Reid: Macro Strategy

3 July 2026

Early Morning Reid

than-expected services sector activity. S&P 500 (+0.35%) and Nasdaq (+0.83%)

futures are also higher.

Economic data released earlier this morning showed that China’s services sector

expanded more than anticipated in June, driven by robust domestic and

international demand. The RatingDog Services PMI eased slightly to 54.1 from

54.4 in May but beat the 53.0 expected. There was continued growth in new

business, with both domestic and overseas orders increasing. Notably, services

exports rose at their fastest pace since October 2024. Meanwhile, the S&P Global

Australia Services PMI improved to 50.5 from 48.7 in May, signaling a modest

recovery in activity.

It's also worth noting that Bloomberg are carrying a story this morning that the

Trump administration and its allies are actively exploring ways to reshape the

Federal Reserve by removing or replacing key officials. Despite a recent Supreme

Court decision allowing Fed Governor Lisa Cook to remain in her role for now,

efforts to challenge her position are continuing, with a renewed focus on

following procedural grounds for potential removal. Former Chair Jerome Powell

is also under scrutiny, according to the story, with ongoing political and legal

pressure potentially creating an avenue for his departure.

At the same time, the administration is seeking to influence the central bank

through upcoming appointments, including the presidency of the Atlanta Fed, a

role seen as strategically important for its economic analysis and future voting

power on interest rates. So one to watch.

Ahead of that, markets put in another strong performance yesterday, as an

underwhelming US jobs report led to mounting hopes that the Fed wouldn’t hike

rates this year.