Week Ahead: Uncle Sam Buys In

President Trump’s latest economic strategy is turning heads and markets. In a significant departure from traditional free-market capitalism, the U.S. government has begun acquiring equity stakes in private companies that it considers vital to national security. This shift is occurring during peacetime and without the pressures of a recession, which makes it even more impactful on the market.

A New Kind of Market Player

Let’s start with the headlines. When Japan’s Nippon Steel proposed acquiring U.S. Steel, the deal only advanced after the Trump administration secured a “golden share.”

This special class of shares gives the U.S. president veto power over major corporate decisions like shutting down plants or shifting operations abroad. No government money was invested, but a seat at the table was secured.

Then there’s the Pentagon’s $400 million equity injection into MP Materials, America’s only rare earth miner and processor. That investment made the U.S. Department of Defense the company’s largest shareholder, securing a price floor for critical magnets used in everything from fighter jets to electric vehicles.

Translation? The U.S. government now has real financial skin in the game and a production pipeline to protect.

Golden Shares & Strategic Stakes

Markets responded quickly. MP Materials stock surged as traders priced in lower risk and steady demand. The question now on everyone’s mind: Which company will Washington back next?

Names in defense, AI, quantum research, and clean tech are all being considered. Anyone involved in national security or energy transition could be a candidate.

But it’s not without risks. Government involvement brings politics into the boardroom. Profits might take a backseat to policy. Underperformance could burden taxpayers. And retail traders may lose confidence if government decisions override market logic.

Winners, Risks & Reactions

The bigger shift is psychological. Traders must now consider the possibility of any firm entering a public-private arrangement. A special share here, a Pentagon investment there; suddenly, market forces begin to feel more curated than competitive.

This could trigger momentum across entire sectors seen as “strategic,” but also adds weight to every earnings call, acquisition rumor, or government press release.

Taking a broader perspective, the S&P 500 continues to stay above the 6400 level, indicating that overall market sentiment remains strong. However, some stocks seem to be benefiting from a new advantage: government support. As the U.S. increasingly embraces industrial policy, other countries may follow suit. We can anticipate a global shift from purely free-market competition to more state-influenced economic blocs.

Rare Earths Are Just the Beginning

China currently dominates rare earths. But if the U.S. builds out domestic supply chains with the Pentagon acting more like a VC than a defense agency, it sets a precedent. Sectors like lithium, semiconductors, and even data infrastructure could be next. This is less about protectionism and more about economic sovereignty.

Policy Meets Monetary Easing

The timing is no accident. While the Fed holds rates steady at 4.5%, speculation is rising about a rate cut in September.

Non-farm payrolls on Friday are expected to decline to 108K from 147K, while unemployment is projected to rise to 4.2%. If these expectations are realized, the case for monetary easing strengthens, potentially putting short-term pressure on the dollar. And in the background, the White House is playing a more active role in both fiscal and industrial strategy.

Watchlist

US Dollar Index (USDX):

After retreating from the 97.50 area, the dollar remains unsettled. Watch for price rejection around 97.75 or 98.10. A break above these zones could reignite bullish momentum; failure to break could indicate another leg lower.

EUR/USD:

The pair moved higher off the 1.1700 level but needs confirmation. A drop toward 1.1665 could provide a re-entry if a bullish structure appears. Without it, upside momentum may stall.

GBP/USD:

The break below 1.3470 opens the door to a test of 1.3310. If buyers step in at that level, a rebound may be in play, particularly if the dollar weakens.

USD/JPY:

Closed above 147.70. If it holds, watch 148.40 as the next test level. On a decline, 147.15 is key support. U.S.–Japan trade talks and inflation data could drive sharp moves.

USD/CHF:

Slipped from 0.7970. If it rebounds, look for resistance near 0.8000. Otherwise, the pair is stuck in a neutral zone, awaiting clearer direction.

AUD/USD:

Closed near 0.6550. If it holds, bears may look to enter between 0.6580 and 0.6590. If the pair drops, bulls might find an opportunity at 0.6515, a previously reliable bounce zone.

NZD/USD:

Similar to AUD. Bearish setups may form near 0.6030. Support is strong at 0.5955, a potential buy zone if tested again.

USD/CAD:

If consolidation holds, bulls may look at 1.3670 and 1.3655 for fresh positions. Softer oil prices could support the pair, with BoC rate expectations largely priced in.

Commodities to Watch

Crude Oil (USOil):

Pulled away from trendline resistance. If it slides further, key support zones are 63.35 and 61.00. A bounce there could align with OPEC statements or geopolitical risks in early August.

Gold:

Fell from 3390. Next support is 3295, a potential long entry if bullish structure builds. Otherwise, continued rate-hike fears may weigh on price.

S&P 500:

Hovering around the 6400 mark. A break higher could lead to 6630, but earnings and central bank commentary may keep it range-bound.

Bitcoin:

Bounced after briefly dipping below 15714. Key resistance now lies at 120,350. A close above that level may trigger the next rally. Otherwise, support zones at 113,345 and 111,000 offer potential entry points.

Natural Gas:

If it consolidates soon, look for bearish signals near 3.20–3.28 unless a catalyst shifts the supply-demand balance.

Key Events This Week

This week’s data releases will add pressure or relief to market expectations around the Fed’s next move.

Tuesday, July 29

JOLTS Job Openings: Forecasted at 7.49M (down from 7.77M), signaling a softer labor market. A weaker reading may further fuel expectations of a September rate cut.

Wednesday, July 30

1. U.S. Advance GDP: Expected rebound to 2.4% after last quarter’s -0.5%.
2. Bank of Canada Rate Decision: No change expected (2.75%). A dovish tone could lift USDCAD.

Thursday, July 31

1. FOMC Meeting: Fed likely to hold at 4.5%, but all eyes on forward guidance.
2. Bank of Japan: No hike expected, but hawkish hints could pull USD/JPY lower.
3. Core PCE Price Index: Forecast at 0.3%. If inflation proves sticky, it complicates the Fed’s easing path.

Friday, August 1

Non-Farm Payrolls: Forecast at 108K vs 147K prior. Unemployment is expected to rise to 4.2%. A weak print would support rate cut arguments. Strong numbers could throw markets off balance.

No single release may tip the scale, but together, this week’s reports on jobs, inflation, and growth could shape the quarter’s tone.

Dollar pairs remain range-bound. Equities hover near resistance. Gold clings to support.

It’s a waiting game, and Washington just added a new player to the table: the U.S. government, now acting not only as regulator or lender, but buyer, shareholder, and sometimes decision-maker.

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