Awaiting Alphabet, Tesla, IBM Reports, US-Japan Trade Deal, Stock News and Geopolitics
Latest stock market news
• The US stock market tried to decline yesterday on profit taking in semiconductors (the trigger for the decline was the problems with Stargate financing. That's why ORCL fell by 2% yesterday). However, the sell-off did not provoke panic, and as a result, stock indices closed the day near zero.
This was a rotation from semiconductors to the broad market. The growth of the market breadth is a good sign for a bull market.
Everything is calm in the morning. Only the Japanese stock market is growing by 3% after Trump's announcement of the deal. Bitcoin is hovering around $120 thousand.
• Just when U.S. corporate earnings were beginning to show some negative impact from high tariffs, President Donald Trump grabbed the market's attention by announcing a trade deal with Japan, pleasantly surprising investors.
• Everyone was hoping for more - the prospects for a deal between the US and the European Union have definitely improved now that representatives from the 27-nation bloc are due in Washington on Wednesday for more talks. European stock futures rose 1.1% on the optimism.
• South Korea is studying the deal with Japan as its officials travel to the United States for further trade talks. U.S. and Chinese officials will meet in Stockholm next week to discuss extending the tariffs. The agreement with Japan included a 15% cut in tariffs on U.S. auto exports, down from 25%. That helped boost shares of Japanese automakers, with Toyota Motor jumping 15% and Mazda Motor up 17%.
• A look at Tesla, Alphabet. The broader Nikkei index soared 3.2% to its highest in a year, while 10-year Japanese government bond yields jumped 9 basis points as reduced uncertainty helped the Bank of Japan clear the way for a resumption of interest rate hikes. The dollar initially fell against the yen but last rose 0.2% to 146.9 yen after local newspaper Mainichi reported that Prime Minister Shigeru Ishiba had decided to step down after losing Sunday's upper house election.
• Beyond trading news, investors will be watching earnings reports from Tesla and Google parent Alphabet today, two of the "Magnificent Seven" companies whose shares have largely driven the market higher on optimism about artificial intelligence.
Earnings from U.S. companies have been mixed so far, with investors watching closely for signs of a slowing U.S. economy and the impact of Trump's tariffs. General Motors shares fell 8.1% after the automaker reported a $1 billion hit to its quarterly results due to tariffs.
• Investors are flocking to the most volatile stocks, hoping for quick profits despite the high risks, - JPMorgan. Call options now account for ~68% of total trading volume in the options market, the highest level since late 2021.
• Currency options markets signal the US dollar may be under pressure again - BBG Investors are increasingly worried about the Fed's independence,
as 5-year forward inflation swaps have risen and have broken away from their tight link to 2-year yields - Goldman Sachs.
• Insiders are extremely pessimistic - a record for the entire period of observation, analysts believe.
Only 11.1% of companies with insider activity demonstrated more purchases than sales. This is the lowest figure in history.
• Nvidia's return to China gives Beijing time to ramp up chip production - CNBC
• Chinese shares rise to 8-month highs. Hong Kong shares hit multi-year highs. Construction and energy stocks lead gains.
• RTRS reports that the driver this time is the start of work on a dam project in Tibet, considered the world's largest.
In fact, it is the result of a new wave of fiscal stimulus.
• Chinese company Pop Mart, which produces Labubu toys, is now worth more than Gazprom and Tatneft.
Its market capitalization has reached $42 billion, exceeding the value of Gazprom ($38.7 billion) and has grown 2.5 times since the beginning of the year.
Pop Mart is now even more expensive than (MAT) Mattel (Barbie) — the difference is almost $36 billion.
• Global LNG trade will grow by 5.5% in 2025 and by 7% in 2026, according to the IEA. The IEA expects gas prices at the European gas hub to rise by 16% in 2025 and by 70% in the US.
• US regulators will make the stock market much more accessible to active private investors.
Financial regulator FINRA plans to lower the threshold for “pattern day trading” to $2,000 from $25,000.
• European stock exchanges consider launching 24-hour trading - CNBC.
• UBS: iPhone sales likely fell 18% in June
• Microsoft (MSFT) has hired two dozen people from its DeepMind (GOOG) AI unit in recent months.
• Google (GOOG) is in talks with several media outlets to create an AI project.
• Musk is looking to raise up to $12 billion more for xAI, just weeks after raising $10 billion.
The company needs the funds to buy Nvidia NVDA chips and build data centers.
• Universal Music has filed confidentially for an IPO in the US.
• Netflix (NFLX) is now using AI from startup Runway AI in content production.
• SoftBank and OpenAI squabble over locations for $500 billion Stargate project, WSJ
Despite a high-profile White House presentation, no data center deals have been finalized.
Initial ambitious plans have been scaled back to a small Ohio data center scheduled to launch by the end of 2025.
• Apple (AAPL) likely to win EU antitrust approval for app store fees and rules — RTRS
Medpace (MEDP, +55%). The company raised its 2025 guidance to $2.42 billion-$2.52 billion and improved its EPS forecast on new contracts and buybacks.
• Sanofi (SNY, +2%) is acquiring Vicebio for $1.6 billion (including $1.15 billion upfront) to strengthen its respiratory vaccine pipeline.
• Oracle (ORCL, -2%) is in talks for a $100 million cloud deal with Skydance Media, which is contingent on its acquisition of Paramount (PARA).
• WR Berkley (WRB, +1%) expects premium growth of 8-12%; record EPS and investment income.
• General Motors (GM, -8%) beat expectations: EPS of $2.53, revenue of $47.1 billion; 2025 outlook kept. GM's profit fell in the second quarter due to Trump's tariffs.
• Northrop Grumman (NOC, +9%) raised its forecast for 2025; EPS $8.15, revenue $10.4 billion, active buybacks.
• Tenet Healthcare (THC, -11%) beats forecast: EPS $4.02; revenue $5.27 billion; buyback increased by $1.5 billion.
• DR Horton (DHI, +17%) Q3: EPS $3.36, revenue $9.23 billion; updated bullish guide.
• Danaher (DHR, +1%) beats estimates; EPS $1.80, revenue $5.9 billion; raises full-year guidance.
• Volaris (VLRS, +16%) beats Q2 expectations: revenue of $693 million, but EPADS of -$0.54; 2025 forecast increased.
• Sarepta Therapeutics (SRPT, +2%): Suspended shipments of Elevidys at the FDA's request following deaths.
• Strategy (MSTR, 0%) will issue new STRC “Stretch” prefs worth $500 million for further purchase of BTC.
• Conflux Launches Yuan Stablecoin AxCNH for Global Belt and Road Initiative
In early July, China hosted a meeting of the Shanghai State-Owned Assets Supervision and Administration Commission in response to calls from experts and major Chinese companies to develop Yuan-pegged stablecoins to compete with the US and accelerate the internationalization of the Yuan.
• JPMorgan is considering launching loans secured by clients' crypto assets as early as next year, - FT.
• Telegram crypto wallet has become available to 87 million users in the US.
• Coca-Cola (KO, -1%) to launch drinks with real cane sugar (as Trump wanted) this fall
Coca-Cola's Non-GAAP EPS report of $0.87 beats by $0.03, revenue of $12.5 billion falls by $80 million.
• Lockheed Martin (LMT, -11%): Report below expectations. Revenue: $18.2 billion (expected: $18.58 billion); EPS: $1.46 (expected: $6.54).
• HAL Halliburton +1% after report.
• RTX Raytheon -2%.
• Currently, demand from large investors for ETH significantly exceeds demand for BTC - Santiment.
• Western Union (WU, +6%) is considering integrating payments in stablecoins - CEO.
• AstraZeneca (AZN) plans $50 billion investment in the U.S. as Trump's drug tariffs loom.
• JPMorgan spent a day testing Tesla's robotaxis in Austin and called them "reliable" and "safe."
Tesla's futuristic diner in Los Angeles was packed on its first night.
Musk says if the project really "takes off" (and he's confident it will), such diner-cum-movie-cum-charging stations will pop up in major cities around the world and on highways with Supercharger stations.
• Discount department store chain Kohl's (KSS) is up 38%... It's the new meme stock.
Short sellers account for 49.3% of Kohl's public float. Speculators are attacking short sellers. It's like the good old days of GME.
Key events that could impact markets on Wednesday:
- Eurozone consumer confidence data for July.
- US earnings from Alphabet, Tesla, IBM.
Current Fundamental Reviews
• Trump: "Xi invited me to China. We will probably meet with him in the near future."
• Europe rushes to conclude trade deal with US before August 1. But braces for the worst – BBG.
• Trump announces trade program with Japan that cuts tariffs to 15%.
• Trump's pressure on China through supply chain partners threatens to slow growth and lose most of its exports to the U.S., Bloomberg Economics
• Trump withdraws US from United Nations Educational, Scientific and Cultural Organization (UNESCO), — NYPost.
• European metallurgy is suffering because of Russia – tougher sanctions are needed.
The EU has banned steel imports from Russia. However, imports of semi-finished products from which this steel is produced are still permitted.
• Thailand is close to an agreement with the United States to cut the 36% tariff on its exports before the August 1 deadline, the finance minister said.
• Slovakia intends to meet 100% of its gas needs with supplies from Russia, — BBG.
• Merz is against the ban on internal combustion engine cars that the European Commission is considering.
The German Chancellor called the idea of obliging companies and rental companies to buy only electric cars "wrong" and "ignoring the needs".
It is necessary to maintain "technological openness", Friedrich Merz said on Monday evening in Berlin.
• Germany is increasingly deporting refugees. The second plane in a week has left Leipzig.
• Bessent: I am going to contact the Europeans about the tariffs on Russian oil.
There are difficult negotiations ahead with the G7 regarding Russia.
Bessent reiterated that the US may start discussing with China the import of Iranian oil, which is subject to sanctions.
He predicts that the US economy will grow by +3% by Q1 2026.
Bessent will take part in US-China talks in Stockholm next week.
• The United States and China will discuss extending their existing trade agreements on July 28-29.
The temporary US-China trade agreement expires on August 12. Bessent said the deadline could be extended.
• Trump on Powell: 'He's going to be gone soon anyway.' 'He's keeping people from buying homes.' Powell will step down as Fed chief in May 2026. Unless he steps down sooner, of course. Bessent: 'There's nothing that tells me he [Powell] should step down right now.'
'He's been a good public servant. His term ends in May. If he wants to see it through, I think he should. If he wants to step down early, I think he should.'
FHA Director Pulte said news of Powell's resignation is coming soon.
• Trump: We are considering eliminating capital gains and real estate taxes.
• US - Richmond Manufacturing Index (July) = -20 (expected -2 /previous -7)