Mid-Morning Look

Friday, August 01, 2025

U.S. stocks pulling back aggressively following a modest set of daily declines this week, as weaker jobs data coupled with new tariff announcements out of the White House and some disappointing operating income guidance from AMZN (shares -7%) have investors on edge to kick off the new trading month. July ended positively for major averages with the S&P 500, Nasdaq and Russell 2000 all closing with monthly gains on better earnings, data and trade news. However, overnight President Trump officially hit most U.S. trading partners with sweeping tariff hikes, pushing ahead with his plan. His executive order formally authorized a hike in levies on Canada to 35%, to go into effect on Friday. Most of the other “reciprocal” rates range from 15% to 40% (though the baseline remains 10%) and will be implemented in seven days. The US sets 20% Taiwan tariff; 39% Switzerland; Canada 35%; US to impose 19% tariffs on Thailand, Cambodia.

Lots going on today, jobs data for July was weaker than expected, but the revisions were lower in April and May were notable, showing a much weaker-than-expected jobs market than first appeared, making the case for rate cuts that the Fed just passed on doing this past Wednesday (Revisions show a net change in hiring of -258,000 over those two months). Following the jobs data, U.S. interest rates futures show higher risk of Fed cut at next meeting after payrolls data as traders see 75% chance Fed easing 25 bp at Sept meeting, vs 45% before jobs report. Following the data, the U.S. dollar pulled back off recent 2-month highs (DXY was above 100 yesterday and off early July lows around 96.50), while bonds rallied and yields fell especially on the short end which are more tied to Fed monetary policy. The 10-year yield last down 13 basis points at 4.23%; two-year Treasury yields slump after ISM report, last down 23.2 basis points at 3.719%; 2/10yield curve steepens further, last at 51.1 bps. Gold prices jumped over 2% following the rise on rate cuts and drop in dollar. Another round of data at 10:00 showed more weakness as selling accelerated. Broad based selling early sans a few pockets of strength like Consumer Staples and beaten-up Healthcare.

• U.S. July unemployment rate 4.2%, in-line with consensus 4.2% while July labor force participation rate 62.2% – lowest number since 2022 (down from 62.3%). U.S. July average workweek all private workers 34.3 hours (est. 34.2 hours), July average hourly earnings +3.9% y/y (est. +3.8%) and average hourly earnings all private workers +0.3% from prior month (est. +0.3%).
• ISM U.S. manufacturing activity index 48.0 in July below consensus 49.5 and vs 49.0 in June; prices paid index 64.8 in July (consensus 70.0) vs 69.7 in June; new orders index 47.1 in July vs 46.4 in June; and the employment index 43.4 in July vs 45.0 in June.
• US June construction spending -0.4% (consensus unchanged) to $2.136 trln, vs May -0.4% (prev -0.3%); US June private construction spending -0.5%, public spending +0.1%.
• University of Michigan surveys of consumers sentiment final July 61.7 (consensus 62.0) vs preliminary July 61.8 and final June 60.7; current conditions index final July 68.0 vs prelim July 66.8 and final June 64.8 and expectations index final July 57.7 vs prelim July 58.6 and final June 58.1.
• University of Michigan surveys of consumers 1-year inflation outlook final July 4.5% vs prelim 4.4% and final June 5.0% while the 5-year inflation outlook final July 3.4% vs prelim 3.6% and final June 4.0%.

• In E&C: MTZ reported Q2 EPS of $1.49, ahead of consensus of $1.39 on revenue beat by ~150M, showing +19.7% y/y growth vs guidance suggesting 14.8% as beat was the most pronounced in Comms and Pipelines, while upside in PD was offset by lower revenue in CEI; MTZ raised 2025 revenue guidance by $300M, more than the Q2 beat. FLR shares tumbled after Q2 miss and cut Y25 adjusted EPS view to $1.95-$2.15 from $2.25-$2.75 and cuts FY adjusted EBITDA view to $475M-$525M from $575M-$675M. FLR also provided an update on its ownership of SMR Class B shares. In the next few weeks, NuScale will convert 15mm shares into Class A securities, sending those shares lower.
• In Heavy Duty Trucks/Machinery: Daimler Truck (DTRUY) warned of mounting headwinds in the second half of 2025 after cutting its full year outlook late on Thursday due to weakness in North America, sending its shares lower and weighing on likes of CMI, ALSN, PCAR. Daimler said that the indirect impact of U.S. trade tariffs would cost the company a figure in the low triple-digit million euros range in 2025; GWW cuts 2025 gross margin view to 38.6%-38.9% from 39.1%-39.4% after mixed Q2 results as EPS missed on better revs (cuts year EPS view and raises rev view).
• In China EV monthly sales data: BYDDF said July total production volume 317,892 units and July total sales volume 344,296 units; reported July sales of 344,296, down 10.1% vs. June. They did edge up 0.6% vs. a year earlier. Passenger BEV sales came in at 177,887, down 14% vs. June but up 36.8% vs. a year earlier. PHEV sales sank 4.45% vs. June and 22.6% vs. a year earlier to 163,143. NIO deliveries came in at 21,017, down 15.7% vs. June but +2.5% y/y. July’s total includes 12,675 from the premium Nio brand, 5,976 vehicles from the mainstream Onvo brand and 2,336 EVs for the lower-end Firefly brand. Nio began deliveries of its Onvo L90 SUV. XPEV delivered a record 36,717 vehicles in July, up 6.1% vs. June and 229% vs. a year earlier. LI delivers 30,731 cars in Jul, down 40% year-on-year; the Company officially launched Li i8, a six-seat battery electric family SUV, on July 29, 2025, and expects to begin deliveries on August 20, 2025.

• BOOT +7%; 1Q results above expectations; increased guidance for FY26 while consolidated comp sales growth came in at +9.4% (vs. consensus +6.9%), driven by an +8.5% increase in transactions. Management noted momentum rolling into 2Q, with SSS increasing ~12% in the first four weeks
• FIG +5%; shares extend gains after closing higher by 250% in its trading debut Thursday at $115.50 following its 36.9M share IPO that priced at $33.
• FSLR +3%; as reported better-than-expected Q2 earnings and issued a mixed full-year outlook; expects 2025 revenue of between $4.9B-$5.7B, higher than earlier forecasts of $4.5B-45.5B while narrowed its earnings guidance.
• KMB +6%; reported mixed Q2 as net sales $4.16B missed est. $4.61B on better EPS $1.92 (vs est. $1.67) and said outlook FY ADJ EPS to grow at a low-to-mid single digit rate on constant-currency basis and FY organic sales growth to outpace weighted average growth in categories it competes, which are currently growing at about 2%.
• LLY +2%; NVO shares active after the Washington Post reported Medicare, Medicaid plans to experiment with covering weight loss drugs. State Medicaid programs and Medicare part D insurance plans will be able to voluntarily choose to cover Ozempic, Wegovy, Mounjaro, Zepbound. HIM shares fall on the report.
• MPWR +5%; reported strong Q2 results and Q3 guidance, which solidly beat as Q2 upside was driven by Computing & Storage (C&S) and Communications. Regarding Enterprise Data rev growth, 2025 is now expected to be -10% at the midpoint vs flat prior with Q3 expected to grow +20-30% q/q and Q4 also expected to grow q/q.
• RDDT +15%; shares rallied following a beat-and-raise quarter as revenue and EBITDA respectively came in $70M (16%) and $37M (28%) above the high end of guidance, while advertising revenue growth accelerated to +84% Y/Y and the company guided to 55% Y/Y revenue growth for Q325 on a 68% Y/Y growth comp and better guidance.

• COIN -15%; Q2 revenue is slightly below model (8% below) and core expenses 3% below; transaction revenues were in line, but Subscription & Services revs were 17% below $665M-$745M vs. est. $753M), largely from lighter blockchain rewards and lower stablecoin revenue.
• EMN -16%; reported Q2 EPS of $1.60, compared to consensus of $1.73 and EBITDA of $402M vs. consensus of $417M as the Company beat in Additives & Functional Products (A&FP) while missing in Chemical Intermediates (CI). Weaker demand in consumer durable and auto markets is leading to a deliberate inventory reduction.
• ENVX -24%; shares tumble following quarterly results overnight
• FLR -31%; shares tumbled after Q2 miss and cut Y25 adjusted EPS view to $1.95-$2.15 from $2.25-$2.75 and cuts FY adjusted EBITDA view to $475M-$525M from $575M-$675M. FLR also provided an update on its ownership of SMR Class B shares. In the next few weeks, NuScale will convert 15mm shares into Class A securities, sending those shares lower.
• GWW -11%; cuts 2025 gross margin view to 38.6%-38.9% from 39.1%-39.4% after mixed Q2 results as EPS missed on better revs (cuts year EPS view and raises rev view).
• HIMS -4%; after the Trump administration is planning to cover weight-loss drugs under Medicare and Medicaid, Washington Post reports. The proposed plan would permit state Medicaid programs and Medicare Part D insurance plans to voluntarily cover GLP-1 drugs such as NVO’s Ozempic and Wegovy, as well as LLY’s Mounjaro and Zepbound.
• MRNA -8%; cuts 2025 sales forecast to $1.5B-$2.2B, cutting $300M from the top end as UK revenue deliveries shifted into early 2026 – followed Q2 revs of $142M, down -41% y/y but ahead of ests $112.9M; said it would cut around 10% of its global workforce, shrinking to under 5,000 employees by year’s end.