Closing Recap

Friday, July 18, 2025

U.S. stocks were stuck in a tight trading range all day, holding not far from the 6,300 level for the S&P 500 as stocks closed higher on the week. For the week, the S&P 500 gained 0.59%, the Nasdaq climbed 1.51%, and the Dow fell 0.07%. Volume picked up late day given today’s options expiration where roughly over $2.8 trillion of notional options exposure expired including $1.5 trillion of SPX options and $660B notional of single stock options. The notional open interest for this expiration is similar to that of last July (as per Goldman). Stocks were higher all morning before edging slightly lower early afternoon after The Financial Times reported mid-afternoon that President Trump has escalated his demands in trade negotiations with the EU, pushing for a minimum tariff of 15 to 20% in any deal with the bloc, according to three people briefed on the talks. The US President’s hardened stance aims to test the EU’s pain threshold after weeks of talks on a framework agreement that would have maintained a baseline tariff of 10% on most goods. The news pushed major averages into negative territory but still held up relatively well. The S&P 500 and Nasdaq each touched fresh intraday record highs today, led this week by another surge in technology.

This week was dominated by the start of earnings season (mixed bank results, soft healthcare movers) before the earnings onslaught kicks in the next three weeks, and economic data with a strong string of data keeping Wall Street optimistic on the economy despite fears of tariff impacts on companies as the August 1^st trade deadline nears. A slew of AI and AI-related energy announcements (TLN, CEG, FE) also buoyed artificial intelligence plays; chip-gear giant ASML tumbled on weak guidance; TSM results helped semis rebound mid-week; and in banks, JPM, Citi led bank earnings while SCHW, IBKR helped buoy online brokers, which also rallied on crypto-related enthusiasm. In Fed news, Federal Reserve governor Chris Waller said he would accept the job as Fed chair if asked by President Donald Trump, but so far, the president has not contacted him about it. Last night, Waller said that the Fed should cut interest rates 25 basis points at the July meeting as rising risks to economy favor easing policy rate (which is more in-line with President Trump view of rates than that of current Chairman Powell).

Items to watch next week as we near closer to the August 1^st tariff/trade deadline, we get ~23% of the S&P 500 (SPX) market cap reporting and over 1,400+ companies with 2 of the Mag 7 set to report (GOOGL, TSLA) and several Dow components (IBM, INTC, KO) and Fed Chair Powell speaking at a conference on Tuesday.

• University of Michigan surveys of consumers sentiment prelim July 61.8 vs. consensus 61.5 and vs final June 60.7; current conditions index prelim July 66.8 (consensus 63.9) vs final June 64.8 and expectations index prelim July 58.6 (consensus 55.0) vs final June 58.1.
• University of Michigan surveys of consumers 1-year inflation outlook prelim July 4.4% vs final June 5.0% and the 5-year inflation outlook prelim July 3.6% vs final June 4.0%.

• The U.S. dollar slipped on Friday but held onto weekly gains, as investors weighed signs that tariffs may be starting to increase some inflation pressures along with expected Federal Reserve policy as U.S. President Donald Trump increases pressure on Chair Jerome Powell. The dollar index (DXY) slipped -0.3% at 98.43 but gained roughly +0.4% on week. The euro +0.27% at $1.1625 but ended down on week, Sterling rose to $1.342, and the buck was steady at 148.70 yen, but up on week.

• In Restaurants: CMG was upgraded to Outperform at BMO Capital and raised its tgt to $65 from $56 saying the change is not about 2Q, as expect another quarter of comp declines and margin compression…but believes Chipotle is well positioned for accelerating comp growth and improving margins in 2H’25.
• In Appliances/Home Retail: WHR shares slipped after European comp Electrolux (ELUXY) Q2 Operating profit totalled 797M crowns ($82M) as its North American business drove organic sales growth of 2%, but ex: a 180M crown one-off gain from the sale of a trademark in India, profit fell short of the 710M est.

• In Theme Parks: FUN price tgt lowered to $36 from $43 at Mizuho and to $43 from $50 at Stifel as shares remain down -40%-YTD (vs. S&P 500 +7%) as Mizuho believes the weakness is largely on perceived soft attendance, a thesis supported by weak third-party foot-traffic data.
• In Autos: auto supplier ALV Q2 results top consensus (EPS $2.21/$2.714B above est. $1.95/$2.6B) saying they recovered around 80% of tariff costs in Q2 and expect to recover most of what remains later in year; FY guidance: around 3% organic sales growth (earlier view: around 2%).

• The U.S. oil drilling rig count was down -2 at 422 (down 55 vs year ago) in week to July 18 (falls to lowest since September 2021) said Baker Hughes (BKR), but Natural gas drilling rig count jumped 9 rigs at 117 in week, its biggest weekly increase since December.
• In Oil & Equipment/Services: SLB reported Q2 EPS $0.74 vs. est. $0.73 and revs $8.54B vs. est. $8.47B as Q2 international revs $6.84B and North America $1.65B; said assuming commodity prices stay range bound, we remain constructive for second half of year; RIG FSR last night included 4 ST contracts, headlined by a 3-well contract for 7G drillship Skyros offshore Ivory Coast @ $361k/d.
• In Nuclear/Utility: TLN shares jumped after saying it would acquire Caithness Energy’s Moxie Freedom Energy Center in Pennsylvania and Caithness and BlackRock’s Guernsey Power Station in Ohio for $3.5B. Many of the nuclear/power names were stronger today with VST, CEG, SMR, NRG, LEU.

• CMA Q2 EPS $1.42 tops consensus $1.22; Q2 Net interest income (NII) rose to $575M from $533M y/y 9est. $576M) though the gain was somewhat offset by non-interest income, which fell to $274M from $291M y/y (est. $268M); Q2 Loans increased by $451M to $50.7B and deposits decreased by $653M to $61.2B.
• FNB Q2 EPS $0.36 vs est. $0.34 on NII $347.196Mm vs est. $335.22Mm, CET1 capital ratio 10.8%, credit loss provision $25.601Mm.
• HBAN Q2 EPS $0.34 in-line with consensus and revs $1.95B vs. est. $1.97B; Q2 CET1 capital ratio 10.5%; Q2 net interest income $155M
• IBKR Q2 adj EPS $0.51 vs est. $0.45; Q2 revs $1.48B vs. est. $1.37B; Q2 Commission revenue increased 27% to 516M on higher customer trading volumes; Q2 customer trading volume in stocks, options and futures increased 31%, 24% and 18%, respectively; Q2 Net interest income increased 9% to $860M.
• INDB Q2 adj EPS of $1.25 above ests $1.21; Q2 net income rises to $51.1 mln, driven by higher revenues and lower loan loss provision; announces $150 mln stock repurchase plan; did not provide specific guidance; Q2 net interest margin 3.37%.
• MCB Q2 adj EPS $1.76 vs. est. $1.73; Q2 NIM was 3.83%, an increase of 15bps q/q and up 39bps y/y; Q2 Total loans were $6.6B, an increase of $270.7M, or 4.3% q/q; Total deposits at June 30, 2025 were $6.8B, an increase of $342.0M, or 5.3% q/q.
• RF Q2 adj EPS $0.60 vs. est. $0.56 and revs $1.905B vs. est. $1.858B; Q2 net interest income $1.259B and Q2 net interest margin 3.65%; raised its FY25 interest income to grow between 3% and 5%, up from its prior view of 1% to 4% growth.
• SCHW Q2 EPS $1.14/$5.9B in revs topped the $1.10/$5.7B consensus while bringing in core net new assets of $80.3B, a 31% y/y increase; for Q1, Schwab brought in core net new assets of $137.7B, representing a 5.5% annualized growth rate that set the company on pace to reach its target of 5% to 7% annual growth.
• SFNC Q2 adj EPS $0.44 vs. est. $0.39; Q2 adj net income $56.1M vs. est. $49.4M; Q2 revenue $214.2M vs. est. $217.1M; Q2 CET1 capital ratio 12.4%; Q2 Net interest margin up 11 basis points to 3.06 percent; the 5th consecutive quarterly increase in net interest margin.
• WAL Q2 EPS $2.07 vs. est. $2.03; Q2 net interest margin 3.53%, Q2 credit loss provision $-39.9M, Q2 net interest income $697.6M, Q2 Net Income $237.8M.

• In Asset Managers: IVZ shares jumped after the company aims to unlock hundreds of millions in profit from QQQ by filing proxy with SEC asking owners of the Invesco QQQ Trust Series 1 for their blessing to convert it into an open-ended fund from a unit investment trust. https://tinyurl.com/4n89n7r5
• In Crypto: The crypto upward momentum showing no signs of slowing following the House passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. The GENIUS Act provides a framework for the issuance of payment stablecoins, reserve requirements, and regulatory oversight. Bitcoin hit record highs above $123K on Monday of this week (but back down at $118K) while Ethereum has soared in recent days, up another 6% today to $3,650 while names like HOOD, COIN hit all-time highs along with strength in stablecoin CRCL and Bitcoin miners like CLSK, IREN, MARA, RIOT and others.

• CRSP shares jumped after an SEC filing showed insider Director George buys 989,812 shares of stock on 7/16 at $52.03 in purchase valued at $51,499,918.
• SRPT shares tumble after the company told Bloomberg that a patient died from acute liver failure after receiving its gene therapy in an early-stage study. A company spokesperson said the patient died of acute liver failure last month in an early-stage trial to treat limb-girdle muscular dystrophy. SRPT later extended losses after Reuters reported the FDA will request Sarepta to voluntarily stop all shipments of its gene therapy, Elevidys, a source familiar with the matter told Reuters on Friday.
• VTRS shares slip after saying its ointment did not meet the main goal of a late-stage study in patients with an eye condition called blepharitis; Pimecrolimus 0.3% did not completely remove debris in the eyes after six weeks of twice-daily dosing.

• In Managed care, the WSJ reported Obamacare insurers seek double-digit premium hikes next year; some enrollees could be hit with increases of more than 20% because of federal changes and higher health expenses. Insurers are seeing large 2026 rate increases for Affordable Care Act marketplace plans with Blue Cross & Blue Shield of Illinois wanting a 27% hike and Blue Cross plan in Texas asking for a 21% increase.
• Separately, Prescription drug denials by private insurers in the U.S. rose from 18.3% to 22.9% from 2016 to 2023, with rejections up across many health plans, the New York Times reports

• In Railroads: NSC shares jumped after the WSJ reported last night that UNP is holding talks to acquire its smaller rival Norfolk Southern in what would be a mega-merger in the railroad industry, according to people familiar with the matter. The talks are at an early stage https://tinyurl.com/5f5b255d
• In Logistics/Ocean transport MATX was downgraded to Hold from Buy (tgt to $115 from $135) saying freight rates and volumes have softened further so far in July and the firm expects Matson’s Q2 figures to come in better than previous expectations but Q3 looks to be softer.
• In Chemicals: Wacker Chemie (WKCMF) lowered its 2025 revenue outlook to range of EU5.5B to EU5.9B (previous guidance EU6.1B-EU6.4B) and said full-year EBITDA is now expected to reach between EU500M-EU700M (from EU700M-EU900M prior); company now expects to report a more or less balanced net cash flow (previous guidance: positive, significantly higher than in previous year) – follows recent lower guidance form competitor COVTY. Deutsche Bank downgraded AXTA to Hold from Buy as believes concerns around refinish volumes will remain on overhang on the shares for the foreseeable future.

• In Software: Citizens with a preview as software earnings begin next week; said private company checks suggest an improvement from Q125 to Q225. The firm noted so far, they have spoken to 18 private companies and 13 (72%) made or exceeded their sales plan. In total in Q225, Citizens collected 167 data points regarding the tone of business at 27 public companies, 69% of which were positive, up from 63% in Q125 and 69% in Q424; the firm raised SNOW tgt to $260 from $245 and ORCL to $315 from $240, while saying their best Smid ideas include PCTY, NICE, DOMO into quarter.
• In IT Services & Consulting: CTSH was upgraded from Neutral to Buy at Guggenheim saying channel conversations signaled strength (vs. recent peer results highlighting a competitive demand environment), driven by new wins and strength outside of North America. CVLT was downgraded to Hold at Jefferies citing a more uncertain outlook for when growth will return to low single digit levels.
• In Communication & Networking: BKSY shares fell after announcing an upsized $160M (from $125M) convertible senior notes offering.