Closing Recap

Friday, July 25, 2025

Just an absolute melt up for U.S. stock markets all week, slow, steady, and deliberate, with almost no pullbacks the last 5-days as the S&P 500 (SPX) closed at an all-time high for the 5th day in a row and 14th time this year and the Nasdaq Composite for its 15^th record of the year. Investors remain optimistic over the economic outlook as investors prepare for a data/earnings-heavy week, updates on U.S. trade talks, and a Federal Reserve policy meeting. The U.S. central bank is expected to leave interest rates unchanged at its FOMC rate-setting meeting next week, but market expectations for two 25 basis point interest rate cuts for the rest of this year remain.

Positive developments this week, other than the 85% EPS beat rate for stocks thus far in the S&P 500 (for roughly 200 companies) include headlines on trade. A U.S. trade deal with Japan this week and expectations of a similar agreement with the European Union this weekend have also eased market concerns ahead of President Trump’s August 1 tariff deadline, as the prospect of lower-than-feared import duties is largely seen as softening their economic impact. Earlier, reports indicated the European Union and U.S could reach a framework deal on trade this weekend, ending months of uncertainty for European industry. The deal would likely include a 15% baseline tariff on all EU goods entering the United States and probably a 50% tariff on European steel and aluminium, the officials and diplomats said, Reuters reported. Regarding Canada, President Trump said the U.S. may not reach a negotiated trade deal with Canada, suggesting his administration could set a tariff rate unilaterally.

There really wasn’t much going on today, stuck in a tight trading range all day and holding near record highs (SPX knocked on door of 6,400), though next week offers several potential catalysts that could move the needle including: 38% of the S&P 500 is reporting earnings on a market cap basis, double this week, according to data by Bloomberg Intelligence (includes AMZN, AAPL, META, MSFT – more than 2,600 companies in all – other notables Visa, MA, XOM, CVX, UNH, PG, QCOM, CMCSA); the FOMC and Bank of Canada policy meetings on Wednesday and the Bank of Japan on Wednesday; a slew of jobs data with JOLTs on Tuesday, ADP Private Payrolls Wednesday, Jobless Claims Thursday and the Nonfarm payrolls on Friday; and manufacturing PMI data from China, Europe, and the U.S. All this leads to the Friday August 1^st tariff deadline!

Market stats remain impressive: 1) @Barchart tweets: "85% of Nasdaq 100 stocks are trading above their 100-Day moving average, the most since February 2024" 2) @Barchart tweets: U.S. Margin Debt soars above $1 Trillion for the first time in history; 3) @charliebilello tweets: “With 32% of companies reported, S&P 500 2nd quarter operating earnings are up 7% over the prior year, the 10th consecutive quarter of positive YoY growth.” 4) @Mr_Derivatives tweets: “$SPX Highest Daily RSI since July 16th 2024. Above the upper Bollinger Bands. Up all 5 days this week with an immaculate week $VIX 3rd lowest close of 2025. This bull freight train is undeterred.”

• U.S. WTI crude oil futures settle at $65.16/bbl, falling -$0.87 cents, or 1.32% while Brent crude fell -$0.74 or 1.07% to settle at $68.44 barrel. For the week, Brent was down about 1% with WTI down about 3%. Oil prices eased and settled at a three-week low on worries about negative economic news from the U.S. and China and signs of growing supply. Natural gas prices tumbled -12.76% on week to $3.11 mln Btus.
• Treasury yields finish the week mixed; the 10-year yield was down -2.3bps to 4.385%, ending the week lower by 4.7bps (snaps streak of 3-week streak of rising yields); while the 2-yr yield was little changed, but up 3.9bps on the week to 3.916%.
• Weekly rig data showed US oil drilling rig count was down -7 at 415 (down 67 vs year ago) in week while Natural gas drilling rig count up 5 at 122 in week to July 25 according to Baker Hughes

• CVNA was upgraded from Perform to Outperform at Oppenheimer with $450 tgt saying it represents a unique, digitally driven disruptor, within the expansive and inefficient domestic used car marketplace. The firm said a refreshed deep-dive analysis shows investors still under-appreciate near/long -term growth.
• GNTX rallies on results in auto suppliers as Q2 sales rise 15% y/y to $657.9M, topping the $613M estimate on better EPS ($0.47 vs. $0.38) while revises 2025 revenue guidance to $2.44-$2.61B (vs. est. $2.46B) and said they expect 2025 gross margin of 33%-34%.
• TSLA plans Robotaxi San Francisco launch this weekend according to Business Insider report.
• VWAGY reported an EU1.3B ($1.5B) 1H hit from tariffs and cut its FY sales and profit margin forecasts; now expects this year’s operating profit margin between 4%-5%, compared with prior view 5.5-6.5% range; full-year sales, earlier forecast to rise by up to 5%, are expected to be level with the previous year.

• In Beauty & Staples: ULTA was downgraded to Hold from Buy at Loop Capital citing valuation for the downgrade as opposed to a more bearish view on the company’s fundamentals. EL was upgraded to Overweight at JP Morgan and added it to its positive catalyst watch as it believes EL will deliver at the top of their guide given the better than feared 6.18 event and better performance online. The firm also downgraded PG to Neutral as it expects another lackluster quarter and normalization of category growth.
• In Apparel Retail: CRI shares fell as Q2 net sales rose 4% to $585M; adjusted EPS of $0.17 missed analyst expectations of $0.39; suspends fiscal 2025 guidance due to leadership changes and tariff uncertainties; anticipates $35M net additional tariff impact in H2 fiscal 2025.
• In Food & Beverages: SAM shares rallied on results as Q2 revs $587.9M vs. rest. $588.7M; backs FY25 adjusted EPS view $8.00-$10.50 (est. $9.00), cuts FY25 capex spending to $70M-$90M from $90M-$110M and lowers its FY25 depletions/shipments view to down HSD to down LSD from down LSD to up LSD.

• In Boating/RV sector: Keybanc provided June Boat Retail Data saying June’s -10.3% y/y was in line with normal seasonality (-MSD% sequentially), with May revised upward (-13.6% y/y vs -15.6% y/y prior). The firm noted relative outperformance in Aluminum Fish (-0.4% y/y), with softer trends in Fiberglass Outboard (-16.6% y/y) and Ski (-17.2% y/y). Looking ahead, their marine view remains cautious as for BC, softer vs industry (-11.8% y/y) Ski/Wake: Category -17.2% y/y; MBUU softer, MCFT stronger Pontoon: Category -10.6% y/y; WGO stronger.
• In Gig Preview/delivery: Jefferies previews the sector ahead of earnings saying: for UBER, Delivery of high-teens Mobility growth and relatively consistent incremental margins should support the stock; DASH high expectations for GTV and EBITDA could cap stock upside, particularly if recent take rate headwinds persist; for CART, reaction hinges on sustainability of HSD GTV growth and consistent expansion of adv penetration; LYFT further deterioration in pricing or incremental mktng expenses poses risk to 2H EBITDA.
• Online Travel/Lodging: Oppenheimer previews the sector saying expectations for Online Travel are improving since Q1 earnings on better US close end demand that OPCO sees setting up for Q2 beats, but a tighter booking window could cause conservative 2H guidance on Airline/Hotel companies, especially against tougher Q4 comps. They see EXPE offering the most upside over the next six months if US leisure travel accelerates. BKNG carries the best sentiment, despite its higher valuation, on cleanest earnings algorithm, which, OPCO’s view, should garner a multiple similar to Hotel C-corps. ABNB sentiment remains mixed; most investors see margin upside in ’25 if Experiences/Services revenue is slower to ramp.

• In Brokers & Exchanges: NDAQ was upgraded to Buy from Neutral noting while the stock has already recovered nicely from the April lows, strong execution and peer-group leading solutions create a path for valuation to move closer to information services peers, which had been its thesis in the past.
• In Fintech/Payments: GPN was upgraded to Outperform at Mizuho with $114 tgt noting shares trade 6-7x P/E turns below historical averages vs peers; GPN’s increased scale via Worldpay acquisition and ~$600M of cumulative cost synergies could unlock nearly $5B of annual FCF potential by 2028.
• In Financial Services: MSCI was upgraded from Market Perform to Outperform at Raymond James with $650 tgt saying in their view, MSCI’s growth outlook is clearly not as bright today as it has been for much of the past decade, but it still possesses traits that merit a premium valuation.
• In Insurance: AON among top S&P leaders after earnings and guidance; GNW shares rallied after saying they expect ~$750M in proceeds after French insurer AXA won a London court ruling against Santander (AXA inherited liabilities in a 2015 acquisition of two Genworth units, but AXA will only be entitled to a minority of the award).
• In Lending: SLM reported Q2 below consensus on higher provision and lower originations, slightly offset by NIM expansion. There were moving parts (1x events and seasonality) with both NCOs and originations, but Jefferies said they believe 3Q originations will be strong and are not concerned with credit.

• DOC reported Q2 FFOA in line with consensus and management affirmed 2025 FFOA guidance. Cash SSNOI growth (y/y) decelerated 350 bps since 1Q25, as occupancy across all segments decreased sequentially. Notably, occupancy decreased 290 bps within its lab segment.
• GLPI reported 2Q25 AFFO of $0.96, which was in line with consensus at the midpoint and management raised its FY25 AFFO guidance midpoint by raising the low end of the range by $0.01.
• PECO first in Retail REITs with a quarterly beat vs. consensus (+$0.01), and management raised its FY25 Core FFO guidance by 0.8% at the midpoint; results in the quarter were steady, marked by a 30 bps sequential improvement in SSNOI growth to 4.2%.

• RCKT downgraded to Neutral from Buy and cut tgt to $4 at Bank America saying the decision to reduce expenses and re-prioritize the pipeline makes sense in the wake of FDA’s hold on ‘A501, but looks for shares to remain range bound NT.
• SRPT shares tumble further on week after the European Medicines Agency’s Committee for Medicinal Products for Human Use recommended not granting a marketing authorization for Sarepta’s Elevidys for the treatment of Duchenne muscular dystrophy (shares also downgraded to Underweight at JP Morgan noting nearly every headline this week related to Elevidys has had a negative skew).
• VCYT will replace TGI in the S&P SmallCap 600 prior to the opening of trading on July 29. Warburg Pincus LLC and Berkshire Partners LLC will acquire Triumph Group in a deal expected to close soon.

• In Dental: HSIC was downgraded to Hold from Buy at Stifel saying diligence identifies future U.S. share losses for the company’s consumables business; checks suggest the multi-year share shift to online will continue for the foreseeable future; notes still trades at slight premium to 3-yr average.
• In MedTech: EW shares rallied on results as put up a +$40M/+$0.05 Q2 beat driven by strong performances across the portfolio led by TAVR (+$30M ahead), which saw growth accelerate to +7.8% cc in Q2 (vs +5.4% cc in Q1) on a gradual delayed benefit from EARLY TAVR in the US.
• In Hospital Operators: HCA posted Q2 EPE beat $6.84 vs. $6.25) and raised its 2025 profit forecast to be about $25.50-$27 per share, up from its previous forecast of $24.05 to $25.85 per share as it expects sustained demand for medical procedures to cushion a hit from potential tariffs. The results come a day after CYH shares tumbled, weighing on the entire sector after results/guidance.

• In Railroads: It has been a busy week of headlines between earnings and M&A; Jefferies upgraded UNP to Buy and downgraded NSC to Hold following the announcement that UNP is in advanced talks with NSC to create the first transcontinental rail network in the U.S. They said they recommend investors start building a position to get in on the ground level on what we see as a transformational combination. They also continue to recommend CSX given what they see as an increased likelihood of a BNSF combination.
• In Industrials: FIX shares jumped after reported 2Q25 adj. EBITDA of $334M, far outpacing consensus of $261M primarily driven by better-than-expected revenue growth of +20.1% y/y despite lapping tough comps, composed of +18.6% organic revenue growth (and better margins).

• BAH Q1 revs of $2.92B missed the $2.95B estimate while net income jumped 64% y/y to $271M and Q1 adj net income rose 2.2% y/y to $184M.
• HXL unveiled 2Q25 adjusted EPS of $0.50 vs. the Street’s $0.46. HXL maintained its 2025 guidance parameters (sales, EPS, FCFE), which were lowered on April 21, 2025, vs. its initial guidance provided on January 22, 2025, via weaker momentum in wide-body aircraft deliveries.
• KTOS, LDOS, RKLB, RDW shares spiked late day on reports The Missile Defense Agency just dropped a draft solicitation for a $151B multi-award IDIQ for a multi-domain missile defense system. Primes & startups onboarded to the vehicle will fight for contract $$ on individual task orders."

• Telecom Infrastructure: Needham said they see AT) and Verizon’s (VZ) earnings reports and capex commentary from this week as bullish for the broader communications infrastructure ecosystem due to expected tax savings from the OBBB. AT&T raised expectations for C26 and C27 CAPEX by $1B each. Needham said it sees positive implications for CIEN and its suppliers (LITE, COHR, FN), RDCM, and VIAV, as well as a host of others outside its coverage.
• In Online Learning: COUR shares surged after reporting strong Q2 adjusted profit on better revs and boosted its revenue guidance for the full year (hitting 52-week highs); raised its revenue outlook for the full year to a range of $738M-$746M from prior $720M-$730M view.
• In Media: The FCC approved Skydance’s $8 billion acquisition of PARA and its subsidiaries, including the ultimate parent company of the CBS network of owned and operated broadcast television stations, by granting a series of applications that transfer FCC licenses and authorizations

• Semi equipment stocks fall AMAT, KLAC, LRCX after INTC cuts capex
• STM announced the planned acquisition of NXPI’s MEMS sensors business, focused on automotive safety products as well as sensors for industrial applications.