Mid-Morning Look

Monday, July 28, 2025

U.S. stock markets open higher, with the S&P 500 index (SPX) looking to make it a 6^th straight day of record highs following more positive trade headlines again this weekend. Investors come into one of the busiest weeks of the year potentially, with such large catalysts including the busiest week of earnings season coming up by mkt cap (including results from AAPL, AMZN, META, MSFT on week), the U.S. deadline (8/1) for global trade deals, the FOMC rate meeting this week (Bank of Canada as well), and jobs data expected on week (JOLTs, ADP, and Nonfarm payrolls). On Sunday night, the EU deal cements 15% as the baseline tariff for imported goods to the U.S., broadly the same as the agreement with Japan. That leaves China as the big trade question to be resolved and with talks taking place between Beijing and Washington officials this week. The US and the EU reached a trade agreement that set a lower-than-threatened 15% tariff on most goods, including cars, from Aug. 1. Among the early beneficiaries include LNG (energy) and defense stocks trading higher after the European Union agreed a trade deal with the US. Oil prices in general rose as investors assessed a trade deal between the United States and the European Union that averted 30% tariffs on most EU goods. The Euro went down about -0.9% to $1.1632 vs. US dollar after trade deal headlines overnight. Meanwhile, the US has frozen restrictions on technology exports to China to avoid hurting trade talks with Beijing and help Trump secure a meeting with Xi Jinping this year. U.S. President Donald Trump said on Sunday his administration was close to reaching a trade deal with China but gave no other details. Also, a busy week for yields/rates as today, Treasury Auctions: T-Bills ($155B), 2-Yr ($69B) and 5-Yr ($70B); on 7/29: 7-Yr Auction ($44B), JOLTS Report; on 7/30: FOMC Decision, Canada Rate Decision, ADP Private Payrolls; on 7/31: PCE Report, claims and 8/1: Non-Farm Payrolls.

• Bitcoin miners: JP Morgan with several rating changes as they downgraded top performers RIOT and IREN to Neutral from Overweight; upgraded MARA to Overweight and named CLSK its top pick. The firm updated its bitcoin miner models and price targets to reflect operating metrics (E.G., coins mined, realized hashrate) and changes in bitcoin price and the network hashrate.
• In the Engineering & Construction (E&C) sector: PWR was downgraded Quanta Services to Market Perform from Outperform at Bernstein but raised tgt to $410 from $383, implying 3% downside as believes the recent shift in energy policy in the U.S. will slow the renewable build-out. Citi also previewed the sector saying robust backlog and “self-help” driven opportunity (disciplined execution + capital deployment flexibility), Citi thinks should continue to support topline/EPS visibility for its E&Cs in 2025. PWR remains Citi’s top pick followed by MTZ and FLR
• In Aerospace & Defense: LMT, RTX and other defense names were higher early after the EU agreed to buy large quantities of military equipment under the trade agreement. Space and defense technology firm Firefly Aerospace (FLT) is targeting a valuation of about $5.5B in its U.S. initial public offering, as investor demand for newly listed stocks shows signs of a sustained rebound. The company is aiming to sell its shares between $35-$39 to raise as much as $631.8M, as per regulatory filing. RTX launched its newest Multispectral Targeting System variant, MTS-A HD, that offers significant visual enhancements for maritime helicopter operations. TXT was upgraded to Neutral from Sell at UBS saying business jet demand is healthy, the challenged Powersports business is no longer part of the portfolio, Bell margin expectations have reset lower, and the firm sees limited downside risk to consensus 2025/2026.

• CRVO +17%; after saying its experimental drug, neflamapimod, significantly slowed disease progression in patients with dementia with Lewy bodies, the second most common form of dementia, based on 32-week extension data from its mid-stage trial.
• LMT, RTX shares higher; and other defense names were higher early after the EU agreed to buy large quantities of military equipment under the trade agreement
• LNG +2%; along with VG, NEXT after the European Union pledged $750 billion worth in strategic purchases as part of a sweeping trade pact. The framework trade deal calls for strategic purchases, covering oil, gas, and nuclear fuel, during U.S. President Donald Trump’s term in office.
• NKE +3%; was upgraded to Overweight from Neutral at JP Morgan and raised its tgt to $93 from $64 while raising estimates for the first time in 13 months following its fieldwork and talks with management. It sees a multi-year recovery for the company, driving high teens to 20% annual earnings growth through fiscal 2030
• SMCI +5%; early strength in semi stocks AMD, and equipment names AMAT, KLAC, LRCX, likely helped after Samsung Electronics (SSNLF) has struck a $16.5 billion deal to produce semiconductors for Tesla (TSLA), boosting its underperforming foundry division.

• CHTR -3%; adding to losses post earnings results on Friday.
• CNP -1%; falls on planned $900 million convertible bonds offering.
• CSCO -1%; was downgraded to In Line from Outperform at Evercore ISI noting the stock has performed well recently with a +46% move over the last twelve months vs +17% for the S&P.
• DUOL -4%; after Citizens said they were cautious heading into Duolingo’s Q225 earnings as third-party data suggest engagement slowed since April.
• GILD -2%; after WSJ article saying “RFK Jr. to oust advisory panel on cancer screenings, HIV prevention drugs”
• NEM -3%; as gold miners fall with gold prices, while the dollar rises on trade deals headlines.
• RVTY -10%; after lowering their annual adj EPS forecast to between $4.85-$4.95 from $4.90-$5 prior but did raise 2025 revenue forecast to $2.84B-$2.88B, up from previous forecast of $2.83B-$2.87B.