Closing Recap

Monday, July 28, 2025

U.S. stocks finish little changed, trading in another narrow range ahead of what could be one of the more potentially market making weeks of the year. With today’s very modest win, the S&P 500 (SPX) extended its streak to 6 consecutive record closing highs. On deck this week, the busiest week of Q2 earnings 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, Bank of Japan as well), and jobs data expected on week (JOLTs, ADP, and Nonfarm payrolls). Speaking of trade, news dominated on Sunday night after the U.S. struck a trade agreement with the European Union Sunday night, imposing a 15% import tariff on most EU goods (down from the 30% figure prior) – and averting a bigger trade war between the two allies. Trump noted the EU plans to invest some $600 billion in the United States and dramatically increase its purchases of U.S. energy and military equipment. In all, the US will get 10x more in tariff revs. The news was close to in-line with a deal between the US and Japan last week, with China now on the table this week. Ahead of the 8/1 deadline, President Trump has said he is considering a ‘world tariff’ of 15-20% for most countries. Canada PM Mark Carney said trade negotiations with the US were at “intense phase”. Carney stated Canadians want a resolution, but only ‘right kind” of resolution. Carney said a “landing zone” for a trade deal was possible.

With stocks at all-time highs, Wall Street gets even more bullish as today: 1) Morgan Stanley’s strategist Mike Wilson said the S&P 500 could reach 7,200 by mid-2026, driven by a “rolling recovery” in earnings, solid EPS growth, and supportive macro trends like AI adoption, dollar weakness, and expected Fed cuts. He sees mid-teens EPS growth, with recent earnings revisions confirming momentum. Wilson favors Industrials as the top sector, naming Rockwell Automation, Eaton, Trane, and Johnson Controls as top picks. 2) Oppenheimer raised its S&P 500 target to 7,100 from 5,950 thanks to new trade deals with Japan and the EU easing market uncertainty. This implies an 11% increase from the July 25 close.  The firm also maintained its 2025 earnings forecast of $275 per share, reflecting a forward P/E of 25.8. Strong Q4 and Q1 earnings, with 84% of companies beating estimates this quarter, support the outlook. Opco highlights the U.S. economy’s resilience and the Fed’s success in lowering inflation from 9% to 2.7% without causing a recession. The firm advises investors to focus on quality stocks during market dips and favors cyclical sectors and U.S. exposure while keeping stakes in developed and emerging markets.

• Bitcoin and other cryptocurrencies were in the green to start the week as a U.S.-European Union trade deal settled nerves around global economic uncertainty, but prices gave way to profit taking Bitcoin was climbing over the weekend, boosted by traders’ increased risk appetite following the U.S.-EU trade deal, announced by President Donald Trump Sunday. He said the U.S. would set a baseline 15% tariff on European goods.
• Two Treasury auctions took place today as the US Treasury sold $69B in 2-year notes at 3.920% yield, vs. 3.925% when issued prior as Bid-Cover Ratio: 2.62 (vs. prev 2.58) as Direct Accepted 34.4% (prev 26.3%) and Indirects Accepted: 55.3% (prev 60.5%) of auction. Also, the US sold $70B in 5-year notes at high yield 3.983% vs. 3.879% prior auction with bid-to-cover ratio 2.31, as direct bidders awarded 29.5% of auction and indirects 58.28%. The bunched-up auctions come ahead of the FOMC meeting results on Wednesday. The euro fell over 1.25% below $1.16 vs. the dollar following the EU/US trade deal news.
• Gold prices fell, down -$24.40 or 0.73% to settle at $3,311.20, near a three-week low as a U.S.-European Union trade accord lifted the dollar and risk sentiment, while investors awaited fresh cues on rate policy from this week’s Federal Reserve meeting. The U.S. dollar index (DXY) rose to a one-week high following another signed trade deal and a global trading partner overnight. A weekend deal between U.S. President Donald Trump and the European Commission imposed a 15% tariff on EU goods, half the rate initially threatened, easing fears of a trade war.

• In Beverages: beer stocks fell after Heineken (HEINY) earnings, and said they are seeing a decline (-0.4%) in beer volumes as retailer disputes across Europe dragged on sales and limited its ability to take advantage of the summer heat wave; shares of TAP, BUD, SAM, STZ, DEO lagged.

• For TSLA Samsung Electronics Co. will produce AI semiconductors for Tesla Inc. in a new $16.5 billion pact that marks a win for its underperforming foundry division. Mercedes-Benz Group AG and other European automakers are getting an EU4 billion earnings lift from the trade deal the European Union struck with the US, according to Bloomberg Intelligence.

• MPLs/Pipelines: EPD Q2 revenue missed analyst expectations, adjusted EBITDA also missed; EPS for Q2 2025 beat analyst expectations, indicating stronger earnings per unit; said expects 2025 growth capital investments of $4.0 bln to $4.5 bln; projects 2026 growth capital investments at $2.0 bln to $2.5 bln
• In Power & Utility; GEV was downgraded to neutral from outperform at Mizuho on valuation while raising its price target to $670 due to accelerating EBITDA margins in power and electrification business and higher gas power manufacturing capacity beyond 2028.
• In Oil Services: WFRD was upgraded to Overweight, and HAL downgraded to Neutral at Piper. The firm says HAL and WFRD are facing diverging rate-of-change stories as HAL right sizes into a maturing market, putting downward pressure on estimates, while WFRD has finally level set expectations, one year removed from when it was first negatively impacted by Mexico, setting the stage for shares to re-rate.

• In Banks & Brokers: IBKR is considering launching a stablecoin for customers, joining a few large financial firms that are betting big on the digital token boom as the U.S. eases regulations around the crypto industry, according to Reuters; CMA shares rose after asset manager HoldCo Asset Management, who says it owns $155M of CMA shares, or 1.8% of outstanding shares, pushes CMA to pursue sale process.
• In FinTech/Payments: Figma (FIG) upcoming sees IPO pricing between $30-$32/share, above prior forecast $25-$28 according to filings today; PYPL shares rose for a 9th straight day ahead of earnings tomorrow morning, holding above its 200dma $76.70.
• Insurance: broad weakness in P&C carriers today with PGR (ahead of earnings tonight), ALL, TRV all lower.

• ATAI and its partner Recognify Life Sciences said their experimental drug did not meet the main goal in a mid-stage trial for patients with schizophrenia-linked cognitive impairment
• CELC shares surge after saying its experimental drug, gedatolisib, combined with PFE’s Ibrance and AZN’s Faslodex, delayed advanced breast cancer progression by more than seven months, compared to Faslodex alone in a late-stage study (combo drug cut the risk of disease progression or death by 76% vs. Faslodex alone).
• CRVO said 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.
• GSK announced it has entered into agreements with Hengrui Pharma to develop up to 12 medicines, adding significant new growth opportunities to the company beyond 2031
• SRPT: the FDA probes the death of an 8-year-old boy in Brazil who received the drugmaker’s Elevidys; shares rebounded, well off Thursday’s $10.42 recent low.
• ZYME announced the U.S. FDA has cleared the investigational new drug application for ZW251, a novel glypican-3-targeted ADC incorporating the company’s proprietary topoisomerase 1 inhibitor payload, ZD06519, for the treatment of HCC.

• In Life Sciences: Sartorius (SOAGY) was upgraded to Outperform at Bernstein saying they believe,  a) the company is opening a new margin chapter, driven in the short term by BioProcess acceleration to respond to “recovering” pharma demand, and in the midterm by the substantial Pharma CAPEX that is expected to be deployed in the US in the next 5-10 years; and b) the valuation has hit a floor.
• Hospital Operators: THC and HCA both downgraded to Peer Perform from Outperform at Wolfe Research citing the potential for healthcare exchange pressure in 2026 and provider tax pressure in 2028 and beyond for the downgrade. Wolfe now sees a less compelling risk/reward for the shares amid legislative pressure.

• In the 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 Metals & Mining: BHP was downgraded to Market Perform from Outperform as its share price has moved up to BMO’s £20 target price in recent days, supported by signs of improving sentiment in the sector, particularly given iron ore is back above US$100/t. At the same time, it has reviewed its Jansen assumptions following the announced delays/ CAPEX increase. TECK was downgraded to Neutral from Buy with a price target of $61, down from $69, post the Q2 report after the company outlined continued operational challenges at Quebrada Blanca and lowered its 2025 copper and molybdenum production guidance. Copper names fell (FCX).  

• 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.
• PLTR shares slipped midday after a report in The Information said the defense department is testing AI to gain leverage over providers like Palantir.
• 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.

• In IT Services & Consulting: the group was weaker early with ACN, CTSH, INFY slipping initially after HB1 Visa headlines in addition to TCS announcing layoffs of 12,000 employees amid AI shifts.
• In Internet: DUOL shares fell after Citizens said they were cautious heading into Duolingo’s Q225 earnings as third-party data suggest engagement slowed since April.
• In Networking & Equipment: CSCO 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. While noting that other AI-levered names have seen more sizable multiple expansion, the firm thinks Cisco will "struggle to get credited as an AI winner" without disclosing AI revenue numbers.
• In Chinese Internet: The European Commission said Chinese online marketplace Temu (owned by PDD) was breaking EU rules by not doing enough to prevent the sale of illegal products through its platform. The EU’s findings could ultimately lead to a fine of up to 6% of Temu’s annual global turnover, the Commission said. Shares of NTES, BILI were both downgraded to Neutral at JP Morgan on less attractive risk/reward following YTD rally. The firm said they see limited drivers for upward earnings revisions: 1) it expects S&M expenses to rise in the next 1-2 years on promotion of both new games and legacy titles, 2) a lack of blockbuster game launches in 2H25 to drive game revenue upside, and 3) rich supply of open world games in China could indicate uncertainty in game revenue for Sea of Remnants/Ananta in 2026.