Closing Recap

Wednesday, July 16, 2025

U.S. stocks were choppy this morning, moving between gains and losses before finishing near the highs after President Trump denied that he was planning to attempt to fire Federal Reserve Chair Jerome Powell after polling Republican lawmakers during a closed-door meeting about whether he should oust him. News reports this morning that Trump is likely to fire Federal Reserve Chair Jerome Powell soon, citing a White House official, and discussed the possible move in a meeting with congressional Republicans on Tuesday night sent stock markets lower this morning as the S&P declined as much as -0.7% on the reports. The reports pushed the dollar lower as well, lifting gold prices while Treasury markets were whippy. Markets bottomed around 11:30 am et after Trump said publicly in a speech, “we’re not planning on doing anything,” Trump told reporters at the White House, adding later, “I don’t rule out anything, but I think it’s highly unlikely. Unless he has to leave for fraud.” Those comments eased market concerns, pushing stocks higher and ending near best levels late day. Prior to the Powell headlines, the Nasdaq had edged lower behind semiconductor weakness after ASML 2026 growth commentary, banks were mixed after earnings from GS, MS, BAC and PPI inflation data was cool.

• June industrial production rose +0.3%, above consensus +0.1% while May was unchanged; June industrial output ex cars/parts +0.5% vs May -0.3%. Capacity utilization rate rose to 77.6% from 77.5% in May and above consensus of 77.4%.
• Fed Beige Book showed economic activity increased slightly from late may through early July; the outlook was neutral to slightly pessimistic, as only two districts expected activity to increase, and others foresaw flat or slightly weaker activity; prices increased across districts, with seven characterizing price growth as moderate and five characterizing it as modest, mostly similar to the previous report.

• Oil prices finished lower, but off its worst levels as U.S. fuel inventory builds and concerns about wider economic impact from U.S. tariffs outweighed some signs of stronger Chinese crude consumption.  WTI crude dipped -$0.14 or 0.21% to settle at $66.38 per barrel, off lows $65.42.
• In Weekly oil inventory data, the EIA reported crude stocks fell while gasoline and distillate inventories rose last week. Crude inventories fell by -3.9 million barrels to 422.2 million barrels vs expectations for a 552,000-barrel draw; Crude stocks at the Cushing, Oklahoma, delivery hub rose by 213,000 barrels. Refinery utilization rates dipped -0.8% to 93.9% in the week. U.S. gasoline stocks rose by 3.4 million barrels vs. ests for a 1-million-barrel draw and distillate stockpiles rose by 4.2 million barrels.

• However, President Trump later said when asked during a press conference if he has plans to fire Powell: "not planning on doing anything" and noted he hadn’t drafted a letter to fire the Fed chair (which the NY Times reported earlier). Following trump comments the dollar fell as the euro and yen bounced off weakness. The euro earlier fell -0.23% at $1.1572, the lowest since June 23, against the Japanese yen the dollar weakened slightly to 148.81 (earlier reached 149.18 yen, the highest since April 3) while Sterling dipped to $1.3373 and reached $1.3361, the lowest since May 20.

• In Casino/Gaming/Lodging: RRR was upgraded to Buy at Truist while the firm downgraded GDEN to Hold saying gaming has mostly recovered from Q1’s tariff noise, with companies not yet pointing to any signs of consumer softness. Regionals, Locals and Digital look positive, though Vegas appears to be in a choppy summer, as expected. They say they particularly like the Locals market here and upgrade RRR to Buy expecting a strong Q2 beat with a potentially positive tone suggesting more upside ahead and cut GDEN to Hold expecting a Q2 miss on Strat softness while M&A doesn’t seem imminent. Across our universe, they favor asset quality (CHDN), stable cash flows (GLPI/VICI) and less volatile Digital B2B (SRAD).

• GS profit jumped 22% in Q2 to $3.7B or $10.91 per share, compared with $3.04B, or $8.62 per share y/y; equities trading revenue rose 36% to $4.3B, while fixed income, currencies and commodities hauled in $3.47B, 9% higher y/y; Q2 investment banking fees stood at $2.19B, rising 26% y/y; Revenue from Goldman’s asset and wealth management arm dipped 3% to $3.78B; Goldman set aside $384M as provisions for credit losses, compared with $282M y/y.
• MS reported Q2 EPS $2.13/$16.79B in revs topping ests $2.01/$16.04B as equities revenue surged 23%, while jumped 9% in fixed income y/y; Q2 Investment banking revenue declined 5% in the quarter. Advisory revenue slid to $508M, compared with $592M y/y; Q2 equity underwriting surged 42% to $500M, while fixed-income underwriting decreased 21% to $532M.
• Other bank earnings included:
• FULT Q2 adj EPS $0.55 vs. est. $0.45; Q2 revs $324M vs. est. $321M; Q2 net interest margin of 3.47%, with a two-basis point decrease q/q; Non-interest income increased $1.9M to $69.1M q/q; provision for credit losses was $8.6M; Net loans increased $150.0 million, or 2.5% annualized q/q.
• HWC 2Q results driven by ~6% LQA loan growth, enhanced asset quality, and strategic progress with the Sabal Trust Company acquisition. Robust loan demand, higher line utilization, and targeted OO CRE and C&I campaigns fueled loan growth. Criticized commercial loans were down 4% q/q to $569.3M while non-accrual loans fell 9% LQ to $94.9M. The NIM rose 6 bps q/q to 3.49%, driving NII higher by $6.7M.
• MTB Q2 net income rose to $679M, or $4.24 per share, from $626 million, or $3.73 per share y/y; average CRE loans fell 19.5% to $25.33 billion in the quarter, while average consumer loans rose to $25.35 billion from $21.97 billion in the year-ago period.
• NIC Q2 EPS $2.34 vs est. $2.15, NII $75.109Mm vs est. $72.73Mm, credit loss provision $1.05Mm.
• PNC beat Q2 estimates as EPS $3.85/$5.66B in revs topped consensus $3.54/$5.61B; says the increase was driven by growth in both noninterest and net interest income, with the latter metric increasing in part due to loan growth and an additional day in the quarter; Q2 provision for credit losses $254M (vs. est. $340M).

• In Payments: GPN shares edged higher after the Financial Times said hedge fund Elliott Management has established a large stake in the payments processing company. The stock has declined 31% this year after it reached a deal in April to acquire rival Worldpay for $24.25 billion. https://tinyurl.com/mh4sf4py
• In Insurance: BHF shares rise after The Wall Street Journal reported investment firm Aquarian Holdings was in exclusive talks to acquire the U.S. life insurance company. A deal could be completed in the coming weeks, the Journal reported, citing people familiar with the matter. https://tinyurl.com/3um52a8c ; PGR shares advanced after reporting a 118% increase in its quarterly net profit, to $5.40 (vs. $2.48 y/y) strong premium growth and a 5.2% improvement in its combined ratio to 86.2% from 91.9% y/y. Total net premiums written rose 12% to $20.08B, while net premiums earned jumped 18% to $20.31B.
• In REITs: BMO Capital with several ratings changes as they upgraded DEA to MP from Underperform as sees the stock’s risk/reward more balanced going forward following the 19.5% pullback year-to-date and upgraded DEI to MP from underperform noting shares are down 15% year-to-date, creating more upside than downside potential going forward. Lastly, they downgraded KRC to Underperform as estimates the company’s lease-versus-expiration ratio at 0.7 times in 2026 versus 2.0 times for the office sector average.

• In Hospitals/Facilities: UHS was downgraded to Underperform from Neutral at Bank America and cut PT to $185 from $215 on lower estimates as it sees increasing headwinds from cuts to Medicaid and ACA exchanges within the recently passed Reconciliation Bill. UHS has some of the highest exposure to these headwinds, specifically SDPs (State Directed Payments) and the expiration of enhanced subsidies. The firm also downgraded HCA to Neutral from Buy (tgt to $394 from $410) as it sees increasing headwinds from cuts to Medicaid and ACA exchanges within the recently passed Reconciliation Bill (OBBB). ARDT was also downgraded to Underperform noting it has the highest exposure to the headwinds in the out years from the cuts to Medicaid SDPs (State Directed Payments). Also, CMS announced that it is proposing updates to hospital star rating system so hospitals performing in lowest quartile for safety can no longer receive 5-star rating; proposes bold reforms to modernize hospital payments, strengthen transparency.
• In Medical Equipment and Supplies: LNTH shares fell after CMS decided to maintain its mean unit cost-based reimbursement approach for high-cost diagnostic radiopharmaceuticals, disappointing investors who had anticipated a shift to a reimbursement system based on average selling prices. Also, CMS issued the proposed rule for the rate of Medicare facility reimbursement in the HOPD/ASC (outpatient) settings for calendar-year 2026 last night. Piper noted overall rates were up ~2.6%, though there were several codes rated higher in the ASC proposed rule for names across Piper’s universe, including BSX (specifically Rezum), PRCT (Aquablation), and GKOS (iDose). On the negative side of the ledger, MDT received a potential reimbursement cut for tibial neuromodulation procedures as did BSX for sacral neuromodulation procedures. Stephens noted PRCT’s Aquablation’s proposed HOPD payment increased +5.8% y/y and the ASC payment increased 4.2% y/y; GKOS proposed HOPD/ASC payments for iStent, iStent Infinite, and iDose all increased between +5% to +7% y/y and VCEL’s MACI’s proposed HOPD payment increased 6% y/y and the ASC payment increased +5% y/y.
• In Managed Care: CNC was downgraded to Underperform from Neutral at Bank America and cut tgt to $30 from $52 due to slowing end markets in Medicaid (54% of revenue) and ACA exchanges (23% of revenue) from the recently passed Reconciliation Bill and the increasingly higher likelihood that enhanced exchange subsidies expire at the end of 2025.

• In Transports: truckers active after JBHT results as Q2 EPS $1.31 vs. est. $1.32; Q2 revs $2.93B vs. est. $2.924B; Q2 revs driven by a 6% increase in Intermodal loads and a 13% increase in Truckload loads, a 3% increase in Dedicated Contract Services productivity and a 6% increase in Integrated Capacity Solutions revenue per load.
• In Industrials: ROK was upgraded to Buy from Neutral at Bank America and raised tgt to $410 saying Rockwell is beginning to see the impact of its turnaround strategy, and while large projects are delayed amid trade deal uncertainty, expects trade deals to be signed before the end of the year, accelerating organic growth in 2026 and 2027. CNH was downgraded to Neutral from Buy at Goldman Sachs as thinks expectations of a top-line and margin recovery into 2026 are priced into the current share price despite the ongoing macro uncertainty.
• In Aerospace & Defense: PLTR was upgraded to Neutral at Mizuho and tgt to $135 from $116 saying the company’s recent execution and momentum is stunning, including material upward revisions across its commercial and government segments that Mizuho feels are much underestimated. Mizuho also believes PLTR has a legitimate chance to accelerate revenue growth for a 5th consecutive quarter.

• In Chemicals: AXTA was downgraded to Market Perform at BMO and cut tgt to $33 from $51 saying while near-term headwinds in Refinish have been raised, sees heightened risk to the longer-term. This, along with pressures/issues around insurance and the aging car parc, may continue to shrink refinish volumes.
• In Metals & Mining: MT was downgraded to Equal Weight from Overweight with an unchanged price target of EUR 27 at Barclays saying European steel stock valuations are close to a five-year high relative to spot hot-rolled coil, spreads, which remain at risk. Barclays is starting to see a potential destock cycle emerging into the current deflationary environment.
• In Lumber/Forest: PCH was upgraded to Buy from Hold at Truist saying they believe the company is well-positioned to benefit from rising lumber prices given its “leverage to lumber” strategy. They expect lumber supply from Canada to tighten as the US enacts antidumping duties and countervailing duties totaling 34.45% on most Canadian lumber producers. In trade news, Canadian Prime Minister Mark Carney says that he’s trying to resolve the decades-long US-Canada trade dispute over softwood lumber as part of current negotiations with Washington over tariffs (shares of WY rose on news).

• In Software: Unity (U) shares outperformed after positive comments by Edgewater and Jefferies. Jeff said Q2 mobile game Ad Tech survey of $1.8B+ ad spend again showed APP growing its market lead, with 2025 ad spend share up 414bps y/y and mediation supply up 272bps. On Unity’s Vector model, the # of positive mentions increasing to 9 in Q2 from 7 in Q1 and quantifying the ROAS lift in the 10%-20% range (last quarter 5%-7% range). Firm raises Unity (U) tgt to $35 from $29.
• In Media: RBLX shares strong again after positive comments from JPMorgan saying, "We now project bookings growth of 37% in Q2 and 30% in FY25, well above company guidance of 23%/22%."
• In Quantum names: RGTI shares jumped after saying it raised $350 mln by selling ~30.3 mln shares under recently disclosed ATM (at-the-market) equity sales program in agreement with Jefferies.