Closing Recap

Monday, July 21, 2025

Stock market momentum still remains firmly to the upside despite stocks paring gains late day, pushing the S&P 500 and Nasdaq to fresh all-time highs again. Technology (XLK) and Communications (XLC) were among the leaders today (along with Materials XLB) and joining Industrials (XLI) as the top three sector leaders year-to-date as all three hit record highs today. The XLI is +14.3% YTD, +12.5% for XLK and +11.1% for XLC YTD (Utilities XLU +11% YTD as well). Meanwhile the pain trade has been in Healthcare (XLV) down again today and -4.5% YTD along with Energy (XLE) down on the year after falling today. While the August 1^st trade/tariff deadline approaches for global trading partners of the U.S., attention turns to earnings this week as roughly 23% of S&P 500 index earnings are expected to report this week (per @WallStHorizon), including 5 Dow 30 companies and 2 Mag 7 companies with TSLA, GOOGL reporting. Of the 62 S&P 500 companies reported thus far (fiscal qtr ending May-Jul, per Reuters), 84% have beat vs. 16% miss with the average beat 8%, and avg miss -3%. Complacency remains for major averages as fear remains absent (CBE Volatility index – VIX weak again) while the S&P 500 Index goes 18 sessions without a move of 1% in either direction despite all-time highs, the longest stretch of no 1% move since December.

Very quiet intraday on trade/tariff news after a CNBC interview this morning with Treasury Secretary Bessent. Bessent also said the entire Federal Reserve needed to be examined as an institution and whether it had been successful. Bessent, speaking with CNBC, declined to comment on a report that he had advised President Donald Trump not to fire Fed chair Jerome Powell, saying it would be the president’s decision. But he said the institution should be reviewed, citing what he called “fearmongering over tariffs” despite the emergence thus far of little, if any, inflationary effect. The European Union is exploring a broader set of possible countermeasures against the United States as prospects for an acceptable trade agreement with Washington fade, according to EU diplomats.

Reminder no Fed speak expected this week with the blackout period into the July FOMC meeting (7/29-7/30). Though, Fed Chairman Powell will give the opening remarks at the Integrated Review of the Capital Framework for Large Banks Conference on Wednesday. As we continue to push higher with no pullbacks, market statistics remain amazing: 1) @Mr_Derivatives noted “SPX 60 days now without closing below the 20dma. In 1998 it went 61 days without closing below the 20dma. In 1997 it went 76 days without closing below the 20dma. Absolutely amazing”; 2) @bespokeinvest noted on July 18^th, “The Tech sector came into today on a 46-trading day streak of closes in “overbought” territory. That extended to 47 today. It would need to fall 3.5% from here to move back into neutral territory. Longest streak was 68 trading days ending in Feb. 1999.”

• The Japanese yen rose across the board after Japan’s ruling coalition lost its majority in the upper house, suggesting the result was mostly priced in, while investors braced for market disquiet ahead of a deadline on U.S. tariff negotiations. Note Japanese markets were closed for a public holiday. The yen gained 1% to 147.33 per dollar, although not far off from the 3-1/2-month low of 149.19 hit last week on Japan’s political and fiscal outlook. It also nudged 0.5% higher against the euro to 172.05. Prime Minister Shigeru Ishiba’s Liberal Democratic Party returned 47 seats, short of the 50 it needed to ensure a majority in Japan’s 248-seat upper chamber.
• Oil prices slipped as WTI crude dipped -$0.14 or 0.21% to settle at $67.20 per barrel while Brent crude slipped -$0.07 to settle at $69.21 per barrel. Front-month natural gas futures for August delivery on the New York Mercantile Exchange fell 24.0 cents, or 6.7%, to settle at $3.325 per million British thermal units, their lowest close since July 11, weighed down by stagnant gas flows to liquefied natural gas (LNG) export plants and ample amounts of gas in storage, said reports.

• In Restaurants: DPZ mixed results but shares bounce initially after reported Q2 EPS $3.81 vs. est. $3.96; Q2 revs $1.15B vs. est. $1.14B; Q2 U.S. same store sales growth of 3.4% vs. est. 2.21%; reports Q2 international same store sales growth, excluding foreign currency impact, of 2.4%.

• In Cruise lines: RCL was downgraded to Hold from Buy at Truist though raised its tgt to $337 from $275 saying they have observed a bounce-back in bookings since April’s pullback, but when averaging March-early July’s year over year bookings, demand pace is only up low-to-mid-single digits, well off the high-teens monthly pace.

• In Asset Managers & Banks: FITB enters share repurchase agreement to purchase $300M of common stock; IVZ was upgraded to Buy from Hold at TD Cowen and raised tgt to $25 from $17.50 saying the company’s registration documents requesting to migrate its QQQ exchange traded fund (ETF) from a unit investment trust to an open-end fund structure is a "game changing event."
• In REITs: EQIX shares active after Bloomberg reported Elliott Investment Management has built up its stake in Equinix and is pushing the data center operator to take steps to boost its share price

• COIN tgt was raised from $292 to $500 at Cantor and maintains its Overweight rating saying regulatory and institutional momentum have propelled Bitcoin to new ATHs, as well as other major assets seeing a significant move higher. This dynamic has also helped propel shares of COIN towards ATHs.
• GLXY tgt raised to $36 and named as Piper favorite crypto name as sees company as a “two-headed monster positioned to benefit from accelerating institutional adoption of crypto, as well as growing demand for power from AI/HPC adjacent companies” – sees crypto business value at $14 per share, CRWV deal at $12 per share and Helios data center at $16 per share.

• XYZ will replace HES in the S&P 500 index following CVX’s purchase of Hess that closed Friday. Block will join the index before the start of trading on Wednesday.
• Figma, backers seek to raise up to $1.03 billion In IPO – Bloomberg reported.

• ALKS said its experimental drug, alixorexton, showed clinically meaningful and statistically significant improvements in wakefulness at all doses, compared to placebo, in patients with narcolepsy type-1 in a mid-stage study.
• ARWR shares fell; Bernstein analyst noted increasing investor concern on partner SRPT’s ability to pay Arrowhead $300M in near-term milestones" due under their 2024 partnership.
• BIIB announces $2B manufacturing investment in North Carolina’s research triangle park in conjunction with its 30th anniversary.
• BIIB was also assumed/downgraded from Buy to Hold at Truist and cut tgt to $142 from $199 given the suboptimal growth outlook for commercial franchise, and lack of de-risked potential blockbuster opportunities in the pipeline.
• DMAC raises $30M in private placement to accelerate industry leading preeclampsia and fetal growth restriction pipeline; to issue 8.6M shares at $3.50 each.
• IRON announces positive pre-NDA meeting and confirms plans to submit NDA for Bitopertin in erythropoietic protoporphyria (EPP) in Oct’25.
• ITOS enters into agreement to be acquired by privately held Concentra Biosciences for $10.047 in cash per share plus a contingent value right.
• RHHBY announced top-line results from the astegolimab pivotal program where the Phase 2B trial (ALIENTO) met the primary endpoint, but the Phase 3 (ARNASA) trial did not meet the primary endpoint.
• SRPT was downgraded to Neutral at Mizuho, to Underperform at Needham and price tgts drastically lowered by several Wall Street firms after the FDA asked the company Friday to voluntarily halt shipments of its Elevidys gene therapy after a patient who received a different, experimental treatment died.

• In Medical Equipment: ZIMV announces definitive agreement to be acquired by ArchiMed for $19.00 per share in cash in proposed deal for enterprise value of approximately $730M. BRKR shares fell after announcing lowered prelim revenue guidance for Q2, sees it in a range of $795M-$798M (vs est. $813M), which implies approx flat reported revenue YoY and estimates that its non-GAAP organic revenue in Q225 declined approx 7% Y/Y.
• Healthcare Services: Jefferies out with preview for sector saying they are generally bullish on fundamentals for most H/C companies in its coverage. Intra-quarter checks suggest continued strength in broader healthcare demand/utilization, translating to expectations for good volume performance that likely translates to guidance bumps for some names in its coverage. Also, expect some focus on how the scheduled expiration of exchange subsidies at year-end would impact ’26 outlooks. Q2 Picks: ADUS, AVAH (upgraded), BKD, BTSG, OPCH, THC.

• In Industrials: ROP raised 2025 revenue outlook to rise 13% y/y, instead of 12% as previously estimated, while EPS said it now expects adjusted earnings of $19.90-$20.05, adding 10 cents to the low end of its prior outlook; also guided Q3 results above estimates after Q2 beat ($4.87/$1.94B vs. est. $4.83/$1.93B).
• In Energy: Natural gas producers AR, EQT, RRC, LNG and others tumbled, following lower natural gas prices lower to one-week low on record output, forecasts for less hot weather over next two weeks, stagnant gas flows to liquefied natural gas export plants and ample amounts of gas in storage.
• Utilities: the sector remain on fire this year: 74% of large-cap utilities stocks are outperforming the S&P 500 year-to-date, according to Duality Research analysis. The utilities sector (XLU) has risen 12% so far this year, beating the S&P 500 gain of 7.1%. Results mixed today as nuclear stocks give back some of last week’s gains (NRG, NEU, SMR, OKLO, VST).
• In Housing: New listings of U.S. homes for sale fell -3.2% in June, according to Redfin. That’s the biggest month-over-month decline since February 2023. New listings fell 3.4% year over year, the first annual decline since October 2023. Active listings fell 0.3% month-over- month in June, the first decline since July 2023 on a seasonally adjusted basis. Still, active listings were up 13.3% y/y, near the highest level in five years.

• KTOS price tgt raised to $70 from $54 at Stifel noting last week, Airbus announced a KTOS partnership to deliver a Valkyrie-based drone to the German Air Force. A day later, Aviation Week reported that a new version of the Valkyrie will transition into a program of record for the US Marines.
• Turkey is close to preliminary deal for euro fighter combat jet order, sources Say; Talks between Turkish and U.K. government are advanced

• In Steel Sector: Usiminas (USNZY) downgrade to Equal Weight, TX downgraded to Equal Weight in Brazil steel changes at Morgan Stanley saying steel imports from free-trade zones & countries w/ bilateral agreements remain exempt from the new TRQ system… which incentivizes transshipments and will, keep imports at elevated levels. Chinese steel exports to Brazil reached record highs in May.

• Internet sector: Morgan Stanley previews the Internet sector, raising estimates amid more favorable macro backdrops. AMZN remains Top Pick w/ AWS acceleration key. Morgan sees GenAI driven rev acceleration at both GOOGL but prefer GOOGL NT on valuation. Upgrade PINS to Overweight as growth acceleration not priced and upgraded ETSY to EW on balanced catalyst path. Heading into 2H, is turning positive as it thinks the benefits of these investments are set to drive under-appreciated acceleration and earnings power. SE shares fell after Shopee Indonesia has implemented an Order Processing Fee of Rp1,250 (approximately USD 0.08) per transaction for sellers, effective on July 20.

• Networking & Communications: Citigroup said after meeting with investors in NY post its sector earnings preview last week says investor sentiment skewed more bearish on hardware OEMs relative to component or networking stocks given demand impacts from macro and Section 232 investigations; AI networking stocks like ANET are back in favor on growing Ethernet/1.6T transceiver TAMs respectively; good news on higher sell-in on pull forward in smartphone/PC consumer stocks like AAPL appears priced-in; said CSCO are crowded longs; and NTAP sentiment is negative supported by Citi Quant Crowding Composite scorecard
• In Equipment & Parts: KEYS upgraded to Neutral from Underperform at bank America saying revenue declines following a 5G investment spending peak have largely played out, orders have troughed (+2% y/y on TTM) and after a 31% decline in consensus FY25 EPS estimates, estimates have troughed.

• For European semis, Bank America previews (IFNNY, STM) say they beats for Q2 and raise for Q3, although pull-in risks remain a concern; is above consensus for STM and see a +6% beat on sales; is +8% above IFX on Q4 and see potential raise to FY25 guide.
• Keybanc notes INTC, NXPI, TXN among semi names to report earnings this week and expect broad-based end demand trends to reflect Q225 strength driven by tariff-related pull-ins, though rising uncertainty around final tariff rates and signs of a slower 2H are leading to a more cautious full-year outlook.
• ALAB, one of the more compelling IPOs of the past 18 months, is part of the red-hot semiconductor group soared today. It has strong exposure to artificial-intelligence infrastructure with ties to Nvidia, and after a 37% surge during the first week of November, the stock is now challenging those highs. It recently reclaimed the $100 level for the first time in five months – Barron’s noted.