Closing Recap

Wednesday, July 09, 2025

U.S. stocks opened higher and continued to climb throughout the afternoon as a strong bond auction, new trade/tariff headlines, and details of the June FOMC meeting helped keep investor sentiment positive. Treasury yields fell for the first time in over a week, with the 10-year down 7-bps to 4.34% helped by a strong U.S Treasury 10-year auction. In stock news, technology/AI chip leader Nvidia becomes first public company to hit $4 trillion mkt cap, beating Microsoft and Apple though chip stocks were mixed on the day. Consumer Staples and Energy were the biggest laggards while Utilities, Technology and Industrials were the top winners. In retail, luxury stocks TPR, RL hit 52-week highs while data showed AMZN “Prime Day” sales fall 41% in first day of four-day event. Today President Trump announced increased tariffs (to take effect August 1^st) on several additional countries including: a 25% tariff on Brunei and Moldova, a 20% tariff on the Philippines, a 30% tariff on Algeria, Iraq, Libya and Sri Lanka starting August 1st (now a total of 21 countries with higher tariffs staring 8/1 has been announced in the last few days). Just a slow steady climb for US stocks all day, adding to monthly gains, with Bitcoin hitting all-time highs late day.  

Nick Timiraos of the WSJ noted after today’s FOMC June Meeting minutes that: “The Fed minutes tell US something we already knew: Officials are divided into three groups: 1) Cut this year but not July (the largest group), 2) No cuts this year, and 3) cut as soon as the next meeting (which the minutes suggest is only a “couple”, i.e., Waller and Bowman who both suggested recently).” Minutes from the last Federal Reserve meeting showed, “A couple of participants noted that, if the data evolve in line with their expectations, they would be open to considering a reduction in the target range for the policy rate as soon as at the next meeting. Some participants saw the most likely appropriate path of monetary policy as involving no reductions in the target range for the federal funds rate this year, noting that recent inflation readings had continued to exceed the Committee’s 2% goal, that upside risks to inflation remained meaningful in light of factors such as elevated short-term inflation expectations of businesses and households, or that they expected that the economy would remain resilient. Several participants commented that the current target range for the federal funds rate may not be far above its neutral level.

• US mortgage market index +9.4% to 281.6 in week ended July 4 according to the Mortgage bankers Association while the purchase index climbs 9.4%, the refinance index climbs 9.2% and the average 30-year mortgage rate falls 2 bps to 6.77% in July 4 week.
• China’s CPI inflation rebounded to 0.1% YoY in June, after staying negative for 4 months. Core CPI continued to be a major support, further increasing to a 14-month high of 0.7% YoY. Services’ inflation remained resilient at 0.5% YoY, and consumer goods inflation rebounded by 0.3ppt thanks to government subsidies.

• Treasury yields dropped this morning after President Trump again ramped pressure on Fed Chair Powell on his social media Truth Social account for sharp interest rate cuts. The president posted that the fed funds rate is at least three points too high (echoing recent comments). CME data shows the Fed is widely expected to keep rates on hold later this month. Markets mostly price a 25-basis point cut in September. Treasury yields extended losses this afternoon following a 10-yr auction.
• The U.S. Treasury sold $39B in 10-year notes at 4.362% vs. 4.365% when issued with bid-to-cover ratio 2.61, as primary dealers take 10.87%, direct 23.7% and indirect 65.42%, pushing yields even lower. The US dollar was up slightly, up near 2-week highs vs. the Japanese yen amid intensifying trade concerns. Bitcoin prices jumped to highs late day, surging +2.8% at $111,750 above all-time highs and Ethereum +7% to $2,785

• In Food & Beverages: MNST was downgraded to Neutral from Buy at Redburn citing aluminum uncertainty, noting from 4 June 2025, the US government raised its tariff on imported aluminium from 25% to 50%. As a result, the US Midwest Premium prices soared and this has yet to be reflected in consensus estimates, which look too high in 2026; in the Beer space, TAP and SAM price tgts lowered at Bernstein saying that the structural vs. cyclical debate rages on. Consumers have continued to feel macro pressure and uncertainty, spreading to some other consumer sectors.

• In Casinos: a great run for the casinos (WYNN, LVS, MLCO, MGM) since the upbeat June GGR Macau data last week; today Citigroup raised its tgt on LVS to $72 from $68, MGM to $57 noting Macau’s 8% gross gaming revenue growth in Q2 could drive 3% year-over-year industry EBITDA growth. The firm raised MLCO target to $11 from $8.60 and opened a "30-day upside catalyst watch" on the shares as expects the company to see market share gains and year-over-year EBITDA improvement.
• In Autos: Automakers are urging customers to snap up electric vehicles before a $7,500 U.S. tax credit goes away this fall. TSLA’s homepage on Tuesday displayed a banner: "$7,500 Federal Tax Credit Ending. Take Delivery by September 30, 2025." Sweeping tax and budget legislation approved by Congress will eliminate $7,500 tax credits for buying or leasing new electric vehicles and a $4,000 used-EV credit at the end of September. RBC Capital previews Q2 auto earnings saying they like GM, APTV, DAN, and TSLA on a risk/reward basis.

• In Solar sector: Goldman Sachs downgraded ENPH to Sell (from Buy) and SEDG downgraded to Neutral (from Buy), reassessing the outlook for their resi solar coverage following the recent policy changes that were passed as part of the budget bill. Goldman said they believe these changes are likely to meaningfully weigh on resi demand, both in the near-term given the expiration of individual tax credits starting in 2026 (25D), and more importantly, beyond 2028 as the market calibrates to the new policy environment and economic reality of resi solar excluding the benefits of tax credits. RUN was upgraded to Hold from Underperform at Jefferies saying the OBB is the nearly ‘best-case’ IRA outcome for TPOs that gives RUN a running head start.
• In Energy & Oil sector: EOG was downgraded from Buy to Neutral at Roth and cut its price target by 4% to $134 per share based on its thoughts that global oil prices are close to a near-term top, and it sees risk to the downside for oil in 2H25. U.S. natural gas futures fell about 4% to a six-week low; nat gas fell 12.6 cents, or 3.8%, to settle at $3.214 per million British thermal units (mmBtu), their lowest close since May 28.

• In Insurance: ACGL and RNR were both downgraded to Market Perform at KBW saying ongoing catastrophe reinsurance rate softening; deteriorating accident- and calendar-year mortgage segment profitability (both from enormously strong levels); and an expected uptick in insurance segment underwriting expenses; for RNR said sustained elevated near-term Casualty and Specialty segment combined ratios reflecting (fully understandable) caution over prior accident-years’ reserves and 2Q25E aviation losses.
• In Financial Services: FICO was pressured again after tumbling on Tuesday, with the move coming after Bill Pulte announced that, effective immediately, the GSEs will accept VS 4.0 though it’s still unclear if the FHFA has removed the FICO mandate for conforming mortgages and moved to "FICO or VS". Mortgage lenders can now use the VantageScore 4.0 model when originating loans backed by Fannie Mae and Freddie Mac, which amount to nearly half of recent mortgage originations.

• In MedTech sector: Citigroup opened positive catalyst watches for GEHC, ISRG; upgraded HAE to Buy, reiterated BSX, EW as top picks and downgraded TNDM to Sell noting MedTech has largely withstood the healthcare headwinds but has been caught in the macro. Overall, Citi expects managements to take a conservative approach to tariff impacts, and it embraces the return to fundamentals with several catalysts providing momentum in the 2H25+.
• In Life Sciences: TMO was downgraded to Neutral from Buy at UBS with a view that a confluence of headwinds could pressure life sciences R&D (an end market that broadly comprises 50% of Thermo’s sales) longer than many expect. Citigroup upgraded CRL, HOLX to Buy and downgrade ILMN to Sell saying the 1H25 backdrop for the sector faced several headwinds including the US A&G funding policy changes and global tariffs, which impacted the vast majority of Citi’s coverage with an outsized impact on Tools. Outside of Tools, CRO sentiment leans more negative as cancellations are expected to remain elevated as well as from possible pharma tariff and MFN initiatives.
• In Medical Equipment: RXST shares plunged over -30% after guides Q2 revs $33.6M vs. est. $39.8M as LAL trends deteriorated through Q2, and cuts FY25 revenue view to $120M-$130M from $160M-$175M (est. $167.56M) amid structural issues, I.E., workflow challenges, decreasing utilization.
• In Medical Technology/Services: DOCS was upgraded to Outperform at Evercore and raised tgt to $70 saying overall, sees DOCS as prudently setting FY26 guidance in a conservative spot as the PoC/Formulary business as likely to grow at least MDD in FY26 to $140+ MM, supported by recent channel checks.
• In Managed Care: The WSJ reported that the Justice Department’s criminal healthcare-fraud unit is investigating UNH’s Medicare billing practices, including looking into how the company deploys doctors and nurses to gather diagnoses that increase its payment.

• In Containers & Packaging: BALL, SLGN, OI, and GEF were all downgraded from Buy to Neutral at Bank America in the container and packaging sector, saying earnings and/or volumes could decelerate into 2026, and the firm thinks it might be difficult for defensiveness and easy compares to drive performance in packaging, should the economy improve. The firm said their favorite Buys include AVY: valued at depressed growth outlooks and see pickup in econ activity helping fundamentals, valuations.
• In Industrials: CAT was upgraded from Hold to Buy at Melius with $500 tgt after a short six months on the sidelines and has raised its 2027 estimates materially after thinking about the scale of the datacenter driven capacity increase in engines. This leaves Melius at the top of consensus for 2027.
• In Metals & Mining: Copper prices soared (FCX, SCCO, TECK) on Tuesday after President Trump stated in a cabinet meeting that copper tariffs could be instated at a rate of 50%, well above market expectations of up to 25%. Commerce Secretary Lutnick said this could be in place by later in July or 1-Aug (Bloomberg).
• In Chemicals: RBC Capital noted many commodity chemical stocks rose on Tuesday (CC, TROX, HUN, WLK, OLN, CE, DOW, LYB, etc.) on the rollback of EPA restrictions on several chemicals. While chemical chains associated with this order (heavy metals, PU, phenolic ethers, glycols, and PFAS) are likely to see some benefits from these loosened restrictions. Overall RBC sees loosening restrictions as a positive for commodity chemicals in the US and expects further similar announcements could come over the next few years.

• In Advertising: WPP shares tumbled after lowering guidance saying it sees like-for-like revenue less pass-through costs this year to fall by between 3% and 5%, from a previous estimate of between a flat performance and a 2% decline. WPP also said it sees a decline in operating margin of 50 to 175 basis points, down from prior view of roughly flat headline operating profit margin.
• In Internet: Shares of GOOGL slipped this afternoon after Reuters reported OpenAI is close to releasing an AI-powered web browser that will challenge Alphabet’s market-dominating Google Chrome, three people familiar with the matter told Reuters. The browser is slated to launch in the coming weeks, three of the people said, and aims to use artificial intelligence to fundamentally change how consumers browse the web. It will give OpenAI more direct access to a cornerstone of Google’s success: user data

• In Semis: NVDA hitting fresh all-time highs today amid strength in tech and semiconductors on continued AI momentum trades, as group extends 2 month rebound (becomes first $4 trillion mkt cap company); SMCI was initiated at underperform and $35 tgt at Bank America saying margins will remain under pressure in a more competitive AI server/rack market and availability of components (GPUs, liquid cooling components) may limit revenue growth; MBLY announced a 45M share stock offering.