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Thursday, July 24

Noteworthy macro moves today: US 10Y Treasury Bond -0.3%. Gold -0.9%. Noteworthy US mega-cap moves today: Tesla Inc (TSLA) -6.7%. UnitedHealth Group Inc (UNH) -3.6%. Alphabet Inc (GOOGL) +3.6%. 

Recent developments in global markets are significantly influenced by trade negotiations and economic data releases. The U.S. has made progress on a trade agreement with the European Union, which is expected to impose 15% tariffs on EU imports while avoiding previously threatened higher rates. This optimism follows similar agreements reached with Japan, contributing to increased risk appetite among investors as they anticipate reduced tensions surrounding international trade.

In terms of economic indicators, initial jobless claims in the United States fell unexpectedly for six consecutive weeks to 217,000—well below market expectations of an increase—which suggests resilience in the labor market despite ongoing concerns about hiring momentum slowing down overall. Additionally, preliminary Purchasing Managers' Index (PMI) readings indicate expanding business activity across both manufacturing and services sectors within various economies including Europe and North America.

The European Central Bank's recent decision to maintain interest rates at their current levels reflects cautiousness amid lingering uncertainties related to inflation targets and external pressures from potential tariff impacts stemming from U.S.-EU relations. As such decisions unfold alongside positive earnings reports from major corporations like Alphabet Inc., investor sentiment remains buoyed even amidst mixed signals regarding broader macroeconomic stability.

Consumer Discretionary Select Sector SPDR Fund (XLY) [-1.2%]
The Consumer Discretionary Select Sector SPDR Fund (XLY) is experiencing a daily return of -1.18%, coinciding with a newly announced trade deal between the United States and Japan, which imposes a 15% tariff on Japanese exports to the U.S. This development has raised concerns regarding consumer discretionary spending. Significant contributors to XLY's performance include Tesla (TSLA), which dropped substantially following its earnings report that revealed a revenue decline and missed expectations, along with Chipotle Mexican Grill (CMG) and Lowe's (LOW), both of which also saw notable declines. The S&P 500 Index has decreased slightly, reflecting broader market sentiment that may be influencing XLY's current price movement.

TSLA | -6.3% | -63.1B
Tesla Inc | Automobile Manufacturers
Tesla Inc is experiencing a notable decline in pre-market trading. The company's recent second-quarter earnings report revealed a revenue of $22.5 billion, a significant year-over-year drop, which fell short of analysts' expectations. Adjusted earnings per share were reported at $0.40, slightly below the consensus estimate. CEO Elon Musk indicated potential difficulties ahead, citing the upcoming expiration of the $7,500 federal EV tax credit and rising tariff-related costs. Additionally, Tesla's automotive revenue saw a substantial decline of 16%, and vehicle deliveries decreased by 13.5% year-over-year. Concerns about the impact of an affordable Model Y trim on sales and a nearly 23% drop in European sales further compounded the negative sentiment following the earnings call.

DOW | -10.3% | -2.0B
Dow Inc | Commodity Chemicals
Dow Inc. reported a second-quarter net loss of $835 million, or $1.18 per share, a stark contrast to the net income of $439 million, or $0.62 per share, from the same period last year. Adjusted losses were $0.42 per share, significantly missing analyst expectations of a $0.12 loss. Revenue declined by 7% year-over-year to $10.1 billion, falling short of the consensus estimate of $10.25 billion. The company announced a 50% reduction in its quarterly dividend to $0.35 per share, citing a prolonged industry downturn and macroeconomic challenges. This decision reflects a strategy aimed at preserving financial flexibility amid difficult market conditions. Social media discussions have highlighted the dividend cut and expressed concerns over cyclical growth. Following the earnings report, Dow's stock dropped significantly, moving down by approximately 10.5%.

IBM | -6.7% | -16.2B
International Business Machines Corp | IT Consulting & Other Services
International Business Machines Corp (IBM) reported its second-quarter results on July 23, 2025, with an adjusted EPS of 2.80, exceeding the consensus estimate of 2.65, and revenue of 17 billion, surpassing expectations of 16.59 billion. Despite this overall revenue growth, the software segment generated 7.39 billion, slightly below the anticipated 7.41 billion, raising concerns among analysts. Following the earnings announcement, IBM shares fell approximately 5.4% in after-hours trading. CEO Arvind Krishna noted that the generative AI business has grown to over 7.5 billion, up from 6 billion in the previous quarter. He also mentioned that geopolitical tensions are leading clients to act more cautiously, potentially delaying spending decisions, while federal spending in the U.S. was constrained in the first half of the year but is not expected to significantly impact future performance.

TMUS | +3.7% | +10.4B
T-Mobile US Inc | Wireless Telecommunication Services
T-Mobile US Inc. reported strong Q2 results, with earnings per share of 2.84, exceeding the consensus estimate of 2.68, and revenues of 21.13 billion, surpassing the expected 21.02 billion. The company achieved record postpaid net customer additions of 1.7 million and raised its full-year guidance for adjusted EBITDA to between 33.3 billion and 33.7 billion, up from prior projections. Service revenues increased significantly to 17.44 billion compared to 16.43 billion last year. Social media discussions highlighted the company's performance, noting an adjusted EBITDA of 8.55 billion against an estimate of 8.41 billion and a net income rise of 10.2% to 3.22 billion. Additionally, T-Mobile recorded 830,000 postpaid phone net additions versus an estimate of 700,000, further enhancing its outlook for postpaid net additions and free cash flow expectations between 17.6 billion and 18 billion.

GOOGL | +3.6% | +88.6B
Alphabet Inc | Interactive Media & Services
Alphabet Inc. is experiencing a notable price increase, coinciding with a significant rise in the Interactive Media & Services sector. The company recently reported strong second-quarter earnings, with an earnings per share (EPS) of 2.31, surpassing analyst expectations of 2.16, and revenue of 96.43 billion, exceeding the consensus estimate of 93.9 billion. This reflects a year-over-year revenue increase of 14%, driven by robust growth in Google Search and YouTube advertising. Additionally, Alphabet announced plans to increase its 2025 capital expenditures to approximately 85 billion, up from 75 billion, to meet rising demand for its cloud products. CEO Sundar Pichai noted that Google Cloud's annual revenue run-rate has now exceeded 50 billion, further underscoring the company's momentum in artificial intelligence and cloud services. Following these developments, several analysts raised their price targets for Alphabet Inc., reflecting optimism about its growth trajectory.

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