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Thursday, July 31

Noteworthy macro moves today: Copper -5.4%. Gold +1.0%.

The Bank of Japan (BoJ) has maintained its benchmark short-term interest rate at 0.5%, aligning with market expectations and continuing a gradual normalization of monetary policy amid rising inflation forecasts. This decision comes as the Japanese economy shows signs of resilience, supported by recent positive data on retail sales and industrial output.

In the United States, economic indicators have revealed mixed signals: initial jobless claims rose slightly but remained below expectations, while personal income increased more than anticipated in June. Additionally, core PCE prices matched projections for growth; however, concerns linger regarding potential impacts from ongoing tariff policies introduced by President Trump that could affect various sectors including manufacturing.

Global equity markets are reacting to these developments alongside earnings reports from major tech companies like Meta Platforms Inc., which saw significant gains following strong quarterly results. The U.S. dollar is experiencing strength against other currencies due to this favorable economic backdrop combined with cautious remarks from Federal Reserve Chair Jerome Powell about future rate cuts amidst persistent inflation pressures.

iShares MSCI Japan ETF (EWJ) [+1.0%]
Japan's central bank has maintained its interest rate at 0.50%. Preliminary data for June shows that Japan's industrial production rose by 1.7%, exceeding expectations of a decline and the previous figure. The Federal Reserve's decision to keep interest rates unchanged at 4.25%-4.50% has fostered positive market sentiment, supporting the iShares MSCI Japan ETF (EWJ), which has seen a daily return of nearly 1%. The USD/JPY exchange rate negatively impacted the ETF's performance. Among its holdings, SoftBank Group Corp (SFTBY) reported a significant return, bolstered by an expanded partnership with Ericsson, while Takeda Pharmaceutical Company Limited (TAK) posted strong Q2 earnings with notable revenue and EPS figures.

United States Copper Index Fund (CPER) [-3.3%]
Copper prices have seen a notable decline following President Trump's announcement of a 50% import tariff, which notably excluded refined copper. This decision resulted in a sharp drop in copper prices, marking one of the largest single-day declines in years. COMEX copper futures fell significantly, erasing the premium that domestic copper had established over global prices. The market is adjusting, with major copper firms such as Freeport-McMoRan and Southern Copper experiencing substantial drops in their stock values. The changes in tariffs, along with expectations regarding future trade policies, are likely to influence supply chain dynamics and pricing strategies going forward.

MSFT | +8.4% | +349.1B
Microsoft Corp | Systems Software
Microsoft reported strong Q4 earnings, with earnings per share (EPS) of 3.65, exceeding the consensus estimate of 3.37 by 28 cents. Revenue reached 76.4 billion, surpassing the expected 73.79 billion, reflecting an 18% year-over-year increase. Cloud revenue was particularly notable at 29.9 billion, contributing to a total Microsoft Cloud revenue of 46.7 billion, which grew by 27% year-over-year. CEO Satya Nadella stated that Azure generated over 75 billion in revenue for the fiscal year, marking a 34% annual growth. Following the announcement, Microsoft's stock surged over 6%, with analysts raising price targets, including Wedbush to 625 and BofA to 640. The company also achieved a market cap exceeding 4 trillion for the first time in after-hours trading, driven by robust demand for AI and cloud services. Revenue guidance for Q1 FY2026 was set between 74.7 billion and 75.8 billion, above the consensus estimate of 74.066 billion.

META | +11.5% | +225.4B
Meta Platforms Inc | Interactive Media & Services
Meta Platforms Inc reported robust second-quarter results, with earnings per share at 7.14, exceeding the consensus estimate of 5.90, and revenue reaching 47.52 billion, surpassing expectations of 44.84 billion. The company experienced a 22% year-over-year increase in revenue and a 36% rise in net income, totaling 18.34 billion. Daily active users rose by 6%, reaching 3.48 billion. For the third quarter, Meta anticipates revenue between 47.5 billion and 50.5 billion, above analyst expectations of 46.29 billion. Following these announcements, several analysts raised their price targets for Meta, with BofA increasing it to 900 from 775 and Citi adjusting it to 915 from 803. Additionally, CEO Mark Zuckerberg noted advancements in AI that improved content recommendations, leading to increased user engagement on Facebook and Instagram. Following the earnings report, the stock experienced a notable rise, achieving new all-time highs.

AMZN | +3.0% | +75.0B
Amazon.com Inc | Broadline Retail
Amazon.com Inc. is poised to report strong second-quarter earnings, with analysts projecting earnings per share of $1.33, an increase from the previous year's $1.26, and sales anticipated at $162 billion, reflecting a 10% rise. The Amazon Web Services (AWS) segment is expected to grow by 17% year-over-year, significantly enhancing operating income. Retail revenue is forecasted to reach $103 billion, marking a 7% increase. Subscription and advertising sales are also on track to achieve $27 billion, indicating a 14% annual growth. Meanwhile, social media discussions have highlighted a positive after-hours movement for AMZN following robust cloud revenue reports from Microsoft, which reported a 34% increase in Azure's annual revenue, surpassing $75 billion. This has raised expectations for AWS performance amidst a competitive cloud services landscape.

RBLX | +20.0% | +19.1B
Roblox Corp | Interactive Home Entertainment
Roblox Corp reported its second-quarter 2025 financial results, revealing bookings of 1.44 billion, exceeding the consensus estimate by nearly 19%. This represents over a 50% increase from the same quarter last year. Average Daily Active Users reached 111.8 million, a 41% year-over-year rise, while engagement hours surged to 27.4 billion, marking a 58% increase. The company has raised its fiscal year 2025 sales guidance to between 5.87 billion and 5.97 billion, up from a previous estimate of 5.29 billion to 5.36 billion. For the third quarter, Roblox expects sales between 1.590 billion and 1.640 billion, surpassing the analyst estimate of 1.33 billion. Social media discussions highlight heightened anticipation for earnings, with posts indicating significant price movements and an implied move based on previous earnings reactions. RBLX is noted as having increased substantially since January 11, 2023, alongside other notable stocks.

LLY | -2.8% | 19.8B
Eli Lilly and Co | Pharmaceuticals
Eli Lilly and Co's stock has declined following the release of topline results from the SURPASS-CVOT trial, which compared its diabetes drug Mounjaro to Trulicity in over 13,000 participants with type 2 diabetes and established cardiovascular disease. While Mounjaro showed a non-inferior rate of major adverse cardiovascular events, it did not achieve statistical superiority, with a hazard ratio for cardiovascular death, heart attack, or stroke at 0.92. This led to an initial stock drop of approximately 4.5%, which later adjusted to a decrease of 2.25%. Social media discussions highlighted Mounjaro's cardiovascular benefits over Trulicity, noting its 8% lower rate of major adverse cardiovascular events and greater reductions in A1C and weight. Detailed results are expected to be presented at the European Association for the Study of Diabetes Annual Meeting in September.

CVNA | +16.6% | +13.1B
Carvana Co | Automotive Retail
Carvana Co. reported robust second-quarter results, with earnings per share of 1.28, exceeding expectations of 1.12. Revenue reached 4.84 billion, surpassing the anticipated 4.56 billion and reflecting a significant year-over-year increase. The company sold 143,280 vehicles during the quarter, marking a 41% rise compared to the previous year. Additionally, adjusted EBITDA stood at 601 million, up 70% year-over-year. The positive performance was partly attributed to favorable tariff-related pricing dynamics, contributing an estimated 100 per unit uplift in retail gross profit. Following the earnings report, Carvana's shares surged by approximately 16% in after-hours trading, achieving new all-time highs. Notably, an ongoing SEC investigation related to accounting irregularities has been acknowledged in their latest filing. Price targets for Carvana have been raised by multiple analysts, now ranging from 425 to 460.

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