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Tuesday, July 29

Noteworthy macro moves today: US Dollar Index +0.4%. Noteworthy US mega-cap moves today: UnitedHealth Group Inc (UNH) -4.1%. Eli Lilly and Co (LLY) -2.9%. 

The US Dollar has strengthened significantly following the announcement of a trade agreement between the United States and the European Union, which is perceived as favoring Washington. This deal includes reduced tariffs on EU imports while committing to substantial purchases of U.S. energy products, enhancing confidence in the dollar amidst ongoing economic discussions with China.

Recent economic data releases have shown positive trends that support market sentiment; notably, June's goods trade deficit narrowed more than expected in the U.S., indicating stronger import management amid tariff concerns. Additionally, UK mortgage approvals rose unexpectedly high for June 2023 compared to forecasts, suggesting resilience in consumer borrowing despite previous tax break expirations.

Investors are closely monitoring upcoming Federal Reserve meetings where interest rates are anticipated to remain unchanged but may signal future cuts based on evolving macroeconomic conditions such as inflation metrics and employment figures due later this week. The outcomes from these events could further influence equity markets globally and shape investor strategies moving forward.

VanEck Semiconductor ETF (SMH) [+1.1%]
The VanEck Semiconductor ETF (SMH) has seen a price increase of 1.1% since Monday. A recent trade agreement between the United States and the European Union, which imposes a 15% tariff on various imports including semiconductors, has bolstered the U.S. dollar and is expected to positively influence semiconductor companies by enhancing market stability and reducing uncertainties in international supply chains. Notably, Cadence Design Systems (CDNS) reported strong second-quarter results, surpassing revenue and earnings expectations, and raised its fiscal 2025 guidance due to robust demand for AI-related products. This contributed to CDNS's significant performance within the ETF. Additionally, social media buzz highlighted a record trade for SOXL, a leveraged ETF related to the semiconductor sector, further linking it to SMH.

Health Care Select Sector SPDR Fund (XLV) [-0.8%]
The Health Care Select Sector SPDR Fund (XLV) has experienced a decline of 0.8% since Monday. The U.S. dollar has strengthened significantly due to a new trade agreement with the European Union, which includes 15% tariffs on various imports. This development may be affecting health care stocks within XLV, particularly as the market anticipates interest rate decisions from the Federal Reserve. Social media discussions reveal that the market capitalization in the Health Care sector has dropped significantly, with United Health (UNH) and AbbVie (ABBV) being key stocks set to report results this week. Among the ETF's holdings, notable contributors to its performance include Eli Lilly (LLY), Merck (MRK), and United Health (UNH), all of which have posted declines.

NVO | -20.0% | -36.9B
Novo Nordisk A/S | Pharmaceuticals
Novo Nordisk A/S has revised its 2025 financial outlook, reducing its expected sales growth to a range of 8-14%, down from a prior forecast of 13-21%. This adjustment is primarily due to disappointing growth expectations for key products, Wegovy and Ozempic, in the U.S. market, alongside increased competition from compounded GLP-1 alternatives. Despite reporting an 18% sales increase in the first half of 2025, future growth is anticipated to slow. Additionally, Maziar Mike Doustdar has been appointed as the new CEO, effective August 7, 2025, following the resignation of Lars Fruergaard Jørgensen. The stock has reacted sharply to these developments, reflecting concerns regarding the company's performance and market conditions, with reports indicating a decline of approximately 20% in pre-market trading.

CDNS | +8.1% | +8.0B
Cadence Design Systems Inc | Application Software
Cadence Design Systems Inc reported its second-quarter results on July 28, 2025, revealing revenue of $1.28 billion, exceeding analyst expectations of $1.25 billion. The adjusted EPS came in at $1.65, surpassing the forecast of $1.56. Year-over-year revenue growth was recorded at 20%. The company raised its fiscal 2025 revenue guidance to a range of $5.21 billion to $5.27 billion and adjusted EPS guidance to $6.85-$6.95, both above prior estimates. The anticipated Q3 adjusted EPS is projected between $1.75 and $1.81, exceeding the previous estimate of $1.72. Following the earnings announcement, Cadence's stock price increased significantly, attributed to strong demand for AI-related products and improved bookings, with a backlog reported at $6.4 billion. Notably, the company is facing a legal issue, agreeing to pay $140 million to the U.S. government for selling chip design technology to a Chinese university.

VRSN | -7.1% | -2.0B
Verisign Inc | Internet Services & Infrastructure
Verisign Inc. is experiencing notable price movement following the announcement of a secondary offering of 4.3 million shares by Berkshire Hathaway affiliates, priced at $285 each. This offering aims to reduce Berkshire's ownership below the 10% threshold, thereby avoiding additional regulatory obligations. Verisign will not benefit from the proceeds of this transaction, which is set to close on July 30, 2025. Concurrently, social media activity highlights the sale's significance, indicating a pre-tax total of approximately $1.23 billion to $1.25 billion. Following this news, Verisign's stock price has dropped significantly, reflecting market reactions to this unusual underwritten deal. As of this morning, the stock has decreased by over 7%. Post-sale, Berkshire Hathaway will retain about 9 million shares, subject to a 365-day lock-up agreement.

SPOT | -7.7% | -9.9B
Spotify Technology SA | Movies & Entertainment
Spotify Technology S.A. reported its second-quarter 2025 results, revealing a net loss of €86 million, or €0.42 per share, significantly missing the analyst consensus of a profit of €1.98 per share. Revenue increased 10% year-over-year to €4.19 billion but fell short of expectations of €4.26 billion. Monthly active users grew by 11% to 696 million, surpassing guidance, while premium subscribers rose 12% to 276 million. The company's forecast for third-quarter revenue is €4.2 billion, below the estimate of €4.48 billion, and operating income is projected at €485 million, underperforming the expected €562 million. Factors contributing to the disappointing results include rising employee costs and currency impacts. Following the earnings report, Spotify's stock fell approximately 7.7%.

CLS | +10.3% | +2.3B
Celestica Inc | Electronic Manufacturing Services
Celestica Inc. reported its second-quarter financial results, revealing an adjusted EPS of 1.39, surpassing the estimate of 1.22 by nearly 14%. This represents a significant increase from 0.91 per share in the same quarter last year. Revenues reached 2.893 billion, exceeding expectations of 2.652 billion and reflecting a year-over-year growth of over 20%. The company raised its full-year 2025 adjusted EPS guidance to a range of 5.00 to 5.50 and increased its revenue outlook from 10.850 billion to 11.550 billion. For the third quarter, Celestica anticipates an adjusted EPS between 1.37 and 1.53, alongside projected sales of 2.875 billion to 3.125 billion, both above analyst estimates. Following the earnings announcement, the stock surged approximately 10% in after-hours trading, with social media highlighting the strong financial performance and positive guidance for the upcoming quarters.

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