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Wednesday, July 23

The recent announcement of a trade deal between the United States and Japan has significantly influenced market sentiment, with U.S. equities experiencing gains as investors reacted positively to reduced tariffs on Japanese imports from 25% to 15%. This agreement includes substantial commitments from Japan for investment in the U.S., amounting to $550 billion, which is expected to create numerous jobs domestically.

In addition, there are growing concerns regarding ongoing negotiations between the EU and the U.S., particularly ahead of an August deadline that could see increased tariffs imposed by Washington if no agreements are reached. The European Central Bank (ECB) meeting scheduled for July 24 is also drawing attention; it’s anticipated that rates will remain unchanged amid evolving economic conditions within Europe.

Economic data releases have shown mixed results recently: mortgage applications in the U.S. saw slight increases despite rising interest rates reaching their highest levels in four weeks at around 6.84%, while crude oil inventories fell unexpectedly last week after three consecutive weekly rises. These developments reflect broader trends affecting consumer behavior and energy markets amidst fluctuating global economic dynamics.

iShares MSCI Japan ETF (EWJ) [+4.1%]
Shares of US-listed Japanese stocks are experiencing upward movement following President Trump's announcement of a significant trade deal with Japan. This deal includes Japan's commitment to invest $550 billion into the United States and will implement reciprocal tariffs of 15% on American imports. The Nikkei 225 Index surged over 3% in response, reflecting a favorable market environment for Japanese equities. The iShares MSCI Japan ETF (EWJ) is up by 4.1%, with notable contributions from Toyota Motor Corp., which saw its stock rise significantly. Other key contributors to EWJ's performance include Honda Motor Co. and Sony Corp. Additionally, discussions surrounding potential changes in monetary policy by the Bank of Japan may further influence investment dynamics related to the ETF.

VanEck Semiconductor ETF (SMH) [-0.4%]
The VanEck Semiconductor ETF (SMH) has seen a slight decline of 0.4% since Tuesday, with its daily return at -0.27%. This occurs despite a recent trade agreement between the United States and Japan that reduces tariffs on Japanese exports from 25% to 15%, positively influencing Asian stock markets. Notably, Texas Instruments (TXN) reported strong second-quarter results but issued a cautious third-quarter outlook, leading to a significant drop in its share price. This has negatively impacted the performance of several key holdings within the ETF, including Analog Devices Inc. (ADI), which also experienced a substantial decline due to concerns over soft demand for analog chips and tariff-related uncertainties. Overall, geopolitical risks and sector-specific challenges continue to weigh on semiconductor stocks.

MANH | +14.7% | +2.1B
Manhattan Associates Inc | Application Software
Manhattan Associates, Inc. reported its second quarter results, revealing an adjusted EPS of 1.31, surpassing the analyst consensus estimate of 1.13 by over 16%. This represents an increase from last year's earnings of 1.18 per share. Quarterly sales reached 272.42 million, exceeding the consensus estimate of 263.61 million and reflecting a slight increase from 265.32 million in the same period last year. The company raised its FY2025 GAAP EPS guidance to a range of 3.23 to 3.31, above the previous estimate of 3.09. Additionally, adjusted EPS guidance for FY2025 was increased to between 4.76 and 4.84, compared to a consensus of 4.60. Following the earnings announcement, the stock experienced a notable increase of 10%.

TXN | -9.7% | -17.1B
Texas Instruments Inc | Semiconductors
Texas Instruments reported its second-quarter earnings on July 22, 2025, revealing a net income of $1.3 billion and revenue of $4.45 billion, both surpassing analyst expectations. The company noted a 16% year-over-year increase in revenue, attributed to a recovery in the industrial sector. Despite these results, Texas Instruments provided a cautious outlook for the third quarter, projecting revenue between $4.45 billion and $4.80 billion and earnings per share (EPS) guidance of $1.36 to $1.60, which fell short of some analysts' estimates. Following the earnings announcement, shares dropped significantly in after-hours trading, with declines continuing into the pre-market session, reflecting concerns over the company's guidance and management's tone during the earnings call. Social media discussions highlighted worries regarding slow spending from automotive and industrial customers, contributing to negative sentiment around the stock.

TMO | +4.4% | +7.6B
Thermo Fisher Scientific Inc | Life Sciences Tools & Services
Thermo Fisher Scientific Inc reported its second-quarter 2025 results, revealing an adjusted earnings per share (EPS) of 5.36, surpassing the consensus estimate of 5.23. Revenue for the quarter reached 10.85 billion, exceeding expectations of 10.68 billion. The company's net income attributable to Thermo Fisher increased to 1.617 billion from 1.548 billion in the prior year. Organic revenue growth was noted at 2%, higher than the estimated 0.8%. The adjusted operating income also rose to 2.38 billion, up from 2.35 billion year-over-year. Following these results, the stock price increased significantly in pre-market trading, reflecting a change of approximately 5.6% from the previous close, with a market capitalization of 220.19 billion, surpassing that of peers Danaher Corporation and Fortive.

SAP | -4.0% | -13.8B
Sap Se | Application Software
SAP SE's shares fell significantly following the release of its Q2 financial results, which revealed adjusted earnings per share of 1.50 euros, missing the analyst estimate of 1.67 euros. Revenue for the quarter was reported at 9.03 billion euros, below the consensus estimate of 10.49 billion euros. CEO Christian Klein indicated that clients in tariff-sensitive sectors, such as manufacturing, are postponing spending on cloud services due to economic uncertainty. Despite a year-on-year increase in free cash flow and a notable 24% rise in cloud revenue to 5.13 billion euros, the stock declined over 3% after the announcement. Additionally, SAP maintained its full-year guidance for 2025, projecting operating profit between 10.3 billion and 10.6 billion euros.

T | -3.7% | -6.9B
AT&T Inc | Integrated Telecommunication Services
AT&T Inc. reported its second-quarter financial results, revealing an adjusted EPS of 0.54, surpassing the consensus estimate of 0.52, and revenue of 30.8 billion, exceeding expectations of 30.46 billion. The company added 401,000 postpaid phone subscribers during the quarter, with a churn rate of 0.87%. AT&T anticipates cash tax savings between 6.5 billion and 8 billion from the One Big Beautiful Bill Act over the period from 2025 to 2027, which will support its investment in fiber networks and other strategic initiatives. Additionally, the company reaffirmed its full-year adjusted EPS guidance of 1.97 to 2.07, aligning with analyst expectations. Despite these positive results, AT&T's stock has declined by approximately 3% following the announcement.

STLA | +6.5% | +1.8B
Stellantis NV | Automobile Manufacturers
Stellantis NV shares have seen a significant increase today, despite the announcement of another recall affecting thousands of vehicles due to safety concerns. This recall has not dampened enthusiasm surrounding the company's strategic focus on alternative-fuel vehicles, particularly its commitment to electric models while reducing hydrogen initiatives. Additionally, a coalition including Stellantis is actively opposing a proposed trade deal with Japan that would lower auto import tariffs, raising concerns about potential disadvantages for U.S.-made cars with high domestic content. This discussion reflects ongoing trade negotiations that may impact Stellantis and its competitors. The company is also set to announce its H1 FY2025 earnings on July 29, 2025, with a revenue estimate of $46.0 billion.

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