Closing Recap

Wednesday, July 23, 2025

Another day, another record high for the S&P 500 index (SPX) as investors cheer earnings and positive trade news developments, while the Nasdaq topped above 21,000 and the Dow surged closed to 45K. While earnings were definitely a focus on several sectors today, it was trade/tariff news that pushed major averages to new record highs. Overnight, as President Trump said last night the US and Japan finally reached a deal which would impose 15% tariffs (vs previous 25% threat) on imports including autos, while Japan will invest $550B into the US and open their market to certain goods. Nikkei surged +4% and in Asia, while global autos rallied with Toyota and Honda leaders (as well as US autos). News of that deal got the ball rolling for stocks, as we pushed higher on the open. Around noon, another bump higher as the Financial Times reported that the US and EU close in on 15% tariff as both would waive tariffs on some products, including aircraft, spirits and medical devices. The report noted that Brussels could agree to the so-called reciprocal levies to avoid the US president’s threat to raise them to 30% from August 1^st. Those headlines took major averages even higher. While stock valuations are getting called into question, and the term “frothy” gets throw around – global stock markets continue to defy odds, pushing higher on a daily basis as momentum remains to the upside, and VIX steady declines shows no fear.

Notable sector movers today include winners utilities/power stocks (GEV, TLN, CEG, NRG, OKLO, SMR, etc.) after BRA auction results for the 2026/2027 planned year as capacity auction at PJM Interconnection, the biggest US grid, was $329.17 per megawatt-day, a 22% increase from the previous year (and a ~300% increase from the 2023-2007 average). Japanese autos (TM, NSANY, HMC) rose after the US/Japan tariff news); semiconductors among losers, led by weakness in TXN after guidance weighed on auto chip players (ON, STM); a handful of high short interest, beaten up/unloved plays seeing “meme madness” with unusual moves today in names like GPRO, LVLU, BYND, DNUT, RKT among others. Strength in Smallcaps with the IWM rising to 5-month highs, while the S&P 500 posts its 12th closing high of the year. Markets await key tech earnings tonight from GOOGL, TSLA, IBM. And headlines remain strong as @bespokeinvest tweets: “Only 124 companies have reported earnings so far this season up until today, but the current EPS beat rate stands at 85% (normal is 66%) and the sales beat rate is at 77% (normal is 63%). Average stock has gained 0.72% on its earnings reaction day.”

• U.S. WTI crude oil futures settle at $65.25/bbl, down 6 cents, or 0.09%. In weekly oil inventory data, the EIA said U.S. weekly crude stocks off 3.2M bbls to 418.99M, vs forecast of 1.6M bbl draw; weekly gasoline stocks off 1.7M bbls to 231.13M, vs forecast of 0.9M bbl draw; and weekly distillate stocks up 2.9M bbls to 109.9M, vs forecast of 1.1M bbl draw. Front Month Nymex Natural Gas Fell 5.38% to Settle at $3.0770.

• A U.S. government debt sale of 20-year bonds was well received, as the 20-year bonds, worth $13 billion, were sold with a high yield of 4.935%, nearly two bps below the market at the bidding deadline. The Treasury Department saw solid demand for a $22 billion sale of 30-year bonds earlier this month, as well as a 10-year note auction worth $39 billion. The bid to cover ratio for the 20-year debt sale was 2.79, the highest since April 2024.

• In Food & Beverages: TSN was downgraded to Market Perform from Outperform at Bernstein and cut tgt to $59 from $74, as part of an earnings preview as sees a challenged cattle supply environment with heifer slaughter rates remaining elevated. CALM reported a 72% y/y sales increase to $1.10 billion in Q2, topping the average analyst estimate, while the net average selling price/dozen climbed 55% to $3.305. LW rises on results and guidance as sales rose 4% y/y to $1.68B vs. est. $1.59B and better EPS ($0.87 vs. $0.63) while expecting FY26 sales in range $6.35B-$6.55B as midpoint above the $6.42B estimate.
• Global Intelligence company NIQ Global’s (NIQ) shares fell 3.6% in their NYSE debut on Wednesday, giving the Advent-backed consumer insights company a valuation of $6.1 billion.

• In Lodging/Hotels: HLT Q2 adj EPS $2.20 vs. est. $2.04; Q2 adj EBITDA $1.01B vs. est. $962.9M; sees FY net income $1.64B-$1.68B, down from prior $1.71B-$1.75B; guides Q3 adj EPS $1.98-$2.04 vs. est. $2.12 and sees FY adj EPS $7.83-$8.00, vs. prior $7.76-$7.94; Q2 RevPAR fell -1.5% compared to a year earlier
• In Cruise lines: VIK price tgt raised to $70 from $51, CCL to $38 from $31 in cruise line preview at Bank America, expecting positive management commentary this earnings season as airline US point of sale to Europe has been solid and the BAC aggregated debit and credit card data on cruises has been steady. The firm notes the group has returned +72% on average compared to the S&P (+27%), airlines (+51%), hotels (+36%), and OTAs (+36%). Bofa favorite names in the group remain Buy-rated VIK given its high-end product and unit growth as well as Buy-rated CCL as it de-levers; remains Neutral on RCL.

• In Utility/Power sector: Shares of the whole power/nuclear space seeing big moves higher today (CEG, LEU, NRG, OKLO, TLN, VST) after PJM released its BRA auction results for the 2026/2027 planned year after market today, with prices reaching the cap across all PJM zones. The capacity auction at PJM Interconnection, the biggest US grid, was: $329.17 per megawatt-day, a 22% increase from the previous year (and a ~300% increase from the 2023-2007 average). PJM serves ~67M people across 13 states.
• Wall Street take on PJM auction: Keybanc views this as a positive for CEG and other IPPs and believes the latest results demonstrate that the demand trends in the region are strong enough to offset demand response and the inclusion of RMR units. Jefferies said PJM auction came in meaningfully higher than our $248/MWd forecast and investor fears, settling at the $329/ MWd ceiling. That said, the demand response (DR) moved lower by -550 MW UCAP, and the DR offered into the auction was flat Y/Y despite the $177/MW day floor – believe power companies will benefit, noting TLN and CEG are best positioned.
• In other non-auction power headlines: GEV raises 2025 financial outlook; expects revenue to move towards the higher end of $36-$37B and expects free cash flow of $3-$3.5B, up from previous expectation of $2-$2.5B after posting Q2 beat; OKLO and LBRT launched a strategic alliance to accelerate integrated power solutions for large-scale, high-demand customers, including data centers, industrial facilities, and utility-scale sites. NFE shares fell after Puerto Rico ends talks with New Fortress on $20B LNG deal.
• In Solar: ENPH delivered in-line revenue and upside to margin/EPS as the company continues to manage its supply chain well and sees the benefits of ongoing product design improvements, but shares fell as Q3 revenue guidance was below expectations. The group was lower as solar continues to underperform.

• In Banks: most of the large cap bank stocks earnings are behind us, but still plenty of mid and Smallcap banks; today, NTRS the last of the major Trust banks to report, but investor focus was on CEO comments saying that he has not entertained sale discussions and does not intend to, after the wealth and asset manager reported a second-quarter profit that beat estimates.
• In FinTech/Payments: FI shares tumbled after lowering their 2025 organic revenue to rise about 10%, down from its prior view of 10%-12% growth, as payments volume growth at Clover has softened this year, up 8% in Q2, in-line with last quarter. Separately, Fiserv said it has agreed to buy a part of TD Bank’s merchant processing business in Canada.
• In Financial Servies: MCO Q2 EPS/revs beat at $3.56/$1.9B vs. est. $3.39/$1.85B, while revenue from the analytics segment climbed 11% to $888M in Q2; narrowed its annual adjusted earnings per share forecast to a range of $13.50 to $14, a slight upgrade from its previous outlook of $13.25 to $14 per share.
• In Insurance: Chubb reported operating EPS of $6.14, broadly in line with our estimate of $6.17 and beating consensus of $5.95. Key variances versus our estimate were a stronger underlying P&C combined ratio (82% vs. 84% est.), higher-than-expected catastrophe losses ($630 mln vs. $445 mln est.), higher-than-projected favorable prior-period reserve development ($249 mln vs. $136 mln est.), while NII was in line ($1,687 mln vs. $1,685 mln est.).
• In Real Estate Services: CSGP reported better than expected 2Q25 results, whereby revenue and EBITDA came in $6M (1%) and $25M (42%) above the high end of guidance, while Q3 EBITDA guidance is $30M below consensus, full-year EBITDA was raised by $15M.

• ARWR said it expects SRPT to continue to meet required financial obligations under license and collaboration agreement; if Sarepta fails to make $100M or $200M near-term patient enrollment payment, Co will have right to terminate agreement.
• DTIL said the FDA has granted "orphan drug" tag for its experimental drug, PBGENE-DMD, for the treatment of Duchenne muscular dystrophy (DMD); FDA grants orphan drug status to promote drug development for rare diseases affecting fewer than 200,000 people in the U.S.

• ISRG 2Q revs $2.44B ahead of consensus $2.35B estimates on better GAAP EPS $1.81 (est. $1.55E) as System ASP increased to $1.5M, primarily on dV5 mix. There were 180 US dV5 placements in 2Q (83% of US 2Q placements) vs. 146 in 1Q, and clearances received in Japan/EU, measured roll-outs planned.
• TMO 2Q revenue $10.85B (vs. $10.7B est.), Organic Rev Growth 2% (vs. 0.8% est.), Life Sciences, Lab Product Ahead, and adj EPS $5.36 (vs. $5.23 est.); forecasts 2025 ADJ EPS to be in the range of $22.22 to $22.84 per share and revs to be in the range of $43.6B-$44.2B.

• In Transports: railroad CNI shares dipped after Q2 revs fell -1% y/y to C$4.27B missed the C$4.34B estimate; lowers 2025 adjusted EPS growth forecast due to economic uncertainty and removes 2024-2026 financial outlook due to volatility (prompting downgrades at both Evercore and JP Morgan this morning as softer-than-expected volumes continue to weigh on margin expansion).
• A mixed back for defense stocks on Tuesday with NOC rising on results/guidance while LMT tumbled and RTX declined on outlook cut; today, GD Q2 profit and revenue topped estimates, aided by robust earnings from the marine segment and higher business jet deliveries. Revenue in the aerospace segment rose 4.1% y/y and its nuclear-powered submarine-making marine systems segment also saw a 22.2% rise in revenue.

• In Metals: Copper producer FCX beat Q2 profit as higher copper and gold prices helped offset lower production; Q2 average realized price for copper was $4.54 per pound, up 1.3% from a year earlier, though Q2 copper production dropped around 7% to 963 million recoverable pounds y/y.

• In Media: RBLX was downgraded from Strong Buy to Outperform at Raymond James (though raise tgt to $130 from $81) as sees risk/reward negatively skewed saying the rate of estimate increases suggests that even an incredibly strong number will only be rewarded modestly, while any meaningful shortfall could be punished severely.

• SAP reported Q2 non-IFRS EPS of €1.50 consensus €1.45) and operating profit of €2.57B (consensus €2.42B) on total revenue of 9.03B (consensus €9.08B), up 12% y/y in constant currency (cc), up from 11% last quarter; cloud revenue of €5.13 (consensus €5.15B), up 28% in cc, better than the 26% last quarter; cloud ERP growth of 34% in cc versus 33% last quarter.
• Unity (U) was downgraded to Sell from Neutral at BTIG with a $25 price target ahead of the earnings report saying the 40% month-to-date rally in the shares overstates Unity’s fundamental benefit from its advertising model upgrade
• In Electrical Equipment & Parts: TEL and APH both reported better quarterly results and guidance, helping boost shares of ST which reports next week in the sector.
• The White House intends to publish a plan on Wednesday that calls for the export of American AI technology abroad and a crackdown on state laws deemed too restrictive to let it flourish, a document seen by Reuters shows. According to a summary of the draft plan seen by Reuters, the White House will bar federal AI funding from going to states with tough AI rules and ask the Federal Communications Commission to assess whether state laws conflict with its mandate.

• NXPI reported upside 2Q/3Q results/outlook citing strength led by cyclical auto/industrial markets. Opco noted mgmt. sees early stage upcycle on broadly improving demand signals: 1) Growing distributor backlog, 2) Improving direct customer orders; 3) Increasing short order cycle times; and 4) Higher expedites, up 2x Q/Q.
• ON, ADI, STM among automotive and industrial chipmakers trading lower following TXN results.
• AMD CEO said chips from the Arizona TSM plant cost 5-20% more, as per Bloomberg.