Mid-Morning Look

Monday, July 14, 2025

U.S. stocks rebound after another round of higher tariff/trade news this weekend, as markets continue to take the headlines in stride regarding any potential impacts of higher tariffs on the economy/consumer spending. US stock futures slipped overnight after President Trump on Saturday said he would impose a 30% tariff on most imports from the European Union and Mexico from August 1, even as they are locked in long negotiations. The EU said it would extend a suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement. President Trump said the EU “is talking to us on trade” and South Korea “wants to make a deal”. The news came after higher tariff levels, expected to be enforced on August 1^st with no exception this time, were announced on roughly 25 trading partners last week, including Japan, South Korea, Canada and others.

What else to watch this week: Consumer Price Index (CPI) inflation data tomorrow and the Producer Price Index (PPI) data later in the week; handful of big bank earnings kicking off tomorrow and getting the ball rolling for Q2 earnings (JPM, WFC, C, MS, GS, BAC, etc.); WallStHorizon tweets: “The Q2 2025 earnings season begins this week, with analysts forecasting modest S&P 500 EPS growth of 4.8%—the lowest rate since Q4 2023”; July OpEx is this Friday, with approximately $1.65 trillion in notional open interest set to expire across SPX and SPY linked contracts; over 7 Fed speakers are set to speak this week ahead of the Blackout period starting on Saturday.

In Wall Street strategy calls: 1) RBC Capital lifted its S&P 500 year-end target to 6,250 from 5,730, though remains neutral on stocks for the second half, expecting choppy conditions; there is no change to RBC‘s 2025 S&P 500 EPS forecast of $258, which is slightly below consensus. 2) Goldman strategists expect the S&P 500 to rise by 10% to 6,900 over the next 12 months, implying a P/E multiple on forward consensus earnings of 22 times. 3) UBS said they expect consolidation in the near term in equities (until mid-September) though said they would be surprised if the consolidation phase brought more than 5% downside.

• In Industrials: FAST reported slightly better Q2 sales of $2.08B vs. est. $2.074B and EPS $0.29 vs. est.  $0.28 and said they expect their investment in property and equipment, net of proceeds from sales, to be within a range of $250M-$270M. IR and AME were both downgraded from Buy to Hold w/ $93 and $192 PTs, respectively at Melius after several years at Buy saying they just don’t have a compelling case for outperformance in a world where growth is narrowing. Citigroup previewed the multi-industry space saying they open a positive Catalyst Watch on DOV and raise it to our Multis Top Pick; continue to like EMR with tactical short-cycle improvement + self-help; CARR and IR think also have relatively good earnings visibility at reasonable valuations; self-help efforts + accelerating growth positions XYL well.
• In Consumer Finance: BTIG downgraded AFRM to Neutral from Buy saying traditional prime point-of-sale lenders such as COF and SYF (which they upgraded to Buy with $100 tgt) are expected to begin loosening underwriting standards and take market share across the credit spectrum, a trend likely to hurt FinTechs such as Affirm. BTIG says it worries AFRM will continue to experience revenue less transaction costs margin pressure as co experienced last qtr, while also not showing accelerating gross merchandise value growth. The firm also upgraded shares of ALLY and BFH to Buy.
• In Energy: Oil prices advanced on Monday, adding to recent gains as Brent crude moved back above $70 per barrel. In Offshore Drilling, BORR, TDW and FTI both downgraded to Neutral from Buy at BTIG saying there has been a flight to quality trade in offshore services over the last year, though the firm still views the ongoing slowdown in drilling activity as a pause in the cycle, with 7G utilization still firm and at premium pricing versus 6G floaters. In refiners, MPC, VLO both downgraded to Peer Perform at Wolfe Research citing valuation for the changes.

• ANSS +3%; shares rose after China’s market regulator grants conditional approval for SNPS‘ $35 billion buyout of peer Ansys. This clears a major hurdle for the deal, after back-and-forth over U.S. restrictions on export of electronic design automation tools to China.
• COIN +2%; Cryptocurrency-exposed stocks rise (MSTR, CLSK, MARA, RIOT, IREN) after Bitcoin topped $123,00 for its 3^rd straight day of record highs as the US House of Representatives prepares to consider key industry legislation during its “Crypto Week” starting Monday.
• DARE +133%; after announced positive interim safety and efficacy results from its ongoing Phase 3 clinical trial evaluating the contraceptive effectiveness, safety and acceptability of Ovaprene(R), the company’s investigational monthly, hormone-free intravaginal contraceptive.
• FAST +5%; after reported Q2 earnings and revenue that slightly beat analysts’ estimates while operating-profit margins of 21% were a little better than expected, and were up 0.6% y/y.
• NBIS +12%; was initiated with a Buy at Goldman Sachs and $68 price target saying Nebius is a leading player in the artificial intelligence neo-cloud market, which it has a positive view on.
• SFIX +6%; upgraded to Outperform at William Blair saying it has increasingly been in a more offensive stance as it moves out of the second phase of Baer’s restructuring strategy and into the “growth” phase.
• SONN +167%; after agreeing to merge with another firm to launch a HYPE treasury strategy. The new entity, Hyperliquid Strategies, is expected to hold 12.6 million HYPE tokens and $305 million in cash, for a total estimated value of $888 million at closing of the deal.
• VBTX +20%; HBAN agreed to purchase smaller rival VBTX in a $1.9 billion deal, the companies said on Monday. The transaction, which is expected to close early in the fourth quarter of 2025, will help Huntington’s earnings per share slightly, the company said.

• PG -2%; was downgraded to In Line from Outperform at Evercore and cut tgt to $170 from $190 saying they expect a FY26 outlook with a low but broad range of scenarios to be issued on July 29 when Procter & Gamble reports Q4 results.
• RIVN -2%; was downgraded to Neutral from Buy at Guggenheim following softer R1 sales and assumptions for softer long-term R2/R3 sales.
• WAT -10%; after Waters and BDX’s Biosciences & Diagnostic Solutions business are set to combine in a Reverse Morris Trust transaction valued at about $17.5 billion.