Closing Recap

Monday, July 14, 2025

US equities slipped modestly overnight as trade headlines were back to creating uncertainty and dominating the market discussion. That said, today’s Fear & Greed Index remained elevated at 76/100 (Extreme Greed) into the heart of earnings season versus 75 (Extreme Greed) last week and 60 (Greed) last month. Early breadth favored advancers by 6:5 as small caps outperformed with IWM (+0.43%) versus SPY (-0.02%) and QQQ (+0.11%) in a broadly sideways-moving tape. Communications (+0.73%), Financials (+0.53%) and Real Estate (+0.51%) were early outperformers among S&P sector ETFs, while Technology (-0.38%), Materials (-0.38%) and Energy (-1.17%) led the underperformers with five sectors gaining versus six declining. By late morning both the S&P 500 and Nasdaq were back in the green as Trump indicated willingness to continue tariff negotiations and highlighted weapons sales to Ukraine via NATO and potential Russia sanctions.

In data of note today, Goldman highlighted hedge funds selling bank stocks for the second straight week ahead of earnings and jumping into consumer staples at the most rapid pace in about two years. Goldman also said staples had been the most net-bought group at its prime brokerage desk in July. On the S&P 500, RBC Capital raised its year-end target to $6,250 from $5,730 after raising just last month. RBC maintained its 2025 S&P 500 earnings forecast but cited better investor sentiment and a growing focus on 2026 economic prospects for the move. BofA and Goldman have also raised year-end targets for the S&P. Though earnings really get going this week, early reports (only 22 S&P companies have reported) have shown a 77% beat rate with an average beat of 8% on average year/year earnings growth of 17%. Lastly, on asset group performance, @charliebilello noted gold and bitcoin, up 28% and 26%, respectively, are the top performing major assets so far this year. He further noted we’ve never seen these two in the top spots for any calendar year, so we’ll wait and see.

Heading into the final hour of trading, futures held gains across the board. Breadth favored advancers by about 4:3 with small caps continuing to outperform. Sector-wise, Communications (+1%), Financials (+0.7%) and Industrials (+0.55%) were outperformers, while Health Care (-0.05%), Materials (-0.56%) and Energy (-1.2%) paced the underperformers as the only three sectors in the red. Today was a pretty simple, summer trading day but earnings begin for real tomorrow, and we also get US CPI tomorrow pre-open so things may get a bit more exciting from here.

• WTI August crude futures gained overnight but faded and crossed to red into the open. Early gains on more optimistic views on trade were quickly sold and later replaced by accelerating losses following Trump comments on potential secondary sanctions on Russia if Ukraine attacks continue. Later comments from US officials confirmed secondary sanctions would target tariffs on buyers of Russian oil (think India/China). Futures settled lower by $1.47/bbl, or -2.15%, to $66.98. Brent dipped also, settling lower by $1.15/bbl, or -1.63%, to $69.21.
• Treasury yields are mixed and little changed from Friday, as markets brace for an uptick in inflation tomorrow. June CPI is forecast, in a WSJ survey, to accelerate to 2.7% from May’s 2.4%, with the core reading rising to 3% from 2.8%. Trump’s new tariff announcements keep uncertainty elevated, as the threatens Russia with 100% levies if it doesn’t stop hostilities in Ukraine. That follows the weekend’s announcement of 30% tariffs on the EU and Mexico. The 10-year yield gains little changed at 4.426%. The U.S. dollar rises to near three-week high 

• In Consumer Staples: PG 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.
• In Retail: BBY was downgraded to Neutral at Piper and cut tgt to $75 from $82 noting that BBY has underperformed YTD, and both expectations and valuation are low. However, Piper doesn’t see any meaningful catalysts in the coming quarters to meaningfully accelerate comp/EPS growth.

• In Mobility & Delivery sector: Keybanc raised price tgts for UBER to $110 from $90 and DASH to $295 from $235 in 2H’25 saying their latest Mobility and Delivery Survey showed stable ridesharing adoption and share trends, while autonomous vehicles (AVs) continue to gain adoption driven by new market launches. The rate of food delivery adoption gains appears to be moderating, as it remained stable at 73% compared to KEYB’s last survey, while DoorDash maintained a significant lead in the category with 48% adoption.

• 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.
• In Solar: Mizuho with some alt energy changes noting the One Big Beautiful Bill (OBBB) has emerged as President Trump’s decisive policy, shaping the clean energy sector for years to come. Compared to the previous law, I.E. Biden’s Inflation Reduction Act (IRA), it aims to sunset solar and wind tax credits faster, requires projects to essentially start construction within the next year to get full tax credits and by the end of 2025 to avoid any constraints on using China-made or funded products. Top three picks: FSLR, BE, RUN. Mizuho downgrades FLNC, NXT, and SHLS to Neutral and ENLT to Underperform. In other research, SEDG was upgraded to Equal Weight at Barclays saying they believe the OBBB creates an uneven playing field for loans and cash in solar versus leases, resulting in diverging outlooks for SEDG.

• In Banks/Brokers: Citizens with a large preview saying heading into the second half of 2025, it is bullish on the business outlook across Financial Services and FinTech. Capital markets are recovering solidly with M&A activity still on a normalization" tracking up ~20% over the first half of last year and is annualizing $4.3T while the IPO market is also restarting. With that as a backdrop, they reassess several of our ratings after massive moves in stocks over a short period of time and downgraded shares of GS, EVR, KKR, SOFI to market perform from outperform after big moves higher in shares.

• In Credit Rating Agency: RBC Capital previews the Credit Rating agencies saying they expect both SPGI and MCO to beat the current consensus estimates due to the better-than-feared issuance as issuance picked up in May and June after -19% decline in Billed issuance in April 2025. RBC expects the non-Ratings businesses to have stable growth similar to Q125.
• Cryptocurrency-exposed stocks rise (MSTR, CLSK, MARA, RIOT, IREN) after Bitcoin topped $123,00 for its 3rd straight day of record highs as the US House of Representatives prepares to consider key industry legislation during its “Crypto Week” starting Monday. Last week Bitcoin prices jumped nearly 9% w/w. Crypto-focused asset manager Grayscale said on Monday it has confidentially filed the paperwork to list its shares in the United States.
• 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.

• AZN said Baxdrostat met the primary and all secondary endpoints in BaxHTN Phase 3 trial in patients with uncontrolled or treatment resistant hypertension.
• DARE shares soar 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.
• GSK announced that the U.S. FDA has accepted for review an application to extend the indication of Arexvy to adults aged 18-49 who are at increased risk.
• HIMS: Morgan Stanley said the firm’s data reveals a y/y decline in monthly Hims & Hers app downloads for the first time, with 5% y/y web traffic growth in June, the weakest since March 2024; said monthly app downloads are now 185,000, falling below the level seen prior to the launch of compounded GLP-1s.
• IOVA said real-world data demonstrate 49% response rate for commercial Amtagvi in patients with advanced melanoma.
• KVUE said Thibaut Mongon had stepped down as chief executive officer and board member; the company has named Kirk Perry as interim CEO, effective immediately.
• SONN shares surged 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.
• RARE said late Friday it sees a delayed potential approval for its gene therapy after receiving a complete response letter from the US FDA citing chemistry, manufacturing and controls issues.
• TAK announced that all primary and secondary endpoints were met in two Phase 3 randomized, double-blind, placebo-controlled studies of oveporexton (TAK-861), a potential first-in-class investigational oral Orexin receptor 2 (OX2R)-selective agonist, in narcolepsy type 1 (NT1).

• In Healthcare Services/Insurance: OSCR was downgraded to Neutral from Overweight at Piper Sandler and cut tgt to $14 from $18 saying they are comfortable with CY25 guidance following a review of CY24 risk adjustment data; recent CNC and MOH announcements; and statutory filings from OSCR and competitors in key FL and GA markets but fears that solid CY25 execution is an insufficient catalyst to buoy the stock.

• In Fertilizer/Chemicals: RBC Capital raised tgts for CF to $100 from $90, NTR to $70 from $65 and MOS to $45 from $40 in sector preview into Q2 saying thinks fertilizer equities continue to be a good defensive materials sector against broader market volatility, with limited tariff impacts, generally benefiting from geopolitical uncertainties, and likely seeing better than expected prices through the seasonal mid-year lull.
• In Aerospace & Defense: Trump also announced new military aid for Ukraine and warned of sanctions on buyers of Russian exports if Moscow fails to agree to a peace deal within 50 days. He is also set to reveal $70 billion in artificial intelligence and energy investments, Bloomberg News reported. Defense names that hit 52-week highs today included KTOS, PLTRand RKLB.

• In the AI/Data Center space: NBIS 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. Melius said names like AMZN, ORCL (tgt to $270 from $230), AMZN, MSFT (tgt to $595 from $520) are seeing renewed demand as they provide the computing backbone for AI agent workloads while traditional software-as-a-service (SaaS) cos like CRM, ADBE and WDAY are likely to become less attractive
• In Software: ADSK shares rose after saying it is allocating its capital to organic investment, targeted and tuck-in acquisitions, and continuing its share repurchase program as its free cash flow grows (the commentary reduced expectations of a near term deal for PTC which was speculated last week by Bloomberg initially).
• In Security Software: INTA was downgraded to Underweight in Security sector at Barclays while they see positive setups for FTNT, VRNS and PCOR into Q2. The firm said FTNT checks were positive, and the macro backdrop feels stable so it expects at least a beat-and-flow through on billings this quarter; thinks VRNS could have another clean, beat and flow through quarter as its checks sounded good and it believes the guide is prudent; thinks PCOR sets up well into Q2 with pooled contracts driving higher cRPO growth along with construction indicators looked better than it would have expected this quarter; INTA downgraded as it sees trim FY26 revenue on potentially less multi-year on-premise renewal revenue and ARR growth slowing to into the 15-20% range organically in FY26.
• In Semiconductors: sector was broadly lower early after a strong 2-month run, with the SOX falling more than 2% early before paring losses; in TSM preview, Susquehanna said into earnings, they expect some near-term headwinds driven by F/X and weaker smartphone end market. AI remains the strongest. Despite the lack of upward revision to ’25 EPS, we expect N2 to become a much bigger platform than N3, thus driving upside to ’26 EPS. NVDA slipped early after closing up 0.5% on Friday at $164.92, a record high. It ended last week with a gain of 3.5% while CEO Jensen Huang will be in Beijing on Wednesday.