Mid-Morning Look

Tuesday, July 15, 2025

U.S. stocks open at fresh record highs for the S&P 500 Index, while the Nasdaq adds to its record closing levels from Monday, paced by gains in semiconductors after NVDA shares surged on news the company plans to resume sales of its H20 AI chip in China after securing Washington’s assurances that such shipments would get approved. The news is lifting the semi complex (SOX +2.3%) broadly. Another positive point was inflation data, as CPI for June climbed from the prior month, but was either in-line or slightly below consensus estimates on a core level. Banking stocks are active, with shares of Citi, JPM reporting better results, while WFC and STT slip on lower guidance/mixed results. U.S. Treasury yields dipped initially after data showed inflation edged higher m/m, suggesting the Federal Reserve will likely remain cautious in resuming cutting interest rates this year – but has since seen a bounce in yields across the board (10-yr 4.46%, 2-yr 3.95%, 30-yr around 5%. In trade news, Treasury Secretary Scott Bessent suggested the deadline for a US-China tariff truce slated to end next month is flexible (US listed China stocks strong start on the day BABA, BIDU, PDD). Also, the European Union has finalized a second list of countermeasures to target US goods worth EU72 billion ($84 billion), including Boeing Co. aircraft, automobiles and bourbon, assuming it decides to retaliate against Donald Trump’s tariff policy. The U.S. Dollar index (DXY) rises to highs this morning, +0.35% at 98.40 as the greenback gains against Japanese yen to 148.75, highest since April 3^rd while the euro falls to $1.1638 against US dollar, lowest since June 25. After record highs above $123,000 yesterday, Bitcoin pulls back slightly to $118,000.

• June CPI energy +0.9%, gasoline +1.0%, new vehicles -0.3%, food +0.3%, housing +0.3%, owners’ equivalent rent of primary residence +0.3%.
• June Consumer Prices ex food & energy (or core CPI) rose +0.2% vs. est. +0.3% and on a y/y basis rose +2.9% below the consensus of +3.0%.
• NY Fed’s empire state current business conditions index rose +5.5 in July better than the consensus for decline of -9.0 and vs -16.0 in June; big turn arounds for new orders index +2.0 in July vs -14.2 in June and employment index at +9.2 in July vs +4.7 in June, while six-month business conditions index +24.1 in July vs +21.2 in June; note the NY Fed’s empire state prices paid index +56.0 in July vs +46.8 in June.

• President Donald Trump is in Pittsburgh Tuesday to tout American AI, American energy, and American AI powered by American energy. Among the $70 billion in investments promised by Sen. Dave McCormick, R-Pa., announced today: GOOGL will invest $25 billion in data centers across Pennsylvania and neighboring states over the next two years and is signing a $3 billion, 20-year deal with BAM to upgrade two hydroelectric power plants; utility FE is investing $15 billion in the state’s energy grid; Westinghouse is pledging new nuclear reactor deliveries; and GEV is expanding a local factory.
• In Refiners: Raymond James double upgraded DINO to Strong Buy from Market Perform, downgraded MPC to Outperform from Strong Buy and downgraded CVI to Underperform as valuation is full. With a very steep recovery (+80% on average) in refining stocks since the “Liberation Day” lows, RAJA is adjusting ratings to reflect its views on the new risk/reward outlook. While DINO has traded well lately, RAJA doesn’t think a fairly positive backdrop is reflected in valuation, and as such, are upgrading to Strong Buy.
• In Solar: JP Morgan said it is updating its US residential solar growth assumptions to reflect the expected impact from the One Big Beautiful Bill. The firm is downgrading SEDG to Neutral from Overweight, given the stock’s significant outperformance recently, though it believes that SEDG is relatively best positioned to gain share in the US inverter space as the resi market shifts to TPO; downgrades ENPH to Neutral from Overweight to reflect expected share loss and margin pressure as the industry gravitates towards third-party owned (TPO) systems and its preferred pick in the resi space is RUN.

• CRWV +9%; said it plans to invest as much as $6 billion to set up a data center in Lancaster, Pennsylvania, as the firm expands its capacity across the U.S.
• MP +23%; MP Materials and Apple announce $500M partnership to produce recycled rare earth magnets in the United States; Apple and MP will launch an all-new recycling facility for processing recycled rare earth elements
• NFG +4%; was double upgraded to Buy from Underperform at Bank America with $107 tgt saying since acquiring the Eastern Development Area from Shell in 2020, productivity has gotten increasingly better.
• NVDA +4%; as the company plans to resume sales of its H20 AI chip in China after securing Washington’s assurances that such shipments would get approved (other chip names surging too AMD, SMCI, MPWR).
• TTD +9%; shares jumped after the company will replace ANSS in the S&P 500 index on 7/18 after Ansys is being purchased by Synopsys, according to S&P Dow Jones Indices.

• ERIC 5%; Q2 sales came in at 56.13B Swedish crowns ($5.84 billion), 5% below consensus estimates; forecasts Q3 networks segment sales growth to be below 3-year average seasonality, and its adjusted gross margin between 48-50%; warns of the impact from potential further tariff changes.
• FCX -3%; Morgan Stanley downgraded FCX, TECK to Equal Weight from Overweight and both SCCO, NEXA to Underweight as views the risk/rewards on copper equities as less compelling following the outperformance since April 8 and cites macro and growth concerns, as well valuation.
• IOVA -14%; downgraded to Sell from Neutral at Goldman Sachs with a price target of $1, down from $8 citing the slower than expected launch of the company’s lead drug Amtagvi in second-line melanoma.
• ORGO -8%; and MDXG shares fall as well after CMS proposed a rule in the CY 2026 Medicare Physician Fee Schedule that would reclassify skin substitutes as “incident-to supplies” instead of biologicals, aiming to cut Medicare spending on these products by nearly 90%.
• SLP -20%; shares fell after the drug development software company lowered some of its fiscal year forecasts while posting 3Q results.
• STT -2%; Q2 EPS $2.17 missed the est. $2.34 on revs $3.448B vs. est. $3.353B; Q2 assets under custody and administration rose 10.6% to $49 trillion in the three months ended June 30 from a year earlier; reported a Q2 profit of $630M, down from $655M y/y; expenses rose 11.5% to $2.53B in Q2.
• WFC -4%; Q2 EPS, revs beat on better credit provisions, but Q2 net interest income $11.71B vs. est. $11.83B and said lower interest income in its markets business led to the NII forecast cut as for 2025, said it expects its interest income to be roughly in line with the 2024 level of $47.7B.