July 15th Market Overview

Happy Wednesday

Inflation is down. Stocks took the win.

The Dow went nowhere anyway, because IBM had its worst day since 1987. Banks printed the biggest quarter in the history of American banking and half of them still closed red.

Oil finished up even after Trump dropped his shipping fee.

Let’s dig in...

Today's Big Picture

Chips Gave Back The Morning, Big Tech Caught The Money
Semis flew at the open on ASML's strong report, then handed it all back by midday. Micron led the drop. But the money didn't leave tech, it rotated. Apple, Microsoft, Amazon, and Alphabet held firm and kept the market steady. Fund managers just told Bank of America chips are the most crowded trade around, so a pullback was overdue.

Buffett Says He's The One Who Bought Alphabet
Buffett told CNBC he started Berkshire's Alphabet position himself, not his successor Greg Abel. He owned the miss too, saying he should've bought years ago after watching Google's ad engine up close through Geico. His worry now is the AI tab. Everyone's spending hundreds of billions, and he wants to see the returns first. Same interview, he called this market friendlier to gamblers than investors.

June Prices Fell, And July Hikes Went With Them
Wholesale prices dropped in June, a day after a soft consumer read. That was enough for traders to cut July rate-hike odds to 17 percent, down from 42 the day before. Prices are still up around 3.5 percent over the year, so inflation didn't vanish, it just rose slower than feared. Williams says it's peaked. That's breathing room, not an all-clear.

Market Overview

Index Performance

Stock Spotlight

BlackRock $BLK ( ▲ 6.74% )  
is having its best day in over a year after assets hit a record 15.3 trillion. The part I'd watch is private credit, still taking in fresh money even with withdrawal caps on, which tells you where the big money still wants to be.

Morgan Stanley $MS ( ▲ 0.46% )  
put up a monster quarter, and the SpaceX IPO drove a lot of it, from banking fees to a flood of new wealth money from newly rich SpaceX staff. CEO Ted Pick says he's now shopping for acquisitions.

PayPal $PYPL ( ▲ 17.21% )  
is having one of its best days ever after Stripe and Advent offered 60.50 a share. Michael Burry isn't impressed. He calls it a lowball opening bid, values the company closer to 115, and says he's holding.

SpaceX $SPCX ( ▼ 1.35% )  
slipped under its 135 IPO price for the first time, now four down days in a row. The offering that made Musk a trillionaire is underwater for anyone who bought in, on lockup selling and valuation nerves.

Big Name Updates

Apple $AAPL ( ▲ 4.08% )  
is still one of Buffett's favorite holdings even with Tim Cook heading out, he said today. It was one of the megacaps holding the market up.

Johnson & Johnson $JNJ ( ▼ 2.04% )  
beat and raised its full-year outlook on strong cancer drug sales. Shares slipped anyway, which happens when the bar is already high.

IBM $IBM ( ▼ 2.08% ) |
is still bleeding from Tuesday's drop that wiped out 69 billion in value on weak software demand.

Other Notable Company News

Richemont $CFR crushed sales expectations on its Cartier and Van Cleef jewelry, and pulled the whole luxury group up with it.

Marathon Petroleum $MPC ( ▼ 0.99% )  
is riding refining margins that just hit a record, with the Strait of Hormuz still jammed.

Lucid $LCID ( ▲ 28.57% )  
bounced back a day after a report it hired a turnaround advisor, with bankruptcy on the table.

Centene $CNC ( ▼ 3.01% )  
slid alongside Elevance as the Medicaid insurers all came under pressure.

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Sector Watch

Bond Market

Treasurys and gold both slipped, a little odd on a day inflation cooled. The 10-year yield ticked up near 4.6 percent while gold eased back toward 4,030.

Policy Watch

Fed 
Williams did the heavy lifting today, saying policy is in a good spot and hinting July can stay on hold even with prices still above target.

• Chair Kevin Warsh testified to the Senate right after the wholesale numbers dropped.

• Bank of Canada set rates today too.

Fiscal & Trade

• Trump dropped the plan to charge ships a fee to cross the Strait of Hormuz.

• He says Iranian power plants and bridges are the next targets.

International China grew 4.3 percent last quarter, its slowest since 2022 and short of forecasts. A soft property market and cautious shoppers are the drag, even as factories and exports hold up. Beijing's full-year target is already the lowest it's set in decades.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

UnitedHealth Earnings, Thursday 
After Elevance's Medicaid scare, the biggest insurer reports next. If the same cost pressure shows up, the whole group moves together.

Netflix Earnings, Thursday 
The first real megacap test of earnings season. With big tech carrying the market, its guidance sets the mood.

Retail Sales, Thursday
Two soft inflation reports built the soft-landing story. This tells us whether shoppers are still actually spending.

- John

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