July 16th Market Overview

Happy Thursday

Chip selloff rolled into a second day,Alphabet fell after news its top AI model (Gemini) is behind the other frontier models.

Good news stopped working for today is what my main take away is…. TSMC crushed its quarter and still dropped.

Let’s dig in...

Today's Big Picture

1. Chips Failed The Good-News Test

Taiwan Semiconductor $TSM posted its fifth straight record quarter and the stock fell anyway. The selling spread to memory, equipment, and the rest of the AI names. Hedge funds are now sitting at their lowest AI exposure all year. That reads as profit-taking after a huge run, not a demand problem, and that difference is everything if you're deciding whether to buy the dip.

2. Housing Is Still Stuck

Pending home sales dropped in June and builder confidence fell to 34, a level where more builders see a bad market than a good one. The average 30-year mortgage hit its highest in nearly a year. Buyers needed lower rates or lower prices to step in. They got neither.

3. Oil Looks Calm, Shipping Doesn't

Brent sat near $84 even with the Strait of Hormuz shut. The new wrinkle: Iran reportedly told the Houthis to be ready to threaten the Red Sea if the US hits its power grid. That would knock out a second shipping route with the first already down. The price is quiet, the risk underneath it isn't.

Market Overview

Index Performance

Stock Spotlight

Alphabet $GOOG ( ▼ 4.89% )  
fell after Bloomberg reported its most powerful AI model, Gemini 3.5 Pro, is running months behind. The drop pulled the Nasdaq down to its lows.

UnitedHealth $UNH ( ▲ 1.12% )  
beat and raised its full-year forecast, one of the few green spots on a red day.

GE Aerospace $GE ( ▼ 3.96% )  
lifted its outlook but still fell, with supply chain snags slowing engine deliveries.

SpaceX $SPCX ( ▼ 2.84% )  
slipped below its $135 IPO price, and short sellers have built bets worth close to a third of the tradable stock. The year's biggest listing cooled off fast.

Big Name Updates

Eli Lilly $LLY ( ▲ 0.84% )  
is buying AtaiBeckley for $2.8 billion up front, up to $3.8 billion if the drugs hit their targets. It's a bet on psychedelic-based depression treatment.

Visa $V ( ▲ 2.35% )  
launched a platform that lets financial firms mint, move, and redeem stablecoins.

Microsoft $MSFT ( ▲ 1.18% )  
is training its sales teams to go head-to-head with OpenAI, Anthropic, and Google.

Other Notable Company News

Abbott $ABT ( ▲ 10.61% )  
rose after raising its full-year earnings outlook.

Cintas $CTAS ( ▲ 6.97% )  
climbed on a Bank of America upgrade to buy following strong results.

Lululemon $LULU ( ▲ 0.81% )  
fell after Truist cut it to sell, pointing to softer spending and tougher competition.

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Sector Watch

Bond Market

Yields pushed higher even after this week's softer inflation. A strong jobless-claims number helped, with 208,000 new claims against the 217,000 expected, and Fed officials floated rate hikes on top of it. The 10-year crept up and the dollar held near a one-month low. Friday's import-price report is the next thing that could nudge yields.

Policy Watch

Fed

Two Fed officials made the case for higher rates today. Dallas Fed's Lorie Logan said she'd back a modest hike, and Kansas City's Jeff Schmid called inflation too hot for too long. Markets still put July odds near zero, so either the Fed talks them down or traders get a surprise. That gap is the thing to track into the meeting later this month.

Fiscal & Trade

• A new 25 percent tariff now hits some Brazilian goods.

• Coffee, beef, and certain ethanol products got carved out.

International

Bank of Korea raised rates for the first time since early 2023 as inflation climbs, and the Kospi fell into a bear market.

• Korea also suspended new single-stock leveraged funds and raised deposit minimums after wild swings in its chip stocks.

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.

Friday's Data

University of Michigan sentiment and industrial production land Friday. The real question is whether five-dollar diesel and pricier gas are starting to change how people spend.

Second-Quarter GDP, July 30

The first estimate shows how much of the spring's strength carried into summer.

- John

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