July 20th Market Overview

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Happy Monday

Chips came out swinging this morning and gave most of it back by the close, while oil ran above $90 and then settled down near $89 after Iran said mediators were still talking. Gas crossed four dollars a gallon at the pump.

Four of the biggest names in the market report this week, so we get real answers instead of guesses.

Let’s dig in...

Today's Big Picture

Oil ran hot, then cooled off

Brent topped $90 in the morning and finished near $89.22. West Texas Intermediate settled at $83.23. The pullback came after Iran's foreign ministry said mediators are still passing messages and talks are possible.

Watch the Houthis. They declared a sea navigation ban on Saudi Arabia today, and the Red Sea was supposed to be the workaround for Hormuz. Only eight ships crossed the strait Friday. Gas is back above $4 a gallon, up from $3.87 a week ago.

The chip bounce showed up and left early

Semis opened strong after last week's beating, then faded into the close. The setup is better than the price action suggests. Goldman Sachs said hedge funds sold tech in six of the past eight weeks and cut those positions by roughly a tenth, so most of that selling is behind us. Wells Fargo's Darrell Cronk called it a healthy reality check and flagged the 200-day moving averages as the next line to watch. Light positioning plus earnings is how bottoms get built.

Earnings take over from headlines

Alphabet $GOOGL, Tesla $TSLA and IBM $IBM report Wednesday. Intel $INTC follows Thursday after the close. The Fed is in blackout and the economic calendar is nearly empty, so these calls set the tone by themselves. Dan Ives said it plainly: companies have to show AI is making money, because right now it's all spending. We finally get the receipts.

Market Overview

Index Performance

Stock Spotlight

Advanced Micro Devices $AMD ( ▲ 1.65% )  
launched Helios, its first rack-scale AI system built to compete with Nvidia. Microsoft $MSFT said it will deploy Helios racks in Azure, joining Meta, OpenAI and Oracle as early customers.

Alphabet $GOOGL ( ▲ 1.51% )  
is developing a server chip called Frozen v2 designed around its Gemini model, according to The Information. It would be separate from the tensor chips already in production and could arrive as soon as 2028.

Intel $INTC ( ▲ 2.8% )  
is planning another round of layoffs, this time in its data center group. More than 5,000 US employees have already been cut, mostly in California and Oregon. The company reports Thursday after the close.

AMC Entertainment $AMC ( ▲ 27.32% )  
posted record quarterly revenue of $1.6 billion. CEO Adam Aron said the company has never had a quarter like it in 106 years of operating.

Imax $IMAX ( ▼ 1.4% )  
took $52 million of the $264.1 million opening weekend for Christopher Nolan's "The Odyssey," the first film shot entirely in Imax 70mm. Some theaters added middle of the night showings and sold them out.

Big Name Updates

International Business Machines $IBM ( ▲ 0.58% )  
is drawing breakup chatter after its recent crash. Stifel's David Grossman valued the parts at $257 billion against a market cap near $205 billion, with Red Hat the biggest piece at $62.9 billion. He also called it a low probability outcome and admitted his math is imprecise.

Boeing $BA ( ▼ 2.05% )  
collected close to 150 orders on day one of the Farnborough airshow, led by 100 737 Max jets for SMBC Aviation Capital. CEO Kelly Ortberg said the next generation aircraft won't reach the market until at least 2040.

Bristol Myers Squibb $BMY ( ▼ 0.72% )  
is buying Nvidia's $NVDA newest DGX SuperPOD system for drug discovery work, the first life sciences company on the Vera Rubin architecture.

Paramount Skydance $PSKY ( ▼ 1.94% )  
and Warner Bros. Discovery $WBD both fell after a federal judge temporarily blocked their merger. Twelve state attorneys general asked for the order, arguing the combined company would hold too much power over theatrical releases and cable channels.

Other Notable Company News

JetBlue $JBLU ( ▲ 0.65% )  
won the auction for Spirit's LaGuardia slots, enough for 12 round trip flights, pending court and regulatory approval.

Domino's Pizza $DPZ ( ▲ 1.35% )  
beat on revenue at $1.19 billion but missed on earnings at $4.07 a share. US same store sales were barely positive.

Ryanair $RYAAY ( ▼ 5.83% )  
reported quarterly profit after tax of 538 million euros, down from 820 million a year ago, as unhedged fuel costs more than doubled.

Harley-Davidson $HOG ( ▲ 5.0% )  
was upgraded to buy at Loop Capital with a $32 target on better dealer feedback.

Archer Aviation $ACHR ( ▲ 18.02% )  
said it wants air taxis certified and flying in time for the 2028 Olympics in Los Angeles.

BlackRock $BLK ( ▼ 1.64% )  
is leading a debt sale of at least $12 billion for the El Paso data center project backed by Meta $META.

5 Zacks experts scanned thousands of publicly traded companies.

Then each expert selected their favorite one.
See them now.

Every company also carries a strong Zacks Rank, meaning earnings estimates are already trending upward. These aren't companies you simply hold and hope.

Download “5 Stocks Set to Double now”.

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Sector Watch

Bond Market

Bonds sold off while stocks shrugged. That gap is the honest read on where the risk sits.

• The 10-year yield rose more than five basis points to 4.60. The 2-year hit 4.22, the 30-year 5.12.

• Mortgage rates followed to 6.67, just under a one-year high. That's the part households feel.

Policy Watch

Middle East

Ninth straight day of U.S. strikes on Iran. Iran hit back at U.S. positions and allies in the Gulf, including a Kuwaiti oil facility. A third American service member was killed

Fed

• Blackout until next Wednesday's decision. No speakers, no guidance.

• Nearly empty economic calendar, so oil and earnings set rate expectations this week.

Fiscal and trade

• A CNBC survey found most voters oppose the government taking ownership stakes in U.S. companies. A big share are still undecided.

• The administration has done 30 such deals worth close to $27 billion, per the Council on Foreign Relations, and has talked with OpenAI about a stake if it lists.

International

• Andy Burnham is U.K. prime minister. Investors like reports that Shabana Mahmood gets the finance job, the more cautious pick.

• China held benchmark lending rates for a 14th straight month.

• European Central Bank decides Thursday.

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.

Today's Chip Close

11,708 on the semiconductor index is the bear market line. Where it settles at 4pm tells you whether the technical damage is official or the dip buyers showed up.

Alphabet Earnings, July 22

Two down days on the Gemini delay report means the market wants answers on the call, not just cloud numbers.

Gas Prices

The entire sentiment rebound rests on cheap gas, and pump prices are turning higher with diesel at $5. If that holds, next month's reading gives it all back.

- John

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