July 28th Market Overview

Happy Tuesday

A much needed bounce off this AM’s lows. Alot of names outside of AI are actually doing great today and a diversified portfolio is feeling that.

Healthcare, financials and staples picked up the slack while cheaper oil gave everyone room to breathe. I like a market that can lose its leader and still find plenty to buy. Things are looking healthy, or as healthy as they can under all these mega build outs.

Let’s dig in...

Today's Big Picture

1. Money left chips and found somewhere else to go

The semiconductor group fell for a fourth straight session. Healthcare and financials hit record intraday highs anyway. Baird strategist Ross Mayfield calls it a momentum unwind that has been running six to eight weeks, and says it holds as long as oil and rates behave. A market that can drop its leader and keep moving is a healthier one than a market that can't.

2. Nobody knows what the Fed does tomorrow

The Fed started its two-day meeting today. Most traders lean toward no change, but conviction is thin and a hike is genuinely live. Fed funds futures are now pricing an increase by September. Going into a decision this split is rare, so the reaction Wednesday will likely be bigger than the decision deserves.

3. Oil keeps falling and that is doing real work

West Texas crude traded just above $78 while Iran talked with Saudi Arabia and Oman about reopening the Strait of Hormuz. Brent led the way down and sits near $83. Cheap energy is quietly paying for this rotation. Every dollar off the barrel hands consumer and industrial names a little more margin.

Market Overview

Index Performance

Stock Spotlight

Coca-Cola $KO ( ▲ 4.87% )  
beat on both lines and raised its full year outlook. Shares were on pace to close at a record. CEO Henrique Braun said Coke Zero Zero is heading to new markets after it worked in Europe.

Corning $GLW ( ▼ 13.63% )  
guided next quarter just under what the street wanted and had its worst day since 2002. The stock had more than doubled in a year on AI data center demand. That is the tax on a story stock that turns in a good quarter instead of a great one.

Apple $AAPL ( ▲ 0.73% )  
touched $5 trillion in market value today. Nvidia is the only other company that has ever done it, and Apple now sits above it.

Sandisk $SNDK ( ▼ 12.72% )  
is half off its June 25 close of $2,335. It is still the best performing stock in the S&P 500 this year.

Big Name Updates

Nvidia $NVDA ( ▲ 0.71% )  
is reportedly weighing a roughly $250 billion backstop for a large OpenAI data center project. Funding the customer who buys your chips is exactly the setup investors are side-eyeing right now.

Tesla $TSLA ( ▼ 0.77% )  
drew a $480 target from RBC, which thinks a SpaceX combination is a real possibility. The analyst points at Terafab, the chip venture the two run with xAI.

Boeing $BA ( ▲ 5.21% )  
lost $428 million for the quarter on sales of $24.56 billion, a narrower loss than a year ago. A $280 million charge on the next Air Force One jets did the damage, and first delivery is still set for 2028.

Other Notable Company News

UPS $UPS ( ▼ 6.41% )  
put up $22.8 billion in revenue against expectations near $21.8 billion and raised full year guidance.

PayPal $PYPL ( ▲ 4.08% )  
raised its 2026 profit forecast while arguing it is worth more than the $60.50 a share offer from Stripe and Advent.

Royal Caribbean $RCL ( ▲ 6.08% )  
beat on both lines and lifted full year earnings guidance to a range of $17.73 to $17.87.

Micron $MU ( ▼ 8.71% )  
led the chip selling for a second straight session.

Mercedes-Benz $MBG ( ▲ 0.34% )  
cut its sales outlook after China revenue fell by nearly a third, and the stock rose anyway because the quarter beat low expectations.

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Sector Watch

Bond Market

The 30 year Treasury yield has closed above the five percent line 29 times this year, the most since 2007. It also strung together 14 straight closes above it through Friday, the longest run since July 2007. Yields eased today with the 10 year near 4.60 and the 2 year near 4.31.

Policy Watch

Fed

The decision comes tommorow at 2 p.m. Eastern. Chair Kevin Warsh takes questions half an hour later.

• Warsh likes the phrase "a good family fight" for calls that are not settled going in. Read into that what you will about the room this week.

• Fundstrat's Tom Lee thinks the Fed shrinks its balance sheet instead of touching the policy rate, and says that clears the path for cuts later.

International

• Iran is discussing the reopening of the Strait of Hormuz with Saudi Arabia and Oman while the fighting stays paused.

• Trump says there is a good chance of a deal, and that the campaign resumes if there isn't one.

• An earthquake in Japan collapsed a shopping mall, with evacuation orders out for more than 200,000 people.

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.

Microsoft and Meta results

Both report Wednesday, hours after the Fed. The capital spending line will move these stocks more than the profit line.

Apple and Amazon results

Both report Thursday, the same morning as second quarter GDP and the Fed's preferred inflation gauge. That is a lot landing at once.

SK Hynix tonight

Results are due around 8 p.m. Eastern. Memory has been the noisiest corner of the chip trade, and this is the cleanest look at it.

The debt behind the AI buildout

Goldman Sachs expects the big cloud companies to borrow more to fund construction. They issued $194 billion of investment grade debt in the first half alone. Watch whether the bond market keeps absorbing it this easily.

- John

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