July 31st Market Overview

Happy Thursday

On the way to my brother-in laws wedding today, my wife and I got clipped by a bus on the highway. Everyone is fine and zero injuries outside the poor car. I’m feeling very lucky today no matter how far $UNH ( ▲ 1.47% ) keeps going down.

The Fed's keeping rates higher for longer, Trump's tariff deadline hits tomorrow, and frankly, this feels like we're walking a tightrope. When 27 stocks hit 52-week highs and 25 hit new lows on the same day, something's gotta give. VIX hitting a low base. I expect volatility in the next 2 weeks.

Let's dig in...

Market Summary

Tech Earnings Drive Everything
Microsoft $MSFT officially joined the $4 trillion club after posting revenue beats across every segment, while Meta $META announced infrastructure spending that could hit $100 billion next year. Here’s the problem: equal-weight S&P 500 closed red while the headline index stayed flat—pure concentration.

Fed Kills Rate Cut Dreams
Powell’s “moderately restrictive” stance is working. Today’s PCE reading came in hot, and markets now price just 25 odds of any cut this year. The 2 inflation target feels like a fantasy.

Tariff Deadline Tomorrow
Trump gave Mexico a 90-day extension but tomorrow’s deadline for other countries stands. Copper futures had their worst day since the 1960s after Trump clarified his tariff applies to finished products, not raw materials.

Market Structure Warning
27 S&P 500 stocks hit 52-week highs while 25 hit new lows. When markets split this wide, something usually breaks.

Market Overview

U.S. Stock Indexes, This Week so Far

Stock Spotlight

Microsoft $MSFT ( ▼ 0.59% ) delivered fiscal Q4 revenue of $76.4 billion with Azure cloud still growing despite adding over 2 gigawatts of capacity this year. Management says demand still outstrips supply across AI services. Microsoft Cloud annual revenue topped $168 billion.

Meta $META ( ▼ 2.27% ) posted Q2 revenue of $47.5 billion as AI-enhanced advertising drove growth. Zuckerberg said superintelligence is “now in sight” while planning $66-72 billion in infrastructure spending this year, potentially $100 billion-plus in 2026.

UnitedHealth $UNH ( ▲ 1.47% ) got crushed after Baird downgraded to underperform, slashing the price target from $312 to $198. The firm questioned OptumHealth’s value-based care margins, which dropped to 5 with major regulatory headwinds ahead.

Figma $FIG ( ▼ 4.11% ) opened at $85, doubling its $33 IPO price before climbing above $100. The design software company’s debut represents one of the largest venture-backed American tech IPOs in years, potentially opening the floodgates for more listings.

Big Name Updates

Apple $AAPL ( ▼ 0.3% ) and Amazon $AMZN ( ▲ 0.2% ) report after the bell, completing the Magnificent Seven earnings cycle that’s driven this year’s gains.

Ford $F ( ▲ 0.18% ) projected a $2 billion tariff hit for 2025 despite manufacturing most vehicles domestically. The company paid over $800 million in tariffs last quarter from imported parts and steel/aluminum fees—a preview of tomorrow’s broader impact.

Moderna $MRNA ( ▲ 0.25% ) announced plans to cut 10 of its workforce by end-2025 as COVID vaccine sales decline and the company refocuses on its pipeline.

Other Notable Company News

Robinhood $HOOD ( ▲ 0.75% ) delivered standout Q2 results with revenue up 45 year-over-year to $989 million and 56 EBITDA margins. Assets under custody exceeded $250 billion, doubling from last year.

Eli Lilly $LLY ( ▼ 0.45% ) received positive trial data for Mounjaro, which showed cardiovascular benefits over Trulicity in a study of 13,000-plus patients. The drug cut major adverse events and mortality significantly.

Novo Nordisk $NVO dropped after HSBC downgraded to hold, calling obesity drugs a “mature” market with slower growth ahead. Shares are down 44 year-to-date as the GLP-1 euphoria fades.

Sector Watch

Bond Market

The 10-year Treasury held near 4.36 despite today’s hot PCE reading. Bond traders are waiting for tomorrow’s jobs report.

• PCE came in at 2.6 headline, 2.8 core—both above the Fed’s 2 target
• Personal income rose while spending matched expectations
• Yield curve remains inverted, signaling continued uncertainty

Policy Watch

Powell’s message is crystal clear: rates stay higher for longer. His “moderately restrictive” mantra has completely shifted market expectations.

• Markets now price just 25 odds of any cut in 2025, down from 75 earlier this year
• Two Fed governors dissented Wednesday—cracks are showing
• Labor market remains near full employment despite cooling signs

Trump’s tariff deadline creates immediate uncertainty:
• Mexico got 90 days after Sheinbaum call, but other countries face Friday deadline
• India’s 25 tariffs could hit Apple’s iPhone supply chain
• European spirits brace for 15 baseline tariffs

Today’s Sponsor

Big investors are buying this “unlisted” stock

When the founder who sold his last company to Zillow for $120M starts a new venture, people notice. That’s why the same VCs who backed Uber, Venmo, and eBay also invested in Pacaso.

Disrupting the real estate industry once again, Pacaso’s streamlined platform offers co-ownership of premier properties, revamping the $1.3T vacation home market.

And it works. By handing keys to 2,000+ happy homeowners, Pacaso has already made $110M+ in gross profits in their operating history.

Now, after 41% YoY gross profit growth last year alone, they recently reserved the Nasdaq ticker PCSO.

Invest for $2.90/Share

_{Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.}

What to Watch

Jobs Report Tomorrow
The Fed emphasized labor market conditions as key for policy. Any cooling could revive September cut talk, while strength reinforces the patient stance. This number matters more than usual.

Apple and Amazon Tonight
The final Magnificent Seven reports determine whether AI infrastructure has legs or if valuations have run too far. Both face questions about capital allocation and growth sustainability.

Tariff Fallout Friday
Multiple countries still lack Trump deals. Watch for last-minute agreements or immediate tariff implementation. Apple $AAPL ( ▼ 0.3% ) faces supply chain disruption from India tariffs, while European exporters brace for impact.

Concentration Risk
Today showed extreme concentration—equal-weight S&P 500 closing red while headline stayed flat signals underlying weakness. If mega-cap tech stumbles, the broader market has little support.

Thanks for reading 🙂

- John