Solid Corporate Earnings Results Support Stocks

The S&P 500 Index ($SPX) (SPY) today is up +0.25%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.25%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.19%.  September E-mini S&P futures (ESU25) are up +0.18%, and September E-mini Nasdaq futures (NQU25) are up +0.10%.

Stock indexes are climbing today, with the Nasdaq 100 posting a new all-time high.  Signs of economic resilience and better-than-expected quarterly earnings results are underpinning stocks, with the S&P 500 and Nasdaq 100 posting new record highs this week.  According to data compiled by Bloomberg Intelligence, around 83% of S&P 500 companies that have reported Q2 earnings have exceeded analysts’ profit estimates.

On the negative side, Intel is down more than -9% to lead semiconductor stocks lower after reporting an unexpected Q2 loss of -10 cents a share, weaker than expectations of a +1 cent profit, and said it will reduce capital expenditures and cut staff by 15% by the end of the year.  Also, Charter Communications is down more than -16% after reporting Q2 EPS below consensus. 

Today’s US economic news was negative for stocks after Jun capital goods new orders nondefense ex-aircraft & parts unexpectedly fell -0.7% m/m, weaker than expectations of a +0.1% m/m increase.

The markets are awaiting President Trump’s August 1 deadline for trade deals to avoid high tariffs.  Last Wednesday, Mr. Trump announced that he intends to send a tariff letter to more than 150 countries, notifying them that their tariff rates could be 10% or 15%, effective August 1.  As an update, Mr. Trump late Wednesday said, “We’ll have a straight, simple tariff of anywhere between 15% and 50%,” an indication that the floor for tariffs is rising and suggesting that he would not go below 15%. 

Federal funds futures prices are discounting the chances for a -25 bp rate cut at 3% at the July 29-30 FOMC meeting and 67% at the following meeting on September 16-17.

The markets this week absorbed a heavy slate of quarterly corporate earnings, with reports from about one-fifth of the companies in the S&P 500.  Early results now show S&P 500 earnings are on track to rise +4.5% for the second quarter, better than the pre-season expectations of +2.8% y/y, according to Bloomberg Intelligence.  Around 83% of the S&P 500 companies that have reported have exceeded profit estimates. 

Overseas stock markets today are lower.  The Euro Stoxx 50 is down -0.23%.  China’s Shanghai Composite closed down -0.33%.  Japan’s Nikkei Stock 225 closed down -0.88%.

Interest Rates

September 10-year T-notes (ZNU25) today are down -2 ticks.  The 10-year T-note yield is up by +1.2 bp to 4.408%.  T-notes are under pressure today due to negative carryover from a slide in 10-year German bunds to a 3.75-month low.  Also, upcoming supply pressures are weighing on T-notes as the Treasury will auction $69 billion of 2-year T-notes and $70 billion of 5-year T-notes on Monday.  Limiting losses in T-notes were comments from President Trump, who downplayed his clash with Fed Chair Powell, saying there was “no tension” with Powell, which eased fears that he would fire the Fed Chair.

European government bond yields today are moving higher.  The 10-year German bund yield rose to a 3.75-month high of 2.769% and is up +2.0 bp to 2.722%.  The 10-year UK gilt yield is up +1.9 bp to 4.640%.

Eurozone Jun M3 money supply rose +.3% y/y, weaker than expectations of +3.7% y/y and the slowest pace of increase in 9 months.

The German Jul IFO business confidence index rose +0.2 to a 14-month high of 88.6, although weaker than expectations of 89.0.

UK Jun retail sales ex-auto fuel rose +0.6% m/m, weaker than expectations of +1.2% m/m.

ECB Governing Council member Kazaks said he saw little reason to lower interest rates further unless the economy suffers a major blow, and “There is value in the ECB holding interest rates at current levels, and the time of no-brainer moves to hike or cut rates is over.” 

ECB Governing Council member and Bundesbank President Nagel stated that a steady monetary policy from the ECB is appropriate, as the inflation outlook has remained unchanged and the economic outlook has improved slightly.

Swaps are discounting the chances at 18% for a -25 bp rate cut by the ECB at the September 11 policy meeting.

US Stock Movers

Centene (CNC) is up more than +4% to lead managed health care providers higher after laying out a plan to address problems in its Affordable Care Act business to ensure it turns a profit in 2026.  Also, Humana (HUM) is up more than +4%, and Elevance Health (ELV), CVS Health (CVS), and Molina Healthcare (MOH) are up more than +3%.  In addition, UnitedHealth Group (UNH) is up more than +1% to lead gainers in the Dow Jones Industrials.

Deckers Outdoor Corp (DECK) is up more than +13% to lead gainers in the S&P 500 after reporting Q1 net sales of $964.5 million, well above the consensus of $901.4 million.

Comfort Systems USA (FIX) is up more than +15% after reporting Q2 revenue of $2.17 billion, stronger than the consensus of $1.96 billion.

Newmont Corp (NEM) is up more than +6% after reporting Q2 sales of $5.32 billion, better than the consensus of $4.85 billion. 

Aon Plc (AON) is up more than +6% after reporting Q2 adjusted EPS of $3.49, above the consensus of $3.40. 

Edwards Lifesciences (EW) is up more than +4% after reporting Q2 sales of $1.53 billion, better than the consensus of $1.50 billion, and raising its full-year sales forecast to $5.9 billion-$6.1 billion from a previous estimate of $5.7 billion-$6.10 billion, stronger than the consensus of $5.91 billion.

Palantir Technologies (PLTR) is up more than +2% after Piper Sandler initiated coverage on the stock with a recommendation of overweight and a price target of $170.

Gilead Sciences (GILD) is up more than +2% after Needham upgraded the stock to buy from hold with a price target of $133. 

Carvana (CVNA) is up more than +2% after Oppenheimer upgraded the stock to outperform from market perform with a price target of $450. 

Intel (INTC) is down more than -9% to lead chip stocks lower after reporting an unexpected Q2 loss of -10 cents a share, weaker than expectations of a +1 cent profit, and said it will reduce capital expenditures and cut staff by 15% by the end of the year.  Also, ASML Holding NV (ASML) and Applied Materials (AMAT) are down more than -2%.  In addition, NXP Semiconductors NV (NXPI), Micron Technology (MU), KLA Corp (KLAC), and Lam Research (LRCX) are down more than -1%.

Crypto-linked stocks are sliding today with the price of Bitcoin (^BTCUSD) down more than -3% to a 2-week low.  As a result, Riot Platforms (RIOT) is down more than -3%, and MARA Holdings (MARA) and MicroStrategy (MSTR) are down more than -2%.  Also, Coinbase Global (COIN) is down more than -1%.

Charter Communications (CHTR) is down more than -17% to lead losers in the S&P 500 after reporting Q2 EPS of $9.18, well below the consensus of $9.82. 

Healthpeak Properties (DOC) is down more than -6% after reporting Q2 lab same-store NOI growth of 1.5%, below the consensus of 2.45%.

Sarepta Therapeutics (SRPT) is down more than -5% after an evaluation committee of the European Medicines Agency recommended against the approval of the company’s gene therapy Elevidys. 

Oklo Inc. (OKLO) is down more than -1% after BNP Paribas Exane initiated coverage of the stock with a recommendation of underperform and a price target of $14. 

Earnings Reports (7/25/2025)

Aon PLC (AON), AutoNation Inc (AN), Booz Allen Hamilton Holding Co (BAH), Centene Corp (CNC), Charter Communications Inc (CHTR), Erie Indemnity Co (ERIE), First Citizens BancShares Inc/ (FCNCA), First Hawaiian Inc (FHB), Gentex Corp (GNTX), HCA Healthcare Inc (HCA), Lear Corp (LEA), OneMain Holdings Inc (OMF), Phillips 66 (PSX), Saia Inc (SAIA), Skechers USA Inc (SKX).