Markets Sees Modest Moves
The S&P 500 and Nasdaq both posted weekly gains of 0.6% and 1.5%, respectively, hitting record highs and rebounding from slight losses the previous week. Meanwhile, the Dow slipped 0.1%, closing 1.5% below its record set last December.
Strong Earnings Kickoff
The first three major U.S. banks reporting Q2 results surpassed analyst expectations, boosted by a surge in investment banking revenue. Analysts now forecast an 8.6% earnings growth for the financial sector, outpacing the 5.6% growth projected across the entire S&P 500, according to FactSet.
Mixed Inflation Signals
Inflation data presented a mixed picture. The Consumer Price Index rose 2.7% annually in June, up from 2.4% in May, suggesting higher tariffs may be driving broader price increases. However, wholesale prices rose only 2.3% year-over-year—the smallest increase since September last year.
Retail Sales Bounce Back
U.S. retail sales rebounded with a 0.6% increase in June after a sharp 0.9% decline in May. Since retail sales aren’t adjusted for inflation, part of the June gain may reflect rising prices amid ongoing tariff pressures.
30-Year Treasury Yield Hits 5.00%
The yield on the 30-year U.S. Treasury bond rose for the fourth consecutive week, briefly reaching 5.07% on Tuesday. Although it touched 5.00% two months ago, it has not sustained that level for a prolonged period since 2007.
Consumer Sentiment Improves Slightly
The University of Michigan’s preliminary July report showed a modest increase in consumer sentiment compared to the prior month, though it remains well below last December’s peak. The report also noted a recent decline in consumers’ inflation expectations.
Dollar Strengthens Amid Volatility
The U.S. dollar rose for the third consecutive week against major currencies, yet remains about 9% lower year-to-date. This drop largely stems from sharp declines in March and April linked to tariff-related market volatility.
Fed Cuts?
Bond market activity on Friday reinforced expectations that the U.S. Federal Reserve is unlikely to cut interest rates at its upcoming two-day meeting ending July 30. Interest rate futures indicated that most investors anticipate two quarter-point rate cuts by year-end, with the first expected at the Fed’s mid-September meeting, according to CME Group’s FedWatch tool.
Initial Jobless Claims
Claims declined 7K to 221K versus last week’s (upwardly revised) 228K, and below the 235K expected. Continuing Claims increased 2K from last week to match the cycle high of 1.956M, suggesting hiring sluggishness.
GDP Outlook
The Atlanta Fed’s GDPNow “nowcast” for Q2 GDP was revised down to 2.4% yesterday from 2.6% last Friday.
Crypto News
This week brought positive regulatory progress for the crypto industry. Three key bills—the GENIUS Act, establishing a stablecoin regulatory framework; the Anti-CBDC Surveillance State Act; and the Digital Asset Market Clarity (CLARITY) Act—all moved forward. Trump is expected to sign the GENIUS Act into law today, while the CLARITY and Anti-CBDC Acts, having passed the House, now head to the Senate. Meanwhile, Bitcoin reached a new all-time high of $122,838 on Tuesday, and Ethereum climbed above $3,600, its highest level since December.
Tariff Update
President Donald Trump said Wednesday he plans to send one letter to over 150 countries informing them of the tariff rate they will face.
“It’s all going to be the same for everyone, for that group,” Trump told reporters during a meeting with Bahrain Crown Prince Salman bin Hamad Al Khalifa at the White House. “They’re not big countries, and they don’t do that much business. Not like the ones we’ve agreed with, like China, like Japan.”
What to Watch:
Next week will be a key test with mega-cap tech reports from Alphabet and Tesla on Wednesday, along with updates from recent strong performers like GEV, IBM, and FIX.
Economic Calendar:
- Mon (7/21): Leading Indicators
- Tue (7/22): No reports
- Wed (7/23): EIA Crude Oil Inventories, Existing Home Sales, MBA Mortgage Applications Index
- Thu (7/24): Continuing Claims, EIA Natural Gas Inventories, Initial Claims, New Home Sales, S&P Global US Manufacturing PMI, S&P Global US Services PMI
- Fri (7/25): Durable Orders
Earnings Schedule:
- Mon (7/21): Cleveland-Cliffs (CLF), Domino’s Pizza (DPZ), NXP Semiconductor (NXPI), Roper Technologies (ROP), Ryanair (RYAAY), Verizon (VZ)
- Tue (7/22): Capital One (COF), Coca-Cola (KO), Danaher (DHR), Intuitive Surgical (ISRG), Philip Morris (PM), RTX (RTX), SAP (SAP), Texas Instruments (TXN)
- Wed (7/23): Alphabet (GOOGL), AT&T (T), Boston Scientific (BSX), GE Vernova (GEV), General Dynamics (GD), Prologis (PLD), IBM (IBM), Tesla (TSLA), T-Mobile (TMUS)
- Thu (7/24): Blackstone (BX), Comfort Systems (FIX), Deckers Outdoor (DECK), Deutsche Bank (DB), Digital Realty (DLR), Honeywell (HON), Intel (INTC), Newmont (NEM), Union Pacific (UNP), Valero Energy (VLO)
- Fri (7/25): Aon (AON), AutoNation (AN), Centene (CNC), Charter Communications (CHTR), HCA Healthcare (HCA), Phillips 66 (PSX)
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