Daily News Round Up
Thursday, 10 Jul 2025
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- Equity Market Volatility Expected to Increase Amidst Macroeconomic Uncertainty: Goldman Sachs’ neutral outlook, coupled with the fragile “Goldilocks” scenario, suggests increased equity market volatility in the near term. Stretched valuations, particularly within the Magnificent 7, weakening global indicators, and narrow market breadth contribute to a higher likelihood of a drawdown than a major rally, prompting a recommendation for long-volatility strategies. (FMP)
- Interest Rate Outlook Remains Complex and Politically Charged: The Federal Reserve minutes reveal a significant divergence in views regarding the timing and pace of future rate cuts, amidst external pressure from the White House. While most officials anticipate cuts this year, concerns about inflation, fueled potentially by new tariffs, complicate the outlook, causing market participants to push out expectations for the end of balance sheet reduction. (Reuters) (WSJ)
- Tariff Threats Introduce Uncertainty, But Markets Show Initial Resilience: Despite President Trump’s renewed tariff threats targeting several countries, market reaction has been muted so far, suggesting investors are discounting the risk or anticipating eventual negotiation. However, the potential for further escalation, especially concerning key commodities like copper, remains a persistent concern and demands monitoring, particularly impacting sectors like autos, energy, and mining. (FMP) (Market Watch)
- Sectoral Divergence Driven by Macro Factors and Company-Specific News: Significant movements across sectors are being observed, with mining stocks leading gains on the FTSE 100 due to rising commodity prices, while companies like Illumina face downgrades due to headwinds in specific markets. Upgrades to companies like Caterpillar on expectations in data center growth and Sunrun based on favorable policy changes also highlight the differentiated impact of macroeconomic factors and individual company performance.(FMP) (FMP)
- AI Momentum Continues to Drive Tech Valuations: Nvidia’s continued surge, briefly exceeding a $4 trillion valuation, and a positive outlook for Microsoft fueled by AI capabilities, demonstrate the persistent enthusiasm for AI-related investments. Demand for AI chips is driving revenue growth at TSMC, while analysis suggests AI will continue to drive future growth in tech revenue. (FMP) (FMP)
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What happened yesterday?
Macro
Commodity Prices: Markets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper. (Kiplinger)
Inflation: Goldman Sachs strategists, led by Christian Mueller-Glissmann, have issued a neutral outlook for equity markets over a 3-month horizon, citing stretched valuations, particularly within the “Magnificent 7” U.S. equities, weakening global leading indicators, and narrow market breadth. They maintain a constructive 12-month outlook. Their equity tail-risk framework indicates a greater likelihood of a drawdown than a major rally in the near term. The current environment is described as a fragile “Goldilocks” scenario, vulnerable to a negative growth shock, a sharp rate increase, or a deepening U.S. dollar bear market. Goldman recommends long-volatility strategies, credit protection trades, upside exposure to Chinese equities, and dollar downside plays. They anticipate renewed “risk-off” rotation if macro data deteriorates or inflation reignites. The caution suggests volatility and asymmetric risks, with prudent hedging and valuation discipline likely defining outperformance in the second half of 2025. (FMP)
Inflation: A flood of economic data will keep traders occupied next week, with both the consumer price index (CPI) and producer price index (PPI) readings for June due out, in addition to the Fed’s Beige Book and retail sales data. (Schaeffers Research)
Interest Rates: Here are five reasons why Trump might not get cheap money fast. (Market Watch)
Interest Rates: Financial market participants have pushed out yet again the end date for the effort to shrink the size of the Federal Reserve’s large balance sheet, the minutes of the U.S. central bank’s June 17-18 policy meeting showed on Wednesday. (Reuters)
Interest Rates: Only “a couple” of officials at the Federal Reserve’s June 17-18 meeting said they felt interest rates could fall as soon as this month, with most policymakers remaining worried to some degree about the inflationary pressure they expect to come from President Trump’s use of import taxes to reshape global trade. (New York Post)
Interest Rates: There was a general sense among most Federal Reserve officials that interest rates could be lowered by the end of the year, minutes of the Fed’s June 17-18 meeting showed. (Market Watch)
Interest Rates: Minutes from the Fed’s June policy meeting tease at a looming split over whether and when officials will resume rate cuts. (WSJ)
Interest Rates: The minutes reveal more closely the behind closed doors thinking between the U.S.’ top policymakers with the Fed under barrage from the White House. The Fed’s decision to hold rates steady throughout 2025 thus far has drawn the ire of Trump, who has repeatedly called for Fed Chair Jerome Powell’s resignation as Trump demands rate cuts to ignite his growth-focused agenda. (Forbes)
Interest Rates: Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates. (CNBC)
Interest Rates: Prices of Treasury debt have settled lower each trading day in July, marking the longest streak of rising yields since mid May, according to the Dow Jones Market Data team. (Barrons)
International relations: Most Asian stock markets advanced on Thursday, with the South Korea’s KOSPI leading the region, jumping 0.8%, and the Hang Seng Index (Hong Kong) up 0.4%. The Shanghai Composite (China) rose 0.3%, and the Straits Times Index (Singapore) gained 0.5%. The ASX 200 (Australia) remained flat. Japan’s Nikkei 225 fell 0.5% and the TOPIX dropped 0.8% following the imposition of a 25% tariff on Japanese imports. Nvidia (NASDAQ:NVDA) surged, helping the NASDAQ Composite achieve a new record, and prompting a $4 trillion valuation. SK Hynix (KS:000660) climbed 3.2% after Samsung Electronics warned of a steep 2024 profit slump. The Bank of Korea held interest rates steady. (FMP)
International relations: DAX rises toward a four-day winning streak on Fed rate cut signals and US-EU trade optimism, with inflation data and tech stocks in sharp focus. (FXEmpire)
Market Sentiment: The Sevens Report revised its S&P 500 valuation targets for the second half of 2025, citing macroeconomic risks and a shift to 2026 earnings. The base case fair value range is 6,195 to 6,343, with a midpoint of 6,269, based on a 2026 EPS of $295. An upside scenario projects the S&P 500 reaching 6,600 (EPS of $300 and a 22x P/E multiple) and potentially 6,860, aligning with a 161.8% Fibonacci extension. A downside risk scenario suggests a potential fall to 4,675–4,950, with 4,813 as a critical support zone, and a further potential drop to 3,675, which is nearly 40% off current highs. (FMP)
Market Sentiment: Strategists at JPMorgan say retail investors will help drive stock gains this year, and foreign investors could pitch in. (Market Watch)
Policy: Fundraising for U.K. startups is soaring, but the picture is very different when it comes to IPOs. The head of the London Stock Exchange warned of a “language of risk” in the U.K. — rather than a “language of opportunity. (CNBC)
Policy: Beijing’s labor market push and dovish Fed signals drive EV stocks higher, while tech weakness caps Hang Seng gains. (FXEmpire)
Policy: Fed Chair Jerome Powell has sketched out new conditions that could trigger rate cuts by summer’s end, but inflation remains a big question (WSJ)
Policy: President Donald Trump says “anybody” but Federal Reserve Chair Jerome Powell should head the central bank. (Market Watch)
Trade: UBS strategists note credit spreads are near yearly lows despite ongoing tariff-related uncertainty. EU fund cash balances surged in June and then rotated into primary credit deals. Investors holding cash are positioned to capitalize on potential volatility. UBS recommends receiving July or September ECB contracts and suggests a strategy of long EU investment-grade cash versus short CDS (IG vs. iTraxx Main) to exploit summer seasonality when investment grade (IG) tends to outperform high yield (HY). Specific sector recommendations include a preference for high-yield credits, and identifying idiosyncratic trades in auto and energy credits due to tariff exposures and low energy credit correlations to oil prices, respectively. The firm maintains a neutral stance on energy credits. The report advocates using the Economics Calendar API for trade policy announcements and the Bulk Ratings API for issuer credit score monitoring. (FMP)
Trade: Financial markets have shown minimal reaction to President Donald Trump’s new tariff threats against trade partners like Japan and South Korea, despite the threat of steep levies. The tariff deadline is currently August 1, though Trump called the date “not 100% firm.” Option-implied volatilities remain near their lowest levels since April. Analysts at Capital Economics believe markets are correctly discounting the headline risk, pointing to prior deals with Vietnam and the UK as evidence. Trump has shown reluctance to disrupt market sentiment since April. The firm anticipates a few new trade agreements could lead to another pause or diluted policy rollout. Key catalysts to watch include the second-quarter earnings season and upcoming U.S. labor and inflation data, which could reveal the effects of existing tariffs. (FMP)
Trade: Markets showed little reaction this week to new tariff letters from President Trump and an extension of the August 1 implementation date. Piper Sandler analysts suggest a consensus that “the worst of the trade fight is behind us,” but caution tariffs remain a risk. A 10% baseline tariff, along with higher levies on steel, aluminum, autos, and copper, are still in place. Option-implied volatilities are near their lowest since April. There is scant evidence tariffs will be rolled back, and further escalation is possible. (FMP)
Trade: The Brazil levy is the highest tariff announced in Trump’s letters to world leaders this week (WSJ)
Trade: The Nasdaq’s record high on Wednesday highlights a market uptrend that began in April. (Investors Business Daily)
Trade: So far this week, Trump has sent letters to 20 countries threatening new tariff rates and the U.S. market has remained steady. (Fox Business)
Trade: The value of apparel imports from China to the U.S. fell in May to its lowest monthly level in 22 years, according to latest trade data, highlighting the impact of steep U.S. tariffs. (Reuters)
Trade: The president’s tariff announcements suggest he has not backed away from his initial strategy, where even minor trading partners will face tariffs. (NYTimes)
Trade: The time required to bring new marginal copper production online is measured in years, not months, says CIO (Market Watch)
Trade: For four countries, the tariff rates announced Wednesday are below their April 2 levels, while two countries will see an increase and Algeria will not see any change. (Market Watch)
Trade: Tariffs remain the administration’s top priority. The ’90 deals in 90 days’ promise was unrealistic; real progress is slow, and trading partners are incentivized to delay unfavorable agreements. (Seeking Alpha)
Industry
Banking: Recent graduates who haven’t started their gigs at big banks are being recruited for jobs that don’t start for another couple of years. (WSJ)
Consumer Goods: Consumer discretionary stocks are a bet on the broader economy. But how do investors narrow the field to find the best ones to buy? (Kiplinger)
Energy: As Kermit the Frog told us, it’s not easy being green. Turns out it’s not easy being not-green, either. (Barrons)
Financial Technology: The fundraise values the company at more than $7.5 billion. (WSJ)
Mining: The FTSE 100 reached a new all-time high of 8,960.72 on Thursday, increasing by 93 points or 1.05%. This is the second record set in 2025. Mining stocks, including Rio Tinto (up ~3.6%), Glencore (up ~3.6%), Anglo American (up over 4%), Fresnillo (up over 2%), and Endeavour Mining (up over 2%), led the gains due to rising iron ore, copper, and gold prices. President Trump’s 50% tariff on copper imports and threats against Brazil had little impact on investor sentiment. The FTSE 100 has gained 9.5% year-to-date, driven by rotation out of U.S. equities into UK-listed resource and dividend-rich firms, supported by a UK-US trade agreement and perceived geopolitical hedge. (FMP)
Private Equity: Global private equity and venture capital deal value climbed in the first half, continuing a trend of high-value yet lower-volume deals. The aggregate deal value grew 18.7% to $386.42 billion between January and June from $325.57 billion for the same period in 2024, according to S&P Global Market Intelligence data. (Seeking Alpha)
Shipping: Global Ship Lease is seeing ‘tremendous demand’ for its smaller ships as customers seek flexibility amid tariff uncertainties. (Market Watch)
Corporate
Alphabet Inc: Alphabet Inc. (NASDAQ:GOOG) retains a “Buy” rating from Cowen & Co., reiterated on July 9, 2025, with a stock price of $178.68, though Cowen suggests a “hold” action. The stock increased by 1.95%, currently trading at $178.58, after fluctuating between $175.65 and $180.27 today. Over the past year, the stock has ranged from $142.66 to $208.7. Alphabet has a market capitalization of approximately $2.16 trillion and a trading volume of 16,068,307 shares. The company faces potential antitrust fines from the European Union related to disagreements with hotels and airlines, and increased competition from Nvidia-backed Perplexity AI. (FMP)
Ball Corporation: BofA Securities downgraded Ball Corporation (NYSE:BALL) from Buy to Neutral, reducing the price target to $66. The downgrade reflects concerns about Ball’s volume growth potentially lagging competitors and factors including exposure to the beer market and potential rising aluminum prices. The stock is currently near the $60 mark, and BofA anticipates a slowdown in momentum throughout the remainder of the year after a post–July 4th promotional slowdown. (FMP)
Byrna Technologies: Roth Capital maintained a “Buy” rating for Byrna Technologies (NASDAQ:BYRN) on July 9, 2025, with a stock price of $32.04, raising the price target from $33 to $37. The stock currently has a market capitalization of approximately $726.6 million and a Zacks Rank #1 (Strong Buy). Today’s trading volume is 93,391 shares, with the stock fluctuating between $31.91 and $33.45, showing a decrease of 0.13, or -0.40% from the previous session. Over the past year, the stock has ranged from a high of $34.78 to a low of $7.79. (FMP)
Caterpillar: Melius upgraded Caterpillar (NYSE:CAT) to a Buy with a price target of $500, representing a 30% upside. This change is based on revised long-term earnings projections, particularly for 2027, driven by Caterpillar’s growing engine business supporting data centers. The price target of $500 is based on a 17x earnings multiple, reflecting confidence in the company’s ability to capitalize on data center power needs. (FMP)
Firan Technology Group Corporation: Firan Technology Group Corporation (OTC:FTGFF) reported earnings per share of $0.10 on July 8, 2025, exceeding the estimated $0.07. Adjusted EBITDA rose to $8.7 million, up from $6.5 million in the same quarter of 2024, and net earnings increased by 36.3%, reaching $3.5 million. Revenue was approximately $35.56 million, falling short of the $49.99 million estimate, with total bookings of $45.8 million. The company’s backlog stands at $133.5 million, a 9% increase from the previous year-end. FTGFF has net debt of $13.5 million, a debt-to-equity ratio of 0.53, a current ratio of 1.94, a P/E ratio of 22.62, a price-to-sales ratio of 1.74, an enterprise value to sales ratio of 1.94, and an enterprise value to operating cash flow ratio of 14.16. (FMP)
Fox Corporation: Wolfe Research upgraded Fox Corporation (NASDAQ:FOXA) from Underperform to Peer Perform, citing reduced macroeconomic risks. Recession probabilities have dropped to 10%, and upfront sports ad pricing has increased by roughly 10% year-over-year. TV ad revenue accounts for nearly 40% of Fox’s total sales, and the NFL may contribute up to a quarter of its advertising income. Fox’s valuation currently stands at approximately 10 times forward free cash flow. (FMP)
Illumina: Citi downgraded Illumina (NASDAQ:ILMN) from Neutral to Sell, reducing its price target to $80. Concerns exist regarding Illumina’s ability to meet second-half expectations, despite anticipated second-quarter results aligning with forecasts. Headwinds include a softer academic funding environment and sluggish demand in China impacting the consumables business. This downgrade follows the possibility of a third guidance cut this year and concerns that current expectations may be too high. (FMP)
LyondellBasell (NYSE: LYB): UBS maintains a “Sell” rating for LyondellBasell (NYSE: LYB) with a price target of $49, revised from $50, as of July 9, 2025. The stock is currently priced at $63.96, a 0.40% increase of $0.26, with a daily high of $64.40 and low of $61. LyondellBasell’s market capitalization is approximately $20.56 billion, with a trading volume of 1,125,471 shares. Its past year high is $100.46 and its low is $51.11. The company will release its Q2 2025 financial results on August 1, 2025, followed by a webcast and teleconference, with a replay available until September 1, 2025, starting at 1 p.m. EDT. (FMP)
Microsoft Corp: On July 9, 2025, Oppenheimer analyst Brian Schwartz set a $600 price target for Microsoft (NASDAQ: MSFT), a potential 19.58% increase from the then-current price of $501.76. Microsoft’s current stock price is $501.73, reflecting a 1.03% increase, with daily fluctuations between $499.74 and $506.78 (the latter being the highest price over the past year). Schwartz projects a potential revenue increase of $276 billion through fiscal year 2030, driven by AI advancements through Azure and solutions like Copilot. Microsoft’s market capitalization is approximately $3.73 trillion, with a trading volume of 11.99 million shares. (FMP)
Microsoft Corp: Microsoft Corporation (NASDAQ:MSFT) shares increased by approximately 2% intra-day following an Oppenheimer upgrade to Outperform and a new price target of $600. The upgrade is based on confidence in Microsoft’s AI-powered software and cloud services leadership, particularly through Azure. Oppenheimer anticipates Azure growth acceleration by fiscal 2026 and highlights Microsoft’s ability to achieve the “Rule of 60” (high revenue growth and profitability) at a significant scale. (FMP)
Nvidia (NVDA): Nvidia (NVDA) briefly reached a $4 trillion market valuation, requiring a ~0.7% increase from $162.88 to achieve this milestone. The company’s stock trades near a 60x multiple of 2026 earnings estimates. The rally is driven by four factors: reasoning AI demand, eased U.S. export restrictions on AI chips, enterprise AI uptake with RTX Pro servers, and industrial AI reshoring. Analysts, such as Dan Ives, anticipate more companies joining the $4 trillion valuation club. Q2 earnings, export policy updates, and factory announcements are key catalysts to watch. (FMP)
Nvidia / Tesla Inc: Nvidia rallied to record highs Wednesday, while Tesla reversed lower on the stock market today. (Investors Business Daily)
Sunrun (NASDAQ:RUN): Sunrun (NASDAQ:RUN) shares increased by more than 2% intra-day following a Jefferies upgrade from Underperform to Hold and a doubling of the price target to $11. The upgrade is attributed to the recent passage of the One Big Beautiful Bill Act (OBBBA) and the finalized IRA provisions, which offer a more favorable policy environment for Sunrun’s third-party ownership business model. Jefferies anticipates a potential double-digit market decline in the residential solar sector by 2026 but views Sunrun as best-positioned to gain market share, citing its stronger balance sheet and distribution reach. (FMP)
TSMC: Taiwan Semiconductor Manufacturing Co (TSMC) reported second-quarter sales of NT$933.8 billion ($31.9 billion), a 39% year-over-year increase, exceeding market estimates of NT$927.83 billion and TSMC’s own guidance range of $28.4 billion to $29.2 billion. Growth is driven by demand for AI chips from clients like NVIDIA and Apple, along with High-Performance Computing (HPC) and 5nm/3nm processes. Nvidia recently achieved a $4 trillion market cap. TSMC will announce full Q2 earnings on July 17, including net profit, gross margin trends, forward guidance (Q3 outlook), and capital expenditure updates. (FMP)
Webster Financial Corporation: Webster Financial Corporation (NYSE: WBS) is scheduled to release its Q2 2025 earnings. UBS maintains a “Buy” rating for WBS, increasing the price target from $68 to $69, representing a potential 16.87% increase from its then-price of $59.04. Key financial metrics are: a price-to-earnings (P/E) ratio of 12.8, a price-to-sales ratio of 2.36, an earnings yield of 7.81%, an enterprise value to sales ratio of 2.70, an enterprise value to operating cash flow ratio of 9.01, a debt-to-equity ratio of 0.42, and a current ratio of 0.054. (FMP)
Wingstop (NASDAQ:WING): Wolfe Research analyst Alex Zukin set a price target of $280 for Wingstop (NASDAQ:WING) on July 9, 2025, representing a -15.85% difference from the then-trading price of $332.74. The current stock price is $333.98, up 2.24% ($7.33) with a daily trading range of $322.52 to $334.90. Over the past year, the stock has ranged from $204 to $433.86. Wingstop’s market capitalization is approximately $9.28 billion, with a trading volume of 208,321 shares. Wall Street maintains a Strong Buy rating (ABR of 1.59) with 73.9% of 23 brokerage firms issuing a Strong Buy recommendation. (FMP)
Wingstop (NASDAQ:WING): WestPark Capital initiated coverage on Wingstop (NASDAQ:WING) with a “Buy” rating. The average brokerage recommendation (ABR) is 1.59, with 65.2% of 23 firms rating it “Strong Buy” and 8.7% rating it “Buy”. Wingstop’s current stock price is $332.74, up 1.86% ($6.09) today, with a daily trading range of $323.91 – $334.90. Over the past year, the stock has ranged from $204 to $433.86. The company’s market capitalization is approximately $9.28 billion, and its trading volume is currently 208,321 shares. (FMP)
