Market Snapshot
| Dow | 44837.56 | -64.36 | (-0.14%) | | Nasdaq | 21177.21 | +70.27 | (0.33%) | | SP 500 | 6389.77 | +1.13 | (0.02%) | | 10-yr Note |
|
|
|
| | NYSE | Adv 953 | Dec 1782 | Vol 1.02 bln | | Nasdaq | Adv 1794 | Dec 2744 | Vol 10.68 bln |
Industry Watch
| Strong: Energy, Consumer Discretionary, Information Technology |
| | Weak: Materials, Utilities, Real Estate, Consumer Staples, Health Care, Financials, Industrials, Communication Services |
Moving the Market
Trade deal between the U.S. that features a 15% tariff rate on European imports, $600 billion investment into U.S. economy, and a $750 billion purchase of U.S. energy
Fresh record highs for the S&P 500 and Nasdaq Composite
|
Mixed finish after fresh record highs
28-Jul-25 16:40 ET
Dow -64.36 at 44837.56, Nasdaq +70.27 at 21177.21, S&P +1.13 at 6389.77
[BRIEFING.COM] Opening gains fueled by the announcement of a trade deal between the U.S. and the EU quickly pushed the S&P 500 and Nasdaq Composite to new all-time high levels, but a lack of major developments on any front stalled momentum and saw the major averages finish mixed.
At its peak, the S&P 500 set a new intraday record at 6401.07. After spending much of the afternoon with a modest loss, the index closed up 1.13 points to 6,389.77, squeaking out a new record closing high. The Nasdaq Composite, for its part, set an intraday record at 21,202.18. The closing level of 21,178.58 was also a new closing record high. The DJIA underperformed with a loss of 0.1% for the day.
The trade deal between the U.S. and EU will feature a 15% tariff on EU imports with 0% carveouts for certain products like aircraft and component parts, semiconductor equipment, and certain raw materials.
The deal also includes a provision whereby the EU will invest $600 billion in the U.S. and purchase $750 billion of U.S. energy.
The latter point, in conjunction with a 2.4% increase in crude oil prices to $66.75 per barrel, helped the energy sector (+1.0%) close as the day's top performer.
Despite a strong start, the consumer discretionary (+0.7%) and information technology (+0.8%) sectors were the only other sectors to finish in positive territory.
A strong start to the week for chipmakers underpinned the tech gains, with the PHLX Semiconductor Index closing up 1.6%, aided by the EU trade deal carveout for semiconductor equipment.
The consumer discretionary sector was bolstered by its largest components. Amazon (AMZN 232.79, +1.35, +0.6%) traded higher ahead of its earnings report on Thursday. Tesla (TSLA 325.59, +9.53, +3.0%), meanwhile, has recouped almost all of its losses from last Thursday, when the stock fell 8.2% after reporting lackluster Q2 earnings. The stock outperformed today on the back of news that Tesla struck a $16.5 billion agreement for Samsung Electronics to manufacture its AI6 chips.
The other eight S&P 500 sectors spent the majority of today's session trading with losses that steadily broadened throughout the day. Early breadth figures slightly favored advancers but selling interest picked up throughout the session. Decliners outpaced advancers by a nearly 2-to-1 ratio on the NYSE and a nearly 3-to-1 ratio on the Nasdaq.
While today's gains were limited by a lack of headlines, this week will see nearly 38% of the S&P 500 by market cap report earnings (including four “Magnificent 7” names), alongside a trove of economic data and the potential for a trade agreement between the U.S. and China. Trade delegations from the U.S. and China met for trade talks today in Stockholm, Sweden.
Separately, U.S. Treasuries began the week on a lower note, lifting the 10-yr yield back above its 50-day moving average (4.406%). Today's 2-yr note auction met decent demand, but the 5-yr note sale was a bit worse, and both auctions saw below-average foreign demand
The 2-year note yield settled up two basis points to 3.88%, and the 10-year note yield settled up three basis points to 4.42%.
- Nasdaq Composite: +9.7% YTD
- S&P 500: +8.6% YTD
- DJIA: +5.4% YTD
- S&P 400: +2.9% YTD
- Russell 2000: +1.2% YTD
Trade deal buzz fizzles
28-Jul-25 15:30 ET
Dow -123.78 at 44778.14, Nasdaq +33.69 at 21140.63, S&P -8.50 at 6380.14
[BRIEFING.COM] After a strong start to the session fueled by the trade deal optimism, the major averages trade at their worst levels of the session as the market enters the final half hour of trading.
The announcement of a trade agreement between the U.S. and the EU provided early buzz, but a lack of further developments saw the markets succumb to some relatively broad-based selling.
Officials from the U.S. and China met in Stockholm today to discuss a trade deal, but today's talks ended without reports of anything substantive. The two nations are set to meet again tomorrow, which could be a driving factor if a deal is agreed upon.
The pause on the lower tariff rate expires August 12, although press reports indicate both sides are expected to extend that deadline for 90 days.
Major averages at session lows
28-Jul-25 15:00 ET
Dow -115.68 at 44786.24, Nasdaq +41.32 at 21148.26, S&P -6.49 at 6382.15
[BRIEFING.COM] The major averages trade at their worst levels of the day amid widening losses in the eight sectors that have spent the majority of the session in negative territory.
Currently, the materials (-1.5%), real estate (-1.4%), utilities (-1.0%), and consumer staples (-1.0%) sectors all sport losses greater than 1.0%.
Though the energy (+1.1%), consumer discretionary (+0.8%), and technology (+0.4%) sectors hold on to most of their advances, an increase in selling activity now has the major averages mixed for the day.
The Nasdaq Composite (+0.2%) is treading above its flatline, while the S&P 500 (-0.1%) and DJIA (-0.3%) have lost hold of their early gains.
Breadth figures have continued on a downward trend since this morning's slightly positive opening, with decliners outpacing advancers by a nearly 2-to-1 ratio on the NYSE and a roughly 3-to-2 ratio on the Nasdaq.
S&P 500 slips as Albemarle, Revvity, and Centene drag; Diamondback rallies
28-Jul-25 14:30 ET
Dow -148.22 at 44753.70, Nasdaq +31.91 at 21138.85, S&P -10.65 at 6377.99
[BRIEFING.COM] The S&P 500 (-0.17%) is in second place on Monday afternoon, down about 11 points.
Briefly, S&P 500 constituents Albemarle (ALB 74.79, -8.95, -10.69%), Revvity (RVTY 95.34, -8.33, -8.04%), and Centene (CNC 27.04, -1.35, -4.76%) dot the bottom of the standings. ALB is among one of the worst lithium stocks today, RVTY falls after reporting earnings, and CNC caught a Cantor Fitzgerald downgrade to Neutral this morning citing macro uncertainty in key markets.
Meanwhile, Diamondback Energy (FANG 149.62, +5.01, +3.46%) is one of today's top performers despite a dearth of corporate news.
Gold falls as risk appetite improves on U.S.-EU trade deal; dollar climbs
28-Jul-25 14:00 ET
Dow -100.30 at 44801.62, Nasdaq +48.00 at 21154.94, S&P -4.92 at 6383.72
[BRIEFING.COM] The tech-heavy Nasdaq Composite (+0.23%) is in first place on Monday among the major averages, the sole average in positive territory.
Gold futures settled $24.40 lower (-0.7%) at $3,311.20/oz, as investor sentiment shifted following a new U.S./EU trade framework deal unveiled just before the August 1 tariff deadline. Markets responded positively to the reduced 15% tariff rate on EU goods, which was significantly lower than previously threatened levels. This improvement in risk appetite diminished gold's safe-haven appeal and helped drive stock indices higher. At the same time, a slightly weaker U.S. dollar offered modest support to the yellow metal.
Meanwhile, the U.S. Dollar Index is now about +1% higher to $98.63.
Revvity plummets as lower FY25 EPS outlook and margin compression weigh (RVTY)
Revvity's (RVTY) stock is plunging lower following the release of its 2Q25 earnings report, with the weakness directly tied to the company's downward revision of its FY25 EPS guidance to $4.85-$4.95, down from the previous $4.90-$5.00 range. While the company did slightly nudge its FY25 revenue guidance higher to $2.84-$2.88 bln, reflecting modest optimism, this adjustment is providing little consolation to investors who are more focused on the profitability outlook.
- Adjusted operating profit margin contracted to 26.6% in Q2 from 28.8% in the year-earlier period, a decline that signals mounting pressure on profitability. Key factors driving this margin compression include unfavorable product mix, ongoing investments, and heightened cost pressures, particularly from tariffs and supply chain dynamics, which have impacted both the Life Sciences and Diagnostics segments. These margin pressures likely played a pivotal role in RVTY's decision to lower its FY25 EPS guidance, as the company grapples with balancing growth initiatives against rising operational costs.
- In the Life Sciences segment, revenue saw a solid 4% increase on an organic basis, driven by robust demand for reagents and double-digit growth in the Signals Software business, fueled by new orders and strong SaaS performance. While pharmaceutical and biotech sales contributed modestly, the segment faced a low-single-digit decline in instrumentation revenue due to soft academic and government demand, though this was offset by the software strength.
- The Diagnostics segment recorded a 2% organic revenue increase, propelled by low-single-digit growth in immunodiagnostics globally, bolstered by strength in the Americas and recent menu expansions. The reproductive health business also contributed with high-single-digit growth in newborn screening, while a key milestone—the FDA approval of an automated platform for the T-SPOT latent tuberculosis test—positions the segment for further upside in a significant market. However, double-digit declines in China due to policy changes tempered overall gains, reflecting geographic disparities.
- RVTY's transformation plan, a strategic overhaul aimed at enhancing operational efficiency, driving innovation, and fostering partnerships, has been a critical enabler of its ability to exceed revenue expectations. Key aspects include a focus on cost management, the launch of advanced platforms like the IDS i20 analytical system, and investments in R&D to bolster its product pipeline, all of which underscore the company's commitment to long-term value creation.
RVTY's weakness stems primarily from persistent margin pressures and the downwardly revised FY25 EPS guidance, which have overshadowed the revenue beat and slight guidance lift. The company's transformation plan offers some hope of improved results down the road, but the combination of modest top-line growth and eroding margins isn't sitting well with investors today.
AutoNation Q2 results on Friday highlighted by tariff fears being less of a headwind than expected
AutoNation (AN) saw a nice move higher on Friday when it reported its Q2 results. The dealership operator reported an impressive EPS beat, and just as notable was its record Q2 revenue, which grew 7.6% yr/yr to $6.97 bln. While the results were impressive, what seemed to please investors the most was that, despite the 25% tariff on foreign automobiles, the impact was fairly minimal.
- Management noted that AN saw limited additional impact on its Q2 results from tariffs, with MSRP and invoice prices being stable. Additionally, AN noted the June CPI report showed modest month/month declines in new and used vehicle pricing. Management's expectation is that AN will be fairly cushioned from any further tariffs due to its broad portfolio of brands and models.
- The impressive revenue was driven by sales of new vehicles with particular strength in its domestic segment. New vehicle sales increased 8% yr/yr, leading to a +9% increase in same-store new vehicle revenue. Its domestic segment increased 19% yr/yr, and +14% from Q1 on a same-store basis. This tells us its consumers are in better shape than expected, despite the tariffs, and there is a clear preference for domestic vehicles to avoid the tariffs.
- In terms of inventory, AN's supply of used vehicles is at its highest level since June 2022. However, availability remains constrained due to the lingering impact of lower vehicle production during COVID. That said, the company sourced over 90% of its used vehicles through trade-ins and its "We'll Buy Your Car" program, totaling 28,000 units for the quarter.
- AN feels well positioned in terms of its used car inventory for 2H25. However, new vehicle inventory ended the quarter at 41,000 units, down from 44,000 a year ago. While AN doesn't expect the same store unit growth in the first and second quarters to continue in 2H25, it is encouraged by new vehicle sales activity in the last couple of weeks.
- A bright spot appears to be its new hybrid and electric vehicles sales. Hybrid new vehicle unit sales, which is about 20% of AN's volume, increased more than 40% yr/yr, and battery electric new vehicle sales (7% volume), increased nearly 20% yr/yr. This mainly reflects OEM incentives, with some pre-buying ahead of the termination of government incentives.
Amid the healthy number of earnings reports last week, AN was a name that flew under the radar. Given its exposure to foreign automobile tariffs, we had concerns going into this report about what the impact might be. It turned out to be better than expected. The results were solid, and management's commentary around the impact of tariffs seemed to soothe investors' nerves. The stock traded higher on its Q2 results but is pulling back modestly today. With that said, the less-than-feared effect of tariffs is an encouraging sign.
Gentex strong Q2 report on Friday and buybacks caught our attention
Gentex (GNTX) popped 16% on Friday following a surprisingly good Q2 report. That was followed by Gentex being added to Briefing.com's YIELD report late Friday, which tracks share repurchases and dividends. As a result, the name caught our attention and made us want to dig into the story a bit. This automotive supplier (dimmable mirrors, camera-based driver assistance, connected car) beat on EPS/revs, while also raising FY25 revs pretty substantially.
- The Q2 period began with a flurry of activity that has not slowed down. Gentex closed on its acquisition of VOXX on April 1, then moved quickly into a chaotic period of global trade uncertainty that lasted for the entire quarter and remains unresolved. Nevertheless, Gentex said it was a very productive quarter as it was able to perform at a very high level and its operational efficiency improved significantly yr/yr.
- Revenue rose a healthy 14.8% yr/yr to $657.9 mln, which was much better than expected and its highest growth since 4Q23. In fairness, the VOXX addition helped boost growth. However, given the impact that tariffs and counter-tariffs have had on demand for its products, especially in the China market, Gentex was pleased with its results.
- Notably, Gentex had 18 net new nameplate launches of its interior and exterior auto dimming mirrors and electronic features in Q2. Over half of these launches included advanced feature content, with Full Display Mirrors (FDM) and HomeLink being the primary technologies introduced. There are YouTube videos of the FDM, we can see why it's popular. This product has been one of Gentex's primary growth drivers.
- In Q2, FDM launched on the Cadillac VISTIQ, Ferrari 296 GTB, Genesis GV60, Hyundai IONIQ 9, and the Mitsubishi Outlander, bringing its total number of nameplates launched to 139. With six months of actual performance and improved visibility around program launches, Gentex now expects FY25 FDM unit shipments to increase by 150-300K units compared to 2024. Interest in FDM remains strong, even in a challenging production environment, particularly in North America.
- The buybacks are another key part of the Gentex story. The stock has been weak in recent months given the tariffs. However, management apparently sees its stock price as a value buy. GNTX has increased share buybacks. During Q2, it repurchased 5.7 mln shares for $126.2 mln. And year-to-date, it has repurchased 8.8 mln shares for $202 mln. But they are not done apparently. In mid-July mgmt authorized an additional 40 mln shares, representing more than 18% of shares outstanding, which is a huge amount.
Given the flurry of earnings announcements last week, it was easy for Gentex to get lost in the shuffle. However, we wanted to flag the name, especially in light of the increased share buyback activity which propelled it into our YIELD rankings. Sentiment has been low for Gentex recently, but management apparently sees value down here. The stock gapped higher on Friday, so caution is warranted, but there are some positives here.
NIKE runs higher as JP Morgan upgrade bolsters confidence in turnaround effort (NKE)
JP Morgan's (JPM) upgrade of NIKE (NKE) represents a significant vote of confidence for investors, especially given JPM's stature as a tier one firm. This move underscores the growing belief that NKE's "Win Now" turnaround strategy is gaining solid traction as the company emerges from its deepest slump in years. Shares are jumping sharply higher on this analyst action, reflecting market enthusiasm for the company's strategic pivot and renewed growth potential.
- A key development supporting this optimism is the new trade deal with Vietnam, announced in early July, which has alleviated concerns over substantial cost increases that could have forced NKE to either absorb higher expenses or raise prices, both of which risked impacting profitability and consumer demand. Previously, NKE had estimated a $1 bln cost impact in FY26 due to tariffs, a burden it was preparing to offset through price increases and supply chain adjustments.
- This trade agreement not only mitigates that financial pressure but also eases margin constraints, which have been suppressed by higher promotional activity aimed at reducing inventory. In 4Q25, gross margin plummeted by 440 bps yr/yr to 40.3%, with Q1 guidance anticipating a further contraction of 350-425 bps; however, with the largest financial impact of the "Win Now" strategy now absorbed, this development provides a clearer path to margin recovery.
- NKE's efforts to reinvigorate its product lineup through innovation -- a cornerstone of its turnaround plan -- are also showing promising signs of progress. Recent launches like the Pegasus Premium and Vomero 18 are gaining traction among runners, signaling a renewed focus on performance-oriented products that could strengthen its market position. After several months of clearing out outdated inventory, NKE's product line is now largely up to date, enabling improved pricing power and a more competitive stance, particularly against rivals like On Holding (ONON) and lululemon Athletica (LULU).
- Despite these positive developments, challenges remain, notably in Greater China, where revenue declined by 20% last quarter due to softer consumer demand, exacerbated by competitive pressures and nationalistic sentiment. This weakness could continue to weigh on overall growth if not addressed effectively.
JPM's upgrade to Overweight with a $93 price target serves as the catalyst driving NKE's stock higher today, reflecting the firm's increasing optimism about the "Win Now" turnaround plan. With the largest financial hurdles behind it and stronger results anticipated in the back half of 2025, NKE appears poised for a potential rebound, contingent on navigating ongoing regional challenges.
Boston Beer sharply higher on Q2 results; better than feared tariff impact
Boston Beer (SAM +6%) is trading sharply higher today after reporting its Q2 results yesterday after the close. Despite a weaker than expected volume environment and a challenging macro backdrop, the beer and specialty beverages giant (Samuel Adams, Truly, Twisted-Tea) exceeded expectations. The company delivered strong margin expansion and EPS growth. Perhaps just as encouraging to investors is the better-than-feared tariff impact on FY25 EPS.
- Because of the current challenges faced by the beer industry and notably bad weather in key selling weeks (13 consecutive weekends of rain in the Northeast), SAM's depletion softened sequentially and yr/yr. Depletions were down 5% in the quarter, while shipments fared better, being only down 1%. Shipments were mostly driven by wholesaler demand for its new Sun Cruiser and Truly Unruly innovations. SAM expects shipment trends to rebalance with depletions in 2H25.
- Despite the softness, SAM was able to deliver strong margin expansion and EPS growth in the quarter, mainly due to progress on productivity initiatives. These include improved brewery efficiency, pricing actions, and a favorable product mix. Notably, gross margin expanded 380bps yr/yr to 49.8%. As a result, SAM has raised its FY25 margin guidance to 46-47.3% from 45-47%, despite an estimated 70-100 bps tariff headwind.
- A bright spot is its new Sun Cruiser tea. The ready-to-drink spirit (RTD) launched last summer and went national at the start of FY25. The drink has been gross margin accretive and continues to grow volumes week/week. It's being well received by wholesalers, retailers, and consumers. As a result, it has quickly captured a 4% market share.
- Just as encouraging is its updated FY25 EPS guidance. On a positive note, SAM reduced its estimated impact of tariffs on EPS. The unfavorable tariff impact on EPS is now expected to be $0.96-1.28, down from $1.25-1.90. While FY25 EPS guidance excluding tariffs remains unchanged, the smaller tariff hit is being viewed as better-than-feared by investors.
Overall, SAM delivered Q2 results that exceeded expectations despite a challenging environment. Margin expansion, strong performance from new products, and a reduced tariff impact are resonating well with investors. Also, these results tell us that the US consumer is holding up pretty well despite the macro environment. Investors are pleased to see that as well. Finally, the stock has pulled back significantly since mid-May, which tells us sentiment was running low heading into this report. That helps to explain today's big move.
|
