MARKET WRAP

Stocks rallied across the board today, with the major indices notching fresh all-time highs. Today’s move was broad-based with very little intraday hesitation. The session started with a dose of relief following the announcement of a trade deal with Japan. The specifics of the deal didn’t seem to matter much as the belief that the overall tariff fallout might be less severe than feared. On the day: SPX +0.8%, QQQ +0.4% and IWM +1.5%.

Elsewhere, Gold was lower (as was the dollar), the US10YY ticked higher, now 4.39%, Oil was quiet. One notable thing was the collapse in the VIX, now back to 15.43. Traders liked today’s more broad based rally than the mixed signals day to day recently. They took vol to the woodshed in response with the assumption of an underlying bid still confirmed.

Notable Gainers: BKR +11.5%, PLTR, +3.7%, TTD +3.6%, AZN +3.6%, MRK +2.9%, GS +2.5%

Notable Losers: TXN -13.3%, MSTR -3.3%, FI -13.3%, ENPH -14.2%, ON -4.5%

After hours: It’s still early but Chipotle CMG with the big after hours earnings move, -9%. Alphabet and Tesla fairly quiet following their reports, conference calls to come.

• MRKT Call: John Butters of FactSet joins to talk earnings growth numbers, and what to watch for this season as far as guidance and tariff commentary. Guy and Dan look at the AI story vs the 90’s IT bubble. Finally, previewing Tesla earnings and then a look at the latest meme stock craze.

• RiskReversal Pod: Dan hosts Mike Walrath, CEO Yext⁠. They discuss digital media evolution, especially in the context of generative AI, the effects of fragmentation in search experiences, and more.

MRKT MATRIX: TODAY’S TOP STORIES

• Dow jumps 400 points, S&P 500 hits another record as Trump hatches trade deals before deadline (CNBC)

• Trump Strikes Deal With Ally Japan Setting Tariff Rate at 15% (Bloomberg)

• Canada Says It Won’t Accept a Trade Deal With the U.S. at ‘Any Cost’ (NYTimes)

• EU Readies €100 Billion No-Deal Plan to Match US 30% Tariff (Bloomberg)

• US Tariffs Are Changing Europe’s Approach to Chinese Investment (Bloomberg)

• Trump Goes to Bat for Big Tech in Global Trade Talks (WSJ)

• GoPro, Krispy Kreme Surge as Markets Abuzz About Meme Stocks (Bloomberg)

• Goldman Sachs and BNY join forces to transform $7.1 trillion money market industry with digital tokens (CNBC)

• Texas Instruments shares sink as tariff risks cloud chip demand outlook (Reuters)

WHAT’S NEXT?

Today’s rally was confident, with volatility fading fast. The VIX fell back below 16, even as Treasury yields ticked slightly higher on the day. After the bell, Alphabet and Tesla are fairly quiet so far, we’ll see more on tomorrow’s open. But stepping back, the market seems to have passed an early-week test, when it briefly looked like a test from the highs could be setting up. The test didn’t last long as buyers stepped in once again, holding the recent consolidation levels and keeping the underlying bid intact.

That said, there’s some action on the periphery that’s worth watching. Over the past week, there’s been a noticeable surge in speculative trading, with meme stocks, crypto-themed names, SPACs, and more. It’s the kind of behavior that often shows up late in a rally. But it’s also important to remember: these speculative phases can last longer than you think. The current environment is starting to draw comparisons to early 2021, when the market had just ripped back to new highs after the COVID crash. That period saw the birth of the Gamestop frenzy in January, yet stocks kept climbing for most of the rest of the year before eventually topping out.

The key difference now? The backdrop for rates. In 2021, the 10-year Treasury yield had a 1-handle. Today, we’re mid 4% territory. That changes the cost of speculation, and may ultimately put a different spin on how long this latest run can last.

For tomorrow, some global economics, as well as new home sales here (housing related stocks have been volatile of late). On the earnings front, Intel, airlines and Newmont. One note on LUV, and AAL, both of their expected moves have increased into the print, showing a bit of investor apprehension:

Thursday, July 24th

• Pre-market: BX 3%, AAL 7.5%, LUV 6.5%

• 8:15am - ECB Rate Decision

• 9:45am - S&P Global PMI

• 10am - New Home Sales

• After-hours: INTC 7.6%, NEM 5.1%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: It All Comes Down To Earnings...

A look at today’s rally with SPX making new highs. John Butters from FactSet joins to talk earnings growth, and what to watch for this earnings season as far as guidance and tariff commentary. A look at the AI bubble vs the 90’s IT bubble. Previewing Tesla earnings then a look at the latest meme stock craze.

• Analysis: S&P e-mini, Nasdaq 100 e-mini, The dollar, TSLA, US10YY, TLT, KSS, OPEN, DNUT, Bitcoin, Gold, TXN, FI, COF, 

• Earnings preview: Tesla

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s newest episode: A Japan Deal Inked, Agentic Assistants & AI Browser Wars with Yext CEO Mike Walrath

Dan and Guy discuss the recent announced trade deal with Japan along with earnings to watch out for this week.

After the break, Dan Nathan hosts Mike Walrath, CEO and Chairman of the Board of ⁠Yext⁠. They discuss Yext's role at the forefront of digital media evolution, especially in the context of generative AI. Mike shares insights from his entrepreneurial journey, including founding and selling companies to Yahoo and Oracle, and his transition from a private market founder to leading a public company. The conversation covers the challenges and opportunities in digital advertising, the impact of AI on search and answer engines, and future business strategies. Mike also addresses Yext's mission, the effects of fragmentation in search experiences, and how structured data plays a crucial role. The discussion dives into broader market trends, including the browser wars and the potential future disruptions in consumer experiences due to AI.

Learn more about our sponsor Betterment, Current, and RBC Capital Markets.

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