Morning Brew July 21 2025

Good morning,

Friday was a day of little inspiration, with markets overall moving minimally. Looking back at last week, it was relatively uneventful, except for the fact that we traded at all-time highs: the Dow gained 0.07%, the S&P 500 gained 0.6%, and the Nasdaq rose by 1.5%.

The main noteworthy movements were seen in Netflix and cryptocurrency stocks. Netflix fell 5% despite reporting good earnings and presenting a strong outlook. Meanwhile, both Coinbase and Robinhood traded higher following U.S. legislation on cryptocurrencies, with former President Trump expressing openness to include crypto in retirement plans.

The University of Michigan's Consumer Sentiment Index increased this month, though consumers remain concerned about future price pressures. In the UK, Deloitte reported that its consumer confidence index dropped by 2.6 percentage points to 10.4% in the second quarter, marking its lowest level since the first quarter of 2024, according to Reuters. Additionally, Japan’s ruling coalition lost its upper house majority.

US Yields are a little lower this morning, the 30 year is back below the 5% and the 10`s are at 4.40. EURUSD is 1.1630. The Yen is a little stronger after the Japanese election to trade at 148.00. Gold ans Silver are friendly at 3367 and 38.30

The crypto market reached a market cap of $4 trillion for the first time, making it comparable in value to Nvidia. U.S. Commerce Secretary Lutnick expressed confidence that the United States can secure a trade deal with the European Union.

Trump is suing the Wall Street Journal over an Epstein report, seeking $10 billion in damages.

Upcoming earnings releases are poised to drive this week's market activity. Companies like Tesla, Alphabet, SAP, Coca Cola, VW, Nestle, and Roche are on the docket. Among key EU earnings, which will be the most watched? Will it be the two of the Magnificent 7 or the defense stocks, like RTX, Thales, and Lockheed?

While there aren't any critical data releases expected, surprises in those might impact the market. U.S. politics, along with tariff negotiations, have the highest potential to influence market shifts.

Monday, July 21

- People's Bank of China Interest Rate Decision

- US: CB Leading Index (MoM)

- Canada: PPI (MoM, YoY), Raw Materials Prices (MoM, YoY).

Earnings: Verizon. Ryanair

Tuesday, July 22

- Eurozone: ECB Bank Lending Survey[1].

- US: Fed Chair Powell Speech; Richmond Fed Manufacturing Index.

- US: Redbook year-over-year growth.

- US: 10-Year TIPS Auction.

- US: 15-Year and 30-Year Mortgage Rate updates.

- US: Fed Balance Sheet release.

Earnings: Lockheed Martin, Coca Cola, Phillip Morris, GM, RTX, SAP, Texas Instruments,

SAP: Investors are looking for whether Europe’s largest software company can maintain its momentum from Q1 results which saw the shares surge on forecast-beating income and strong cost discipline, with the company enjoying rising demand for its cloud-based services related to the AI boom. Shares rallied the most in six years on the last set of results and are up 10% YTD.

UniCredit: Stock is up 50% YTD as European bank stocks enjoy a rare boon. UniCredit has raised its stake in Commerzbank to 20% and signaled its interest in a possible takeover – investors will want to know more about this and its takeover of rival Banco BPM, which has been dealt a blow after an Italian court ruled UniCredit must exit Russia to complete the transaction.

Compass Group: Post-Covid return-to-normal winner, the contract food business Compass may see tailwinds from US payrolls continuing to surprise as 68% of group revenues are from the US. Last update saw management stick to annual guidance despite an 8.5% rise in organic turnover. It expects full-year high single-digit growth in underlying operating profits, supported by revenue increase 7.5%. Look for any shift in the guidance after this quarter now there is perhaps a little more visibility for the FY and on tariffs.

Wednesday, July 23

- Eurozone: Consumer Confidence Flash.

- US: Existing Home Sales and MBA Mortgage data.

- US: EIA Crude Oil, Gasoline, Distillate, Heating Oil, and Refinery Stocks data.

- Canada: New Housing Price Index (MoM).

Earnings: Alphabet, Tesla, AT&T,

Thales: This European defence spending winner soared after Q1 results and is up around 80% YTD. Europe's largest defence electronics posted like-for-like adjusted operating income up 5.7% to €2.42 billion as revenues gained 8.3% to €20.58 billion in Q1. Investors looking for signs of continued order inflows and commentary around the German/French spending commitments, particularly after French President Macron said the country would increase military spending to €64bn by 2027, an additional €3.5 billion in 2026 and €3 billion in 2027 that will take the total to double the run rate of 2017.

Thursday, July 24

- Global Flash PMIs (Germany, Eurozone, UK, US, France

- European Central Bank Interest Rate Decision and press conference

- Switzerland: SNB Chairman Schlegel Speech.

- UK: CBI Business Optimism Index, CBI Industrial Trends Orders.

- Turkey: Interest rate decision.

- Japan: Tokyo CPI and Core CPI updates.

- US: S&P Global Manufacturing, Services, and Composite PMI Flash Initial and Continuing Jobless Claims, Fed Balance Sheet.

Earnings: American Airlines, Nokia, Nasdaq, Intel,

Roche: The Swiss drug giant reported 6% growth in group sales in Q1, driven by an 8% increase in pharmaceutical sales, though diagnostics was flat. The company stuck to its full-year guidance of mid-single-digit sales growth, despite a 5% negative impact from currency fluctuations. The key focus could be on Trump’s tariffs on pharmaceuticals, which he has threatened to introduce by 1 August. Roche said in the Q1 earnings call it was satisfied with mitigating tariffs, for example by shifting inventories. Investors will want further reassurances in the Q2 call – so far the stock has failed to recover much from its post Liberation Day lows.

Nestle: The world’s largest packaged foods group said the impact of US tariffs was "unclear" when it reported better-than-expected first-quarter organic sales growth. The firm, which at the same time hiked prices for its Kit-Kat chocolate bars and Nescafe coffee, maintained its 2025 outlook, expecting organic sales growth to improve operating profit margin of at least 16%. Investors will be searching for whether management can offer any fresh perspective on tariffs, and how it judges tailwinds from declining cocoa prices, which have halved since the start of the year.

Lloyds: Shares of the UK bank have risen about 40% so far this year and expectations are for continued growth in net interest income (NII), which rose 3% in Q1 to £3.29bn. Q1 saw net interest margins rise to 3.03% from 2.97%. Morgan Stanley forecasts this to tick up further to 3.06% and 2.1% QoQ growth in NII. About the same time as the results we are expecting a Supreme Court ruling on motor finance, which several analysts have said could be a positive catalyst for the stock and the broader bank sector in the UK.Investors will be happy to get clarity on this front as it could remove an overhang for the shares. Investors will also want to hear more about the £4bn investment plan to develop new revenue streams to make it less reliant on NII. Lloyds Q1 profits fell 7% to £1.5bn, in line with forecasts, due to increased provisions for bad loans and the expected impact of tariffs – look for signs that they are less worried than three months ago on those fronts.

Friday, July 25

- UK: Retail Sales

- Germany: Ifo Business Climate, Current Conditions, Expectations.

- Eurozone: ECB Survey of Professional Forecasters.

- Italy: Business and Consumer Confidence.

- Eurozone: Loans to Companies/Households, M3 Money Supply.

- US: Durable Goods Orders

- US: Baker Hughes Oil and Total Rig Count.