Weekend Update, July 21st, 2025
Summer Tailwinds
Index, Sector, and Asset Performance
The S&P 500 extended its new ATH run last week, with equity indices generally higher with DJIA -0.1%, S&P 500 +0.6%, and NASDAQ Composite +1.5%. In the bond market, shorter term yields fell, dropping as much as -3 bps at the 5-year maturity but rose as much as +4 bps at the back end. The U.S. dollar gained +0.6% amongst a resounding chorus of its on-going “demise.” Investors should be wary of a rebounding dollar in the coming months as an excuse/reason for a normal summer retreat in many indexes and sectors.
On Friday, the Financial Times reported that President Trump is pushing for a 15% to 20% minimum tariff on all imports from the European Union, reigniting trade tensions.
Tech stocks and crypto led gains last week including: Palantir Technologies: PLTR +8.04% Palantir was upgraded from Underperform by Mizuho Securities as its sustained revenue growth has proven to be stronger than expected and has changed the minds of doubters. Advanced Micro Devices: AMD +7.22% Evercore sees potential upside to 2025 estimates for Advanced Micro Devices after the company said that it will resume shipments of its MI308X chips to China after receiving U.S. approval. Oracle: ORCL +6.46% Evercore ISI to name the company as the “fourth global hyperscaler.” Evercore maintained its Outperform rating on Oracle and boosted its price target to $270 from $215.
Among declining sectors, energy fell -3.9%, health care declined -2.6%, and materials lost -1.3%.
Year-to-date, blockchain, gold, defense contractors, technology, and non-US stocks have led, while the US dollar, oil, construction, and cannabis stocks have been left behind. Here’s an expanded sector performance summary from Erik Conley.
Economic Indicators and Earnings Commentary
Signs of inflationary pressures in the CPI report were cancelled out by PPI at 0% and good retail sales, and the bullish trend continued slowly higher. CPI showed some subtle signs of tariff-induced price pressures. If one strips out the drop in the auto’s components, core CPI would have risen by 0.55%.
US consumer sentiment rose in July to a five-month high. Sentiment remains 16% below the December 2024 level and well below its historical average.
Behind the scenes in the real time bond market, inflation expectation/break evens are beginning to turn up slightly from about 2.45% at the same time real growth expectations (TIPs) are roiling over. Historically, these two things have proceeded with market stalls and occasionally squalls over the coming 2-3 months.
Later this week, existing home sales come on Wednesday and durable goods orders on Friday. Durable goods orders likely fell last month -10.0% amid a drop in the transportation component (usually aircraft orders).
Netflix had a -3.11% drop even though they reported revenues of $11.08B, versus the expected $11.06B, and earnings per share of $7.19, versus the expected $7.07.
Charles Schwab rallied +2.9% on record 2q25 results with +25% YTY revenue growth and +60% in GAPP income. It opened over +1mm new brokerage accounts and had +80 billion in new AUM, up 31% YTY.
This week’s earnings includes Verizon Communications (VZ), Coca-Cola (KO), Philip Morris International (PM), Alphabet (GOOG, GOOGL), Tesla (TSLA) and IBM (IBM).
Commodities and Currencies
Oil continues to do little.
Gold is stuck near $3,350/oz.
Bitcoin rallied toward $120k with Ethereum ($3,750) taking the lead in the public’s eye for momentum around stable coins.
Oak Harvest Weekly Stock Talk
Nothing but Net, Summer Seasonality
Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
