ADDX GO Market Morning Wrap - 22nd July

Stock Market  

On Monday, Eastern Time, the S&P 500 and Nasdaq closed at record highs, driven primarily by gains in Alphabet (Google) and other large-cap stocks. This week, investors will focus on earnings reports from the "Magnificent Seven" and updates on trade negotiations.  

 

With the August 1 tariff deadline set by President Trump approaching, the U.S. stock market's bull run faces a significant test. The S&P 500 has risen about 8% year-to-date, with investors betting that the economic impact of tariffs will be less severe than feared.  

 

U.S. Commerce Secretary Lutnick expressed optimism on Sunday about reaching an agreement with the EU, stating, “I believe we can get a deal done, which would be great for America because the President is a strong backer of the country.”  

 

However, EU diplomatic sources revealed that, with prospects of an acceptable trade deal with the U.S. government fading, the EU is preparing broader countermeasures.  

 

Trump has threatened 30% tariffs on goods imported from Mexico and the EU, and sent letters to trade partners like Canada, Japan, and Brazil, proposing tariffs ranging from 20% to 50%.  

 

Matt Maley, an analyst at Miller Tabak, noted that the Trump administration’s increasingly hawkish stance on tariffs is becoming evident, and the key question is whether the market has already priced in this factor.

 

He added, “Earnings season kicks into high gear this week, and corporate guidance will be more critical than ever. For the market to meet Wall Street’s current targets, those guidances need to significantly raise earnings expectations.”  

 

Investors will also watch Federal Reserve Chair Powell’s speech on Tuesday for clues on potential rate cuts, especially after mixed inflation signals last week.  

 

According to the CME FedWatch tool, traders have largely ruled out a July rate cut, with over a 50% chance of a cut in September.  

 

Meanwhile, the Trump administration continues to pressure Powell, with Rep. Anna Paulina Luna filing criminal charges with the Justice Department on Monday, alleging Powell committed perjury twice.

Global Hotspots  

CBO: Build Back Better Act to Add $3.4 Trillion to U.S. Deficit  

 

The Congressional Budget Office estimates that the recently signed tax and spending bill (Build Back Better Act) will increase the U.S. deficit by $3.4 trillion over ten years.

 

The CBO’s analysis indicates the bill includes cuts to Medicaid and provisions that will lead to 10 million Americans losing health insurance by 2034.  

 

Iran’s Foreign Minister: Uranium Enrichment Program Continues  

 

Iran’s Foreign Minister Abbas Araghchi stated on July 21 that Iran’s uranium enrichment facilities were “severely damaged” after a U.S. attack.

 

However, he emphasized that the enrichment program has not stopped, as it is vital to Iran’s national pride.  

 

Zelenskyy: Ukraine Preparing for New Round of Talks with Russia  

 

Ukrainian President Zelenskyy announced on July 21 that Ukraine is preparing for a new round of talks with Russia in Turkey, focusing on prisoner exchanges, child repatriation, and preparations for a leaders’ summit.

 

Ukraine’s National Security and Defense Council Secretary Umerov has proposed the talks to Russia.  

 

Fitch Downgrades 25% of U.S. Industry Outlooks to “Deteriorating”  

 

On July 21, Fitch Ratings stated that policy risks are casting a shadow over U.S. credit prospects.

 

In its mid-year update, Fitch downgraded the 2025 outlook for 25% of U.S. industries to “deteriorating” due to increased uncertainty, slowing economic growth, and expectations of prolonged high interest rates.

 

The recently passed tax and spending bill highlights long-term fiscal challenges for the U.S., particularly pressuring healthcare-related industries.  

 

Egg Prices Cool, but U.S. Beef Prices Hit Record Highs  

 

For U.S. consumers, beef prices are now surging after egg prices spiked to record highs earlier.

 

Egg prices have eased as avian flu was controlled and suppliers restored production. However, beef prices are now hitting new records, with experts warning that a decline will be more challenging.  

Company News  

Neuralink Completes Two Surgeries in One Day  

 

Elon Musk’s brain-computer interface company Neuralink announced on July 22 that it successfully completed surgeries for patients P8 and P9 over the weekend, marking the first time it performed two surgeries in a single day.

 

Both patients are recovering well and in good spirits. Musk stated, “Imagine your loved ones walking again or a parent with dementia recognizing their children again. Neuralink will ultimately transform millions, even billions, of lives.”  

 

JPMorgan Shuffles Quantum Computing Team Leadership  

 

JPMorgan has restructured the leadership of its research group focused on quantum computing and advanced technologies.

 

According to sources, former IBM inventor Marco Pistoia, who led the applied research group since 2020, has recently left. A Monday memo revealed that JPMorgan hired Rob Ott, former head of digital technology and quantum computing at State Street, to replace Pistoia.  

 

OpenAI and UK Sign Strategic Partnership  

 

On Monday, the UK government announced a “strategic partnership” with OpenAI, focusing on AI safety research and infrastructure investment.

 

OpenAI will expand its London office, its first overseas site opened two years ago, further strengthening its research and engineering teams as part of its global expansion.  

Forex & Commodities  

International oil prices fell.  

 

At close, NYMEX WTI crude futures for the front-month contract dropped $0.10 to $65.95 per barrel, down 0.15%. ICE Brent crude futures for the front-month contract fell $0.07 to $69.21 per barrel, down 0.10%.  

 

COMEX gold futures for the front-month contract rose $48.10, up 1.43%, to $3,406.4 per ounce.  

 

At the New York close, the U.S. dollar index fell 0.64% to 97.83, with most non-U.S. currencies rising.  

Key Events  

Yen Rebounds 1% After Ishiba’s Defeat  

 

On Monday (July 21), the yen strengthened over 1% against the dollar in early New York trading.

 

Japan’s Senate election results showed that the ruling coalition of the Liberal Democratic Party and Komeito failed to secure a majority, impacting Japan’s political landscape.

 

Earlier, per Xinhua, Prime Minister Shigeru Ishiba stated at a press conference that he would remain in office despite the coalition’s loss of a Senate majority.  

Cryptocurrency  

Major digital assets showed mixed performance on Monday.  

 

Bitcoin fell 1.3% to $116,852, with 24-hour trading volume surging 34.1% to $70.39 billion.

 

Ethereum (ETH-USD) dropped 0.9% to $3,733.  

 

XRP (XRP-USD) lost 0.1%, BNB (BNB-USD) gained 0.4%, and Solana (SOL-USD) rose 6.3%. Dogecoin (DOGE-USD) shed 3%, and Cardano (ADA-USD) climbed 0.5%.  

 

The total market value of the cryptocurrency industry fell 0.7% in the past 24 hours to $3.9 trillion, with trading volume up 26.9% to $210.97 billion.  

Key Events  

Trump Media & Technology Group Holds $2 Billion in Bitcoin Assets  

 

Trump Media & Technology Group (DJT) announced it holds nearly $2 billion in Bitcoin and related securities, accounting for two-thirds of its $3 billion in liquid assets, based on its previously announced Bitcoin reserve strategy. This has sparked a new wave of speculation in crypto-related stocks.