Anna's Markets Recap

_{Just facts, you think for yourself}

Saturday, 5:13 AM

July 19, 2025

Good morning news friend! Here is a quick recap of what happened in the markets this week. 📰🌟

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What Moved Markets Last Week

The week of July 14-18 presented a complex economic picture, forcing investors to weigh conflicting data points. A key divergence emerged between inflation metrics. The Consumer Price Index (CPI) for June showed persistent price pressures, with the annual rate rising to 2.7%, driven by stubborn shelter and energy costs. In contrast, the Producer Price Index (PPI) offered a sign of relief, with wholesale prices remaining flat and the annual rate slowing to 2.3%, below analyst forecasts. This gap suggests that while corporate input costs are easing, these savings have not yet translated to the consumer, potentially allowing companies to rebuild profit margins.

The labor market told a similarly mixed story. While the economy added a solid 147,000 jobs in June, the growth was concentrated in government and healthcare. A concerning signal came from the manufacturing sector, which shed 7,000 jobs and has lost 89,000 positions over the past year, pointing to a slowdown in industrial activity. This underlying weakness was reflected in consumer sentiment, which, despite a minor uptick in July, remains low, suggesting households are still cautious amid high prices and an uncertain outlook. These cross-currents created a volatile backdrop, with sector-specific news driving performance.

Tech and Growth

The technology sector was a tale of two narratives: the continued dominance of the AI theme and the impact of operational stumbles. NVIDIA (NVDA) shares surged to a record high, closing the week at $172.41 after the company announced it would resume shipments of its H20 AI chips to China. The news, following a meeting between CEO Jensen Huang and President Trump, removed a significant overhang for the stock and sent positive ripples through the AI ecosystem, lifting peers like Broadcom and Super Micro Computer.

In contrast, Microsoft (MSFT) spent the week managing the fallout from a massive 19-hour global outage that disrupted its core cloud services, including Teams and Outlook. The failure, attributed to a configuration change, exposed the fragility of hyperscale platforms and created a reputational challenge for its Azure business.

Elsewhere, Alphabet (GOOGL) rallied for an eighth consecutive day, fueled by positive analyst sentiment ahead of its earnings report, with Bank of America raising its price target to $210. Amazon (AMZN) focused on its expanded four-day Prime Day event, heavily featuring generative AI shopping assistants to drive sales. Meta Platforms (META) moved to bolster its AI capabilities by acquiring voice startup Play AI while also taking steps to improve content quality on Facebook. The narrative around Tesla (TSLA) remained fixed on the long-term potential of its Full Self-Driving technology, justifying its high valuation.

Banks and Financials

The financial sector contended with a shifting interest rate outlook and the looming disruption of digital assets. Shares of JPMorgan Chase (JPM) fell after an HSBC downgrade cited valuation concerns. The pressure was amplified by comments from JPMorgan's president, Daniel Pinto, who warned that Wall Street’s forecasts for Net Interest Income (NII)—a key driver of bank profitability—may be overly optimistic given anticipated Fed rate cuts. In a proactive move to manage costs in this environment, Bank of America (BAC) announced it would redeem $2 billion of its higher-cost senior notes.

A significant long-term challenge emerged as the U.S. House designated the week "Crypto Week" to advance legislation for stablecoins. This gained urgency amid reports that retail giants are exploring their own stablecoins, which could allow them to bypass the card networks of Visa (V) and Mastercard (MA). In a direct response, Mastercard hosted a special investor briefing on its stablecoin strategy, signaling its intent to engage with the disruptive technology.

Consumer Goods and Healthcare

Typically defensive sectors were not immune to risk. UnitedHealth Group (UNH) had a catastrophic week, with its stock plummeting after reports confirmed a DOJ criminal investigation into possible Medicare fraud. The crisis was compounded by the sudden departure of CEO Andrew Witty and the suspension of the company's financial guidance, destroying investor confidence.

A major policy threat also loomed over the pharmaceutical industry, with reports of potential 200% tariffs on imported drugs. This poses a direct risk to companies with global supply chains like Eli Lilly (LLY), threatening profit margins despite the company’s efforts to expand U.S. manufacturing.

In retail, Walmart (WMT) announced it was cutting hundreds of corporate jobs to streamline operations. In contrast, Costco (COST) and Procter & Gamble (PG) reinforced their stability by declaring quarterly dividends. In company-specific news, Johnson & Johnson (JNJ) received FDA approval for an updated cardiac treatment platform, while AbbVie (ABBV) announced layoffs in its aesthetics division following a "botched marketing campaign."

Energy and Industrials

The energy and industrial sectors were moved by a major legal ruling and consumer pressure. Exxon Mobil (XOM) suffered a significant strategic blow when an arbitration tribunal ruled against it in a dispute with Chevron (CVX). The ruling clears the way for Chevron to complete its $53 billion acquisition of Hess Corporation, giving it control over a massive, prized oil discovery in Guyana. The decision is a major loss for Exxon and forces the company to rethink its long-term growth strategy.

Meanwhile, Home Depot (HD) found itself targeted by two separate consumer boycott campaigns from different ends of the political spectrum. One campaign criticized the company’s silence on immigration raids, while another alleged the quiet removal of its Diversity, Equity, and Inclusion (DEI) initiatives. These campaigns create a substantial brand risk for the retailer.

Commodities

Amid the broader market uncertainty, gold maintained its status as a key hedge. Gold prices corrected during the week, ending near $3,351 per ounce. However, the broader upward trend remains intact, with technical analysis suggesting a potential for further gains. The metal’s price action reflects investors balancing the dual risks of sustained inflation and a potential economic slowdown.

Did you know we also write in-depth deep dives? They are long, packed with insights, and have received rave reviews. If you’re up for a detailed, action-packed read, check them out:

• The American Healthcare System

• The Social Security Crisis - Anatomy of a Shortfall

• America’s Housing Paradox - An Analysis of the US Housing Market

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Baked with love,

Anna Eisenberg ❤️