Market Overview
The S&P 500 achieved a new record, driven by a combination of strong performances in mega-cap stocks and continued momentum in the small-cap and mid-cap spaces. Tesla (TSLA, Financial) posted better-than-expected Q2 delivery figures, while Apple (AAPL, Financial) received an upgrade from Jefferies.
- S&P 500 closed at a record high
- Tesla (TSLA, Financial) gained 4.97% after favorable delivery reports
- Apple (AAPL, Financial) appreciated 2.22% following an upgrade
- NVIDIA (NVDA) and Alphabet (GOOG, Financial) benefited from AI enthusiasm
Sector Performances
Energy, materials, and information technology were the best-performing sectors. Meanwhile, the health care sector underperformed due to significant losses in Centene (CNC) following updated guidance.
- Energy sector: +1.7%
- Materials sector: +1.3%
- Information technology sector: +1.3%
- Health care sector: -1.0%, impacted by Centene's (CNC) guidance withdrawal
- Financials sector: -0.1%, despite banks' plans to raise dividends or repurchase stock
Employment and Legislative Updates
The ADP Employment Change Report showed a job loss, but investors are awaiting more comprehensive data from the upcoming June Employment Situation Report. In legislative news, the "One Big, Beautiful Bill" remains stalled, with its passage likely delayed.
- 33,000 jobs lost in the ADP Employment Change Report
- June Employment Situation Report expected soon
- Delays in passing the proposed legislative bill
Global Markets and Commodities
Mixed performances were observed in global markets, with notable changes in Europe and Asia. Commodities, particularly crude oil and gold, saw price increases.
Guru Stock Picks
Jana Partners has made the following transactions:
- Reduce in LW by 7.94%
Andreas Halvorsen has made the following transactions:
- Reduce in BBIO by 15.65%
Stock News
- Alibaba (BABA, Financial) is launching a 50 billion yuan ($7 billion) subsidy program to enhance its instant commerce operations amid rising competition. The initiative aims to support both consumers and merchants on its Taobao platform, as Alibaba faces pressure from rivals like PDD Holdings (PDD, Financial) and JD.com (JD, Financial) in China's competitive food delivery market.
- Lockheed Martin (LMT, Financial) has secured a nearly $3 billion contract from the U.S. Department of Defense to upgrade the Aegis ballistic missile defense system. This 10-year contract will cover software upgrades for various systems, including those in Guam, Poland, and Romania, reinforcing Lockheed's long-standing role as the prime contractor since 1995.
- KKR & Co. (KKR, Financial) has agreed to acquire Spectris (OTCPK:SEPJF) for £4.1 billion ($5.6 billion), surpassing an earlier bid by Advent. The deal values Spectris at 40 pounds per share, a 6.3% premium over Advent's offer, and marks KKR's third takeover proposal for the UK-based precision instruments maker.
- Tesla (TSLA, Financial) reported a 0.8% year-over-year increase in China-made electric vehicle sales for June, ending an eight-month decline. Despite the modest recovery, Tesla faces stiff competition from local rivals like BYD (OTCPK:BYDDF) and NIO (NIO, Financial), which reported significant sales growth. Tesla's shares rose 1.1% premarket as investors await its Q2 deliveries report.
- Elon Musk has taken over Tesla's (TSLA) sales operations in Europe and the US following the departure of a key executive. This move comes as Tesla grapples with declining vehicle deliveries and increased competition. Musk's political involvement has also impacted Tesla's sales in key markets.
- Foxconn (OTCPK:FXCOF) has reportedly withdrawn hundreds of Chinese staff from its Indian iPhone factories, posing a challenge to Apple's (AAPL, Financial) manufacturing expansion in the region. The move may be linked to China's efforts to control technology transfers, affecting Apple's strategy to diversify production outside China.
- SoftBank (OTCPK:SFTBY) faces a U.S. Federal Trade Commission investigation into its proposed $6.5 billion acquisition of semiconductor company Ampere. The probe could delay the deal, which aims to bolster SoftBank's AI infrastructure investments. SoftBank's CEO emphasized the acquisition's role in advancing AI innovation.
- U.S. Bancorp (USB, Financial) plans to raise its quarterly dividend by 4% following successful Federal Reserve stress tests. The bank will also continue its $5 billion share repurchase program, reflecting strong capital levels. The stress capital buffer for U.S. Bancorp is set to decrease, indicating improved financial stability.
- Thoma Bravo is in discussions to acquire Verint Systems (VRNT, Financial), a software company for call centers. Verint's stock surged 16% in after-hours trading amid acquisition talks. The company has been seeking a buyer as its stock has declined over 30% year-to-date.
- Apple (AAPL) received an upgrade to Hold from Jefferies, citing potential surprise growth in iPhone sales for Q3. Despite this optimism, Jefferies anticipates a slowdown in sales later in the year, particularly in the services revenue segment, as global iPhone sales showed strong growth in recent months.
- Google (GOOG, GOOGL) was ordered to pay $314.6 million to Android users in California after a jury found it misused cell phone data. The lawsuit claimed Google collected data without consent, leading to unnecessary costs for users. Google plans to appeal the verdict, arguing the data collection was part of essential services.
- Regeneron Pharmaceuticals (REGN, Financial) received FDA accelerated approval for its multiple myeloma therapy, Lynozyfic. The approval is based on promising trial results, though the drug's continued approval will depend on further confirmatory trials. The therapy includes a Boxed Warning for potential side effects.
- Merck (MRK, Financial) announced that the FDA granted priority review for a label update for its PAH treatment, Winrevair. The update follows positive results from the Phase 3 ZENITH trial. The FDA's decision is expected by October 2025, potentially enhancing Winrevair's market position.
- Ingersoll Rand (IR, Financial) acquired Termomeccanica Industrial Compressors and its subsidiary Adicomp for €160 million. The acquisition aims to strengthen Ingersoll Rand's capabilities in the renewable natural gas sector, with expected synergies improving the deal's financial attractiveness.
- Coinbase (COIN, Financial) has acquired the token management platform LiquiFi, furthering its strategy to offer integrated services for blockchain businesses. The acquisition aligns with Coinbase's goal to dominate the institutional crypto market, though financial terms were not disclosed.
GuruFocus Stock Analysis
- Amazon (AMZN) Price Target Raised to $250 at Truist on Strong Q2 Outlook by Faizan Farooque
- Microsoft to Cut 4% of Workforce as AI Spending Pressures Margins by Faizan Farooque
- Google (GOOGL, Financial) Offers New EU Proposal to Avoid Antitrust Penalty by Faizan Farooque
- Rivian (RIVN) Dips as Q2 Production Misses the Mark by Faizan Farooque
- Glencore Unleashes $1B Buyback After Viterra Exit--Is a Stock Comeback Brewing? by Khac Phu Nguyen
