Archive for July, 2025

• Morning News: July 31, 2025
  Eddy Elfenbein, July 31st, 2025 at 7:06 am

  China’s Small Workshops Are Hurting. Trump’s Tariffs Are Only One Reason.

  China Official PMIs Signal Impending Slowdown

  Bank of Japan Raises Price Forecasts, Fueling Rate-Hike Hopes

  Eurozone Proves Robust as Joblessness Stays at Record Lows

  French Inflation Stays Steady as ECB Holds Rates

  Thailand and Cambodia Reach Trump Trade Deals, U.S. Official Says

  Trump’s Tariff Authority Is Tested in Court as Deadline on Trade Deals Looms

  Murky Pledges of Investment Cast Shadow on Trump’s Trade Deals

  Countries Promise Trump to Buy U.S. Gas, and Leave the Details for Later

  Trump Just Crashed the Copper Market

  Wheat Holds Near May Low, Weighing Strong Dollar and US Exports

  $30 Potatoes and $300 Flour in Gaza: Prices So High They’re ‘Meaningless’

  When Does Capitalism Become Predatory?

  One Way to Ease the US Debt Crisis? Productivity

  A Worthless Number (GDP) Rises Not Due to Growth, But Because It’s Worthless

  Powell Bucks Pressure, Dissents in Showing Resolve on Inflation

  Trump’s Fight With the Fed Won’t End With Rate Cuts

  How Podcast-Obsessed Tech Investors Made a New Media Industry

  StanChart CEO Says ‘Shame on’ Big Banks Quitting Net Zero Group

  The Condo Market Is Floundering: Four Charts That Explain the Downturn

  Blackstone Is Not Making Housing More Expensive

  China Summons Nvidia Over ‘Backdoor Security’ Risks of A.I. Chips

  Meta Shares Soar as Ad Business Continues to Fuel AI Ambitions

  Microsoft’s Cloud Unit, Bolstered by AI Demand, Supercharges Earnings

  Coal-Powered AI Robots Are a Dirty Fantasy

  How an ‘Entrepreneur of the Year’ Brought the First Big Bust to AI Boom

  Texas Highways Have a New Nighttime Creature: Autonomous Trucks

  Mercedes and Porsche Squeezed by U.S. Tariffs and Slowdown in China

  Ford Is Latest Carmaker to Blame Tariffs for Profit Slump

  Lilly’s Mounjaro as Effective on Heart-Attack Risk as Older Drug

  AB InBev Shares Plunge as Sales Volumes Miss Forecasts

  British American Tobacco Backs Guidance on Better-Than-Expected Earnings

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• Morning News: July 30, 2025
  Eddy Elfenbein, July 30th, 2025 at 7:13 am

  Xi Ties His Legacy and China’s Economy to $167 Billion Dam

  China Politburo Holds off on Further Stimulus

  Singapore’s Central Bank Stands Pat as U.S. Tariffs Loom

  Cooling Australian Inflation Locks In August Rate Cut

  Eurozone Economy Shows Signs of Resilience Even as Tariffs Bite

  Trump’s Trade Deals Come With Few Details to Flesh Out Big Numbers

  World Bank Plans Securitization, Debt Swaps to Boost Development

  Trump Keeps Pressuring the Fed to Cut Rates. Here’s Why Its Independence Matters

  Fed to Avoid Clear Signal on Rate-Cut Timing

  Fed Governors Could Break Ranks as Trump Intensifies Powell Pressure

  S&P 500 Breaks Winning Streak After U.S.-China Meeting Ends Without a Deal

  UBS Profit Beats Estimates as Ermotti Sees Brighter Outlook

  HSBC Profit Tumbles as China Losses Mount

  Conspiracy Theorists Found a New Boogeyman: Payroll Data

  Harvard Created Windfall From Bringing Executives Back to School

  Lina Khan: A Secret to Zohran Mamdani’s Success

  Copper Market in Tumult Waiting for Details of Trump’s 50% Tariff

  Even Nuclear Experts Are at a Loss Right Now

  Top F.D.A. Official Resigns Under Pressure

  Ozempic Maker’s Stock Plunges 20% After Profit Warning

  Palo Alto Networks Nears Over $20 Billion Deal for Cybersecurity Firm CyberArk

  Russia Builds a New Web Around Kremlin’s Handpicked Super App

  TikTok Asks Users to Help Police Misinformation

  America’s First Transcontinental Railroad Will Boost Our Supply Chain

  How a Railroad Mega-Merger Years in the Making Came Together

  Boeing Takes Slow Approach to Expansion

  Mercedes and Porsche Squeezed by U.S. Tariffs and Slowdown in China

  Adidas Shares Tumble After Sales Miss, Guidance Confirmation

  How a Chinese Brand Reshaped Hong Kong’s Food Delivery Scene

  Starbucks Abandons Mobile Order, Pickup-Only Stores

  Kraft Heinz Raised Prices More Than Expected to Beat Estimates

  Hershey Trims Profit Guidance on Tariffs, Higher Cocoa Costs

  The New ‘Perfect Combination’: The Reese’s Oreo Cup? The Oreo Reese’s Cookie?

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• CWS Market Review – July 29, 2025
  Eddy Elfenbein, July 29th, 2025 at 10:10 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  The Stair-Step Rally

  Lately, the 20-day moving average has been the big star on Wall Street. I have to confess that I usually don’t follow the 20-DMA—it’s just too small.

  But now it’s hit the big stage. Why do I say that? Because the S&P 500 has closed above its 20-DMA for the last 66 days in a row. That’s the longest streak in 28 years.

  

  More importantly, looking at the 20-day moving average tells the story of the current market. Namely, the S&P 500 has been steadily moving higher, but very slowly. We haven’t had a 1% daily move in over one month. In five of the last eight trading sessions, the S&P 500 has closed, up or down, by less than 0.15%.

  Tiny steps, but steadily upward. That’s been the story of this summer market.

  The stock market was down today but not by much. Today was also a good day for many lower volatility stocks. I suspect this trend will continue (with some hiccups).

  Frankly, the stock market needs to broaden out. Since April, the S&P 500 Equal Weighted ETF (RSP) has fallen behind the rest of the market. That means that fewer stocks are doing the heavy lifting.

  Earnings continue to dominate Wall Street. This week, 164 S&P 500 companies are due to report results for Q2. We’re now about one-third of the way through earnings season and, to be fair, the results are a mixed bag.

  For example, more companies are beating expectations, but they’re doing it by less. That tells me that companies are doing a better job of guiding analysts. Earnings growth appears to be tracking higher than expected. Still, this looks to be one of the slowest growing quarters for corporate earnings in a few years.

  Let’s look at some numbers (via FactSet). So far, 34% of companies in the S&P 500 have reported earnings. Of those, 80% have beaten expectations. That’s a very strong number. Companies are reporting earnings that are 2.3% above estimates. Historically, that’s not so hot. The five-year average has been 9.1% above expectations.

  Overall earnings growth for Q2 is tracking at 6.4%. If that number holds, it will be the closest growth since Q1 of 2024 which was 5.8%.

  Wall Street is still optimistic for what’s ahead. For Q3, Wall Street expects earnings growth of 7.6%, and 7.0% for Q4. That works out to full-year earnings growth of 9.6%. That gives the market a forward P/E Ratio of 22.4. That’s pricey. It’s above the 10-year average of 18.4%.

  One story of this earnings season is that those that fall short of expectations have been clobbered. According to Bloomberg Intelligence, companies that miss earnings have lost nearly 5% the day after the report. That’s worse much than usual.

  This is a very busy week for Wall Street. Obviously, the earnings reports are the big story, but we also have a Federal Reserve meeting. The Fed folks started their two-day meeting today. The Fed will release its policy statement tomorrow at 2 pm ET.

  I’ll spoil the drama for you: the Fed won’t make any changes to interest rates. Not this time. After that, however, things get interesting. For now, Wall Street expects a 0.25% rate cut after Labor Day. While this has been expected for some time, it’s not a slam dunk. In the futures market, the odds of a September rate cut are around 66%.

  

  After that, futures traders expect one more cut before the end of the year, and two or three more next year.

  Tomorrow, the government will release its first estimate for Q2 GDP growth. This is important because the GDP report for Q1 wasn’t very good. According to BEA, the U.S. economy shrank at a real annualized rate of 0.5% for the first three months of this year. For Q2, the consensus is for growth of 2.3%.

  If a Fed meeting, GDP and corporate earnings aren’t enough, we’ll also get the big July jobs report on Friday. Tomorrow, we’ll get a sneak preview when ADP releases its report on private payrolls.

  Earlier today, the Labor Department released its report on job openings. There were 7.4 million vacancies last month. That’s down from 7.7 million in May. This is more evidence that the labor market is cooling off.

  For Friday, Wall Street expects the unemployment rate to tick up by 0.1% to 4.2%. The expectation is that the economy added 115,000 net new jobs last month. That’s down from 147,000 in June.

  In the last report, private payrolls increased by just 74,000. The problem is that state and local governments added 64,000 education jobs. I’m glad to see those folks working but for long-term health, we need to see growth in the private sector.

  In 2023, the economy averaged creating over 210,000 new jobs each month. Last year, that fell to an average of 167,000 new jobs. So far this year, the economy is averaging just 130,000 new jobs each month. Friday will probably be more of the same.

  I’m also curious to see if wage growth has been holding up well. I think it’s fair to say that the U.S. economy is broadly positive with some areas of concern. For example, many young home buyers have been pushed out of the market.

  Possible Stocks for Next Year’s Buy List

  It’s still only July, but I wanted to share with you some names that I’m considering for next year’s Buy List.

  As usual, our Buy List holds 25 stocks. We don’t make any changes during the entire year. Then at the end of the year, five new stocks are added, and five old stocks are kicked out.

  These are 12 stocks that are on my radar. Bear in mind that these are only names I’m currently looking at. There’s no guarantee that they’ll be one of the five I choose in December.

  Accenture (ACN)

  Cadence Design Systems (CDNS)

  Cintas (CTAS)

  Costco Wholesale (COST)

  IDEXX Laboratories (IDXX)

  Labcorp (LH)

  Marsh & McLennan (MMC)

  McKesson (MCK)

  ServiceNow (NOW)

  Synopsys (SNPS)

  UFP Technologies (UFPT)

  Waters (WAT)

  That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

• Morning News: July 29, 2025
  Eddy Elfenbein, July 29th, 2025 at 8:45 am

  U.S. Exporters Get Welcome Surprise in Trump Tax Law

  Trump Team Seeks to Solve ‘Stockholm Syndrome’ With Export Push

  Trump’s Tariffs: Where He Started, What He Threatened, Where He Ended Up

  Trump Is Winning His Trade War. What Will That Mean for the Economy?

  Trump’s New Trade Order Is Fragile

  India and Trump Still Don’t Have a Tariff Deal: Here’s Why That Matters

  Taiwan President’s Bad Week Hangs on Outcome of Trump Trade Deal

  Europe Made Major Trade Concessions to Trump. How Did That Happen?

  Trade Deal Brings Relief to Europe’s Luxury Industry

  Europe’s Star Economy Picks Up Pace as Fresh Tariff Hikes Loom

  Bank of Japan Likely on Hold Though U.S. Trade Deal Cuts Uncertainty

  Powell Under Siege as Fed Plans to Stand Pat on Rate Cuts

  Now to See How the Fed Deals With All the Pressure

  Firing Powell Is Too Risky — Even For This White House

  The Fed Chair Doesn’t Set Rates by Himself. Here Are the Other Voting Members.

  Almost Every Corner of Emerging Markets Is Surging as Dollar Sinks

  The FTC and DOJ Make a Hopeful Pivot Toward Free Markets

  Rohit Chopra’s Rule 1033 Hasn’t Been Killed Yet, But It Should Be

  Barclays Profit Rises 23% as Trump Tariff Turmoil Lifts Trading

  The Texas Economy Ain’t All That

  The Boom in AI Is Stressing the Largest US Power Grid

  $85 Billion Deal Creates America’s First Coast-to-Coast Rail Operator

  Boeing Stems Cash Outflow as Aircraft Deliveries Advance

  Apple Is Shutting a Store in China, Its First Closure in the Country

  WeWork Wants You to Know It’s a Grown-Up Real-Estate Firm Now

  PayPal Raises 2025 Profit Forecast as Venmo Revenue Jumps 20%

  UnitedHealth Issues New, Lower Targets as Profit Shrinks

  Even Top Earners Are Falling Behind on Credit Card and Car Payments

  Economic Anxiety Leads More Consumers to Embrace ‘Christmas in July’

  Consumers Are Under Stress, Procter & Gamble Says

  Mars to Invest $2 Billion in U.S. Manufacturing Through 2026

  When Coke and Pepsi Fought for Soft Drink Supremacy in Space

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• Morning News: July 28, 2025
  Eddy Elfenbein, July 28th, 2025 at 7:04 am

  Trump Says He’ll Reduce 50-Day Deadline He Gave Putin For Truce

  What’s Going On With Trump’s Tariffs?

  How Li Ka-shing Landed in the Middle of US-China Tiff

  U.S. and China Meet as Trade Truce Nears Expiration

  CK Hutchison to Invite China Investor to Join Port Deal

  EU Welcomes Pause in US Trade Fight While Seeking Better Terms

  The EU’s $750 Billion Energy Deal With Trump Looks Hard to Reach

  Trump Wins the Hulkamania Tariffs Brawl He Started

  Trump’s Tariffs Are Already Stunting World Growth While Markets Shrug

  A Data Deluge Brings a ‘Moment of Truth’ for Markets This Week

  The ‘Most Talked About Bond’ in London Is a Losing Bet

  Ben Bernanke And Janet Yellen’s Inflation Mystification Ails The Fed

  Trump is Quietly Changing the Fed, Even Without Firing Powell

  Don’t Be Seduced by Zero-Sum Thinking About the Economy

  The Bull Market for Economists Is Over. It’s an Ominous Sign for the Economy.

  Hedge Funds Ditch Tech and Buy Essentials, Goldman Sachs Says

  Why Activist Investors Are Essential, Not Improper

  Ex-Trader Turned Market Cop Halts Jane Street’s India Bonanza

  World Bank Chief Says Zimbabwe Needs G-20 Help to Exit Debt Trap

  A US Defense Strategy Is Coming, Just Not From the President

  Three Ways America’s World Order Could Collapse

  The Housing Market Is Frozen. Zillow’s C.E.O. Knows You’re Still Scrolling.

  America’s Youth Should Be Free To Innovate Without Barriers

  CEOs Trumpet Smaller Workforces as a Sign of Corporate Health

  Samsung to Make Tesla AI Chips in Multiyear Texas Deal

  Tesla Engineering VP Moravy Says Company in ‘Big Swing Moment’

  The Country Where 76% of Cars Sold Are Electric

  UnitedHealth Grew to Be a Leviathan. Then Came the Backlash.

  The Protein Bar Arms Race

  Welcome to the Grocery Store Where Prices Change 100 Times a Day

  Luxury Brands Are Getting Hit by a Vibe Shift

  Tariffs Delayed the Fall Fashion Line at Upscale Brand Vince. It Wasn’t All Bad.

  Forget Cartier: Made-in-China Luxury Captivates Chinese Consumers

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• Morning News: July 25, 2025
  Eddy Elfenbein, July 25th, 2025 at 7:02 am

  Trump’s Escalation of Clean-Energy Fight Is Creating More Pain for Producers

  The World Has Too Much Steel, but No One Wants to Stop Making It

  US-Japan Trade Deal Hinges on Fund That Remains a Puzzle

  Bond Vigilantes Eye Japan as Right-Wing Populists Surge in Polls

  Russia’s Central Bank Cuts Key Rate Again as Economy Slows

  ECB Must Remain Completely Open in Future Rate Decisions, Says Villeroy

  German Business Sentiment Edges Higher Despite Tariff Uncertainty

  Euro Falls Versus Dollar After German Ifo Data Miss Forecasts

  Trump Turns to ‘Flood the Zone’ Playbook to Attack Powell’s Fed

  The More Trump Pressures the Fed, the Less Likely He Gets Lower Rates

  BofA’s Hartnett Renews Warnings Around Bubble Risks for Stocks

  Why Playing the Long Game Still Matters

  The Columbia University Deal Isn’t Great. But It Dodged a Bigger Disaster.

  FTC Must Make ‘Made In America’ Easier To Make In America

  Trump’s Tariffs Are Being Picked Up by Corporate America

  Intel to Lay Off 15% of Workers, Cancel Billions in Projects in Bid for Rebound

  America Will Come to Regret Selling A.I. Chips to China

  Volkswagen Hit Hard by Trump’s Tariffs

  Boeing Emerges as a Winner in Trump’s Trade Wars

  Airlines Are Having a Bruising Year. Delta and United Are Doing Better.

  Can Airbnb Redefine Travel Again?

  F.C.C. Approves Skydance’s $8 Billion Merger With Paramount

  Paramount Settled With Trump. Its Shows Are Skewering Him.

  Dude! They Killed Colbert!

  America Needs Colbert

  Sarepta-Roche Gene Therapy Fails to Get EU Regulator’s Nod

  As Consumers Lose Their Appetite, Food Brands Fight to Keep Wall St. Happy

  How McDonald’s Lost Its Value Edge—and Is Trying to Claw It Back

  Behind a Maine Coffee Company’s Decision to Raise Prices

  How Taylor Swift Turned a Glitter Freckle Maker Into a Sensation

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• Morning News: July 24, 2025
  Eddy Elfenbein, July 24th, 2025 at 7:02 am

  Global Economies Show Resilience Despite Tariff Fears, Surveys Show

  How a Chinese Border Town Keeps Russia’s Economy Afloat

  Chinese Social-Media Hashtag Signals Growing Frustration With Job Market

  Trump Says Countries Will Face Tariffs Ranging From 15% to 50%

  Trade Deal Could Give Japanese Cars a Leg Up in U.S. Market

  South Korea Jockeys for a Deal With Trump at Least as Good as Japan’s

  German Consumer Confidence Hit by Economic Uncertainty

  Turkey Central Bank Returns to Rate Cuts Path After Unrest Forced Hike

  ECB Is Set to Hold Fire on Rate Cuts With Trump Tariffs Unresolved

  Trump to Tour Federal Reserve, Ramping Up Pressure Campaign on Powell

  The Fed Needs to Tread Carefully With This Strange Dollar

  Dow Drops as Tariff Uncertainty Causes Worse-Than-Expected Loss

  The Stock Market’s Most Unserious Season Is Back and Dorkier Than Before

  A Case For the Sales Tax As the Most Honest Form of Taxation

  A Billionaire’s Quest to Find Credit Suisse Nazi Accounts Puts UBS in the Spotlight

  Columbia Agrees to $200 Million Fine to Settle White House Fight

  New EU Sanctions Could Be the First to Hit Moscow’s Crude Flows

  Canadian Company Claims to Find Large Oil Reserves in Poland

  The West’s Insatiable Demand for Missiles Boosting U.S. Weapons Makers

  The Quiet Obamacare Overhaul Needs a Loud Reveal

  U.S. Homes Are Not Selling, and Prices Continue to Rise

  The Chatbot Culture Wars Are Here

  AI Should Pay a Price for Its Environmental Damage

  Tesla Profit Falls, Hurt by Plunging EV Sales

  Tesla Braces for ‘Rough’ Quarters as US Ends EV Incentives

  T-Mobile Adds More Subscribers Than Rivals

  Alphabet Stock Looks Poised to Rise After Its Results, Boosted Capital Spending Plan

  Amazon Gave Prime Day Shoppers More Time to Browse. Many Went to Walmart

  Retail Tourism Shortfall as Foreign Visitors Skip the US This Summer

  A Hot Protein Bar Company Has Added a Wild New Product: Frozen Cod Fillets

  Chipotle Mexican Grill Falls as Weak Dine-Out Demand Weighs on Annual Sales Forecast

  McDonald’s to Test ‘Dirty Sodas’ and Flavored Cold Brews to Cash In on Drinks Craze

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• Morning News: July 23, 2025
  Eddy Elfenbein, July 23rd, 2025 at 7:04 am

  Tariff Risk Drives Another Round of Asia Forecast Downgrades

  U.S. and Japan Reach Trade Deal

  Behind Japan’s Trade Deal: 8 Rounds of Talks and ‘Hurrying Slowly’

  Indonesia to Remove Numerous Trade Barriers, White House Says

  EU Readies €100 Billion No-Deal Plan to Match US 30% Tariff

  As the Dollar Slides, the Euro Is Picking Up Speed

  The US Can Survive Tariffs. That Doesn’t Mean They’re Worth It.

  Bitcoin in Your 401(k)? That’s Not a Risk I Would Take

  What Is Tokenization and Is It Crypto’s Next Big Thing?

  The U.S. Needed the CLARITY Act To End Crypto Regulatory Uncertainty

  At the Fed’s Banking Conference, Sam Altman, Capital Rules and Avoiding the Powell Drama

  Fed Legend Paul Volcker Would Shrug Over This Attack

  Treasury, IRS Face Staff Cuts, Tight Deadlines With Roll Out of New Trump Tax Breaks

  GoPro, Krispy Kreme Surge as Markets Abuzz About Meme Stocks

  Dimon’s Success Creates Headaches for JPMorgan

  Citigroup Expands Private-Company Research, Joining JPMorgan

  Soaring Wealth Inequality Is the Greatest Retirement Gift of All

  Biggest US Power Grid Auction Prices Rise by 22% to New Heights

  U.S. Mid-Atlantic Factory Activity Contracts at Fastest Rate This Year

  Can a Steel Boom Revive This Rural American County?

  How China Came to Rule the World of Rare Earth Elements

  Hackers Hit US Nuclear Body as Microsoft Warns of China Link

  Chinese Hackers Are Exploiting Flaws in Widely Used Software, Microsoft Says

  OpenAI’s Data Center Ambitions Collide with Reality

  AT&T Adds Wireless and Home-Internet Subscribers, Accelerates Fiber Build-Out

  Mike Lynch’s Estate Ordered to Pay Hewlett Packard $945 Million

  Tesla’s Darkening Outlook to Test Robotaxi Vision Pushed by Musk

  Trump Expects $20 Million More in Ad Dollars From ‘60 Minutes’ Settlement

  Coke’s New Cane-Sweetened Soda Risks Upending US Sugar Supplies

  Hershey Lifts Candy Prices, Citing High Cocoa Costs

  With Labubus and a Cat Cafe, a Shopping Mall Thrives in New York City

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• CWS Market Review – July 22, 2025
  Eddy Elfenbein, July 22nd, 2025 at 8:02 pm

  (This is the free version of CWS Market Review. If you like what you see, then please sign up for the premium newsletter for $20 per month or $200 for the whole year. If you sign up today, you can see our two reports, “Your Handy Guide to Stock Orders” and “How Not to Get Screwed on Your Mortgage.”)

  Q2 Earnings Seasons Is Looking Good So Far

  The stock market closed at yet another all-time high on Tuesday. Today’s market was noteworthy because it was a “broader” rally. By that, I mean that more stocks are jumping in on the fun. It’s not just a “tech only” rally.

  I like to look at the relationship between the S&P 500 High Beta ETF (SPHB) and the Low Volatility ETF (SPLV). This is an easy way to read the market’s mind.

  

  Since the market low in April, High Beta, meaning the riskier stocks, are up more than 52% while Low Volatility is just 9%. Today, High Beta was flat while Low Vol was up 1.4%. I’d like to see more of that kind of action.

  We have some early numbers for this earnings season, and it’s looking quite good. So far, 12% of companies in the S&P 500 have reported Q2 earnings. Of those, 83% have beaten earnings. That’s higher than the 5- and 10-year averages.

  The S&P 500 is on track to deliver Q2 earnings growth of 5.6%. That would be the slowest growth since Q4 2023. So far, 83% of companies that have reported have beaten on revenues. Bear in mind that on Wall Street, you’re expected to beat expectations.

  The S&P 500 is currently trading at 22 times forward earnings. That’s high but not unreasonable. There are, however, signs of market excess. For example, the meme stock brigades are back. Thanks to a cheering section at Reddit, shares of Opendoor Technologies (OPEN) have taken center stage. Last Monday, OPEN was traded as low as 77 cents per share. Yesterday, OPEN peaked at $4.97 per share.

  Trading volume for the stock has surged from 50,000 or so each day to over 500,000,000 per day. That’s an increase of 10,000-fold in just a few days. I think I have a feeling for how this will end.

  Now Kohl’s’s (KSS) has been picked up by the day-trading frenzy. I’m not sure how long this will last. About half of Kohl’s outstanding shares available for trading are shorted. At one point today, the stock was up more than 100%. By the closing bell, KSS settled for a gain of 37%. (It’s just a department store!)

  Truthfully, these meme stocks are closer to gambling than true investing. They certainly can be fun games to play, but it really helps if you’re the first one out the door.

  

  There were several prominent earnings reports today. GM (GM) beat earnings and reiterated its guidance but the stock fell 8% after the carmaker said that it’s concerned about tariffs hurting sales. GM’s core profit fell 31.6% to $3.04 billion.

  Sherwin-Williams (SHW), a former Buy List stock, had a disappointing earnings report. For Q2, the paint people made $3.38 per share. That was 42 cents below expectations. The stock reversed its earlier losses and only closed down modestly.

  Shares of Northrop Grumman (NOC) reached a new high. The stock was up over 9% today. The company raised its guidance.

  Labcorp (LH) also got a nice 3.7% lift today. Philip Morris (PM) missed its revenue estimates and the shares got dinged 8.4% today. The stock yields close to 3%. Mettler-Toledo (MTD) also had a good day.

  There are going to be a lot more earnings reports this week.

  How the Market Behaves at a New High

  The S&P 500 hit another all-time high yesterday. This week, I wanted to take a closer look at how the stock market has historically behaved when it’s at an all-time high. Perhaps counterintuitively, the stock market has done quite well off its all-time high. You might be inclined to think that the all-time high is the worst time, but the evidence says otherwise.

  I took all the S&P 500 daily closes going back to 1960. Since then, there have been about 16,500 trading days. Of those, the index hit an all-time high on nearly 1,200 days or about 7.3% of the time.

  The day following an all-time high close, the stock market has gained a total of 75%. Annualized, that works out to 12.8%. The rest of the time, when the market’s not at an all-time high, the annualized gain is just 7%. That’s quite a big difference.

  From my experience, the worst market days don’t come off peaks. Instead, the market gradually crumbles off its peak, and then the big drop happens.

  I also found that even if the S&P 500 closes within 10% of a new high, but not at a new high, then the market averages an annualized gain of 7.9%.

  As well as the stock market has done when it’s at a new high, what’s also impressive is how stable the market has been at all-time highs. Since 1960, there have been only three times when the market has gained more than 2% in a single day off an all-time high. Interestingly, all three came in the 1990s.

  Coming off an all-time high, the market has gained more than 1% only 5.4% of the time. Normally, 1% up days come more than 7.2% of the time. The lesson is that calm markets tend to be good markets, and markets that are rising tend to keep on rising.

  Too often, investors feel that strong markets have given them unwarranted gains and that they have to sell out before the correction comes. The problem is that you never know when it will come. Just look at this year when we had a nasty drop followed by a pretty impressive rally.

  Peter Lynch famously said, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.”

  This is another example that good investing really comes down to patience.

  Mueller Industries Delivers Solid Earnings

  This morning, we got a nice earnings report from Mueller Industries (MLI), which is one of our Buy List stocks. I like Mueller a lot. It’s a well-run mid-cap that’s largely overlooked by Wall Street.

  I’m always surprised at how Wall Street can completely ignore such good businesses. Only one analyst follows MLI despite it being a big winner for many years and having a market value of $10 billion. Since early 1992, the stock is up by 40,000%.

  So what does Mueller do? The company makes and sells copper, brass, and aluminum products. The company operates through three segments: Piping Systems, Industrial Metals, and Climate. You may have noticed that copper prices are soaring and much of the reason is our tariff policy.

  After some adjustments, MLI’s Q2 net income was $1.96 per share. That’s compared with $1.41 per share for the same quarter one year ago. The lone analyst had been expecting Q2 earnings of $1.62 per share. Mueller’s net cash generated from operations was $190.6 million. MLI’s cash balance net of debt was $1 billion at quarter end, and the current ratio is strong at 4.9 to 1.

  CEO Greg Christopher, said, “Excluding the recovery reported thus far on our tornado related insurance claim, we delivered a record quarter. Tremendous credit goes to our manufacturing operations and commercial teams for their outstanding execution and focus amidst complex market conditions. We are particularly pleased to see the positive progress and contributions made by Nehring and EPC, our 2024 acquisitions, and look forward to their continued improvement.”

  If business continues to go well at Mueller, then I think the company can earn $6 per share this year and perhaps $6.50 per share next year. If that’s correct, then the company is attractively valued. Over the last five weeks, the shares are up 18%.

  

  The Federal Reserve meets again next week. Don’t expect any change to interest rates this time, but the odds of a rate cut before the end of the year are high. Also, the Q2 GDP report will be out on Wednesday which is the same as the Fed policy statement. That’s all for now. I’ll have more for you in the next issue of CWS Market Review.

  – Eddy

  P.S. I’m currently reading “The Wealth Ladder: Proven Strategies for Every Step of Your Financial Life” by Nick Maggiulli. In the book, Nick systematically breaks down how to build wealth. It’s one of those books where I find myself nodding along with each page. Check it out.

• Morning News: July 22, 2025
  Eddy Elfenbein, July 22nd, 2025 at 7:05 am

  Trump Gets a US Toehold in Congo’s Mines as Peace Deal Nears

  China’s Problem With Competition: There’s Too Much of It

  EU Officials Head to China and Japan Expecting Mixed Results

  The Global Economy Is Powering Through a Historic Increase in Tariffs

  Thai Cabinet Names New Central Bank Chief

  U.S. Leading Indicators Show Economic Clouds Gathering

  Treasuries Slip With Fed’s Powell Set to Speak on Regulation

  Michelle Bowman’s Reforms Will Help Reverse Dodd-Frank Damage

  US Exchanges Set to Reap Windfall as Market Volatility Fuels Trading Rush

  Will Payment Stablecoins Benefit From Federal Deposit Insurance?

  ‘Black Holes for Capital Gains’: New Tax Trick Takes Off in ETFs

  JPMorgan Closes $210 Million Carbon Loan to Draw New Investors

  BlackRock Restricts Use of Company Devices for China Travel

  NIH Budget Cuts Are a Setback for American Science

  Without Billionaires, There Would Be No Medicare and No Debt

  Singapore’s App-Led Car Sharing Offers Relief From Stratospheric Cost

  Florida’s High-Speed Rail Rattles Investors, Defying Its Promise

  Northrop Grumman Lifts Profit Outlook on Defense Demand

  GM Profit Falls as Trump Tariffs Add $1.1 Billion in Costs

  Google Seeks Licensing Talks With News Groups, Following AI Rivals

  Google A.I. System Wins Gold Medal in International Math Olympiad

  Microsoft Rushes to Stop Hackers from Wreaking Global Havoc

  The Astronomer CEO’s Coldplay Moment Is a Textbook Fiasco

  Silicon Valley’s Favorite Podcast Is Now Hot in Washington Too

  How Does This Podcast Star Make $20 Million a Year?

  L.A. Times Owner Says He Will Take Newspaper Public in Next Year

  Universal Music Group Files for U.S. Public Offering

  US Liquor Sales Plunge in Canada Amid Tariff Spat, Hurting Whole Market

  Coca-Cola Earnings Beat Estimates as Strong Demand in Europe Helps Offset Weakness Elsewhere

  Kraft Heinz Failure Is a Cautionary Tale for Many M&A Deals

  The Hottest New Cafe Is in Someone’s Living Room

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