WELCOME TO THE GRADIENT
Good morning! The markets feel like a soap opera lately, and this week's episode stars none other than President Donald Trump and Fed Chair Jerome Powell. Inflation ticked upward, stocks went for a rollercoaster ride, and semiconductor giants faced an unexpected plunge. Let's jump into it.
TRUMP THREATENS POWELL (AGAIN) 📉
Markets shivered this week as Trump revisited threats of firing Fed Chair Jerome Powell. Can he actually do it? Powell coolly reminded everyone: No chance. Legally, the Fed stays independent.
Markets responded with anxiety anyway, as the Dow dipped 436 points amid tariff worries and rising inflation. Drama aside, Powell seems safe—for now..
ECONOMY
INFLATION REARS ITS UGLY HEAD AGAIN📈
June's CPI jumped 0.3%, largely fueled by energy costs and tariff-affected goods. Retail stocks took a beating, while the S&P and NASDAQ shrugged it off, enjoying their summer parties. With inflation ticking upward, rate cuts seem off the table for July, but maybe September? Powell keeps his poker face on.
EARNINGS WATCH
GOOGLE & TESLA IN THE SPOTLIGHT 🌟
Big tech earnings land this Wednesday, with Alphabet (Google) and Tesla leading the charge. Expect fireworks as investors look for continued AI-driven revenue growth at Google and profitability signals at Tesla. Meanwhile, consumer favorites like Domino's and Coca-Cola will offer deeper insights into spending behaviors.
The Essentials
BANKS REPORT RESILIENT CONSUMERS (AND LOTS OF DEBT) 💳
JP Morgan, Bank of America, and American Express all reported robust earnings this quarter. Good news: People are spending. Bad news: Credit card debt is soaring. American Express saw spending reach a quarterly high, while JP Morgan CEO Jamie Dimon noted the economy’s resilience—though warned of geopolitical risks and tariffs. Banks are loving the interest; your wallet, not so much.
HOUSING MARKET STILL FEELING THE CHILL 🏠
Housing remains sluggish, burdened by high mortgage rates (6.7% on a 30-year fixed) and surplus inventory. Home builders are discounting aggressively. Will next week's new and existing home sales data offer hope, or will housing keep dragging GDP growth down?
CONSUMERS FEELING CAUTIOUSLY OPTIMISTIC 🛍️
University of Michigan's Consumer Sentiment inched up to 61.8, still below historical averages. Consumers are cautiously optimistic, though still wary about inflation and trade tensions. Short-run business optimism increased slightly—maybe things aren’t so bleak after all?
WALL STREET GRADIENT
SEMICONDUCTORS CRASH ON SHAKY GUIDANCE 💻
ASML and TSMC posted strong earnings but threw investors into a panic by refusing clear 2026 guidance, citing geopolitical uncertainties and tariffs. ASML shares plummeted despite stellar numbers, creating what some are calling "a perfect dip-buy." TSMC surged, riding strong demand for advanced chips. Bottom line: AI and tech are still hot tickets.
Stocks of the Week
HONEST & NIKE 📈
Two names caught our attention: Honest Co., a penny stock with rock-solid fundamentals now trading at attractive valuations, and Nike, a powerhouse poised for a turnaround. Both stocks have dipped recently, creating potentially lucrative buy opportunities.
NIKE
A Big Winning opportunity?
HONEST
A lucrative option?
Watchlist for This Week 📅
Monday: Verizon, Domino's Pizza earnings.
Tuesday: Powell's speech on banking; Coca-Cola earnings.
Wednesday: Existing home sales, Alphabet and Tesla earnings.
Thursday: New home sales, ECB rate decision.
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Until next time,
Wall Street Gradient | A RaiGen Endeavor