U.S. stocks before the market opens: Futures on the three major stock indexes have mixed gains and losses. IBM plunges more than 20% before the market opens. The market awaits Wash’s testimony and June CPI
The three major stock index futures were mixed, with major European indexes generally falling, gold, silver and oil rising, and IBM's stock price plummeting before the market due to the performance; the market is awaiting the testimony of Federal Reserve Chairman Warsh and June CPI data.
Before the market opened on Tuesday, the three major U.S. stock index futures were mixed, while major European indexes generally fell. As of press time, Nasdaq 100 futures were up 0.52%, Dow futures were down 0.59%, and S&P 500 futures were down 0.09%. In terms of commodities, Brent crude oil rose 3.76% to US$86.43/barrel; WTI crude oil rose 2.05% to US$79.74/barrel. Spot gold rose 0.70% to $4,030.04 an ounce. Spot silver rose 0.52% to $57.96. In terms of individual stocks, memory chip stocks generally rose, with SK Hynix up about 7% and SanDisk up about 3%. As Wall Street's earnings season begins, traders are generally cautious and the stock market is stabilizing. The market focus turned to the testimony of Federal Reserve Chairman Warsh and the latest inflation data to be released later, with investors waiting for key signals to guide the direction. The United States' resumption of the blockade of the Strait of Hormuz against Iranian ships pushed Brent crude oil up nearly 5% during the session, hitting $87.19 a barrel. At the same time, Federal Reserve Governor Christopher Waller said that if inflationary pressures persist, the authorities may need to raise interest rates in the near future, and money markets immediately priced the probability of an interest rate hike in July to about 50%. Hebe Chen, senior market analyst at Vantage Global Prime, said: "The surge in oil prices and yields has clearly sent a signal that the inflation outlook has deteriorated. This uncertainty explains the current swing sentiment in the market - investors are increasingly wary of the deteriorating background, but have not yet fully priced in the worst-case scenario." The surge in oil prices caused a huge shock in the market. Is the Fed closer to raising interest rates? Oil prices soared 9% on Monday, driving the dollar to strengthen and global stock markets and precious metals to fall. It's a familiar scene, with oil prices once again becoming the driving factor in the market. After Iran announced a blockade of the Strait of Hormuz last weekend, Trump said it would resume its naval blockade against Iran. Not only that, Trump also announced that he would impose a 20% fee on all goods transported through this (but this move lacks legal basis). Under the threat of dual blockades and toll collection by the United States and Iran, the number of ships passing through the strait has once again dropped to single digits. The number had climbed to about 50 ships after the United States and Iran signed a memorandum of explanation in late June. However, as the two sides continue to exchange fire, the memorandum has become "in name only." The latest data shows that oil inventories in members of the Organization for Economic Cooperation and Development (OECD) fell to the lowest level since 1990 in May, and the U.S. strategic crude oil reserves fell to a new low in more than 40 years. The IEA said that global observable crude oil inventories decreased by 360 million barrels from March to May. Crude oil market buffers are disappearing faster than expected, meaning the ability to absorb supply shocks in the future will inevitably decline. Therefore, if the situation between the United States and Iran continues to escalate, and if production capacity and exports cannot be significantly improved, oil prices may face greater upward pressure than in March and April, and market volatility may intensify. U.S. June CPI data will be released tonight (July 14) and is expected to fall from 4.2% to 3.8%, but the data cannot reflect the latest market concerns. Surprisingly, Fed Governor Waller said this week that "if the CPI continues to be well above the 2% target, the Fed may need to raise interest rates in the near future." Morgan Stanley: S&P 500 second-quarter earnings may increase by 19%, AI drives market spread Morgan Stanley said in its latest research report that the current round of gains in U.S. stocks is still driven by profits. As the profits of ordinary companies improve, the market's leading range of gains is expected to spread from large technology stocks to more industries. The bank predicts that S&P 500 second-quarter earnings per share will increase by 19% year-on-year, revenue will increase by 9%, and performance is expected to exceed expectations by mid-to-high single digits. The second quarter profit forecast was raised by 2% before the financial reporting season. This is different from the usual seasonal pattern of downward revisions, which means that companies face a higher threshold. The profit growth rate in 2026 is expected to have risen to 24%, with revenue growth and profit margin expansion roughly equal in contribution; the "Big Seven" earnings are expected to grow by 30%, and the remaining 493 companies are expected to grow by 16%, but the latter forecast has shown signs of upward revision. The current earnings revision breadth is positive 24%, which is at a historical high, with consumer discretionary and transportation industries performing outstandingly.
Artificial intelligence remains the most important investment thread. In the second quarter, 40% of AI adoption companies identified by Morgan Stanley disclosed at least one quantifiable benefit, up from 37% in the first quarter and 21% in the same period last year. About 25% of companies in the S&P 500 reported measurable AI benefits, up from 14% a year ago. Relevant investments continue to cover semiconductors, infrastructure software, networks and network security. Data center storage prices are expected to rise by another 30% in the third quarter, and the visibility of cloud computing demand extends to 2028. At the industry level, industrial capital expenditures are expanding from data centers to automation, equipment and manufacturing. Bank loans increased by about 7.5% year-on-year. In the second quarter, the scale of mergers and acquisitions, stock and bond financing increased by 64%, 107% and 19% respectively. However, rising deposit costs may lower profit expectations. Consumption performance was better than expected, durable goods stabilized, hotel revenue per available room increased by about 5%, and tourism, gaming and aviation showed an early-cycle recovery. UBS previews financial reports of major U.S. banks: Capital market income is strong, costs and net interest margins are key UBS expects that the second-quarter performance of large U.S. banks will benefit overall from the recovery of investment banking and trading businesses, but long positions in the market are relatively concentrated, and fees, net interest income and management guidance will determine the stock price reaction. JPMorgan Chase's second-quarter EPS is expected to be US$5.54, with net interest income of US$25.7 billion, investment banking fees of US$2.89 billion, a year-on-year increase of approximately 15%, and market business income of US$10.3 billion, a year-on-year increase of approximately 15%. The company's full-year net interest income guidance is $103 billion and expense guidance is $106 billion. There is still room for revenue growth, but increased costs and the departure of executive Marianne Lake may weaken the valuation premium, and the option implied volatility is about 3.08%. Bank of America's EPS is expected to be US$1.12 to US$1.13, with net interest income of US$16.2 billion, investment banking fees of approximately US$1.88 billion, a year-on-year increase of 30%, and market business income of approximately US$6.3 billion. Expenses are expected to be US$18.4 billion to US$18.5 billion, which is the biggest risk; the full-year net interest income growth rate is expected to be at the upper end of the 6% to 8% guidance, and the market is concerned about whether it can maintain an operating leverage of more than 200 basis points. Wells Fargo's EPS is expected to be US$1.73, net interest income is US$12.27 billion, and net interest margin is 2.44%, narrowing by 3 basis points month-on-month. Net interest income guidance for 2026 is approximately US$50 billion and expenses are approximately US$55.7 billion. The stock's expectation threshold is relatively low, but if the net interest margin declines more than expected, the market may question the full-year guidance. Goldman Sachs expects EPS to be US$13.84, lower than market expectations of US$14.40; revenue is expected to be US$16.2 billion. Market business revenue is expected to be US$9.04 billion, a year-on-year increase of 16%, of which stock business growth is approximately 25%; investment banking business revenue is US$2.75 billion, an increase of 25%. With longs crowded, fee-to-compensation ratios become key. Citigroup's EPS is expected to be US$2.55, with net interest income of US$15.9 billion, market business income of US$6.55 billion, a year-on-year increase of approximately 11%, and investment banking expenses increasing by 17% to US$1.24 billion. Expenses are expected to be US$14.4 billion, higher than market expectations; return on tangible common equity is expected to be 10.6%, and management's full-year target is still 10% to 11%. Google enters NVIDIA's "turf": TPU expansion strategy targets new cloud service providers Google is pushing its self-developed AI chip TPU from internal infrastructure to the external market, and for the first time is targeting emerging cloud service providers (Neocloud) that have long relied on Nvidia GPUs on a large scale, trying to use a lower-cost and more flexible business model to compete for Nvidia's share in the AI computing power market. According to a report by The Information on July 13, Google has recently been actively promoting TPU to a number of new cloud service providers, not only emphasizing its advantages in cost, stability, etc., but also proposing to provide financing support for data center projects and promising to lease back some TPU to reduce the financial pressure on customers to build computing infrastructure.
Faced with Google’s offensive, Nvidia quickly launched a defense. On the one hand, it discusses new financial incentives for some customers, and on the other hand, it launches a GPU leaseback guarantee plan, hoping to further stabilize the new cloud service provider ecosystem. This competition around AI chips and cloud infrastructure is extending from product performance to financing, leasing and ecosystem. Promoting external sales of TPU does not just mean increasing chip sales. According to reports, some management within Google believe that TPU is expected to be equivalent to about 10% of Nvidia's AI server chip business in the future, and some large AI customers, including Meta, have also been focusing on lower-priced alternatives. A larger customer base can also increase TPU production scale and improve overall manufacturing economics. It fell more than 20% before the market opened! IBM's second-quarter revenue falls short of expectations, customers cut spending dragging down software business Preliminary data on IBM's second-quarter results disappointed the market. The company disclosed revenue that was below analysts' expectations, and CEO Arvind Krishna said that some customers are shifting capital expenditures to hardware areas such as servers, storage and memory, causing software purchases to be squeezed. At the same time, the company's internal sales performance fell short of expectations, and multiple large-value contracts failed to be implemented as planned, further dragging down quarterly performance. Affected by the performance news, IBM's stock price fell sharply before the market opened. As of press time, it had fallen by more than 23%. At the close of the previous trading day, IBM's stock price was at $290.23. According to an open letter to investors released by Arvind Krishna on Tuesday, IBM expects second-quarter revenue of $17.2 billion, which is lower than the average analyst estimate of $17.9 billion according to data compiled by Bloomberg, with a gap of about $700 million. Krishna said that currently some customers are adjusting their spending priorities and investing more money in hardware areas such as servers, storage and memory to cope with the tight supply environment, which has squeezed the demand for software procurement to a certain extent. However, he also admitted that the company's own execution problems were also an important factor leading to the performance gap. (
Artificial intelligence remains the most important investment thread. In the second quarter, 40% of AI adoption companies identified by Morgan Stanley disclosed at least one quantifiable benefit, up from 37% in the first quarter and 21% in the same period last year. About 25% of companies in the S&P 500 reported measurable AI benefits, up from 14% a year ago. Relevant investments continue to cover semiconductors, infrastructure software, networks and network security. Data center storage prices are expected to rise by another 30% in the third quarter, and the visibility of cloud computing demand extends to 2028. At the industry level, industrial capital expenditures are expanding from data centers to automation, equipment and manufacturing. Bank loans increased by about 7.5% year-on-year. In the second quarter, the scale of mergers and acquisitions, stock and bond financing increased by 64%, 107% and 19% respectively. However, rising deposit costs may lower profit expectations. Consumption performance was better than expected, durable goods stabilized, hotel revenue per available room increased by about 5%, and tourism, gaming and aviation showed an early-cycle recovery. UBS previews financial reports of major U.S. banks: Capital market income is strong, costs and net interest margins are key UBS expects that the second-quarter performance of large U.S. banks will benefit overall from the recovery of investment banking and trading businesses, but long positions in the market are relatively concentrated, and fees, net interest income and management guidance will determine the stock price reaction. JPMorgan Chase's second-quarter EPS is expected to be US$5.54, with net interest income of US$25.7 billion, investment banking fees of US$2.89 billion, a year-on-year increase of approximately 15%, and market business income of US$10.3 billion, a year-on-year increase of approximately 15%. The company's full-year net interest income guidance is $103 billion and expense guidance is $106 billion. There is still room for revenue growth, but increased costs and the departure of executive Marianne Lake may weaken the valuation premium, and the option implied volatility is about 3.08%. Bank of America's EPS is expected to be US$1.12 to US$1.13, with net interest income of US$16.2 billion, investment banking fees of approximately US$1.88 billion, a year-on-year increase of 30%, and market business income of approximately US$6.3 billion. Expenses are expected to be US$18.4 billion to US$18.5 billion, which is the biggest risk; the full-year net interest income growth rate is expected to be at the upper end of the 6% to 8% guidance, and the market is concerned about whether it can maintain an operating leverage of more than 200 basis points. Wells Fargo's EPS is expected to be US$1.73, net interest income is US$12.27 billion, and net interest margin is 2.44%, narrowing by 3 basis points month-on-month. Net interest income guidance for 2026 is approximately US$50 billion and expenses are approximately US$55.7 billion. The stock's expectation threshold is relatively low, but if the net interest margin declines more than expected, the market may question the full-year guidance. Goldman Sachs expects EPS to be US$13.84, lower than market expectations of US$14.40; revenue is expected to be US$16.2 billion. Market business revenue is expected to be US$9.04 billion, a year-on-year increase of 16%, of which stock business growth is approximately 25%; investment banking business revenue is US$2.75 billion, an increase of 25%. With longs crowded, fee-to-compensation ratios become key. Citigroup's EPS is expected to be US$2.55, with net interest income of US$15.9 billion, market business income of US$6.55 billion, a year-on-year increase of approximately 11%, and investment banking expenses increasing by 17% to US$1.24 billion. Expenses are expected to be US$14.4 billion, higher than market expectations; return on tangible common equity is expected to be 10.6%, and management's full-year target is still 10% to 11%. Google enters NVIDIA's "turf": TPU expansion strategy targets new cloud service providers Google is pushing its self-developed AI chip TPU from internal infrastructure to the external market, and for the first time is targeting emerging cloud service providers (Neocloud) that have long relied on Nvidia GPUs on a large scale, trying to use a lower-cost and more flexible business model to compete for Nvidia's share in the AI computing power market. According to a report by The Information on July 13, Google has recently been actively promoting TPU to a number of new cloud service providers, not only emphasizing its advantages in cost, stability, etc., but also proposing to provide financing support for data center projects and promising to lease back some TPU to reduce the financial pressure on customers to build computing infrastructure.
Faced with Google’s offensive, Nvidia quickly launched a defense. On the one hand, it discusses new financial incentives for some customers, and on the other hand, it launches a GPU leaseback guarantee plan, hoping to further stabilize the new cloud service provider ecosystem. This competition around AI chips and cloud infrastructure is extending from product performance to financing, leasing and ecosystem. Promoting external sales of TPU does not just mean increasing chip sales. According to reports, some management within Google believe that TPU is expected to be equivalent to about 10% of Nvidia's AI server chip business in the future, and some large AI customers, including Meta, have also been focusing on lower-priced alternatives. A larger customer base can also increase TPU production scale and improve overall manufacturing economics. It fell more than 20% before the market opened! IBM's second-quarter revenue falls short of expectations, customers cut spending dragging down software business Preliminary data on IBM's second-quarter results disappointed the market. The company disclosed revenue that was below analysts' expectations, and CEO Arvind Krishna said that some customers are shifting capital expenditures to hardware areas such as servers, storage and memory, causing software purchases to be squeezed. At the same time, the company's internal sales performance fell short of expectations, and multiple large-value contracts failed to be implemented as planned, further dragging down quarterly performance. Affected by the performance news, IBM's stock price fell sharply before the market opened. As of press time, it had fallen by more than 23%. At the close of the previous trading day, IBM's stock price was at $290.23. According to an open letter to investors released by Arvind Krishna on Tuesday, IBM expects second-quarter revenue of $17.2 billion, which is lower than the average analyst estimate of $17.9 billion according to data compiled by Bloomberg, with a gap of about $700 million. Krishna said that currently some customers are adjusting their spending priorities and investing more money in hardware areas such as servers, storage and memory to cope with the tight supply environment, which has squeezed the demand for software procurement to a certain extent. However, he also admitted that the company's own execution problems were also an important factor leading to the performance gap. (