Dollar hits new 40-year high versus yen, euro lower after ECB decision
The dollar index, which measures the greenback against a basket of currencies, rose 0.32% to 101.47, with the euro down 0.35% at $1.137. U.S. crude jumped 5.41% to $91.51 a barrel and Brent was at $100.42 per barrel, up 6.75% on the day. The ECB kept interest rates unchanged as expected but held the door open to another increase in September, as a fresh jump in energy prices threatens to keep inflation well above its 2% target. President Christine Lagarde said "while developments in underlying inflation have remained contained, the full effects of the energy shock have yet to play out". The recent rebound in oil prices, along with comments from multiple Fed officials, including Chair Kevin Warsh, that have flagged concerns about inflation pressures over labor market concerns, have helped push market expectations for rate hikes from the central bank higher. U.S. data on Thursday showed weekly initial jobless claims dropped by 22,000 to a seasonally adjusted 187,000, according to the Labor Department, the largest decline in three months and well below the 212,000 estimate of economists polled by Reuters.
Intel blows past estimates, recording fastest sales growth in almost 15 years on 'unprecedented' demand
Intel reported better-than-expected second-quarter results on Thursday, notching its fastest revenue growth rate for any quarter since 2011 and issuing guidance that topped expectations. The stock jumped 11% in extended trading. For the current quarter, Intel said it expects adjusted earnings per share of 38 cents on revenue between $15.8 billion and $16.8 billion. Analysts were expecting revenue of $15.1 billion and EPS of 27 cents, according to LSEG. Intel is boosting its capital expenditures, targeting a "meaningful increase" next year, as it aggressively tries to morph into a manufacturer of chips for other companies. Intel said its foundry reported $5.8 billion in sales, up 31% on an annual basis.
15 Billion Reasons Alphabet Shares Are Sinking After Reporting Strong Earnings Growth
Shares of Alphabet traded roughly 7.1% lower, as of 10:24 a.m. ET. Second-quarter revenue of nearly $119.8 billion rose 24% year over year, while operating profit of $40.7 billion increased 34%. Revenue topped Wall Street expectations by close to $3 billion, while adjusted earnings per share of $2.85 missed consensus estimates by $0.04. Investor focus remains on capital expenditures. Investors have become quite squirrely as hyperscalers like Alphabet go all in on AI, committing hundreds of billions of dollars to large-scale infrastructure projects. Here are 15 billion reasons why Alphabet stock is sinking today. Raising already high capex guidance Heading into the quarter, Alphabet's full-year capex guide was already a staggering $180 billion to $190 billion. But on the company's earnings call, Alphabet's CFO Anat Ashkenazi raised the guidance to $195 billion to $205 billion, increasing the midpoint by $15 billion. That could put it above Amazon's $200 billion 2026 capex guidance, which had been the highest among the hyperscalers, although Amazon has yet to report earnings.
Tesla Misses Badly on Earnings as Free Cash Flow Turns Negative
Active FSD subscriptions rose 56% to 1.48 million. Operating expenses jumped 47% to $4.35 billion on AI and research spending, dragging operating margin down to 1.4% from 4.1%. Free cash flow turned negative at $1.1 billion, as capital expenditure surged 142% to $5.79 billion.
Lockheed Martin Rockets 10%, RTX Jumps 7% on Beat-and-Raise Quarters and Record Backlogs
Lockheed Martin posted adjusted EPS of $7.94 on revenue of $20.1 billion, up 11% year over year, versus roughly $7.23 and $19.37 billion expected. The company booked $65 billion of new Q2 orders, including a multi-year $35 billion THAAD interceptor agreement with the Missile Defense Agency, taking backlog to a record $230 billion. Management raised Lockheed Martin's full-year 2026 guidance across the board, lifting EPS to $29.95 to $30.65, revenue to $79.75 billion to $81.75 billion, and free cash flow to $7 billion to $7.2 billion.
The Probability of a July Fed Rate Hike Has Tripled Over the Last Week -- Here's Why
The probability of a July FOMC rate hike has soared over the last week In five days, on July 29, the 12-member Federal Open Market Committee (FOMC), including Fed Chair Kevin Warsh, will render its verdict on whether to raise or stand pat on interest rates. This decision can send shockwaves through the equity and bond markets. On July 15, the CME Group's proprietary FedWatch Tool, which tracks 30-day Fed funds futures prices to gauge the probability of changes to the federal funds target rate at upcoming meetings, predicted a 10.7% chance of an FOMC rate hike on July 29. By July 22, the probability of the FOMC raising interest rates had more than tripled to 34.7%. BREAKING: US May PCE inflation, the Fed's preferred inflation metric, rises to 4.1%, the highest reading since April 2023. Core PCE inflation rose to 3.4%, its highest since October 2023. US inflation is now officially running at more than double the Fed's 2% target.
TSMC Just Announced Incredible News for Nvidia and Broadcom Investors
TSMC management confirmed the AI build-out has not slowed. In fact, it announced an additional $100 billion investment to grow its Arizona production facilities. Nvidia and Broadcom stocks trade for 22.6 and 31.9 times forward earnings, respectively. For reference, the S&P 500 trades for 21.5 times forward earnings. I think both Nvidia and Broadcom are screaming buys at these levels. Patient investors can receive a massive payoff over the next few years as these two rise to meet their full potential as stocks.
ORCL Stock Rises After-Hours On Pentagon Deal Worth Up To $7B — Why Retail Sees NOW, PLTR, MSFT And Others Benefiting Too
Shares of Oracle Corp. (ORCL) gained nearly 3% in after-hours trading on Thursday after the company secured a Department of War Enterprise Software Agreement worth up to $6.99 billion over 10 years. The contract carries an initial award value of $3.31 billion over the first five-year ordering period and includes an unexercised option that would increase its total value to $6.99 billion. The initial five-year agreement includes perpetual and subscription-based software licenses, maintenance, support and consulting services. The agreement is designed to consolidate fragmented software licensing and procurement into a single enterprise-wide contract, with the Department projecting at least $441 million in taxpayer savings over its lifetime. Defense Secretary Pete Hegseth estimated earlier this week that the war with Iran has cost the U.S. $37.5 billion since it began in February, reported AP. Kirsten A. Davies, Chief Information Officer for the Department of War, said in a statement, “By fundamentally improving how we procure on-premises Oracle capabilities, we are driving at least $441 million in taxpayer savings while rapidly and effectively serving our warfighters.”