Morning in New York: investors will refrain from sharp movements

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

U.S. Secretary of Commerce Howard Lutnick confirmed that while trading partners will be able to continue negotiations with Washington after August 1, import duties will go into full effect as of that date. Smaller economies, including those in Latin America, the Caribbean and Africa, will see a prime rate of 10%. Larger economic blocs such as the EU are being asked to either open access to their markets or start paying "fair" duties. These announcements increase uncertainty about U.S. foreign trade policy and may curb risk appetite, especially in export- and import-oriented industries and emerging market assets. 

Additional pressure on the mood of the investment community is exerted by the escalating conflict between Donald Trump and Fed Chairman Jerome Powell. The reason was the information about the growth of the cost of reconstruction of the Fed headquarters up to $2.5 bln. Attempts to question the legitimacy of the project can be used as an argument in favor of changing the head of the Fed, which adds political tension in anticipation of the next FOMC meeting;

On Monday, July 21, composite data of leading economic indicators for June (consensus: -0.3% m/m, May: -0.1% m/m) will be released. Deepening negativity could increase concerns about the sustainability of growth in the US economy and affect movements in cyclical stocks;

Prior to the opening of the main session, Verizon Communications (VZ), Roper Technologies (ROP), Domino's Pizza (DPZ) and Cleveland-Cliffs (CLF) will report quarterly results. At the postmarket, NXP Semiconductors (NXPI), AGNC Investment (AGNC), Steel Dynamics (STLD) and WR Berkley (WRB) will present financial results. 

Futures on American stock indices are trading in the plus. We assess the balance of risks for the upcoming session as neutral with an average level of volatility. We focus on the S&P 500 movements in the range of 6250-6350 points (from -0.7% to +0.9% to the closing level of the previous session).  

- The head of Nvidia (NVDA)Jensen Huang sold 75,000 shares of his company for $12.94 million as part of a plan to sell up to 6 million securities. He got rid of a $37 million stake last week.The company said it intends to resume shipments of H20 chips to China after receiving a signal that the U.S. is ready to approve export licenses, but warned Chinese partners that stocks of these products are limited. 

- Ilon Musk announced the development of xAI baby app Baby Grok with safe content. This was a response to criticism of the Grok 4 chatbot for inappropriate statements. The project may support xAI's image and indirectly influence interest in Tesla (TSLA). 

- Shares of Block (XYZ) are adding about 10% amid its impending inclusion in the S&P 500 Index to replace Hess (HES), which was acquired by Chevron Corp (CVX). 

- Cava Group (CAVA) opened its first restaurant in Michigan, becoming the restaurant chain's 28th state of presence. The company continues its aggressive expansion in the Midwest and plans an accelerated expansion with a goal of launching 1,000 locations by 2032. 

Trades on July 18 on the American stock exchanges ended in a slight minus. S&P 500 decreased by symbolic 0.01%, Nasdaq 100 lost 0.07%, Dow Jones fell by 0.32%, and Russell 2000 fell by 0.61%. Trades were held in a narrow range on the background of moderate news. The securities of the "Magnificent Seven" showed mixed dynamics. Tesla (TSLA: +3.21%) looked better than the others. Utility companies (XLU: +1.68%) were the leaders of growth in the broad market. The energy sector (XLE: -0.81%) was the outsider due to lower oil prices;

The June report on housing starts in the U.S. recorded an increase of 1.321 million homes, which was higher than the consensus. At the same time, the May data were revised upward. This indicates some recovery in the construction industry. The preliminary assessment of consumer sentiment from the University of Michigan for July also exceeded forecasts: the best result since February was recorded. Of particular importance for investors was the dynamics of inflation expectations of the population: annual benchmarks decreased by 0.6 p.p., to 4.4%, and five-year benchmarks - by 0.3 p.p., to 3.6%. Despite this, both indicators remain above the December values;

Christopher Waller, a member of the Fed's Board of Governors, again favored a rate cut in July, but noted that depending on incoming macro data, the decision could be made in September. Nevertheless, the market continues to lay low probability of monetary policy easing at the next meeting;

- American Express (AXP: -2.4%) beat earnings and revenue forecasts, confirming full-year guidance, but investors were rattled by concerns about future growth. 

- Quotes of 3M (MMM: -3.7%) declined despite an improved outlook for 2025 and strong quarterly results: pessimism was triggered by an uncertain performance in the consumer segment. 

- Charles Schwab (SCHW: +2.9%)reported better-than-expected results, noting growth in new accounts, improved margins and a rebound in client balances. 

- Schlumberger (SLB: -3.9%) beat consensus on earnings and revenue, but weak cash flow and pressure on results in North America triggered a selloff in its shares. 

This article was AI-translated and verified by a human editor