Market Trends & Economic Outlook - US stock futures are treading carefully as bond yields have picked up, leading investors to scale back bets on Federal Reserve interest rate cuts [2] - The 10-year Treasury yield has added nearly 15 basis points in the past week, approaching 45% [5] - Traders reassess expectations for Federal Reserve interest rate cuts as price increases accelerated in June [5] - The market is closely watching President Trump's trade plans and potential tariffs on pharmaceutical companies and semiconductors, assessing their impact on inflation [6] - Bets on Federal Reserve interest rate cuts are fading as recent data has shown signs of sticky inflation, with core prices increasing 29% in June compared to the prior year [47] - Traders now see just a 52% chance the Fed cuts rates in September, down from a 70% chance seen just a week ago [48] AI & Technology Sector - Nvidia closed at a record high, above $170 per share, with plans to sell H20 AI chips in China [7] - ASML, a supplier of computer chipmaking equipment, said it may not achieve growth in 2026 due to macroeconomic uncertainty and geopolitical developments; shares fell more than 7% in pre-market trading [8] - The AI trade is considered to be in a 3-5 year bull market, but may be overheated in the short term [10][11] - Apple announced that it would buy rare earth magnets from MP Materials in a $500 million deal [46] Banking & Financial Performance - Bank of America reported adjusted earnings per share of 89 cents, higher than analyst expectations of 85 cents, with revenue at $265 billion [16] - Bank of America's net interest income for the second quarter came in at $1467 billion, above estimates for $146 billion [18] - Bank of America's trading revenue in the second quarter came in at $538 billion, exceeding the street's expectation of $494 billion [19] - Bank of America's investment banking revenue came in at $143 billion, slightly above estimates for $127 billion [21] Precious Metals Market - Silver has risen more than 28% this year, outperforming gold and copper [24] - Croup forecasts silver to continue to soar above $40 an ounce [24] - Central banks have been a huge determining force in their buying of gold, with over 1,000 tons bought in each of the last three years [31] - Trump's tariffs on copper threatening to be 50% on August 1st, we're seeing a lot of front running in this trade [28] Healthcare Sector - Johnson and Johnson reported second quarter adjusted EPS of $277, boosting its full-year sales outlook to a range of $932 billion to $936 billion and full-year adjusted earnings per share to a range of $1080 to $1090 [42][43] - The pharma sector is bracing for potential tariffs from President Trump [44] Impact of Tariffs - Rio Tinto said that US tariffs on its Canada-made aluminum have added $300 million in costs in the first half of this year [39] - Trump hit Canada with a 50% tariff on aluminum and auto parts in June [40]

Federal Reserve Policy - Market expectations for rate cuts are becoming increasingly difficult to justify based on CPI data [1] Inflation & Market Expectations - The market is expecting rate cuts [1]

Inflation & Interest Rates - India's inflation eased for the eighth consecutive month [1] - This strengthens the case for further interest rate cuts by the central bank [1]

Group 1 - BOC Aviation (BOCA) delivered 13 aircraft in 2Q25, maintaining flat year-over-year (YoY) and increasing two quarter-over-quarter (QoQ), with a total of 24 aircraft delivered in 1H25, which is an increase of six YoY and four half-over-half (HoH) [1] - The firm’s self-owned fleet grew to 441 aircraft by the end of 1H25, up 12 YoY and six HoH, while the order book increased to 351, reflecting a growth of 132 YoY and 119 HoH [1] - Aircraft lease rates are trending upward, with the Airbus A320NEO lease rate rising approximately 6% YoY as of February 2025, supporting high-priced contract execution and potentially lifting gross lease rental yields [2] Group 2 - The firm sold 14 self-owned aircraft in 2Q25, an increase of three YoY and 10 QoQ, with a total of 18 self-owned aircraft sold in 1H25, also up three YoY [3] - The market value of the firm’s self-owned fleet exceeded book value by 15% as of the end of 2024, indicating that steady aircraft disposals could improve fleet quality and realize asset premiums [3] Group 3 - The firm has a higher exposure to floating-rate liabilities (27% at end-2024), making it more sensitive to interest rate cuts compared to leasing peers, with historical share price movements closely tied to US Treasury yields and interest rate cut expectations [5] - In previous periods of rising interest rate cut expectations, the firm’s share price increased by 18.7% from its trough to peak in November 2023 and climbed 26.2% by July 2024, suggesting potential short-term catalysts for share price [5] Group 4 - Improved aircraft deliveries are expected to drive up gross lease rental yields, while overseas interest rate cuts may lower financing costs, leading to a steady recovery in the firm’s return on equity (ROE) [6] - The firm’s historical average valuation has shown a strong correlation with its ROE, indicating that ROE expansion could provide room for a steady rise in valuation [6]

Monetary Policy - Mexico's central bank indicated a likely deceleration in the pace of interest rate cuts [1] - The signal follows last month's 0.5 percentage point reduction [1]

Chile’s consumer prices fell twice as much as expected in June, fueling expectations that the central bank will resume interest rate cuts this month https://t.co/fxVZLYUfoE ...

Investment Ratings - Harvey Norman (HVN AU) is rated Overweight (OW) with a price target of A$6.50 [11][27][30] - Wesfarmers (WES AU) is rated Underweight (UW) with a price target of A$67.00 [19][30] Core Insights - Harvey Norman is expected to benefit from a recovering housing cycle, with earnings projected to turn positive in FY25 after previous declines [11][12][27] - Wesfarmers' core businesses, Bunnings and Kmart, are stable but mature, with limited growth potential and high valuation multiples already reflecting their quality [19][30] Summary by Sections Harvey Norman - The investment thesis highlights an improving outlook from a low base, with earnings declines moderating and expected sales recovery [11][27] - Key drivers include a recovering housing cycle, resilient franchisee sales momentum, and high operating leverage to sales acceleration [12][27] - Valuation remains attractive at a FY25E P/E multiple of approximately 14x, with a significant discount to broader industrials [4][27] Wesfarmers - The investment thesis indicates an Underweight rating due to high valuation multiples that do not justify current earnings growth expectations [19][30] - Key challenges include capped sales growth for Bunnings and Kmart, ongoing losses at Mt Holland in a weak lithium market, and limited organic growth opportunities [20][30] - The valuation is stretched at around 33x FY26E PER, despite recent earnings downgrades [9][30]

Company Overview - Virtus Investment Partners (VRTS) shares increased by 6.3% to close at $200.71, with notable trading volume exceeding typical levels [1] - The stock has gained 10.5% over the past four weeks, indicating positive momentum [1] Market Sentiment - Broader market optimism regarding potential trade agreements and expectations of earlier interest rate cuts by the Federal Reserve has positively influenced investor sentiment towards finance stocks [2] - Investors are seeking better investment options for higher yields, which is expected to lead to inflows for asset managers, positively impacting their revenues [2] Earnings Expectations - Virtus is projected to report quarterly earnings of $6.17 per share, reflecting a year-over-year decline of 5.5% [3] - Expected revenues for the upcoming quarter are $188.7 million, down 7.1% from the same quarter last year [3] Earnings Estimate Trends - The consensus EPS estimate for Virtus has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook [4] Industry Comparison - Virtus operates within the Zacks Financial - Investment Management industry, where SEI Investments (SEIC) also holds a Zacks Rank of 2 (Buy) and has seen a 7.7% return over the past month [4][5] - SEI's consensus EPS estimate has increased by 2.9% over the past month, reflecting a year-over-year change of 9.5% [5]

Market Overview - U.S. stock markets experienced a successful June, with the Dow, S&P 500, and Nasdaq Composite increasing by 4%, 5.7%, and 5.7% respectively, closing at record-high levels for the first half of 2025 [1] - Despite this success, the first half of 2025 marked the weakest performance for the indexes since 2022, with potential catalysts for the second half including a U.S.-China trade deal, anticipated interest rate cuts by the Fed, and reduced recession fears [2] Imaginary Portfolio - An imaginary diversified portfolio was created, consisting of five stocks that each gained over 50% in the first half of 2025, with further upside potential indicated by favorable Zacks Ranks [3][4] Company Highlights Jabil Inc. (JBL) - Jabil is benefiting from strong momentum in capital equipment, AI-powered data center infrastructure, and digital commerce, with a focus on product diversification [7] - Expected revenue and earnings growth rates for Jabil are 5.9% and 18.5% respectively for the next year, with a 9% improvement in the Zacks Consensus Estimate for next-year earnings over the last 30 days [9] Howmet Aerospace Inc. (HWM) - Howmet Aerospace is experiencing growth in the commercial aerospace market, supported by robust build rates and recovery in wide-body aircraft, along with strength in its defense aerospace business [10] - Expected revenue and earnings growth rates for Howmet are 8.5% and 29% respectively for the current year, with a 0.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last seven days [11] CVS Health Corp. (CVS) - CVS Health is investing in technology to reduce costs and enhance customer experience, with improved Medicare Advantage star ratings aiding its position [12] - Expected revenue and earnings growth rates for CVS are 3.5% and 12.6% respectively for the current year, with a 2.3% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [14] Carvana Co. (CVNA) - Carvana's acquisition of ADESA's U.S. operations has strengthened its logistics and auction capabilities, with expectations for year-over-year growth in retail unit sales [15][16] - Expected revenue and earnings growth rates for Carvana are 32.1% and over 100% respectively for the current year, with a 7.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 30 days [17] NRG Energy Inc. (NRG) - NRG Energy operates in the energy and home services sector, producing electricity from various sources and expanding operations through both organic and inorganic initiatives [18][19] - Expected revenue and earnings growth rates for NRG are 2.6% and 17% respectively for the current year, with a 2.8% improvement in the Zacks Consensus Estimate for current-year earnings over the last 60 days [20]

Chile’s economic activity unexpectedly dropped in May on declines across several sectors, supporting the central bank’s outlook for renewed interest rate cuts over the coming quarters. https://t.co/uEBPk1nk2B ...