Macro Events & News
What began as a week primed for downside volatility quickly turned into a surprisingly resilient stretch for the markets. Initial fears surrounding the U.S.-led missile strikes in Iran—and Iran’s retaliatory strikes on U.S. bases—fueled early Monday weakness, but the reaction was short-lived. Despite the serious headlines, the market response was muted, with even crude oil seeing only a brief pop before retreating. Reports that Iran had warned the U.S. of the specific bases to be targeted, and that U.S. forces were able to evacuate in advance, contributed to the perception that the conflict may have been more performative than escalatory. By week’s end, the worst appeared to be over, and risk appetite returned.
On the trade front, the market got a boost Thursday even before U.S. officials confirmed Friday that a trade deal with China had quietly been signed earlier in the week. The delay in the announcement remains puzzling, but the market strength suggest insiders may have already known. While details are trickling in, early indications suggest a mutual tariff structure of 30% on Chinese goods and 10% on U.S. goods—broadly mirroring pre-Liberation Day levels but expanded to cover more products. Trump administration officials added that more deals are likely in the pipeline and downplayed the July 9 tariff implementation deadline, further easing concerns.
Friday’s release of the May Personal Consumption Expenditures (PCE) report showed headline inflation rising 0.1% month-over-month and 2.3% year-over-year, both in line with expectations. However, core PCE came in slightly hotter at 0.2% month-over-month and 2.7% annualized, modestly above the 0.1% and 2.6% consensus. Markets were also stirred by remarks from President Trump, who floated the idea of replacing Fed Chair Jerome Powell next year with a more dovish alternative—a comment that added further tailwinds to the week’s risk-on sentiment.
The 10-year Treasury yield retreated to 4.27% on softer than expected economic data and dovish commentary from Fed officials. The VIX was lower for the week, closing at 16.32.
All the major indexes had a impressive week, all closing higher: the Dow up 4%, the S&P 500 up 3%, and the Nasdaq up 4%.
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7% ▲
Netflix Inc (NASDAQ:NFLX) steadily climbed throughout the week, largely unaffected by broader geopolitical or macroeconomic developments. There were no major headlines specific to the company, with momentum seemingly continuing from last week’s wave of price target increases by equity research analysts.
august bear notes
Netflix’s rally has been impressively persistent, continuing to climb steadily since its April earnings report. The move has largely come without new headlines and appears to be driven by sustained investor momentum and recent bullish analyst calls. While a pullback may seem overdue, similar calls for a cooldown have been proven wrong for weeks. At this stage, it may be best to let the trend play out. This doesn’t look like an optimal time to add, but trimming could also prove premature—momentum remains firmly intact.
9% ▲
Uber Technologies (NASDAQ:UBER)struggled on Monday alongside the broader market following weekend escalations in the Middle East and the launch of Tesla’s robotaxi service in Austin. Sentiment shifted when reports highlighted the limitations of Tesla’s offering and geopolitical tensions eased. Shares saw a notable boost on Tuesday after Waymo announced its expansion into Atlanta, powered by Uber’s platform.
august bear notes
Uber briefly dipped to the $82 level early in the week but quickly rebounded as sentiment shifted. Initial concerns over Tesla’s robotaxi rollout faded after early videos from influencers revealed clear limitations in Tesla’s current autonomous software. Issues included cars stopping in intersections and missed pickup locations, exposing the infancy of Tesla’s platform. While Tesla remains a long-term threat due to its vertical integration, Uber continues to gain ground with key partnerships like Waymo, whose expansion into Atlanta underscores Uber’s AV strategy. Still, reliance on external partners may cap Uber’s upside compared to vertically integrated peers.
2% ▲
UnitedHealthcare Inc (NYSE:UNH) continued to hover around the $300 level as ongoing legal challenges and unresolved operational issues kept a lid on any upward momentum. There were no material updates throughout the week.
august bear notes
UnitedHealthcare held its ground around the $300 level despite continued headline risk. Reports of expediting prior authorization processes—which could pressure margins—and news of potential shareholder lawsuits midweek added to existing concerns. Investors seem to be in a holding pattern, awaiting further clarity on the DOJ investigation. The $300 level has proven resilient, but risks remain. A negative outcome from the DOJ could result in a sizable fine and pressure revenue, especially given the already reduced guidance and lack of transparency from its last earnings report.
0%
Workday Inc (NASDAQ:WDAY) showed signs of potential breakdown, briefly dipping to $230—marking new post-earnings lows following a lackluster Q1 report. A late-week rally helped shares recover enough to close relatively flat.
august bear notes
Workday may not be a household name, and its product visibility and growth rate don’t grab headlines, but it remains a fundamentally sound company. It boasts respectable financials and a sticky enterprise customer base. A solid base appears to be forming near current levels. Interestingly, CNBC’s Jim Cramer recently called it a stock he doesn’t like—potentially a positive sign for contrarians who follow the “inverse Cramer” strategy. All it may need now is a catalyst to reignite investor interest.
