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INTERACTIVE BROKERS

 Warm-Up
- Cover Art - Best Ever - Not...
- New term - QUISHING
- I gotchooo and Say less

Markets
- What a Week! - GDP, Earnings and FOMC meeting
- MORE ATHs!
- Earnings Season Update
- Homes - Capital Gains?

Cover Art
- Can we take a close look at what was AI generated this week?
- At least TWO glaring issues ...

China - another delay/pause?
- President Trump tells reporters on Air Force One that he could meet with Chinese President Xi by the end of the year (???)

EU Deal 
- Framework of the deal seems done
- 15% across the board tariff on EU goods into the US (a couple of exceptions)
- Prices for Olive Oil from your favorite region is going up
- Some new benefits for US cars into Europe
- - If this is all so good for say US car manufactures, why aren't Ford and GM stocks doing anything?

Earnings this week of note:
- Microsoft (MSFT): Expected to report on July 30, 2025
- Meta Platforms (META): Scheduled to report on July 30, 2025
- Amazon (AMZN): Scheduled to report on July 31, 2025
- Apple (AAPL): Scheduled to report on July 31, 2025
--- Those 4 companies are 20% of the S&P weighting

Earnings Season Update
- Overall, 34% of the companies in the S&P 500 have reported actual results for Q2 2025 to date. Of these companies, 80% have reported actual EPS above estimates, which is above the 5-year average of 78% and above the 10-year average of 75%.
- If 80% is the final number for the quarter, it will mark the largest percentage of S&P 500 companies reporting a positive EPS surprise for a quarter since Q3 2023 (81%).
- In aggregate, companies are reporting earnings that are 6.1% above estimates, which is below the 5-year average of 9.1% and below the 10-year average of 6.9%.

Real Estate 
- Existing home sales fell 2.7% in June but were unchanged from June 2024.
- According to the latest report from the National Association of Realtors®, record-high home prices, elevated mortgage rates, and a moderate supply are discouraging some potential home buyers, particularly first-time home purchasers.
- The median existing-home sale price in June was $435,300, up from the May price of $423,700, and higher than the June 2024 price of $426,900
- Inventory ticked up from a 4.6-month supply in May to 4.7 months in June
- Sales of single-family existing homes dipped 3.0% last month. The median single-family existing home price was $441,500 in June, compared to $428,800 in May and $432,900 in June 2024.

Quishing
- QR codes used to trick people into visiting malicious websites or unknowingly share private information, a scam that has become known as “quishing.”
- The increasing prevalence of QR code scams prompted a warning from the Federal Trade Commission earlier this year about unwanted or unexpected packages showing up with a QR code that when scanned “could take you to a phishing website that steals your personal information, like credit card numbers or usernames and passwords. It could also download malware onto your phone and give hackers access to your device.”
- There is work being doen to develop a “smart” QR code called a SDMQR (Self-Authenticating Dual-Modulated QR) that has built-in security to prevent scams. But first, he needs buy-in from Google and Microsoft, the companies that build the cameras and control the camera infrastructure.

Thoughts?
- During a pivotal push by Ukraine to retake territory from Russia in late September 2022, Elon Musk gave an order that disrupted the counteroffensive and dented Kyiv’s trust in Starlink, the satellite internet service the billionaire provided early in the war to help Ukraine’s military maintain battlefield connectivity.
- According to three people familiar with the command, Musk told a senior engineer at the California offices of SpaceX, the Musk venture that controls Starlink, to cut coverage in areas including Kherson, a strategic region north of the Black Sea that Ukraine was trying to reclaim.

Trump and Powell
- Clearly nothing there...
- Trump had funny moment with Powell at renovation site
- May 2026 will be the day Powell steps down - when his term is over
- Until then, Trump will use Powell as an excuse if economy falters
- END OF STORY

Chocolate and Coffee
- Swiss food giant Nestle said Thursday that prices for its KitKat bars and Nespresso coffee pods could rise further in the second half of this year, as U.S. tariffs risk exacerbating existing commodity price pressures.
- CEO Laurent Freixe said that he was “satisfied” with broad price hikes implemented in the first half of the year, but said that company was still considering whether further action would be needed.
-- Arabica coffee prices have more than doubled since early 2023, while those for cocoa have more than tripled.

Who Would Have Thought?
- Obesity drugmaker Novo Nordisk today cut its full-year sales and operating profit forecasts for the second time this year, sending its shares down as much as 17%.
- The maker of weight-loss drug Wegovy is struggling to convince investors it can remain competitive in the obesity drug boom against U.S. rival Eli Lilly
- Novo shares have fallen sharply over the past year.

TESLA
- Shares fell last 8% Thursday after the company reported a second straight quarter of declining auto sales, and CEO Elon Musk told analysts that there could be a “few rough quarters” ahead due to the expiration of federal electric vehicle tax credits.
- Musk’s EV maker reported a 16% decline in automotive revenue from a year earlier to $16.7 billion.
- Total revenue fell 12% to $22.5 billion from $25.5 billion a year earlier, missing the average analyst estimate of $22.74 billion, according to LSEG.
- BUT ROBOTaxis are coming! (someday, maybe)
- Next plan is to roll up xAI into Tesla - Shareholders may not be too happy with that.
-- BTW 0- Shares have just about recovered already from the post-earning drubbing

Still losing $
- Intel reported second-quarter results on Thursday that beat Wall Street expectations on revenue, as the company’s new CEO Lip-Bu Tan announced significant cuts in chip factory construction. The stock fell about 5% in extended trading.
- Earnings per share: Loss of 10 cents per share, adjusted.
- Revenue: $12.86 billion versus $11.92 billion estimated
- Intel said it expects revenue for the third-quarter of $13.1 billion at the midpoint of its range, versus the average analyst estimate of $12.65 billion. The chipmaker said that it expects to break even on earnings while analysts were looking for earnings of 4 cents per share.
- Company also cited several other spending cuts in the memo, particularly in the company’s costly foundry division, which makes chips for other companies and is still looking for a big customer to anchor the business.
- Intel said its foundry business had an operating loss of $3.17 billion on $4.4 billion in revenue.

Economic and Other
- Two very important market-moving reports are out this week. The first estimate of gross domestic product for the second quarter is released this week.
- FYI 0 The economy contracted 0.5% in the first quarter.
- Expectations are that an uptick to +2.7% for Q2 - VERY strong!
--- ALSO - The Federal Open Market Committee has a rate decisions due Wednesday at 2PM. ----- What are we thinking about the potential for a rate cut this meeting?

New Trial Balloon
- No Capital Gain tax on home sales?
- Been thinking about this more - how does this help with housing prices and affordability?

Amazon  Fraud Prevention
- An Amazon venture fund backs startup developing fix for return fraud
- Retailers of all sizes have in recent years struggled with an uptick in fraudulent returns. The scam involves shoppers requesting a refund, but instead of returning the merchandise, they keep the item and send back an empty package or a box of unrelated junk.
- Cambridge Terahertz, a Sunnyvale, California-based startup, has developed a 3D imaging system that can see inside unopened packages, enabling retailers to more easily and quickly spot cases of return fraud.

Transport M&A
- Union Pacific said on Tuesday it would buy smaller rival Norfolk Southern in an $85 billion deal, to create the nation’s first coast-to-coast freight rail operator and reshape the movement of goods from grains to autos across the country.
- If approved, the deal would combine Union Pacific’s stronghold in the western two-thirds of the U.S. with Norfolk’s 19,500-mile network that primarily spans 22 eastern states.
- This would mark the largest-ever buyout in the sector

THE GAME
Since the start of 2023
(Approx numbers as some names off as they have been bought out - so take with some grain of salt)
- 116 names, Total of the plus and minus is 330% - average is 2.85%
- Highest is 99.54% and lowest is a loss of 22%
- 64 losers, 54 winners (46% batting average)
- That is raw numbers, does not take into account reinvesting, amount invested, just the returns from the buy and the sell

 

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