U.S. Stock Market Preview | The three major stock index futures are mixed, "terrifying data" will be revealed tonight, and Netflix will announce its earnings after the market closes

1. As of July 17th (Thursday) before the US stock market opens, the three major US stock index futures are mixed. As of the time of writing, Dow futures are down 0.19%, S&P 500 futures are down 0.08%, and Nasdaq futures are up 0.02%.

1. As of the time of writing, the German DAX index is up 0.51%, the UK FTSE 100 index is up 0.30%, the French CAC 40 index is up 0.81%, and the Euro Stoxx 50 index is up 0.83%.

1. As of the time of writing, WTI crude oil is up 0.69%, priced at $66.84 per barrel. Brent crude oil is up 0.32%, priced at $68.74 per barrel.

Market News

The US June "horrific data" is about to be released, which may affect the rate cut expectations for September. The US June retail sales data will be released tonight at 20:30, with the market expecting a month-on-month increase of 0.1%. Given the inflation being lower than expected and the turmoil surrounding the Federal Reserve's leadership change, this data may influence the rate cut expectations for September.

Trump: Will impose a 10% or 15% tariff on over 150 countries. US President Donald Trump stated that as the trade agenda progresses, he will send letters to over 150 countries notifying them that the tariff rates could reach 10% or 15%. Trump said on Wednesday at the White House: "We will send notifications to more than 150 countries, clearly stating what the tariff rates are." Trump added, "The tax rate is the same for these countries." He mentioned that the trade partners receiving these letters "are not major powers, and their business is not significant." Trump also stated that the tax rate "could be 10% or 15%, we have not decided yet."

Wall Street defends Powell! CEOs of major banks speak out: The independence of the Federal Reserve is the cornerstone of market confidence. As the long-standing conflict between US President Trump and Federal Reserve Chairman Powell intensifies, senior leaders from some major banks on Wall Street emphasize the importance of having an independent Federal Reserve. Bank of America CEO Brian Moynihan, Goldman Sachs CEO David Solomon, and JPMorgan CEO Jamie Dimon all stressed the importance of the Fed's autonomy. Moynihan stated in an interview on Wednesday that the Federal Reserve "is designed to be independent." Citigroup CEO Jane Fraser stated in a statement: "The independence of the Federal Reserve is where its credibility lies. This is crucial for our capital markets and the competitiveness of the United States." Federal Reserve's Bostic: Inflation pressures are intensifying, supports keeping interest rates unchanged. Atlanta Fed President Raphael Bostic stated on Wednesday that he still supports keeping interest rates unchanged, noting that recent inflation data shows price pressures are rising. Bostic said, "We are seeing underlying signs in the economy that inflation pressures are increasing, which is indeed concerning." When discussing interest rates, he stated, "For now, I will wait and see." The core inflation rate in the U.S. was below expectations for the fifth consecutive month in June, but the Consumer Price Index (CPI) report released by the U.S. Bureau of Labor Statistics also showed that tariffs have begun to push up prices for some goods. Bostic remarked, "We may be at a turning point. Over the past few months, the inflation data has indeed performed very well, very close to target levels. But the recent CPI report has conveyed a different message."

Trump's policies shake up the market! Wall Street's big banks' M&A dreams dashed, yet unexpectedly reaping billions in trading revenue. Wall Street banks had optimistically believed that Donald Trump's second term would bring a wave of mergers and acquisitions, but instead, it led to a trading feast. The trading revenue of the five largest U.S. banks in the first half of the year surged by $10 billion compared to the same period last year, reaching record levels. This was mainly due to tariffs and tax policies driving a significant increase in trading activity in the stock, currency, and bond markets. However, investment banking revenue only saw a slight increase of less than $1 billion and remains nearly 40% lower than the peak in 2021, as market volatility affected M&A and initial public offering (IPO) transactions.

Federal Reserve's Williams: Tariffs will have a greater impact on inflation, restrictive policies are "entirely appropriate." New York Fed President Williams stated that he expects tariffs to have a greater impact on inflation in the coming months, thus the Fed's current tightening policy is "entirely appropriate." In a speech prepared for an event organized by the New York Association for Business Economics, Williams said, "Although the impact of tariffs is currently relatively limited from a hard overall data perspective, I expect this impact to strengthen in the coming months. Maintaining this moderate tightening monetary policy stance is entirely appropriate." The Fed has kept the benchmark interest rate unchanged so far this year, and it is widely expected to maintain this rate at the end of July. According to futures market data, investors expect the next rate cut to occur in September.

Individual Stock News

Netflix (NFLX.US) earnings report imminent: Stock price doubles facing test, advertising business becomes new focus. As Netflix's stock price approaches its highest valuation level since 2022, the upcoming second-quarter earnings report and future outlook of the streaming giant are attracting significant market attention. The company is set to release its second-quarter results after the U.S. stock market closes on Thursday, with the market generally expecting it to continue its growth momentum. According to aggregated analyst forecasts, Wall Street expects Netflix's third-quarter earnings per share to reach $6.70, with revenue of $11.3 billion, representing year-on-year growth of 24% and 15%, respectively. Notably, the company will no longer disclose quarterly subscription user numbers, a traditional core metric, starting this fiscal year, instead guiding investors to focus on revenue and profit performance PepsiCo (PEP.US) Q2 performance exceeds expectations, advancing health product strategy under supply chain cost pressure. PepsiCo's financial performance in the second quarter exceeded expectations, with organic sales growth of 2.1% year-on-year for the quarter ending June 14, and earnings per share of $2.12, both surpassing analysts' average expectations. The company reaffirmed its fiscal year 2025 targets, expecting low single-digit growth in organic revenue for the year, with core profits remaining roughly flat compared to the previous year, but indicated that supply chain costs (including tariffs) will continue to rise. Despite a 2% increase in pre-market stock price on the day, the stock has fallen 11% year-to-date, while the S&P 500 index has risen 6.5% during the same period. The company is responding to changing consumer preferences and cost pressures by expanding its health food line, increasing the supply of low-sugar/no-sugar products, adjusting product formulations (such as removing artificial colors and flavors, adding natural ingredients like avocado), and launching products at multiple price points.

GE Aerospace (GE.US) Q2 profits exceed expectations, raises full-year guidance. GE Aerospace's financial performance in the second quarter significantly exceeded expectations, and the company raised its full-year performance guidance: adjusted earnings per share for 2025 are expected to reach $5.60-$5.80 (previously not exceeding $5.45), with adjusted revenue growth, operating profit, and free cash flow all improved. Adjusted earnings per share for the quarter were $1.66 (surpassing analyst expectations of $1.43), with adjusted revenue of approximately $10.2 billion (exceeding expectations of $9.6 billion). The commercial aircraft business saw a 30% year-on-year revenue increase and secured the largest order in history for wide-body aircraft engines from Qatar Airways, totaling over 400 engines. Despite facing supply chain cost pressures from tariff policies, the company partially hedged risks through cost control and pricing strategies. The stock has surged 60% year-to-date, reflecting market recognition of its recovery in aviation demand and strategic transformation.

Alcoa (AA.US) Q2 performance exceeds expectations, tariffs lead to over $100 million increase in costs for the quarter. Alcoa's Q2 revenue was $3.018 billion, a 4% increase from $2.906 billion in the same period last year, better than the market expectation of $2.95 billion. The net profit attributable to the company was $164 million, compared to $20 million in the same period last year. Adjusted net profit was $103 million, up from $30 million in the same period last year. Adjusted earnings per share were $0.39, compared to $0.16 in the same period last year, in line with market expectations. Adjusted EBITDA was $313 million, down from $325 million in the same period last year. Looking ahead, Alcoa expects total alumina production and shipments for 2025 to remain consistent with previous forecasts, between 9.5 million and 9.7 million tons and 13.1 million and 13.3 million tons, respectively; aluminum production is also expected to remain unchanged, between 2.3 million and 2.5 million tons.

AI demand confidence receives strong support! TSMC (TSM.US) Q2 profits reach a record high of $13.5 billion, raises full-year revenue guidance. TSMC, the world's largest chip foundry, raised its revenue growth expectations for 2025 on Thursday, providing a strong boost to investor confidence in the ongoing global artificial intelligence (AI) investment boom. The chip manufacturing giant raised its sales growth forecast in dollar terms for this year from the previous mid-20% to approximately 30%, while also expecting strong revenue growth in the third quarter, projected to be between $31.8 billion and $33 billion, significantly higher than $23.5 billion in the same period last year and $30 billion in the previous quarter This adjustment further strengthens market expectations that tech giants from Meta (META.US) to Google (GOOGL.US) will continue to invest in data center construction to support AI development. As of the time of writing, TSMC has risen over 3% in pre-market trading.

Novartis (NVS.US) Q2 performance exceeds expectations, but new drug portfolio struggles to offset the decline of Cosentyx and CFO transition impact. Novartis reported a 12% increase in Q2 revenue to $14.054 billion, with earnings rising 24% to $4.024 billion, and core earnings per share of $2.42, surpassing market expectations. Although sales of the core psoriasis treatment Cosentyx were $1.63 billion this quarter, below analysts' expectations of $1.75 billion, the strong performance of the new drug portfolio effectively mitigated the impact. Notably, Novartis is currently undergoing a critical business restructuring phase. Under the leadership of CEO Vas Narasimhan, the company has completed the spin-off of its ophthalmology and generic drug businesses, focusing resources on the development of innovative drugs.

Jensen Huang cashes out at high levels: sells another $37 million of Nvidia (NVDA.US), aiming to reduce holdings by 6 million shares this year. Documents from the U.S. Securities and Exchange Commission (SEC) show that Nvidia CEO Jensen Huang sold 225,000 shares of the chipmaker, totaling approximately $37 million. This sale is part of a stock selling plan Huang established in March of this year. Huang began trading stocks last month, with the most recent sale disclosed last Friday also involving 225,000 shares, valued at approximately $36 million. According to InsiderScore data, Huang has sold a total of 1.2 million shares of Nvidia stock this year, worth about $190 million. Based on his reduction plan announced in March, he is expected to sell up to 6 million shares of Nvidia stock this year, the same number as the previous year. In last year's pre-arranged plan, he cashed out over $700 million through stock sales.

OpenAI accelerates "de-Microsoftization": latest move involves Google (GOOGL.US) to build a hybrid cloud ecosystem. OpenAI announced on Wednesday that it will use Google's cloud infrastructure to run its popular chatbot ChatGPT. This effort to expand computing capacity aligns with OpenAI's desire for more computing resources, as the company initially relied entirely on Microsoft (MSFT.US) for cloud service resources, but now its business demands are growing, requiring more computing power to meet those needs. Subsequently, the relationship between the two companies has changed, with Microsoft listing OpenAI as a competitor last year. Both companies provide AI tools for developers and subscription services for businesses. OpenAI has included Google in its list of suppliers, explicitly stating that ChatGPT and its application programming interface will use Google Cloud Platform, in addition to resources from Microsoft, CoreWeave, and Oracle.

Important Economic Data and Event Forecasts

Beijing time 20:30: U.S. June Import Price Index MoM (%), U.S. Initial Jobless Claims for the week ending July 12 (10,000), U.S. July Philadelphia Fed Manufacturing Index, U.S. June Retail Sales MoM (%) Next day at 04:00 Beijing time: U.S. net foreign purchases of long-term securities in May (in 100 million USD).

At 22:00 Beijing time: Federal Reserve Governor Christopher Waller will speak on the housing market and the outlook for the U.S. economy.

Next day at 00:45 Beijing time: 2027 FOMC voting member and San Francisco Fed President Mary Daly will participate in a discussion at the Rocky Mountain Economic Summit.

Next day at 01:30 Beijing time: Federal Reserve Governor Lisa Cook will speak on artificial intelligence and innovation.

Earnings Forecast

Friday morning: Netflix (NFLX.US), Interactive Brokers (IBKR.US)

Friday pre-market: American Express (AXP.US), Charles Schwab (SCHW.US), Schlumberger (SLB.US)