U.S. Stock Outlook | Three Major Index Futures Rise Together, Novo Nordisk Lowers 2025 Outlook

1. As of July 29 (Tuesday) before the U.S. stock market opened, the futures of the three major U.S. stock indices rose. As of the time of writing, Dow futures were up 0.13%, S&P 500 futures were up 0.30%, and Nasdaq futures were up 0.47%.

1. As of the time of writing, the German DAX index was up 1.17%, the UK FTSE 100 index was up 0.55%, the French CAC 40 index was up 1.10%, and the Euro Stoxx 50 index was up 1.02%.

1. As of the time of writing, WTI crude oil was up 0.07%, priced at $66.76 per barrel. Brent crude oil was up 0.13%, priced at $69.41 per barrel.

Market News

"Fed Mouthpiece": The Federal Reserve is not ready to cut rates this week. "Fed Mouthpiece" Nick Timiraos published an article stating that Federal Reserve officials expect they will ultimately need to continue cutting rates, but they are not ready to do so on Wednesday. Their disagreement lies in what evidence they need to see first and whether waiting for everything to become clear is a mistake. Officials are currently divided into three camps on whether to resume rate cuts. The focus will be on whether Powell will provide any hints about a September rate cut during the press conference, and whether his colleagues will start laying the groundwork for the next meeting's rate cut in the coming days and weeks.

The next catalyst for cryptocurrency is coming. Bo Hines, Executive Director of the Presidential Advisory Council on Digital Assets, stated that the White House will release a cryptocurrency policy report on Wednesday, which is based on the executive order regarding digital assets signed by President Donald Trump in January. In January, Trump signed an order stating that he would "promote U.S. leadership in the field of digital assets and financial technology while protecting economic freedom." Currently, Congress is actively regulating the industry. Another catalyst for the cryptocurrency market will be the Federal Reserve's interest rate decision. The market generally expects rates to remain unchanged, but unexpected actions or statements from Fed Chairman Powell could impact the market, including the cryptocurrency market.

Wall Street's most optimistic forecast! Oppenheimer raises S&P 500 year-end target to 7100 points. On Monday, Oppenheimer raised its annual target for the S&P 500 index to 7100 points, the highest target among major Wall Street brokerages. The firm is optimistic about the easing of trade tensions and strong corporate earnings The current target value implies an 11% upside for the benchmark index compared to the latest closing price. The bank had previously set the target value for the index at 5,950 points. The Oppenheimer strategist team led by John Stoltzfus stated in a report: "With President Trump announcing trade agreements with Japan and the EU... we believe that the 'tariff barriers' have been largely overcome."

Trade war alert downgraded! The impact of U.S. tariffs is less than expected, and Wall Street breathes a sigh of relief. The tariffs imposed by the U.S. on imported goods appear to be slightly below the levels threatened by President Donald Trump in April, but this is enough to alleviate Wall Street's concerns about a severe economic recession. Following last week's trade agreement between the U.S. and the EU, it now seems that the actual tariff rates will ultimately fall within the range of 15% to 20%. This rate is significantly higher than the low single-digit levels at the beginning of the year but lower than the 25% or even higher rates feared after the tariff announcement on April 2. JP Morgan has reduced the recession risk from 60% on D-Day to 40%, which, while still above normal levels, is at least not as pessimistic as before. Like other institutions, the bank had anticipated that Trump's tariffs would trigger a wave of destructive retaliation globally.

Individual Stock News

Novo Nordisk (NVO.US) lowers sales growth and profit expectations for 2025. Novo Nordisk warned on Tuesday that its full-year sales and operating profit growth would be below previous expectations, marking the company's second downward revision for 2025. As the producer of the weight-loss drug Wegovy, Novo Nordisk is striving to convince investors that it can remain competitive with U.S. rival Eli Lilly amid the weight-loss drug craze. Over the past year, Novo's stock price has significantly declined. The company stated in a release: "The downward revision of the 2025 sales outlook is due to a reduction in growth expectations for the second half of 2025." In local currency terms, Novo Nordisk now expects sales to grow by 8%-14% in 2025, down from the previous expectation of 13%-21%. The company also lowered its operating profit growth expectation from the previous 16%-24% to 10%-16%. As of the time of writing, Novo Nordisk's pre-market stock price has dropped over 20%.

Healthcare cost dilemma unresolved, UnitedHealth (UNH.US) profit guidance "plummets" and stock price follows suit. UnitedHealth announced an annual profit guidance that fell short of expectations in its second-quarter earnings report, marking another setback for the healthcare giant as it struggles to regain investor confidence. The company currently expects adjusted earnings per share of no less than $16 in 2025, significantly below the average analyst expectation of $20.40; revenue is projected to be between $445.5 billion and $448 billion, while analysts expected $449.16 billion. This healthcare giant, known for its robust growth, shocked Wall Street earlier this year by unexpectedly withdrawing its performance guidance due to soaring healthcare costs. The lower-than-expected performance guidance reflects the challenges UnitedHealth currently faces: failing to accurately predict the rising cost trends in the first half of the year, which could lead to its adjusted earnings per share experiencing the first annual decline since 2008 Increased market volatility poses challenges for business transformation, United Parcel Service (UPS.US) refuses to issue performance guidance for two consecutive quarters. United Parcel Service has declined to provide earnings guidance due to difficulties in navigating market fluctuations, highlighting the challenges faced by the delivery giant in restructuring its network and revitalizing its business. The financial report shows that United Parcel Service's revenue in the second quarter was $21.2 billion, a year-on-year decrease of 2.8%, exceeding market expectations; the non-GAAP earnings per share were $1.55, below the market expectation of $1.57. The company stated on Tuesday that "given the current macroeconomic uncertainty," it will not provide forecasts for full-year revenue or operating profit. United Parcel Service has only made limited forecasts for capital expenditures and dividend payments for 2025, and it still expects the ongoing transformation plan to achieve $3.5 billion in cost reductions.

Stellantis (STLA.US) resumes performance guidance, warns of €1.2 billion tariff impact in the second half. Global automotive giant Stellantis announced on Tuesday that due to a new trade agreement between the EU and the US, the company, which owns brands such as Jeep and Fiat, is resuming its financial guidance while expecting to face approximately €1.2 billion (about $1.4 billion) in tariff impacts in the second half of this year. Stellantis stated in a release that the adjusted operating profit margin for the second half is expected to remain in the low single digits, a downward revision from its previous forecast of single-digit profit margins for the full year, which was withdrawn in April due to tariff turmoil; the company also predicts that industrial free cash flow will improve in the second half compared to the €3 billion ($3.48 billion) cash flow drain in the first half.

Volatile markets become cash cows, Nomura Holdings (NMR.US) sees net profit soar 52% year-on-year in the first quarter. Despite increased global market volatility, thanks to strong performance in trading and investment banking, Nomura Holdings' net profit surged 52% year-on-year in the first quarter. Japan's largest investment bank and brokerage achieved a net profit of ¥104.6 billion (approximately $705.7 million) from April to June, significantly up from ¥68.9 billion in the same period last year. This performance continues Nomura's record of achieving the highest annual profit in history for the fiscal year ending March 2025, further solidifying its leading position in the Japanese market while advancing its long-term strategy to become a global financial giant. The global markets division of Nomura saw a 7% increase in revenue due to market volatility triggered by US President Trump's tariff proposal announced in April, with a surge in demand for macro and spread products.

Barclays (BCS.US) reports a 23% profit increase in the first half and announces a $1.3 billion stock buyback plan. Driven by a trading boom sparked by US President Donald Trump's trade tariffs, Barclays Bank's market business reaped substantial rewards, resulting in better-than-expected performance. Additionally, the bank announced a £1 billion (approximately $1.33 billion) stock buyback plan. Data shows that the bank's pre-tax profit in the second quarter increased by 28% year-on-year to £2.5 billion (approximately $3.34 billion), exceeding the average expectation of £2.23 billion from analysts at the London Stock Exchange Group (LSEG); the group's total revenue reached £7.2 billion, in line with analyst expectations. For the period from January to June, the bank's pre-tax profit increased by 23% year-on-year to £5.2 billion (approximately $6.94 billion), surpassing the average analyst expectation of £4.96 billion Whirlpool (WHR.US) Q2 performance misses expectations, lowers full-year profit guidance. Whirlpool's Q2 sales fell 5.4% year-on-year to $3.77 billion, below the market consensus of $3.85 billion; adjusted earnings per share were $1.34, also below the market consensus of $1.68. Sales in North America decreased 4.7% year-on-year to $2.446 billion, sales in Latin America fell 10% year-on-year to $806 million, and sales in Asia dropped 5.9% year-on-year to $320 million. Looking ahead, Whirlpool maintains its full-year sales expectation at $15.8 billion; the full-year adjusted earnings per share expectation is $6-8 (down from the previous expectation of $10), below the market consensus of $8.96. The company also plans to cut its quarterly dividend from $1.75 per share to $0.90 per share.

Tariff impact weaker than expected, Philips (PHG.US) raises full-year profit forecast. Philips slightly raised its adjusted operating profit margin forecast. The company stated that the actual impact of the trade war has not been as severe as previously feared. The Dutch medical technology company currently expects its full-year adjusted operating profit margin to be in the range of 11.3% to 11.8%, an increase of 50 basis points from the previous forecast. According to its statement released on Tuesday, Q2 sales grew 1% year-on-year to €4.3 billion (approximately $4.98 billion). In May of this year, the Amsterdam-listed company had lowered its annual profit forecast, attributing the reason to costs associated with tariffs, estimating related losses could reach up to €300 million.

Important Economic Data and Event Forecast

Beijing time 20:30: U.S. June wholesale inventory month-on-month preliminary value (%).

Beijing time 22:00: U.S. July Conference Board Consumer Confidence Index, U.S. June JOLTs job openings (10,000).

Next day Beijing time 04:30: U.S. API crude oil inventory change for the week ending July 25 (10,000 barrels).

Earnings Forecast

Wednesday morning: Visa (V.US), Booking (BKNG.US), Starbucks (SBUX.US)

Wednesday pre-market: UBS (UBS.US), Rio Tinto (RIO.US), UMC (UMC.US), New Oriental (EDU.US), HSBC (HSBC.US)