Mid-Morning Look

Tuesday, July 14, 2026

U.S. stock markets are getting an early boost as consumer prices (CPI) June inflation data saw its largest single month decline in over 6 years as drivers saw some relief at the pump, but a revenue warning from Dow component IBM is weighing on the software tech sector, as shares fall over -20%. U.S. futures got a pop following data that showed very “cool” prices in the June CPI across the board, as core goods declined for the second straight month, down -0.09%, housing was up just 0.12% and core services ex-housing was -0.2%. Overall, the headline and core CPI prices were well below consensus and prior month readings easing fears of Fed rate hikes in coming meetings (see data below). A few Dow components making big moves as shares of IBM plunge following weaker prelim revenue outlook (taking down the software sector) while investors rotated back into semiconductors and memory stocks, but GS surges on results. Markets now await from Fed Chairman Warsh testimony on the economy to Congress this morning, his first since being named new FOMC Chair.

Banking stocks mostly lower after results despite strong top/bottom line, strong equity and investment banking revs for JPM, WFC, BAC, GS and Citi this morning. Wells posted Q2 beats on top and bottom lines this morning, GS was better than expected on every line of its results with monster IB and trading revs y/y, BAC beat on the top and bottom lines, and reported that total investment Banking fees rose 50% in the quarter to $2.1B, Citi Q2 adj. EPS $3.15 above est. $2.72 while revs rose 14.3% y/y to $24.766B topping est. $23.737B aided by robust trading and strong investment banking fees and JPM a top/bottom line beat but FICC revs were weaker.

The surprise today came from tech following a preannouncement warning from IBM which released preliminary Q2 results below consensus as mainframe and related software sales disappointed, with large deals failing to close on expected timelines. IBM Q2 revenue rose a modest 1% y/y to $17.2B, missing the consensus $17.86B as Software revenue rose 5% while Infrastructure declined -7%. Gold and silver prices rebound given the cooler CPI data but surging oil prices remain a concern as the US hit Iran targets for a 3^rd day overnight. The Vix edges higher moving above the 17 level despite early stock market strength. Futures on Brent crude rose 1.2% to cross $84 per barrel, the highest price seen on the contract in a month. The dollar (DXY) sunk on the CPI reading.

• Casinos & Leisure: Wynn Macau (WYNMF) upgraded to Buy from Neutral at Goldman Sachs saying despite tweaking down industry GGR growth forecast, the firm revised up Wynn’s FY26-28 EBITDA estimates. Citigroup lowered ests on MGM, WYNN on weak Q2 for Macau, which is arguably Macau’s toughest quarter since reopening, with GGR impacted by both the global soccer tournament and some extremely unfavorable hold rates. Wells Fargo upgraded RRR to Overweight as foresee plenty of upside ahead after walked away from company visit more constructive on the temp. disruption impact at GVR and Durango.
• Transports: in railroads: Susquehanna upgraded CSX to positive (IM, pricing acceleration, aligning valuation to market) and downgraded CNI to neutral (thesis played out; upside limited into USMCA review). The firm said they remain positive on CP up North (Can-Mex trade offsets and advantaged IM offerings) and remain positive on UNP longer-term (NSC neutral on deal terms). In trucking, Susquehanna said they are most constructive on KNX (purest one-way TL pricing play + LTL optionality) and JBHT (intermodal strength, and pricing power as diversified freight leader), favor CHRW within brokerage on execution, and stay negative on RXO, where they think valuation has outrun an improving but still-unproven earnings story.
• Data Center/AI infrastructure sector: CLSK signed a 20-year infrastructure lease with a global technology company for its Sandersville, Georgia, campus. The triple-net lease is expected to generate about $6.6B in contracted revenue over its initial term, with the potential contract value rising to $11.6B if the tenant exercises two five-year extension options. Ai startup Reflection said it has signed a more than $1B deal to secure Computing capacity from NBIS, including access to NVDA’s latest chips. The move builds on Reflection’s June agreement with SPCX for Computing capacity. HUT price tgt raised to $165 from $85 at Benchmark noting the co has converted the megawatts at two new Ai data center sites into at least $16.8B of contracted, investment-grade lease value, financed the buildout with $7.5B of non-dilutive project bonds, and expanded a development pipeline that now stands at more than 9 GW in six months.

• CLSK +7%; after signing a 20-year infrastructure lease with a global technology company for its Sandersville, Georgia, campus. The triple-net lease is expected to generate about $6.6B in contracted revenue over its initial term, with the potential contract value rising to $11.6B.
• FCEL +17%; was upgraded to Buy at UBS driven by recent deal with FIT Energy; announcement of collaboration with Siemens for product development and FCEL’s ability to fill the void created by competitors scaling up to pursue significantly larger orders.
• GS +6%; reported blowout Q2 results as EPS $20.98 crushed ests $14.48 and revs surged 39% y/y to $20.34B above consensus est. $16.13B while raises quarterly dividend to $5.00 from $4.50. Investment banking revs surged 55% y/y to $3.4B, Q2 FICC sales & trading rev rose 32% y/y to $4.59B, tops est. $3.76B while equities business revs of $7.42B, surged 72% y/y.
• JPM +2%; strong results as Q2 revs rose 27% y/y to $57.3B top estimates of $51.1B; Q2 EPS $7.70 tops est. $5.59; Q2 Total Deposits $2.71T (est $2.69T), loans: $1.54T (est $1.52T), Equities Sales & Trading $6.03B (est $3.98B), FICC Sales & Trading $6.05B (est $6.29B), Investment Banking Revs rose 30% to $3.90B.
• NXTC +266%; shares surge after saying it will merge with privately held Avere Therapeutics in an all-stock deal and operate as Avere Therapeutics after closing. NXTC says concurrent $320 mln private financing will fund development of AVR-001, an experimental once-weekly pill for inflammatory diseases.
• TSEM +13%; said it plans to invest about $3B to expand its advanced semiconductor manufacturing capacity in Japan, backed by about $1B in grants from the Japanese government; the company also updated its 2028 financial targets, forecasting $3.6B in revenue.

• BIIB -7%; said its experimental Alzheimer’s drug diranersen missed the main goal of its mid-stage study, which tested whether higher doses provided greater benefit in patients with early Alzheimer’s disease; said the drug, however, slowed decline in memory, thinking and daily functioning in the trial.
• CRCL -3%; after Mizuho downgraded to underperform (tgt to $50 from $85) as believes that Open-USD’s pass-through model to distributors and large scale with over 140 partners could fundamentally alter the company’s business model.
• ERIC -11%; shares fell on mixed Q2 results, with earnings topping analyst estimates despite a decline in sales, as strength in its cloud business, but flagged rising component costs linked to AI demand; Q2 revs declined 6.1% Y/Y to SEK 52.7B, missing the consensus estimate of SEK 54.04B while EPS of SEK 1.22 beat.
• HCA -6%; shares fell after results and guidance; Q2 revs $20.23B vs. est. $19.43B but narrowed its Fy26 rev outlook to $77B-$79.5B from prior $76.5B-$80B view and also lowered its 2026 net income outlook to $6.3B-$6.7B from prior $6.495B-$7.035B and lower EPS view of $28.70-$30.50, from $29.10-$31.50 prior.
• IBM -22%; shares tumbled after issuing prelim Q2 revenue rose a modest 1% y/y to $17.2B, missing the consensus $17.86B as Software revenue rose 5% while Infrastructure declined -7%; said weaker-than-expected z17 demand and delayed large customer deals weighed on results (the comments on software weighs on the rest of the group CRM, MNDY, NOW, TEAM, SAP, etc.)