Good morning investors! The earnings season is officially here!
Today we cover:
IBM had its worst day
Banks crush it!
COLA to fall?
📊 Economy and News
Oil Jumps Again As US Prepares for Another Blockade
Oil prices rose after U.S. forces struck Iranian targets and Washington reinstated its naval blockade of Iranian ports.
“Oil could retest $100 if the current intensity of hostilities persist for a few weeks, or head higher still if regional oil infrastructure is targeted,” said Saul Kavonic, senior energy analyst at Mst Marquee.
Global hits:
China’s Q2 GDP growth cools to 3-1/2-year low, structural imbalances complicate policy.
Japan manufacturers stay upbeat on chip demand, services hit by costs.
Argentina’s monthly inflation eases to 1.9% in June.
Reminder: Foreigners bought $132 billion of U.S. securities in May.
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📈 Stocks
S&P 500 7,543.59 (+0.38%)
DJIA 52,508.27 (+0.0.18%)
NASDAQ 26,107.01 (+0.90%)
BRENT CRUDE 85.14 (+1.92%)
* Prices as of Jul 15th, 12:20 AM UTC
IBM Had a Bad Day – Reports Bad Numbers
International Business Machines (IBM) shares plummeted 25% after the company issued preliminary second-quarter results that missed Wall Street expectations.
The drop marks IBM’s worst single-day performance on record, surpassing its previous worst day in October 1987 when shares fell 23.7%.
IBM reported adjusted earnings of $2.93 per share on revenue of $17.2 billion, below analyst forecasts of $3.01 per share and $17.86 billion, according to FactSet.
CEO Arvind Krishna cited weakness in the software and infrastructure businesses, as clients shifted spending toward hardware such as memory chips.
This contrasts with a strong first quarter, when software revenue grew 11% and results beat expectations.
The report, however, helped other names surge, including CrowdStrike (+12%), Dell (+7.13%), and Nvidia (+4%).after IBM exposed cybersecurity as nondiscretionary spending.
Interestingly, CNBC’s Jim Cramer noted the sharp sell-off still doesn’t make IBM a buy.
Bank earnings:
JPMorgan (+2.5%) beat handily with $6.14 EPS (vs. $5.59 expected) and $16.9B in profit. Investment banking revenue soared 30% — its strongest showing since 2021 — pushing the stock near record levels.
Bank of America (+1.9%) reported $1.21 EPS (vs. $1.12) on $31.56B revenue. Strong trading results and net interest income delivered a solid beat across both Wall Street dealing and traditional banking.
Citigroup (-5.3%) posted a strong $3.15 EPS (vs. $2.72) and 14% revenue growth to $24.77B — its best quarter in years. However, higher expenses and cautious second-half guidance weighed on the stock.
Wells Fargo (-2.7%) topped estimates with $2.00 EPS (vs. $1.72) and $22.62B revenue, but investors were disappointed by core earnings closer to $1.80 and flat net interest income guidance
Goldman Sachs (+9%) crushed expectations with $20.98 EPS (vs. $14.47) and $20.34B in revenue (vs. $16.4B). Investment banking fees surged 55% and markets revenue jumped 53%, driving the stock to a new all-time high.
Surprising: New York becomes first U.S. state to impose AI data center ban. In other news, Apple is in talks with startup that shrinks AI models to run on an iPhone. Lastly, Yum Brands, parent of Taco Bell, KFC, and Pizza Hut, fell Tuesday as health officials investigate a possible link between lettuce served at some Taco Bell locations and a record cyclospora outbreak.
Interesting: Paramount still plans to close WBD merger by end of September despite lawsuit.
SK Hynix South Korean shares jump 11% as Asia tech stocks rally.
ASML raises sales forecast for second time this year on strong AI chip demand.
💵 Personal Finance
Cooling inflation has lowered expectations for next year’s Social Security cost-of-living adjustment (COLA). New estimates project a 3.7% increase (per analyst Mary Johnson) to 3.8% (per The Senior Citizens League) for 2027.
This marks a notable decline from Johnson’s previous 4.7% forecast. Government data released Tuesday showed the Consumer Price Index rose 3.5% over the past 12 months through June, below expectations, largely due to falling energy prices.
The official 2027 COLA will be announced by the Social Security Administration in October and could still change. Social Security benefits are adjusted annually to help beneficiaries keep pace with inflation. The average COLA over the past decade has been 3.1%; in 2026, recipients received a 2.8% increase.
Related Medicare Changes for 2027:
Standard Medicare Part B premium: $209.50/month (up $6.60 or 3.3% from 2026)
Medicare Part D deductible: $700 (up from $615)
Catastrophic out-of-pocket threshold: $2,400 (up from $2,100)
Retiree confidence has also slipped, with inflation, healthcare costs, and housing cited as top concerns
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